Mr. Bruce Gibney.

 

 
Bruce Gibney is writer and venture capitalist, he started investing when his Stanford University roommate Ken Howery co-founded PayPal and offered Gibney the chance to buy “friends and family” shares.
After investing in PayPal, Gibney worked as a litigator but was soon hired by Peter Thiel to work at Thiel’s hedge fund, Clarium.
He then moved to Founders Fund, a venture capital fund started by Thiel. Thiel and Founders Fund were the earliest outside investors in Facebook, SpaceX, Palantir, and made other investments including in AirBnB, Lyft, Spotify, and Stemcentrx.
Gibney wrote Founders Fund’s controversial statement of ideology, What Happened to the Future? in 2011, which called for more aggressive investments in breakthrough technologies and became a widely cited article in the technology community.
Gibney left Founders Fund in December 2012.

 

LW: You were a "family and friends" investor in PayPal while you were still at Stanford and your firm was one of the earliest investors in Facebook. What insight led you to believe that this was where the future was going and did you have any idea just how much a part of all our daily lives they would truly become?

BG: With PayPal, I had one piece of genuine insight and the rest was luck.  I’d just met Peter Thiel, the co-founder of PayPal, through my college roommate (my roommate went on to be PayPal’s first CFO).  Peter was, and remains, one of the smartest and most original thinkers I’ve known.  Now, PayPal’s early business plan, which involved beaming money through Palm Pilots seemed pretty premature given the state of e-commerce. But the need for e-transactions was growing, so there an important but unaddressed market existed.  I thought Peter would figure it out, as he’s apt to do.  And he did.  Appreciating Peter’s talent was the one item of real cleverness on my part.  The rest was heavily a product of environment: I was at Stanford, it was the late 1990s, start-ups were the rage, and I didn’t fight the trend.  As for Facebook, that came later and was entirely Peter’s call.  I think he made the investment for the same reason I invested in PayPal – Zuckerberg was extremely talented and there was a clear need for something in social networking.  More and more people crowded online and had no really good ways to manage those connections. While everyone thought Facebook could be big, it exceeded everyone’s expectations (except perhaps Zuckerberg’s).  It’s possible to argue, without exaggeration, that Peter’s first investment in that company was the single greatest investment of the past fifty years on a returns basis.

And that’s really all there is to venture capital: 1) identify an area where people have an unmet need; 2) support someone really talented who has, or can figure out, a solution to that need; 3) be slightly luckier than average.  The same dynamics applied to the investment in SpaceX, which makes rockets and is run by Elon Musk (of Tesla Motors fame) and to my investments in Lyft, AI companies, etc. – some combination of minor prescience, trust in talent, and good fortune.

LW: Despite the fact that you are a pioneer of technology, the more we get to know you, you are a true custodian of "old school" ways. Tell us about that.

BG: Science, technology, and the traditional ways and trades are committed to elegance, and they’re willing to spend considerable effort achieving it.  The definitions of elegance differ, but the satisfaction a mathematician gets when viewing a superior proof isn’t dissimilar from the appreciation of a Geneva watchmaker for a fine mechanical piece. (Formerly, it wasn’t uncommon for scientists to be precision instrument makers on the side, and to spend huge amounts of time making devices of seemingly superfluous beauty).  And there’s a belief shared by technologist and the “old school” that the world can be perfected, if enough energy and talent are brought to bear.  The result is better, more enduring work – great engineers, like great painters, want to get it exactly right.  And when they do, it’s immensely satisfying, and endures.  So it’s easy for me to be simultaneously a committed traditionalist and a technological enthusiast.

By the way, I don’t think it’s a coincidence that the most elegant Western societies have arisen in times of great technological change – I’m thinking especially of Britain from George III-Edward VIII and of the United States from 1870-1965.  The surplus value created by technology was partly spent on cultivating education, the arts, and social graces, and the animating motivations overlapped – just as a steam engine could be improved, so could people, pictures, anything. (This isn’t to say the societies were perfect – anything but – though they did seek perfection.) And it wasn’t wholly an country-house event: for example, Tribeca was industrial before it was residential, but its warehouses have been preserved because they were well-built and their owners took pride in flourishes that elevated them from brick boxes to something more interesting and enduring.  I doubt citizens of Phoenix, circa 2100, will be eager to convert 1970s shipping depots into lofts – tacky societies are deservedly ephemeral.   

LW: Your mother is from Shanghai and your father is of Irish descent, two very strong cultural influences. Do you feel that you lean more to one than the other, bit of both, or neither?

BG: They both have an incredible work ethic – and although I technically have two jobs and they’re officially retired, there’s no question that I’m actually the laziest member of the family. They’re also both entrepreneurial, so I get that from them. The key difference between them is that my father isn’t very chatty and my mother is very sociable.  I take after my father in that department – like him, I rely on my partner to do most of the heavy social lifting.

My grandmother was another major influence.  She was born in the twilight of the Qing dynasty and had the combination of serenity and eccentricity that fading empires were really good at producing in their smarter aristocrats.  She was modern enough to assume that she could do whatever she wanted (she studied math, an outré choice for a woman of her society) but had an aristocratic imperviousness to criticism.  I picked up a very weak version of that worldview from her – it’s impossible to pay sustained attention to critics or the conventional wisdom and still do something interesting.

LW: You've recently added "Author" to your list of achievements with a book provocatively entitled "A Generation of Sociopaths: How the Baby Boomers Betrayed America", in which you publicly dethrone the generation that seems to be controlling the planet right now. As a group that does not like to be criticized, how's the reaction been from them?

BG: The reaction seems to be mostly as expected – young people generally agree with the argument and some Boomers buy it, but a lot of Boomer comments have been hostile. The book argued that the mainstream, middle-class, white Boomers are unusually fixated on keeping their senior benefits checks flowing regardless of the consequences.  A review of the negative-leaning comments on the book suggest that this description is true for an important subset of the Boomers.  So even though the book covers problems in infrastructure, debt, mass imprisonment, the environment, the student loan crisis, lower incomes for younger people, the angrier Boomer readers tend to ignore those issues.  They focus instead on the (unfounded) idea that I’m arguing for taking Social Security away from the elderly: the other issues, not being serious problems for Boomers, apparently cease to matter.  I think that’s why as a political generation, Boomers have not insisted on fixing these other problems.

For the record, the book argues that Social Security and Medicare, which are in trouble, should be saved – including through higher taxes on people like me, so the critics are wrong there.  But, as I argue in the book, as a political generation, Boomers prefer a convenient feeling over an inconvenient fact.  In a weird way, the hate mail validates the thesis.

As I labor to explain in the book, starting on page 2, I don’t think all Boomers are sociopaths, although I do think their political culture is pretty exploitative and ultimately self-defeating. And I think younger people understand this, and when GenX and the Millennials take control in a few years, the Boomers are in for a rude surprise.

LW: On a lighter note, we are always in great anticipation as to what you will be wearing when you come for an appointment at the shop. Seemingly without rhyme or reason, we have been treated to everything from three piece purple corduroy suit (made by us, of course) to what can only be best described as "a homeless guy". Please elaborate on what influences your wardrobe decisions on any particular day.

BG: I have two modes of dress: sweat pants/t-shirt when I’m writing and a suit for everything else.  Mostly, you’re a victim of my work schedule on a given day, although every so often I’ll wear something incredibly awful just to amuse you.

Aside from trips to the gym or the grocery store, I do think men should aspire to wear tailored clothing when they leave the house on weekdays.  Dress influences behavior and diet, and I don’t think the decline in manners or the rise of obesity can be disentangled from the transition to “business casual” a few decades ago.  That’s a controversial opinion, but since I made 75 million enemies with my last book, what’s another couple million?

LW: And finally Bruce, what's the next big thing?

BG: I’m working on another book, which should be out in 2019.  And since it’s summer, it’s time to start thinking about new additions to the fall wardrobe – some tweeds and maybe another double-breasted.