[music]
Welcome Vitali um to the podcast. Uh
nice to have you here. Uh one of the
things that I cover on my podcast is
like sort of macro trends that are
happening in the world uh on this pale
blue dot of ours that you can see from
far away in the in the universe. Um so
what's happening here Vitali about I I
mean first off welcome to to the show.
Tell us a little bit about yourself and
then we'll go into some one of the
couple things that I'm really interested
in.
>> Yeah thanks for having me. Um coming to
you from Bay Area from Silicon Valley
where I've spent most of my life who
grew up. Um I run NAFTA Capital which is
an investment banking practice. Uh we we
raise capital for growth stage companies
and uh new M&A probably about half and
half in a few different uh uh deep tech
categories mobility energy transition uh
industrial automation prop tech um and
material science data center and the new
category we're entering is aerospace and
defense. Uh we're also in the process of
raising our own venture fund MAFA uh
MAFA Ventures and we have a sister
company that helps uh kind of post
series A deep tech companies build sales
engines called MAFA growth. Uh I also do
a lot of writing a lot of research uh
and have uh my second book coming out
later this year that's focused on
political economics uh called a
displacement machine and kind of what's
happening with young men in America and
and what might be next with AI taking
over more and more jobs.
Now the the thesis of your book is that
jobs will be lost, but almost on a daily
basis you hear jobs will be lost, jobs
will not be lost, jobs will be lost. So
you you're definitely on the jobs will
be lost side is what I'm thinking. Um
talk about that and what your thesis
would be if that happens.
>> Well, there's no way that jobs will not
be lost, right? We're talking about, you
know, the next industrial revolution and
everybody wants to be optimistic and and
people say, "Of course, it's going to be
great and and they're just naturally
optimistic." But you have to look at
kind of some some sheer facts here. You
know, first industrial revolution took
about 100 years, about four generations.
Um, and where the grandfather certainly
didn't know, you know, didn't know the
job that his grandkid would do. Um we
had the second industrial revolution
that took about 60 50 years depends how
you count. Uh so about three generations
so already kind of getting tighter and a
little bit more difficult for people to
make the transition. Um and then the the
computer revolution is you know it's
about 40 years starting in ' 70s ' 80s
however you want to count. Um and we we
are part of that. So we we feel that and
and we know that for older generations
it was it was difficult to make the
digital transition. Now this one is
happening within the context of one
generation within 10 years and that
means that people who will be displaced
who are already being displaced they
have to retrain and they're still
mid-career and I don't think it's
realistic for somebody who has let's say
a high school education and is doing a
you know logistics job or um or is
working in a in a warehouse or doing
some assembly or driving a truck or
doing some basic administrative work. uh
it's not realistic for them to retrain
for a career of the future and raise
their their level of of uh of education.
So that's what that's what concerns me.
Um will we get through it? Of course we
always get through everything, but it's
a question of kind of pain. And um if
you look at you know Goldman Sachs is on
my side, right? They're projecting a
pretty pretty big unemployment 10 20%
possibility in the next 5 years. Um, and
what we know for sure if you study
history is that any society that gets a
20% unemployment goes fascist,
>> right? And you can see, you know, World
War II and and uh and how the Nazi party
came to power uh democratically is
within 3 years the middle class in
Germany after World War I lost their
status and lost their income and lost
their ability to live, you know, how
they they were used to living. And
that's that's what creates these
movements. So that's what really
concerns me. Will we make the
transition? Sure. But the question is
kind of at what cost and how is it what
is it going to look like and what can we
do to get ahead of that uh to ease that
transition. Um you know Europe is doing
uh Europe has a you know famously has a
good social net that uh is helpful here.
Even China is passing regulation about
uh robotics replacing labor and how that
can be done or not done. US has no
guardrails right? We're just kind of
free-for-all and uh that may you know
take us very quickly into a brick wall.
So, that's that's what I'm concerned
about.
>> Very interesting. Um, one of the things
I picked up on there was the truck
driver. Are we that close to having
automated trucks on the road?
>> We already have automated trucks on the
road being tested. Uh, we there's
several companies in Europe and US and
in China that are doing commercial uh
EBS uh commercial AVs. They're all
electric, but um uh autonomous vehicles
that are already operating in limited
environments. So in mining in in big
kind of rail yards things like that uh
it and there's already companies that
are publicly traded companies I won't
name names um that are already testing
this for on-road um onroad uh autonomy
and truck driver you know or
professional driver in the US is the
single biggest profession and it's been
notori it's a notoriously difficult
profession so there's a high turnover
rate for example in in trucking truck
drivers they on average
>> you know it cost them a lot to reach
root and train a truck driver, but they
will they will stay with the company for
about 10 months on average. Maybe that
stretched out a little bit. Uh but that
was a stat I remember from a few years
ago. So um it will solve a a particular
pain uh to begin with because you know
now now there's platooning. So
essentially one driver is platooning
several trucks behind them. Um so
there's ways you know people have been
trying to say solve this problem for
years. But it will get to a point where
it's going to be fully autonomous and
you're going to see professional drivers
lose their job and that's about 9 or 10
million people in US that are in that
profession.
>> Interesting. Now talk about the
manufacturing side too. Um I think Elon
Musk said that last year or it is June
now. Yeah, he said last year he said by
the end of this year we'll have robots
on the
manufacturing floor of Tesla if it's not
already there. Um but it would might be
more scaled out by the end of this year.
>> Yeah, I mean you have to separate the
hype from reality. Uh I would never
quote Elon Musk on anything around
timelines because he's never met a
timeline. Um so but the reality is that
uh automotive manufacturing has been the
most roboticized uh category for many
years right because you can you can very
much define a process it goes in the
line it's kind of the most friendly to
robotics 10 years ago I went to Shenzen
went to an electronics manufacturer and
kind of on the on the ground floor you
saw um a bunch of yellow suits right and
those were the workers doing assembly
and then you had uh green suits that
were like one out of
Those were the managers. You go to the
next floor and it's only green suits and
automation. And then the idea was you go
to the third floor and it's just lights
out manufacturer with no human
involvement. That was 10 years ago,
right? So if you want to see the future,
go to China and and see how they're
doing manufacturing. Um manufacturing
will be more and more automated. um you
know if you look if you go to the
Porsche factory um you know the first
time a human touches it is after it
comes out of the out of the um paint
booth [clears throat] right
>> so there are already major parts of the
process that are automated um and you
know there was all this hype uh
political hype um about bringing
manufacturing back to the US maybe it'll
come back but it won't be humans it will
be robots that are doing that work
>> so that's that's long gone kind of
simple you know simple moving part from
left to right and doing all those things
and getting roboticized.
>> On the other hand, you know, who wants
to stand on their feet for eight hours
doing the same repetitive task?
>> That's that's no that's no life. That's
no lifestyle. Question is like how do
you get those people to be productive
and and feel uh you know let them earn a
living in another way. How do you
retrain those people? Um but in in our
fund, we're specifically looking at five
specific categories in vertical
robotics. Uh one being healthcare
healthcare robotics which could be which
can span from surgical um technologies
that are super precise which have been
in market for a while now um surgical
robots to um things in a hospital that
help for example autonomous robots that
will move hospital beds and move
patients around the hospital which makes
it more efficient and faster because
usually that's a big pain to things
around the home because we have aging
populations from Japan to Germany and
Italy and Spain to us, you know, and and
other areas around the world where you
need uh companions that will do certain
things around the house. I mean, it it
spans from from kind of uh delivering
pills on time to somebody uh all the way
to um to literally a companion because
in Japan it's notorious. People live by
themselves
>> um and they're lonely.
>> So, that's one one key category that's
probably the biggest addressable market
in the near next, you know, 3 to 5
years. Uh the second one being logistics
right so materials handling handling
things around the warehouse um and then
of course manufacturing automation not
just automotive but everything else um
and then autonomy uh onroad autonomy
whether it's passenger vehicles or
commercial vehicles or mass transit or
airplanes all those things uh those are
the big robots right that are that are
navigating the physical world with with
AI
>> uh and then finally uh security and
defense right we can't ignore that in
today's world unfortunately. Uh and that
also bifurcates to military technology
which is basically high high-tech
weapons and then there's actual true
defense security which has some dual use
um as well right where it's more
defensive and you know anti- drone etc
those kind of things. So those are the
areas that we look at and broadly if you
look at the venture capital industry um
the industry's already moved on about
70% of venture capital is going into uh
these vertical applications kind of
enduser applications with revenue right
on the horizon versus the core
technology that's been invested for the
last you know call it 10 20 years where
we're talking about the the foundation
models for robotics the the different
grippers and sensors and compute kind of
all these kind of horizontal solutions
that gave is the building blocks to now
be able to build the full solutions. So
about 70% of the capital goes directly
now. Um you know we still have a lot of
progress on on the kind of core
technologies but but we focus on kind of
go to market and and look at
specifically you know the specific
problem that they're trying to solve in
their particular market.
[gasps]
>> That was a lot. Um,
I think what I feel like is that you're
turning me over to
now believe that there will be severe
job displacement. And what are we going
to do, Vitali? Like, what are we going
to do? Are we just going to sit around
and play cards? Um, I actually feel like
that's a a a
realistic thing. Um, I observe like the
the trading card market, for example. it
it's uh um you know Pokemon and Magic
and stuff and and there's like a a
renaissance in that right now like uh
there's an investment side but there's
actual people who sit down and play it.
Maybe we're just s the future us are
just going to be sitting around
socializing and playing cards.
>> Well, there's a philosophical angle here
and there's an economic angle, right? So
the philosophical angle is like how are
people going to um to fill their time
and find uh find what they're passionate
about and their meaning in life. You
know, everybody's going to be different
there.
>> But at a more base level, we're talking
about economics, right?
>> And in capitalism, we have the capital
and labor contracts, right? They work
together, capital and labor. And if we
get to a point, you know, it's never
that clean. and it's not going to be a
clean cut. But if we get to a point
where capital doesn't really need labor
that much or at some point eventually at
all, then we have complete kind of
sucking cell. On the other hand, even if
you're in a B2B business and you're
selling to other companies, US is a 70%
plus consumer economy. So at the end of
the day, somebody's selling to consumers
and they're driving the economy,
>> right?
>> So if you have an unhealthy economy
where consumers have no money to spend,
then nothing's going to work,
>> right? So, so it's kind of a self-fixing
system in that sense. But we are going
to get out of whack, right? If we don't
if we don't balance all of these factors
and very consciously go in a particular
direction which in involves um our
legislature, it involves the government
to be able to create these economic
conditions based on what's in front of
us, not what's behind us. Unfortunately,
the average age of a senator in the US
is probably 120. And uh what we're
talking about, you know, the Moors law
was, you know, was uh 18 months, right?
Every 18 months, there was a doubling of
power and technology in semiconductor.
The Moore's law in AI and robotics is 6
months right now, and it's only going to
shrink.
>> So, we need to get ahead of it. You
know, every six months, basically, we're
having a quadrupling of power of AI in a
year, right? and and that that's only
getting compressed. So, how do we put in
the guard rails that that the these
factors that are completely changing the
economics of business that they not
going to completely break the economics
of our society, right? And and I don't
hear a lot to be honest yet from from
politicians who are thinking about this
and putting the guardrails in place
because if I'm a founder of a of an AI
or robotics company, I have a fiduciary
duty. You know, that's how capitalism
works is my job is to you as a profit
motive. I want to maximize the
opportunity for my company, maximize the
value, reduce the cost, increase the the
revenues. That's what I'm supposed to
do. So without a guardrails, I'm going
to maximize that. Yeah.
>> So, there has to be an equal playing
field for everybody in that in that
category that has here are the rules of
the game. You can be you can do what you
want. You can be the winner. You can be
number one, but you're not going to
break our society. Uh, you know, it's
it's too dangerous, right? So, so going
back to that, you you did offer a nice
balance between uh so capital
understands that it doesn't need labor,
but also
for capital to make money, it needs
labor to spend, right? So, like h how do
you
like does government have to be involved
there? Is that what you're saying? Um
and regulation, is that is that where it
comes in? uh there's that whole layer
there that needs to be figured out,
right? And I think that's what you're
saying.
>> Yeah. I I think we need to have a reset
and then understand the economics. What
does that mean? You know, how do we if
people are getting displaced and if if
we're allowing robotics like in China
there's a law they just passed a couple
of laws
>> on a kind of country level and on a
province level or not province they call
it something else but essentially they
passed laws and said you cannot lay off
people to replace them with AI with
robotics. Um and and there's certain
rules to the game. You have to pay them
a year. I think severance etc. You have
to make sure that they can retrain.
You're responsible for that. And um
there has to be some version of that in
the US. Um although manufacturing
fortunately unfortunately is not as big
of a factor in the US as it as it was 25
years ago.
>> Um and that's the opportunity to to uh
displace that. So uh but the other
question is okay is there going to be
then you know you you can you can take
things that we know. So for example for
every employee in US the company pays a
tax and the employee pays an income tax
right so if there are no employees or
much fewer employees 10 to one all of
that tax revenue goes away. So then we
need some kind of equivalent of that
being or more so paid uh by the company
for the robotics for the productivity
that they have for the productivity gain
and some of the tax revenue maybe goes
as like a negative tax meaning a refund
to a certain group of people that allows
them to kind of help ease the transition
or generally we get to this utopia that
Musks and other describe um that you
know nobody's going to work everything's
being roboticized it's going to be great
well how are people going to eat? Like
is is it going to be everything is going
to be free and abundant and uh you know
it doesn't work. I I was born in the
Soviet Union and I can tell you that
this this this vision of utopia and
communism and you know Marxism communism
doesn't work. In practice you still had
people even in the in the days of Soviet
Union they were more motivated and
instead of you know they would go around
the rules they would essentially steal
to have a better lifestyle than their
neighbor next door right because they
they weren't interested in that. So
human nature is going to be human
nature. Um but there has to be something
you know I'm not a I'm not a tax expert
by any means but uh but as a hobbyist
economist um you know there's some very
obvious gaps that need to be filled and
and and this is why I guess that UBI
talk UHI talk has has been surfacing
ideas are being thrown out. Um
yeah what do what are your thoughts on
that? It just seems I see it more and
more.
>> Yeah. I mean, you know, it's not it's
not without precedent. You look at
Norway, for example,
>> they have a they obviously have a lot of
oil reserves and and they're taking the
income that the century country
generates from those natural resources
and it pays a negative tax, right? So,
first of all, uh universal basic income
is uh has become very polarizing in the
US. US is all about slogans and brands
and and what you name things in politics
makes a difference. So calling it a a
reverse tax or negative income tax I
think everybody will get behind that
right Republicans too. Um so so that's
one thing but the question is you know
where does that come from and is it a
transition to something else and we have
a game plan that's 5 or 10 year
transition or does this become a
permanent part of our economics is that
you know all these things sol are solved
there there are some gaps that could be
filled obviously US has now surpassed
you know US debt has surpassed our GDP
um for the first time and um you know
this could be a very long separate
conversation you know kind inflating our
way out of that is maybe the only
answer. Um but um there are certain
things we can reduce. So for example the
healthcare industry in US completely
broken right there's a profit motive at
least 40% is wasted because it's then in
this kind of cycle of insurance billing
and paying and administrative work that
goes into all of that. um that you know
I I give people example like okay the
army exists to protect the population um
and we just pay a tax and and we
everybody has the coverage of the army
so why don't we do the same thing with
healthcare which is designed to protect
the population even more so
>> um that's kind of the justification of
of nationalizing healthare which every
other normal country has done um which
is a huge huge area of spend um so there
there's definitely things that can be
reduced in our balance sheet let's
in our in our P&L of the country and and
how we run our economy. Um, but we also
need to figure out, okay, if there's
certain, you know, if we have this big
transition and a big part of the
population is going to struggle with
this, we need to figure out a way to
help them make that transition. And
maybe there is a future where
everybody's an entrepreneur and
everybody knows everything and they can
start their own businesses and sell to
each other and it's going to be a happy
utopian place. Um, but it's not going to
happen overnight, that's for sure.
Okay. Uh yeah, I mean
it's uh it's a good narrative there
about the entrepreneur stuff, but yeah,
like not everybody is is capable of it,
too. So, um one thing that you said
there, and I'm going to do this for the
clips, but uh what is your take on US
versus Canada healthcare system?
Um
so US versus Canada health care system I
don't know enough about the Canadian
health care system besides the fact that
um you know US is unique in completely
private system where
um there are many many people who can't
afford the basic health care and that
means that they don't catch things on an
annual physical and it becomes uh
terminal cancer or some other you big
four disease. Uh so that's kind of a
non-starter, right? That that's the
basic that has to be fixed. Uh one
suggestion I've heard that's interesting
is to every year reduce the uh the age
of of of Medicare by one year. So we
gradually get to the system where you
qualify and you could take the Medicare
option, you know, at 64, 63, 62, 61,
etc. By the time you get there, you kind
of, you know, you you make the
transition. um we kind of phase out the
private health care system that way
because it'll provide a better option.
>> Um so it's it's really about how the
billing is handled. You can still say
that you know all the not all but most
of the best universities and best
university education is in the US. So we
produce the best uh doctors probably
arguably there are some other countries
that do it well you know as well but US
at volume does the best and uh it's not
a question of quality it's a question of
affordability
>> okay
>> and we really have to fix this this
issue with uh with how people are paying
you know paying in exorbitant amounts of
money every month or their employers are
and they have to factor it in instead of
you know paying their employees the cash
in their pocket they have to budget for
you know $2,000 a for somebody in their
40s to have basic health insurance. It's
crazy.
>> I've actually been lucky enough to
experience both healthcare systems and I
do prefer the American one um only
because I found like you had more
competition for care and thus it kept
the
I guess the quality level high.
um and premiums low. In Canada,
it's it's uh it's a little bit
cumbersome to get the right care at the
right time. Um yeah, and it's uh I'll
just say that like definitely there's
not the bankruptcies that happen in the
US because I I've heard that too like it
the healthcare if you if you get um
you've heard that, right? Like it's the
number one source. I think something
like uh yeah I think something like 40%
of the population has medical debt
>> in this country.
>> Yeah. Which is something unheard of that
I've heard in Canada. So So that part I
get like you don't want to get sick and
then all of a sudden you're you're
bankrupt because of it because Canada
doesn't allow that to happen in in a in
a certain sense. But there are tradeoffs
and I think like it could be run
uh optimally so that people have a
little bit more um I think it's yeah I
mean certainly there's competition right
but uh let's say being in a top 1% sure
I can afford to pay and I'll have the
best healthcare in the world
>> but if we're talking about kind of from
the perspective of uh of government you
know I want maximum percentage of the
population to have the best outcome
>> and it's kind of orthogonal the the cost
structure is one thing and then the
quality of care is is probably a
separate thing and they they don't
necessarily overlap 100% at least
there's there's certainly some
competition
for the best doctors and you can only
have so many best doctors
>> but the other thing is US has an
advantage because it's it's 10 times the
population of Canada
>> right California has more population
than all of Canada and that means that
you can divide the risk by a larger
population and you can provide the
opportunity for providers for doctors uh
to have a bigger potential market um the
insurance there there's other elements
if we really drill down on this and and
again I'm not an expert But I I know
enough to be dangerous. Um for example,
the the cost of malpractice insurance uh
in the US uh is so so high. Um I know
somebody who was a pediatric
neurosurgeon and this is many years ago
>> but first you know first year uh he was
in private practice. His his insurance
on its own was like uh $90,000 a year
and would just climb from there as he
builds up the cases, right? make
historic cases that he could be sued
for.
>> Um, which doesn't exist to the same to
the same degree nearly in in other
countries, right? You'd really it's a
very US is very lious society and we pay
for it because then there's, you know,
malpractice insurance and all these
things that are created on top of that
as a cost structure. So there there's
definitely ways to kind of cut all of
that down and reform the entire
healthcare system.
>> Question is, you know, is there going to
be the political will to do that? um
looking at history probably not. So we
have to figure out some kind of a
phasing strategy uh whether it's that
Medicare kind of reducing the age of
Medicare over time uh or something else
or we start kind of kind of sniper
rifling like specific cost structures
and taking those out of the equation and
trying to reduce it. But right now we
pay the most and we have the worst
outcomes looking at kind of population
health by percentage.
Speaking about political will, it feels
to me that AI is being used in that way.
We saw it with the layoffs at first. Um
where people and companies were laying
off just for the sake of it or they they
I guess um they were using it to justify
the layoffs. Um not fully correct.
However,
it was done for
reasonings like here's the political
will. Like it it's it's almost like uh
here here's the reason. So So I think
that at some point you're right. There's
going to be regulation that comes in and
AI might be the political will that we
all need.
>> Yeah, I would say there's a couple
different things happening in tech. We
have, you know, the big tech companies
hired very very quickly during co
>> and the ones that are doing layoffs are
still not below their COVID headcount.
>> And there's a lot of AI washing uh with
certain companies who are just saying,
"Oh, we're doing this because we're more
efficient. We're laying off." They're
not doing it because they're more
efficient. They're using that as an
excuse.
>> Yeah. uh because there's kind of certain
trends um starting with you know Musk
coming into Twitter and cutting 80% of
the workforce but not killing the
company entirely. They they lost half
their revenue um but still um and then
you saw a bunch of layoffs kind of
following that and but reality is they
do have to put in a lot of capex a lot
of investment into data centers to keep
up with each other and they have to get
that money from somewhere. So they're
cutting humans and putting that money
into data center to automate things. Uh
they are cutting out a number of layers
of middle management. Uh traditionally
that doesn't need to be there.
>> Um I wrote uh a couple of mega trends uh
two of the eight mega trends for EY this
time around which is published every
four years. Uh one of them is kind of on
the future of of uh organizations and
what that's going to look like. And in
our research, we identified that
>> mostly it's going to be middle
management that's going to go,
>> right? You're going to have management,
you're going to have individual
contributors uh primarily. So,
>> yeah, it's it's uh we're the tip of the
spear, right? It's cannibalizing the
tech industry first, but it's going to
come for customer service,
administrative jobs, um um all sorts of
things. And then ultimately in the
physical world, we're going to see it as
well kind of replacing uh you know,
repetitive tasks in the physical world.
I did see like a little uptick on
customer service roles mainly because
people were sick of talking to AI um or
Yeah. So did you notice that?
I'm not tracking the labor statistics
that closely, but it it's it's you know,
I think the near-term effect as you're
going to see the quality of customer
service may improve because the systems
are smarter
>> and they solve a call, for example,
faster or they solve a trouble ticket
instead of three round trip emails,
it'll do it in one. You know, those kind
of KPIs we're going to see, but
inevitably it's going to reduce the
number of people you need in customer
service. maybe not eliminate but
drastically reduce because they're going
to use these automation tools or the
first layer of support will be automated
and you can already see it on any
website right if you if you see a chat
support um uh little you know in any
corner of any website and the first
layer is already you know 99% of the
time it's bots before you get to a human
so they're they're reducing that the
load for customer service for sure
>> I mean we we see it even at McDonald's
when they want to try and get you to to
go to that kiosk at the Right. Or even
>> Right.
>> Yeah. [gasps]
>> That's a good proxy for the same same
thing. Yeah.
>> So, tell me about your your book um your
essay and uh the thesis behind it and
maybe go through some of the the points
that you feel will map out the trends
for the next 5 years.
>> Yeah. The book is uh so I wrote a book
10 years ago called Accelerate Startup
which is kind of soup to nuts on how to
startups. I have a second edition of
that coming out this year which is
completely rewritten because 10 years
later AI has kind of rewritten the rules
of how startups what they do how they do
it and what they focus on. So that's
that's one. The the other one is like I
mentioned political economist book
called the displacement machine. And um
what I was the initial thesis was around
kind of this grievance economy which is
uh young men being pulled into crypto
and into supplements and into all sorts
of misogynistic content online to try to
play the blame game. Psychologically
it's the same thing. you you somebody is
in a in a bad place in their life and
they try to find an outside reason why
they are in that place, right? And you
point and you give them somebody to be
angry at.
>> Um or you give them an an opportunity to
opt out. That's how this whole crypto
industry works. Crypto is complete
nonsense uh relative to uh to you know
traditional economics. It's like trading
you know nothing. and and whoever says
that it's you know just nent is is kind
of silly because it's been around for
almost 20 years now.
>> Um so um but people get pulled into that
because they don't feel like they can
participate in normal economy so they
need some alternative some shortcut. Uh
that's why that works. uh what I
noticed, you know, so there there's that
element that's that's kind of top of
mind right now, especially and it really
kind of went through the roof under
COVID when people were kind of lonely,
alone and and were being pulled into
these online communities even more so.
Um social media is has no guardrails,
right? Because of section 230, um people
can do and say whatever they want. And
then before you had people that were a
little twisted that were kind of in
line, kept in line because they're part
of society. now they can find each other
online and that's how we see we we see
these these really negative memes coming
about uh and and kind of these these
movements um enter the political
entrepreneurs political entrepreneurs
are people who are taking all of this
and pointing them towards political
action um and when you saw you know
Charlie Kirk's funeral which was at a
football stadium um with translated live
to a bunch of people and then you had
people going out there and basically
giving you know their version of a of a
Nazi speech um with Steven Miller's
literally the same themes as as Nazi
speeches. You know, to me that's like
that was alarm bells because then you
see this transition from kind of taking
you know people being economically taken
advantage of with all this all these
things that are being sold to them
because they have a a hole to fill in
their in their in their mind. uh to then
being pointed at these political uh
movements and using kind of negative
campaigning to kind of find a scapegoat
and turn people against something not
for something but turn them against
something in that direction. Um so so
that's kind of the history lesson there.
Um, I also pulled in, you know, things
like the southern strategy, um, which
was a a very important element and kind
of the the moral majority, right? This
is what this is the movement the
evangelical movement that brought about
uh Reagan and has has has uh has been
long lasting since then but started with
you know this church as this big mega
churches uh avoidance or trying to avoid
taxes on their schools and being and and
forcing them to reintegrate schools but
they really turned up political message
and um and all of that. Now the next
question is like okay what happens when
this gets all even worse because a lot
of these people come from kind of from
areas where manufacturing left the
country and kind of gutted society. Um
and you have people who not only lost a
paycheck but they lost community, right?
And they're looking a way to fill that
because they don't they don't you know
they used to be able to graduate high
school know that they can go get a good
union job in manufacturing and in
automotive assembly etc. and a couple of
years later they can get married, they
can buy a house, they can have kids,
they they can have a nice middle class
life. All that's gone, right? So, um, so
all of that now, you know, a lot of
those people retrained to these jobs
that are going to be some of the first
affected by AI automation. So, it's
going to completely kind of, you know,
take the floor from under them. So, what
what what happens next, right? And and
kind of trying to think, okay, these
trying to connect the dots, right? these
these social entrepreneurs, these
political entrepreneurs that are going
to take advantage of this situation and
what are they going to do with it? And
then looking at other countries and how
they've dealt with with kind of
reintegration. So when you had East and
West Germany reintegrate, right, that
that could have been a potential
disaster, but the way they did it, they
are the biggest and strongest economy in
Europe, right? So there's there's hope
there. Denmark has a particular way of
handling uh when people get uh get lose
their job and how they get retrained and
how they preserve community and how they
preserve income and all those things. So
you know there's a bit of towards the
end I try to kind of provide a little
bit of a prescription on what needs to
be done in the next few years and how
much money needs to be spent which is
probably about hundred billion dollars
would it be which is in the big picture
not that much. We just spent that on a
pointless war in Iran um in a few
months. But being able to set society on
a course where we have the social net
and we we kind of help ease this
transition to what comes next um for for
us and the next five or 10 years are
going to be we're going to you know this
kind of crisis period started with 9/11.
Uh you can argue there's a great book
called the fourth journeying is here and
it talks about kind of the seasonality
in civilization and that we're in a
crisis period now which will last
probably into kind of by 20 into like
early 2030s where we're going to turn
and society is going to feel very
different. The last time we had this was
you know the great depression through
World World War II, right? And you can
see the difference between pre Great
Depression, America and the world and
post World War II kind of the spring of
it all and and and how healthy society
became and and the economy and the
growth we got. So the the projection is
that we're kind of going through the
same thing now and by let's say 2032
2035 we should be on the other side of
it. The question is how do we navigate
these next few years and make sure that
our society doesn't break because
there's no guarantees that it won't. you
I love your perspective because you're
coming from somebody who has lived in a
communist society and you're now looking
at fixing a capitalist society with some
sort of communism people would say but
it's like um am I wrong there's a lot of
nuance to it right there's a lot of
nuance yeah there is nuance
>> it's not it's not there's only there's
not only capitalism communism right
that's very reductionist
>> uh even like democratic socialism is not
socialism right democratic Socialism is
what most of the countries in Europe are
effectively. So
>> there's a lot of nuance there and you
know I I like to say I'm a single issue
voter and that issue is economics
>> because if we have a healthy economic
society then a lot of the other negative
negative things fade away to a certain
degree right
>> is is there a country that you would say
I would model it after this country.
>> It's very difficult. Um you know US has
certain advantages if we just stop being
stupid. Um, one of which is that uh we
have this uh this great group of future
economy drivers which are working age
immigrants into the US and we have this
uh this amazing resource called Central
and South America that we should welcome
with both arms open uh and provide
opportunity because these are people who
are coming they're they're they're
hungry for success. They want to be
successful with their families. I'm
telling you this as a, you know, as a as
a refugee. My family immigrated out of
Soviet Union as refugees before Soviet
Union broke broke up. Um, and they want
a good life for their family and they're
going to come and they're going to drive
the economy. Whereas um in Asia, even
China, China, we've passed peak China as
far as population because the one one
child law. Mhm.
>> So, China's is is already been shrinking
for the last four or five years and will
be projected to be half the size by the
end of the century
>> by the way. And you can't build an
economy if your if your population is
going to is shrinking by half, right?
>> Mhm.
>> So, you need a growing growing
population. We have plenty of room in
this country, right? Especially in the
middle of the country. Um and um and
Europe has has big structural problems,
right? you have an aging population but
uh they're they're very much against uh
the migration that needs to happen and
it's always kind of south to north
migration right and and you have uh
North Africa and Middle East as the
source of migration into Europe um which
I would argue is is very you know
culturally a huge gap between Europe and
and and that population that's why and
Europe's never been good about uh
integrating immigrants anyway so there's
going to be some structural problems
there but we this advantage where we can
have a relatively young economy. We have
a lot of natural resources. So, we are
on our way. So, is there a country to
model after everything? No. Um because
we have unique advantages, but there's
certain things we can learn from Europe
as far as a social uh safety net. Um we
definitely need to fix our our
healthcare system. We need to get money
out of politics and get to a normal, you
know, 10-week campaign, not two-year
campaign with billions of dollars. Uh
because you know we have Trump again
because Elon Musk gave him $300 million
period. That's the single biggest
factor. Um so you know we need to fix
certain things and hopefully we we don't
break you know all the way. Um and and
we get a chance to to fix those things.
>> What companies are you excited about
that you're investing in right now? um
which sector and
within that sector what what do you look
for?
So I we're we're focused, you know, when
you're a VC, you're focused on your
thesis. You don't do kind of
extracurricular, especially early on
with a fund one, you don't do
extracurricular investments in in random
things as an angel. Um so we're laser
focused on robotics because we think uh
you know from our research that's 39%
kagger, a compound annual growth rate
projected, which is which makes it the
fastest technology wave of all time,
faster than the internet wave, the
mobile wave, social, etc. by far. So
that's the area kind of broadly where
we're focused on. Um and generally we
like companies who can become category
leaders in their space. They've
identified their customer and also we
are a little bit old school in the way
that we're doing a small portfolio
concentrated portfolio of companies 20
to 30 in the in the whole fund and that
means it gives us an opportunity to to
be helpful uh with each company open up
opportunities for them uh with you know
potential big customers uh help them
with supply chain all those kind of
things. So that's that's kind of the
general area. uh give you a couple of
companies that I'm excited about that
I've angel invested in the past. Um and
it's always been products that I like to
use, right? I see that I see, you know,
I discover a product that I use or want
to use and I I like, you know, something
about their story. So, I'll give you
three examples. Uh one is a company
called FitBot, which is an uh you know,
I've been involved with them for almost
10 years, and they were the one of the
first kind of AI personal trainers. So,
I have a home gym. I've been going to
the gym, you know,
>> an average of 5 days a week for the last
15 years.
>> Um, and um, and this is, you know, it
solves a particular need where you
basically say, "Here are my goals.
Here's how much time I have, what
equipment I have, and it'll generate the
work and it'll track everything over
time just like a personal trainer would,
right? So, for 10 bucks a month, instead
of $100 an hour, you have a personal
trainer in your pocket,
>> which is great."
>> So, that that's one that that made sense
a lot to me. and they've grown leaps and
bounds. They're one of the leaders in
this category uh these days and uh great
product, great team. Um another one is I
I you know I I've done a lot in mobility
um and I I was very excited to uh to get
involved with Rivian early on and had an
opportunity to invest while they were
still private. Um now their stock
performance after IPO hasn't been great.
There's been a lot of macro uh macro um
conditions that they couldn't really
control. Um, and there's a lot of
companies that went under in the sector
that and they and they stayed uh stayed
afloat and they've been able to survive.
Now they have the R2, the kind of mass
market vehicle launching and I think
that's their kind of model 3 moment
where they're going to go mainstream. So
I'm excited about uh Rivian still. And
another one is Perplexity. So Perplexity
um I was an early user. I had some
friends who invested in them kind of at
seed and series A stage and um I I just
find they have a very elegant way of of
solving and they move very quickly in
the space where they don't need the
capital investment of the big LLM
players um but they're providing that uh
that functional layer that's very very
useful to to professionals especially
that gives them all the tools in one
place
>> and uh we use it heavily and I also had
an opportunity to invest in them um a
couple of rounds ago. Uh so those you
know generally as an angel investor and
this is very typical behavior kind of
thinking from that perspective you
always invest in things you know and
that you're passionate about. Um as a
professional money manager of a fund you
have to set a thesis for a particular
category. You have to build up the
knowledge base and the institutional
knowledge in that area and and the
network and invest uh in the areas where
you you think you know are going to be
big in a few years kind of systemically.
So that's a long answer for you.
No, no, thank you for that. I I think
robotics is definitely a good bet. Um,
and uh I look forward to having one in
my house one day to do the dishes and
stuff. How do how far do you think we're
away from that?
>> So, I'm pretty bearish on humanoids. Um,
okay. in general. I think um so think of
it this way and the best the easiest way
I found to explain is look at look at
how many uh look at the warning sticker
in the back of your toaster right in
your house
>> and everything that can go wrong with a
toaster.
>> Now imagine a 150 200lb robot that's
walking around the house around kids,
pets and and elders
>> around stairs and all sorts of things.
>> Is it safe? I don't know.
um probably not yet and not not even
close to it. Then the question is like
of usefulness, right? If we're creating
a new category and this thing is going
to cost realistically, I don't know,
$20,000.
Uh I mean in US you have to look at the
kind of the average population is
they're hanging on to their cars longer,
a few years longer now. Like an average
age of a car is about 14 years on the
road. Um because they're trying to save
money. So is you know how much of the
population is going to buy a $20,000
toy, right? or what is it going to
replace for them? Is it going to walk
their dog? Is it going to do their
laundry? Like what is it going to do
that's displacing current spend that
they have at home? So I don't I don't
think we have much good we don't have
many good answers to that just yet. Now
in the commercial environment
um then if we look a little bit deeper
yes uh robotization of certain tasks
then becomes a question of do we have a
um do we have a use case for something
that's bipedal that looks like you know
that has a head has hands and has feet.
Uh that use case is pretty small. You're
going to see a lot more use case for
like a tracked robot right big warehouse
or big uh manufacturing plant. It's
going to roll around. that's much more
efficient than walking like a human.
Yeah. So the kind of human scale uh
robotics that's the question is is
where's the place for that? Is there a
place for that?
>> Um so I think the form factors that
you'll actually see in production with
companies figure that we're advising a
company called humanoid uh that's based
out of the UK. Their form factor is
doesn't look quite like a simple robot
with hands and arms and legs. uh it's
usually tracked uh you know having uh
wheels or tracks that it rolls around on
or it attaches to something and it has a
sensor array but it doesn't need to look
like a human head with eyes and mouth.
Uh we're we're pretty far away from
that. I think we're 5 10 years away from
that. China, you know, if you want to
see the future, go to China. They're
five or 10 years ahead in robotics
already. So you can see what's going to
come here after, you know, in the next 5
years.
>> Amazing. Yeah, I've seen uh cars that
have umbrellas and things like that. So,
uh, that has a umbrella that goes up and
protects them from rain and things like
that. I saw that on the timeline.
>> Yeah.
>> Yeah. There's interesting things, but
it's always a question of, okay, what
what's cool and and is good content
online versus
>> take my money. I want to buy this thing.
It's going to solve a problem for me.
It's going to do a job for me. Like,
what am I going to put in my house? You
know,
>> Yeah. Exactly.
>> You're going to Once you become a
customer, you're thinking, "Okay, I'm
going to pull out my credit card and buy
this thing." Then you start thinking
like, you know, you can buy the the
Boston Robotics dog. It's cute and it
does tricks. Are you going to spend
$20,000, right? Yeah, exactly.
>> Yeah. Maybe for commercial purposes, for
military, sure. But is that thing Are
you going to buy it instead of a dog? I
don't think so.
>> No.
>> So, well, thank you so much for being on
the show. This has shed a lot of light
and I'm going to be thinking about this
conversation
a lot because there's a lot that you
downloaded and uh I'll probably have
some follow-up questions, Vitali, so
I'll talk to you. Well, it's been my
pleasure.