The Autonomous Digital Economy Is Here

We're moving fast and it's all inevitable.

“What is it about blockchain that we're not just grabbing onto this and running?”

Every asset in the world has known it. If they can't monetize it, they want to kill it. Most human beings fear that innovation will cost them the goods of today and will open up bads in the future. Innovation might actually solve today's problems and it might unlock future goods.

We can't even imagine yet. Matthew, I'm so excited to have you on the show, man.

We are about to have a conversation around a topic that I feel like I haven't had enough guests

on the show about where we're going, but I'm so incredibly interested in and your take on this idea of autonomous digital economy and where you and

“and your investment firms see the world going.”

I just appreciate you taking this time, man. Fantastic, Ron. Glad to be here. I hope we can do a good job for your audience. I have absolutely no doubt that you will. So let's set the stage right away.

When we say this term, this is your term in autonomous digital economy, what exactly at a high level does that mean and we can start to break into the branches and the different legs of the stool as we go through our conversation. Yes, thanks, Ron. It's something that we're all in the middle of. We're sort of experiencing it every day and yet we have it confused about where it's all heading.

And I find it helps people to sort of get the heads around it. If you just think about what we've already done the last 30, 40 years, we digitized communications and content and we did that with the internet. And today we use it every day, every small business. You know, relies upon it every, every one of us every day is using that technology and those

innovations. The issue is we didn't get round yet to digitalising various other things, including value. We can't really move value natively over all of that infrastructure. We just spent 30, 40 years building. And of course, decision-making, intelligence and even work is increasingly accessible and digitalisable so that advanced computing can assist us in very many ways. And for us, if you converge all of that together, if you converge the internet,

AI and agents and digital finance and blockchain, if you converge it all together and you look ahead

“a few years, I think you begin to see that, you know, pretty much the entire economy will be running”

on digital rails. A lot of the decision-making and work will probably be made by agents. And the digital infrastructure that we already have, the internet, stack will have to be upgraded so that we can run value and make transactions and keep it secure and deal with issues like identity over those rails globally. So for us, an autonomous digital economy is the future. It's one of the things that's most inevitable. And we're about halfway there. And the last thing

I'll say Ryan is, if anyone's thinking, this isn't going to happen, cloud flair announced last month

that for the first time computers and agents are driving about over half of all the world's

internet traffic. So we're moving fast and it's all inevitable. I want to start with, with blockchain as a technology, not getting down into coins or anything like that or tokenization yet, but just the technology in general. So my core industry that I came out of that I built my career and was the property casually insurance world. And since I learned about what blockchain was and I dove deep into it to understand it, to me it has been the most obvious

technological improvement that are that the insurance industry could make in screenlining how transactions are done, how data is trans. Almost like the insurance industry was built for blockchain to understand how these transactions are made. The risks that's captured in that transaction be on the past that data between the, and sometimes dozens of organizations that need to touch it in order to properly under it, et cetera. However, very, very slow adoption almost almost none.

There's a few obscure, and I'm, and I only need to obscure because they're small, startups that have played around with different uses for blockchain in that space. But it seems despite, I don't know many experts in any field who have spent any time with this blockchain

of the privacy issues, many of the issues with laundering and things that are done with yet. It feels

like everyone's scared of it or it just seems like an incredibly slow in this technology being brought into our ecosystem. Why do you think that is like, what is it about blockchain that we're not just grabbing onto this and running? Yeah, so this is interesting that you

“asked the question in that way, and I think embedded in the way you asked the question is certain”

expectations you might have about how quick change occurs. We invented the internet in the 70s. Some people were using it a little bit in the 80s. It really didn't ramp up until the 90s where we all began to say, well, what's email or what's a website or, you know, let alone, can I buy something online? You know, by the zeros, we still only had less than half the US and in most other countries substantially less than half of the people online,

and here we are in the 20s and we still only have 2/3 of the world online and you'd be surprised. I mean, a lot of people still go shopping in shopping malls and don't buy everything at Amazon. So the point I'm making there is that that's a 40-50 year trajectory. In the case of the digitalization of value and blockchain and running value transactions over the internet natively, we're really

only 15 years in and the first few years of those 15 years, this was really not being thought of as

being a technology that would apply to every business and every company. So I feel we're very early. Now, having said that, the adoption rates are ramping really fast, so there's certain areas, such as stable coins in the developing world, digitalized funds and treasures used in the crypto world for various purposes, and the beginnings of real-world asset tokenization, where we're beginning to, you know, come on board. And I think at this point, the CEOs of every

bank asset management firm, payment company, understands that this is superior technology and that they will be deploying it into their operations. Now we get to the question of insurance and I think I have not studied insurance that closely, vis-a-vis a blockchain adoption, but I think in most

“industries, you have to begin with the pain points that they really care about every day and my”

bet is that the payment is not the biggest issue in insurance. So I think it's the decision-making. You know, it's the assessment of risk and return and decisions around whether or not to ensure something, whether or not to close insurance contracts, etc. And the nuance around that. And here, there's no question in my mind that this is now really getting upgraded fast. We know that AI can simply do better job, a better job of assessing potential outcomes in risks

and so on in huge databases and huge data sets that, you know, whether they'd be public or proprietary, that is beginning to occur. And I think I'd be very surprised if there's any large insurance company in the world where on issues such as that, assessing risk, assessing potential returns and making the decisions around how to price insurance products, they're not beginning to experiment with those technologies. So I feel like in the context of the autonomous

digital economy, in an area like insurance, you're more likely to see decision-making and risk determination being powered by the types of technologies that we invest in. And the transaction and payment portion of it is not as fundamentally important in that industry and they can take time. It's not sort of like their visa or master cards and they've got to handle billions of transactions and do it in very efficient ways and clearly visa or master cards have already

“committed to using blockchain. So it's a long answer Ryan, but I think all of this is coming to”

insurance, but it's just not, it's not the first industry that's getting impacted. And if you go

and they didn't all embrace electronic commerce at the same time and in fact, there are some industries which still are mostly more to with very little click activity occurring around them.

“And I think you should expect the same in this next phase. I think that's a really”

good and interesting take that I maybe, maybe my, my ambition sometimes outweighs my logic on the fact that I would, my, my hope would be things would move faster than reality in history would teach us that they do. That's probably what that is an aspirational wish for for these things. But and I use,

you know, I, I don't solely operate in the insurance industry anymore, but I always kind of use

it as a bell weather because they tend to be a laggard, right? And in the adoption, but I think your take on where their priority is is correct. You know, it's, they're making their money off their determination on whether or not someone's house is going to burn down not in their ability to transact business faster via payment from insert to carrier. So that makes, that actually makes

“a lot of sense. Now, you use to term in there that I think maybe for you and I, we understand pretty”

well, but I think some people in the audience may not, which is this idea of tokenization and they

may have even heard some of the audience may have heard like tokenizing hard assets and one example

that I'll give and then I'll pass it over to you is I was looking at a platform recently, just doing some research because I was interested that takes rental properties and the owners essentially tokenize the equity and then you can buy, you know, they had their own coin that they were using just inside the platform as a way to capture that value, but you could buy tokens into a property and then as distributions came out of that property, you got your percentage of value.

Like maybe just define tokenization in general and then I'd love to maybe just dig into where you see

this happening in some of its use cases. As you were talking, it did occur to me that I

literally talked the last question I focused on property and casualty insurance, but obviously, prediction markets, we could talk more broadly about risk and and how these technologies can help offset risk, but now going on to this new topic of tokenization. So I find that for most

“small business folks and entrepreneurs the best way to begin this conversation is the following,”

every asset in the world has an owner and the the challenges, the proof of ownership is very fragmented and in often cases, you know, oftentimes it's paper or close to paper. So obviously, in something like public equities, we digitize the shares certificate quite a long time ago with the big bang, but if you invest in a fund, if you invest in a company, if you buy something of value or watch or, you know, something like a Kruger and

you know, almost certainly your only proof of ownership is going to be some paper and that's not very efficient. By the time you get to things like real estate, the proof of ownership and the title may require many, many days or weeks to sort out and there'll be a lot of paper shuffling, a lot of notorization of documents, etc, etc. The problem with that is it makes it a very high friction for us to move the value, IEE, exchange the asset value, quickly,

cheaply and easily over the internet. If you want a seller building, typically it's going to take you 45 to 60 days just to do all the documentation and for the asset to change hands. We already know that if we digitize the proof of ownership, we can make it run over the internet and the technology we use to do that is tokenization and it sits on blockchain rails. It's essentially the technology, the innovation that Satoshi Nakamoto created in order to be

able to move a peer-to-peer cash over the internet which became Bitcoin. So it's the same technology but now we're applying it to traditional assets and so dollars you can take a dollar, you can tokenize that dollar and now that dollar can move as quickly as an email or a message over the internet and we call those stablecoins and they have names like Tether and Circle.

that ounce of gold sitting in a vault somewhere and now with that you can tokenize

and record the ownership on a blockchain and now that token, that gold-backed token can move to anyone in the world in real time at almost no cost. And now we're going to get to what we're calling real world assets. Actually I do, gold is a real world asset but don't worry about that. Now let's talk about real estate. Conceptually it's the same thing. I could take the title that says this is the title for a building in San Francisco. I could record that title in the

ownership of that title on a blockchain, issue a token and that token can be used to move transfer exchange that value. Now that already is a very big idea because this dramatically

speeds up, reduces the cost and simplifies the markets for those assets. But it also

“unlock some other things, which are also really important. One is it allows the arrival of”

high frequency trading which in the world of public equities really was only unlocked when me digitalized public equities stress certificates. So you get equivalency trading, which in turn means you get much more liquidity potentially. It doesn't guarantee that anyone wants your asset but conceptually more people can choose to trade the asset. Thirdly you get better price discovery which is really important in real estate and we can come back to that.

And then there's some other things like fractional ownership that get unlocked. So that's where we're

heading. We are going to tokenize and digitalize the ownership certificate for every asset in the

world over time. But some assets are more easy than others. So dollar is easy, right? Because whether it's actually very easy because with the dollar there's no core productions, you know there's no dividends, there's no splits, there's no mergers in acquisition activity. By the time you get to real estate it's really complicated, right? Because with real estate you know you're going to make sure the janitor actually goes and pleans the building and if the

HVAC break someone's got a fixer and how does the ownership of the token equates to all those costs and expenses and activities and and obviously you wouldn't want to own a token in a building a fractional ownership of a big building the sales force tower without you knowing whether everything else that needs to be done to sales force tower occurs. So tokenizing real estate ownership is much more complicated I think than tokenizing dollars or ounces of gold. So I'll

“stop there Ryan. I mean if you want to double click on real estate I'm happy to and I don't really”

know if where your audience is most interested but what I can tell you with certainty is as part of the autonomous digital future that we're describing we will digitize the ownership of every asset and that that will allow most assets most asset classes to be traded quicker cheap and easier over the rails that we just spent 50 years building. Yeah I think of something like the title to your home and the fact that there's an entire cottage industry built around it called

title insurance and the title search process which is an entire what three week takes three weeks for them to figure out and then because the system is so you know kind of paper driven in some cases like the you know the home that I owned was built in 1960 well there's been three owners.

“Well you have to go verify the three owners verify that the transaction was done properly”

from each one of those owners and then you have to buy insurance against the title to make sure that that research wasn't done improperly and somehow someone doesn't have a claim sitting you think about all those pieces where if that if the title ownership is sitting on the blockchain and you can just reference that in a finger snap you know exactly what's there what's been applied what has in and follow essentially and let me know if I'm using this word wrong

but a chain of custody over time as to each one of those owners you can see that and it's it's just there at your fingertips versus having to send somebody the local county clerk's office and do four year request to figure out you know who actually owned this and if anyone's ever put a lean against it is that kind of the idea and how we compact this things. It is a test run and I'm going to interject to thought here for your audience because it's a little baffling to me

you know five and four and three years ago there were a lot of people who were trying to kill

the heads of some of our federal agencies and a lot of senators and other folks and

“I never really understood it because the example you just gave the average American the biggest”

asset they'll ever own is their home at the apartment or the house and most Americans don't have a lot of money so it turns out that the average apartment in Hacker or the average owned residence in America by an American citizen has a value of somewhere between two hundred and two hundred and fifty thousand dollars maybe a little bit more now my data might be a little bit out of date but let's say two hundred and fifty thousand each time they try and buy and sell

their own house it takes them 45 to 60 days minimum in the closing process but this is the shocker it costs them an average of twenty thousand dollars to trade a two hundred and fifty thousand dollar property they lose ten percent of the value of their home each time they try or combine

“so that and you would think that the the the government players who are there to protect the”

average American would understand that if we can take that twenty thousand down to two thousand and if we can make the sixty days be five to ten days maybe that would be an enormous benefit

to every American it would be amazing and then and to your point if we could eliminate the

title insurance altogether which frankly we should be able to do because the government by now should have the information about the title digitalized and they should have issues like leans or rights of way digitalized in fact they probably do but it's not necessarily very accessible but but this is sort of a consumer this is a fundamental right of every American citizen in my mind to be able to have innovators improve their lives stop burning them with excess

cost and work and time and so it's obvious it should have been that everyone should have been so excited that these new innovations and technologies were going to unlock this but for whatever reason the anti-crypto army decided to try and trip down on the industry illegally and we're now coming out of that phase so that's a little bit going back to your earlier point Ryan about the speed of adoption will just to be clear of the last fifteen years since blockchain was invented

there's at least five years in the when America was trying to kill the industry for some reason

“none of the studio understand not to go conspiracy theory on you but I think you have the false”

assumption that our politicians and elite business owners are actually operating in the best interest of the consuming public I think that would be one one assumption I would question oftentimes it feels like if they can't monetize it they want to kill it and I think our dad the fight against AI the fact that we now have politicians were advocating the seizure and ownership transfer of public or private companies as public good in the fight against

these data centers which which I understand some of the concerns but the irrationality of most of the argument against data centers to me it to me signals that there's some unseen incentive or conversation happening that is forcing the negativity right it doesn't seem warranted that you know you can put a similar size building for a Walmart or sorry an Amazon warehouse out here you know I live in upstate New York there's plenty of empty land they just put a huge

Amazon building that looks like its own city you know about 20 minutes from where I'm sitting sorry no no upheaval they did the environmental report off the ghost building bill jobs created everything's good data center essentially the same size you have people picketing you have people you know protesting you have you know these signature campaigns going out to different politicians the fight these things and the argument feels very irrational to me and

maybe just taking a broad stroke over all these technologies and the we've always been the innovative

we've been the country and really how we established ourselves in the world and the place that we currently sit is because we were so so pro innovation so pro technology so pro you know pushing

the data center supporting the infrastructure that we need to push all this their major campaigns

to derail this growth and I you know I find it intriguing to say the least yeah so I'm not a politician I'm not a lobbyist I'm not a government affairs person so in a way I'm just an investor and we'll talk more about that in a minute but just to wrap this point up I mean if you're

“audience or small business owners and entrepreneurs I think you know you should be thought”

for about this question and if we took away the internet from you today would that be good for your business and would that be good for your life and I think a few people would say yes

right and the Pennsylvania Dutch and the Amish you know would say yes we we don't want the internet

we don't want cell phones we don't want messaging you know we we prefer you the United States Postal Service and receiving letters and parcels at home and that's okay but I don't think most people feel that way and and so I think what you need to do is is try and connect innovation and the discussion to what's important in your own life and that's why I gave the example of the average American and how much they lose of the value of their biggest asset each time they

“try and buy and sell it because there's you know 400 million Americans 200 million households”

or something like this and they're all suffering from this reality and if we can make it better it's good for all of them so if you're going to be abstract and sort of say well I don't want tokenized you know property titles I want it to still be paper based understand what you're doing is you're hurting every American and so so when we come to AI it's sort of the same thing which is you know I understand the fear of AI is going to hurt me and my job and my job is

going to change or my business is going to change but the other side of that coin is we have been if it did enormously from data driven decision making in finance and in insurance and and retailers have leveraged electronic commerce to make more products available to us from more places around the world and and all of that has been riding on big data and big data analytics and algorithmic decision making for a long long time you know 30 40 years

you just didn't know and we didn't call it AI and it's sort of like spell check you know it's all like if you want to lose the spell check on your email writing software it's okay you know you can just check a dictionary each time you come up with a word that you're not sure how to spell

the reality is we all benefit from spell check and spell check is a is a in a subtle way

artificial intelligence so so I am I am I am very much of the opinion that before you get to macro just think about your business and the pros and cons and it is possible it is possible

“that you should be fearful about the impact of innovation and technology on your business but I think”

in most cases small businesses can benefit and certainly tech entrepreneurs should be all over this yeah I mean some of the to my friends who run non tech businesses have I have seen the largest increases in productivity and and top line revenue growth by implementing AI into those businesses like I have a buddy that owns a landscaping firm and he had a guy create a simple CRM that fit his business specifically for him and you know it's all AI driven and his

guys have it as a little custom app on their phone and it's cut he said it's cut what did he say two hours of every week out of every one of his sales guys who go out in the field which he has five of he got 10 hours back of their time so two hours for each guy simply by using this AI tool that he said cost him like three grand to have you know somebody's been up and build for him because he's didn't want to take the time or maybe if tried vibe coding it but like the idea is

even if you're not a tech business I mean this is I'm talking to the audience not not necessarily you but like even if you're not a tech business and in some cases the non tech businesses by leveraging some of this technology that's now at your fingertips and has become so readily available you can see massive improvements in streamlining in places where before they were literally

in their truck and then they'd have to remember to bring them in and get them approved and like

“just that amount of time back is what one or two more appointments a day for five guys now”

all of a sudden you know if you're closing half of those you just put five more deals on the board that you couldn't have done before simply because you didn't have the time with a fairly simple AI tool investment so I I look at these things in a very AI optimist this 100% AI optimist I probably spend too much time on LinkedIn commenting yeah but humans make mistakes too that's you know I mean like my little probably sarcastic response that I shouldn't put out there as much as I do

but like every time someone bangs on AI I'm like yeah but the reason the data's terrible is because

humans put it in you're just mad at the AI because it's reading the terrible data that the humans put in and now can't regurgitate the perfect answer like I feel like we hold some of these technologies especially early on and it's probably just adoption curve as you said which I

“think was maybe a fairly logical but I think something that was really important to be said”

is that just an adoption curve standpoint where we're still holding the technology to too high of a standard versus what we would assume the humans are we're thinking it has to be perfect

or it's broke and that doesn't seem like the way to the thing about this yeah but that's great

Ryan but so I just want to again highlight my point of you brought up landscaping so you think I do think it's worth you know whoever you are listening to this bring it back down to real businesses and real activities and then think it through so just give an example you know if you play golf you know how they used to cut the grass and up until recently and in fact still probably on most golf courses people sit on equipment in the hot sun and they have to go around and around

and around the golf course cutting the grass and you know it's polluting it's not good for the environment it's expensive and the drivers have to cover up or they get skin cancer and it's you know there's a lot of issues today there's plenty of golf courses that have satellite driven robotic lawn grass cutters cutting the grass and not every golf course is implemented that but many have they tend to still do as you know the greens and the teas by hand but the fairways they'll have

this equipment so so that's AI that AI driven it's satellite an AI driven and it's part of what we call the autonomous digital feature those autonomous semi or autonomous robotic grass cutting devices are there already right this is not theoretical and so then as a small business only you can see that as a threat or an opportunity obviously if you're a John deer it's it was a threat to the manually operated glass grass cutting equipment you used to sell and it was your choice

John deer whether you embraced this new world husk of honor did and said they sell lots of husk of honor equipment I don't even know who owns husk of honor but did John deer do it I don't know it was a choice you know embraced the future or try and avoid embracing it at the level of the

“guide that sits on the tractor I think they've been reallocated so they're probably still working”

on the golf course they're doing something else so hopefully they're making the greens and teas even better but some of them may have lost their jobs that is a real societal issue that we have to think through because obviously if we're reducing human work everywhere then we have to figure out a lot of issues and concerns legitimately so but I don't think it's bad that the person isn't going to sit in the baking sun and get a lot of skin cancers you know that job

isn't that great a job in my opinion now obviously some people may love cutting grass all day on the tractor and and they would disagree with me but I think societally we have to ask are the jobs that we are eliminating the right jobs for humans to be doing and it's it's like the old and I'll finish here but it's like the old story of the chimney sweep it's all like you know little boys used to have to go up chimneys to clean the chimney and they all got blacked

lung and they all died at very early ages and we eliminated coal fired fireplaces and that meant all this little boys were out of work and we had to find other things for them to do

amongst chimney sweep's were to zero and I think that was a good thing societies so it's a challenge

this is this is not easy stuff but if you're a small business person bring it back home you know if you're a landscaping business how do you power up and conversely what should you stop doing

“and maybe there are entire industries you should be as a small business owner you should be”

actively getting out of because they won't be necessary in the future like chimney sweeping yeah I I think you that's a wonderful point I know we don't know each other that well we're we just met here today but you know my work in working with companies and particularly mid and in smaller sized companies is I teach something called a human optimized model which is why I'm so

incredibly interested in AI right my my belief is that in general humans can do three things better

than machines or or AI which is relationship building solving complex problems and and selling things based on trust I know you can do D to C and that's growing but you know some of a lot of transactions were still very trust based and you know what I try to help these business owners understand is that to your point right that guy who was spending eight hours a day on a tractor cutting along well now he can go get his hands in the sprinkler system that's broke and he

can spend time on the projects that are detailed driven and and very like human expertise driven and take true like breakdown problem solving at the point of failure and spend time on these real actual issues that you need someone to do right that guy like you said I I'm much more up in the in the camp of of we're reallocating and redefining what these roles are I don't see

“I think jobs will be lost but we can't think of them as the humans losing the job just that”

function is lost the human is still going to have plenty of places to go where their expertise mechanically or otherwise I think still can be used and we can actually use for the things that they probably should have been doing more of to begin with where the real labor and real work is versus just sitting on a tractor and driving in straight lines for eight hours a day so I think that's a a really wonderful point I'd like to transition a little bit to to the investment piece

and I'm just interested maybe start as broad as you want but this seems like an incredibly dynamic time to be investing in companies in particular and before we went live you would talked about this explosion of a value in the economy and we just saw SpaceX and you know Elon becoming a trillionaire and everything like one maybe is this a fairly unique and interesting time in general like is that a proper characterization and and then you know regardless of it is or it

is and you know where are you starting to where are you starting to look I mean I know you have your thesis but like what's really got your attention what where do you what do you see coming down the pipe that's got you tuned up all right so we we started talking trying to help the audience understand some inevitable things about the future the direction we're heading we talked about things like what's tokenization and how do we digitalize value

we then went down a slightly different path which is an important path which is you know how what's the role of government how does government embrace innovation and then society what are some of the pros and cons and some of the issues of which there are many

“I think it is a good idea to bring it back to sort of investing and wealth creation and”

value creation so I'm glad you just did that and we're investors so ultimately the way we think

about this rhyme and and I'm really now first going to answer conceptually and then our answer empirically you know conceptually what we are doing as investors as venture investors because we're venture investors is we're trying to get a view a 10 year view of some inevitable changes to the economic landscape that will unlock a lot of wealth creation a lot of value and we took a look at a thing about a 10 year time frame as VCs some things happen quicker

some things take longer but 10 years is sort of about right and once we have clarity on some things that were absolutely sure are going to be happening then the next thing is you look up today and you try and figure out what's most broken where a lot of value is going to start shifting around you know it's going to go from the old to the new and then once you have the clarity on those two things then you look for great entrepreneurs who are really passionate and

move us forward because they're going to have enormous tailwinds buying them and they're going

“to be the beneficiary of all this moving value now it doesn't mean that established businesses”

I can't do everything I just said I mean they could do the same thing the problem is

and it's it always is true established businesses have a lot of legacy activities people processes in you know some costs they make it very hard for them to change and so it tends to be true that if you can see something inevitable about the future and if it's going to dramatically impact a huge profit pool or source of value of today most of the shift most of the value is going to be captured by disruptive new players and that's

what we invest in all right so so that's sort of the way to think about it no obviously if you're an entrepreneur you're loving what I'm saying because you want to be the one that gets back to and builds the new business obviously if you're a small business owner this is a challenge because you you've got to make choices like should I move and if so when and conversely I can't abandon what I am already doing and I don't have a lot of capabilities and resources left over to new things

so it's very challenging for established businesses and in particular for established small businesses all right so that's the concept so practically speaking where are we investing today

“well I think we've already covered it we're investing heavily in what we call AI in the”

agente revolution the upgrading of global decision making and the digitalization and computerization of work and embedded in their intelligence this is just huge it's it's it's not new it's 40 50 years in the making but it's it's time has come and we're digitalizing intelligence and work as we speak so the companies that are the leading edge of that are very very I think investable

though their valuations are going sky high and quickly and maybe too high the second big

thrust for us is we've already talked about is the digitalization of global financial rails and infrastructure and and it's it's necessary both so that the traditional financial companies banks payment companies asset managers insurance companies trading exchanges and so on

“can upgrade themselves but it it's also opening up the opportunity for new to the world players”

many of which were investors in with names like Coinbase and Kraken and upholed and Anchorage and Robin Hood and so on too to grow and scale very quickly so that's the second big thrust and then the third that I would talk a little bit about is the continuing evolution and upgrading of internet companies themselves you know you could if you had a name like revolution you're not actually a new company you've been around for a long time you were an internet based into company

but now you're upgrading yourselves you're embracing blockchain you're embracing crypto you're probably deploying AI tools and you're also migrating towards this future so so for us those are the big three three thrust AI and the digitalization of intelligence and work secondly digital finance including blockchain enable digital infrastructure and thirdly the if you will the upgrading of the internet players and you know sort of like

ink to me was destroyed by Google my space was destroyed by Facebook I don't think we should presume that today's internet companies won't have new competitors but there'll be autonomous digital players not only internet players if you see what I'm saying I do I do one of my least favorite mental blocks is the idea that the way the world looks today is the way it's going to look tomorrow and when you find people making decisions based on that thesis it's

very hard to argue with or argue argue against tends to be those it tends to be very entrenched

idea but seemingly the world never works out that way we're always it's always turning and spinning

just like you said we could go through a million examples all the way back to the industrial revolution of of the company that kick things off ends up getting innovative pawn and you have

really important point just to drill into which is why I'm spending just this extra second here on it that we we can't take a snapshot of the way the world is today guys and and believe that this

is the way the world is always going to be right and I love that you said that you're looking

“out 10 years I think that's a wonderful timeline and you know specifically I'd like to drill into where”

you see agentic AI and and agents in general going maybe both from just your personal opinion or or your companies opinion on the space in general and the technology in general and then maybe from an investment putting the investment hat on you know are you looking at established companies that are integrating agentic AI and and using it as a way to improve operations consumers are already aware of but maybe in a more efficient way or do you think

there's even more opportunity and new functionality in that space yes and test it grown so

so the answer is all of but before you know the short answer but before I get there I mean

many of the tasks that we do today that are part of our economy or the businesses that are listening in those tasks are complex tasks and the human form factor is not necessarily engineered

“to be really good at those tasks and I think I think you have to start there you know in in your”

business you probably have human beings doing things that they are not actually very good at doing a great example would be to abstract vast amounts of financial data crunch it in real time and come up with financials and accounts and and so on you know it's all like our brains are

pretty good but that actually isn't something many of us are really designed for and in fact

as we all know the average American child is not very good at mental mathematics even if you ask them something simple like what's you know eight times eleven which is shouldn't be too difficult and by the time you ask them to you know look at a business in real time and crunch all the data of the P&L for this month and and build a P&L and a balance sheet it's not something most of us can do in our heads and that's and what I just said is obvious right so you know we

we instrumented that a long time ago and we created calculated what we created apricaces and then calculators and then visor calcant lotus one two three and spreadsheets and by now you know most businesses probably have some sort of you know advanced computing device doing a lot of their books and their financials they may still use accountants to do the the order to balance the books and sign off on them even that you know humans are not very good at you know

we know that accounting firms have paid a lot of money but they're not very good at what they do is the truth it takes them a long time and a lot of cost etc so so just continue that thought process what other things do you have humans been doing human beings doing in your business that we're not actually very well designed to do and what devices and work around do you have in place to help them do those things so in your warehouse you have people moving heavy

“pallets and you have to give them tools to help right they they need to reach a reach”

or you know loading a loading I don't even know of the names but you know they have a bunch of equipment because human beings not very good at lifting pallets you know 30 feet up and stacking them in warehouses right so so then you sort of say well why did you want why do you need the human there at all right if the task is to unload a truck bring out all the pallets move them around to warehouse and store them away the human form factor is not good at any of that

and even the the the decision of which pallet goes where is really not something humans are very good at I mean we can't with our eyes scan of our code so we need to device for that and and the same with the the location in the in the warehouse and so so you shouldn't be surprised if we're deploying robotics and equipment in warehouses and we're displacing human beings because the human form factor is an ideal for many of the tasks that grew up in the industrial revolution

and in fact many of the jobs we created in the industrial revolution were not really very nice jobs for humans to do right it's sort of we know that we we had them one at sometime you know

for the health of the humans and we we had labor movements and we had to have working condition decisions and then eventually we got rid of the mills and the people that had to work in them and all got you know tissue in their lungs just slightly minus got all the black lung

“from the gold dust so so why am I starting here because I think that's the way to think about it”

you know we can get more precise if you wish and talk very specifically as you did about do I see companies using advanced AI agents to drive top-line growth or of course you know it's all like because our humans very good at trying to identify which of the 400

million Americans are most likely to want to buy the product no because we can't get a head around

400 million let alone build profiles for 400 million people and try and identify the signals that would have us know if these 10 million at the full inch of million are the right ones to take this offer if you said I'm saying and it's not a new thought because MBNA in capital one we're trying to figure out how to do better credit card solicitations with database technology and algorithms you know 40 years ago um so the the big difference is this number one

clearly the LLMs have made big data analysis and other group algorithmic decision making and machine learning ready for prime time on a scale we could not have imagined the second is the agents which are basically just software the agents are able to do work better and better and they're beginning to be better than us at more and more of the work that we do and I think the third is we're beginning to figure out how to use software combined with hardware to come up with

better form factors than the human to do tasks the humans are not actually very good at anyhow and you put all of that together and and I don't think there are too many functions in any business that are not going to be levered up and improved quicker cheaper easier and even small businesses can start experimenting that's the last point right which is this is not something that requires

any more billions of dollars to get started I remember in the 90s I was always shocked by

you know we were beginning to build websites and science and razor fish would show up with a single page and they said we'll build your website for 40 million dollars there you can build that website for like nothing you know it's a website for nothing you know that I think my website for a couple

“hundred bucks on cloud code yeah exactly exactly so so that's what I would want the small”

business to listen to to to reflect upon which is the costs of accessing these tools is coming down really really fast such that a small business person can in fact leverage AI into their business if they're willing to experiment and give it a go that the hard part is actually having people to help you do it you know I think I think if you're the founder or CEO of a small business you've got the hard to stop in the world already and many of you are struggling to make ends

meet every day already and now someone's going to drop this whole new thing on top of you and it's it's just it's it's hard and so you know Ryan if that's what you help small business people do don't I think that's really really a valuable thing and if I was a small business owner right now I would not I think you do have a choice of when to move so if you're a small business owner you don't necessarily need to change anything this year

but I wouldn't wait five years and for some of you if you move fast you'll be a big business enough a small business so there are there are good reasons to move quickly

“but you have to look at yourself honestly and sort of say am I up for this do I have the capability to”

kind of like some of my people need to get on top of this and do we have the the band work then do we have the resources and and so on that the point is the cost of using an agent

in a small business today is very inexpensive it's not more longer 40 million dollars just to build

the website yeah I mean I've talked to the audience about this before but you know one of the

and and I think you're right I don't think anyone should rush into this if it's not their nature

“right if it's not your nature I don't think rushing in is the right way however I do highly”

advocate for people to be playing around right at least have a paid chatting with you or a paid plot or you know like when when these tools like when 4.5 hit I built like three apps and I have sent just destroyed you know I just deleted them but I built them to just see like what's possible how does it work I've heard this term mcp what is that like like and then do I even need to know that in my work like you know I mean so just just playing around because there's a new

vocabulary that is going to become more and more part of daily discussions I think regardless of where

you are from solo per newer to small business to middle market all the way up to enterprise and

while I completely and utterly agree that rushing in is not the appropriate moving it isn't like

“you have to do something today you're going to go out of business I do think it it is important to”

start to at least understand the nomenclature the the some of the use case or at least what's possible because when these decisions do become more pressing and and you are kind of in a position where you need to make a move one way or the other I feel like if that's when you start to spin up your knowledge on this stuff you're going to be so far behind and it's almost like you're going to be speaking to someone who is talking is speaking a different language to you and I think that's

where a lot of people got in trouble with the internet in the early days right you had these you know

internet marketers and website builders who would come to you and tell you a website that should across a couple grand cost 10 grand and a lot of small business owners didn't know the difference and they didn't understand because they didn't know what it took and they didn't know the time and I do think we can learn from the 2000s and the mid 2000s and the both in the digital and kind of internet revolution that at least it's a good FAFO moment like play around a little bit like get in

there and at least see what it does right I mean we need to have this at our fingertips to at least be able to speak the language even if we're not using it today I agree with everything you just said tonight at this point I want to talk a little bit about mindset but before I go there I'm agreeing with your point which is you know we're 40 or 50 years into using the internet and pretty much everyone listening in is an actually an expert you know you all know how to use so do emails you all know

how to send messages you all know how to use Spotify you all use the internet every day across your businesses in many many ways you're all experts but if I asked any of you to explain the coding of TCP/IP or HTML or frame relay and how they work my bet is almost 90 something percent of you probably don't even know those terms or if you've heard them you could naturally explain them and that's really important to hang on to you can be an expert at leveraging the

internet without actually understanding how it works and so you can be an expert to use applying digital finance in your business and using stablecoins without actually needing to understand what a Merkel route is or what a shrater is in blockchain and the same thing is true in AI you can begin to work with agents without understanding the software that sits underneath an agent and if you're going to leverage and use in your business so it comes to mindset and so here

I'm actually going to steal the concept that RAI partner and my daughter Tulu Lillamura is

“putting into her new book but I think it's very simple and I want to spend just one second on it”

run it's very simple it's a little matrix on one side is goods vbats and on the other side is today be the future and now you've got four cells right you've got the goods and birds of today and the goods of birds of the future most human beings fear that innovation will cost them the goods of today and will open up birds in the future okay and because that they live on the on an access they're living fearfully they are fearing that innovation is going to destroy my business

today and innovation is going to do things in the future that I don't want like cost me my job okay now the other access is very interesting because the other access is that innovation might actually solve today's problems the birds and it might unlock future goods

innovators access um entrepreneurs operate on that access they believe that they can solve the problems of today and as Steve Jobs famously said they're crazy enough to believe that they can change the future in a positive direction and that's the access of innovation and positive

change and it's a choice and and the reality is that your brain is engineered to make you fearful

of uncertainty and it's it's it's a defensive mechanism we we all have it in our brains but if we're not sure about something we should be fit fearful it's called the amygdala in fact but the other access is the access that opens up opportunity and so as a small business owner or an

“entrepreneur it the most important thing right now is to get into that mindset you know believe”

this webinar believe that we're going to live in a digital autonomous future whether you want it or not today and then it will unlock a lot of new to the world opportunities we can't even imagine but it will also solve a lot of the businesses you struggle with every day in your business if you're willing to give it a go and if you're an entrepreneur you'll probably spend most of your time using these technologies to build new businesses we can't even imagine if you're a current small

business owner or for that matter large business CEO or board director you'll probably use

these technologies first and foremost to solve the biggest problems in your business and so just

like I said you know uh black lung in chimney in chimney sweeps was the biggest single issue for the little boys of London who had to go up the chimney they all died so solving that problem with innovation was a good thing it wasn't a bad thing well in your business I don't know what your biggest pain points are it could be we can't find new customers or it might be we can't we forget to revisit the customers who bought in the bars to get them to buy a game

or it might be it just costs too much to run the warehouse with all the people that we have in the warehouse I don't know what the issues are for you my bet is the innovations that we're funding and that are here already can actually help you against most of your core business challenges but it's a mindset issue because if you're going to be fearful you're not going to get anything positive done and most of the world unfortunately sits in that mindset until they don't have a choice

“I think that is a wonderful place to wrap up our conversation because I could not agree”

with you more to your warehouse example one of the things I think is funny about the people who protest the losing these warehouse jobs it you know so coming out of the property casters in insurance space and workers compensation where our jobs are one of the most frequently injured positions in all of our workforce I mean these are people who are constantly injured oftentimes with issues that last

throughout their lives with back-related things knee-related shoulder-related and ultimately they

you know that they're they're taking pain meds and they're on these things for long periods of time because as you said this is work that we're we're not designed to lift these heavy things so now we have now we have to have a fork lift or we have to have a crane and these things fall and people drops and it's like okay I get that that is a job right and and and someone a man or one makes their money

“doing that thing but I think to your point could that person be real allocated to a position where”

their their human skills can be used to to hire value and not have them at boxes fall on their head once a year and they have to be on workers' conference like you know these are these are some of the places where when I think we to your point like when we start thinking optimistically about the future it the world opens up in a way that you you've used a couple of times it's unimaginable and I just I couldn't agree with you more um with that being said I know my audience is going

to want to go deeper into your world where are the places that they can follow along with what you your thoughts your work and and ultimately I go deeper into what you do yeah so so remembering we're an investment firm and we are primarily uh you know venture investors um that isn't for everyone who's listening in um if you if you are an investor and you want to learn more about us you just go

that I think is interesting for everyone uh to take a look at we do newsletters podcast and so on

you can access them to fit there a dot com as well but I would not say by any measure that we are the world's leading thought leaders are around how this impacts small businesses are we are you know we're backing disruptive fast growing AI digital finance and blockchain

companies so so for if depending upon who your audience is we may not be the right people to follow

“we have written some books you can find them on Amazon and on Apple uh I think they're good”

general if there are books about the coming fifth era and what that made up like um you're very welcome to take a look and see if they're good for you um you know Ryan I mean if your audience has a lot of small business people my bet is you're more valuable to them than I am because it's not so much that they need a vision of the future it's they need help just getting started and that

“is a very pragmatic exercise so I'll stop there um it's not that I don't want people to follow us”

take our newsletters and to our buy our books it's just we're an investment firm and we're designed for investors we're not necessarily the best people to hang out with if you're operating a small business and you're trying to figure out how to scale up with these technologies well I appreciate your humility I will say we have plenty of people that do do a lot of investing

“in the in the audience but I also think if for nothing else I think an optimistic view on what's”

coming is just as powerful and a message of optimism and where the world is going is just as powerful as the tactics of getting there because if you're to your point in in the matrix that you describe if you're living on the fear axis it doesn't matter what tactics you use you're going

to always be behind the aid ball you're always going to be finding obstacles where the optimistic

view of what's coming I just don't see a better operating system right I don't think scarcity mindset fearful mindset I don't I don't think this is the time for that this is it's the opposite so I just appreciate the conversation I appreciate your time very much I have enjoyed it and learned a ton and appreciate you and I know the audience was well I wish you nothing but the best and guys we'll have links to both the books because I did go through a couple of the books

and to the to the website and stuff to just scroll down where you're watching on YouTube listening wherever you do Matthew this has been an absolute phenomenal conversation for me personally I appreciate your time and thank you so much thank you very much Ron