In current world events Covid-19 is still a “thing”, the U.S has just exited Afghanistan in an ugly way, hopefully for the last time, and the world looks to be in chaos. It is hard to be optimistic in a world run by mostly incompetent leaders without accountability, but it is refreshing to hear from optimists like Joe Lonsdale in times like these.
Joe Lonsdale is the founder of 8VC, a technology venture capital firm. I had the chance to sit down with Lonsdale and discuss a broad range of topics including his investments, the defense tech sector, companies in the 8VC investment portfolio, China, Afghanistan and even the most influential people in his life. Like I said, we had a broad discussion.
The Lonsdale approach
Before I jump into these topics, I want to first talk about the entrepreneurial, forward thought that Lonsdale uses to run 8VC. Lonsdale explained that he began investing because, as a founder of Palantir a multi-billion-dollar global software company best known for its work in defense and finance, he recruited a lot of great people, and as many of the most talented left to build new companies as is normal in the tech world, he would continue to mentor and advise them. He would advise how to raise funds, enter certain markets, and get certain types of talent.
What started as Lonsdale helping those around him turned into 8VC, a venture capital firm constantly looking for conceptual gaps in the world. These gaps are the difference between how it is today and what could be possible. Lonsdale explained how he and his firm look towards filling these gaps by harnessing top talent in these industries to create value and ultimately make the world better. That may sound pie in the sky, but it works.
Filling the big gaps in defense tech
Defense tech is one of those areas with a big gap. Lonsdale unpacked for me how defense tech formed a big gap, even though Lonsdale and Palantir were in Silicon Valley. Historically, Silicon Valley was a huge defense hub for a long time considering the U.S. beefed up its defense tech going into World War 2. Although you have a huge amount of money going into defense in the U.S., defense tech has not been a priority anymore in Silicon Valley. Lonsdale summarized it well by saying, "when you have these giant inefficient legacy defense companies, and you don't have the top talent going into them for a period of decades, you start to have giant gaps." These gaps are the difference between how the company is doing things versus how it is supposed to be efficiently doing things.
Lonsdale also shared with me one objection some have to the method of filling these gaps with the top talent. Doesn't filling in these gaps breed moral hazard, and are there not a bunch of bad guys in these areas causing all sorts of problems? Lonsdale's view is that even though America is not perfect, it is overall a force of good in the world, and we should fight to make America even better.
I wholeheartedly agree with this. In saying that we risk putting bad guys in important place when we fill these gaps is the poisonous thought that there is no reason to try if there is a risk of failure. There will always be bad people in the world, but we have to remind ourselves that no one is perfect and no one is fully good—we all have done some evil in the world. If we don't try to instill goodness into every facet of our lives, then evil will always take its place. There is no middle ground. Lonsdale pointed out that even though companies like Google have many far-left people who come from "ultra-woke" university cultures who are against helping the DoD, many tech leaders around these companies like Eric Schmidt want to do what's best and actively work on great projects to strengthen US defense.
We often hear of the evil of big tech, but the reality is that it is not that they are big that is the problem. It is the responsibility of big tech as an influence on the American people that can be equally used for evil as much as good. Lonsdale explained that when these large, influential companies are under the influence of woke, unpatriotic ideologies, related to the ideologies fought against in World War 2 and the Cold War, we begin to have problems. We are a generation and a half away from World War 2, and I believe we forget the cataclysmic potential risk that it takes.
Lonsdale said that adversity and confronting hardship make us strong and that when you don't have adversity for a long time, you become weak. He says that 9/11 is a similar example to how, after 9/11, many people were worried and afraid of more attacks. Lonsdale says that if Palantir had been established before 9/11, Palantir likely would have been caught as analysts would have been empowered with better conceptual access to large amounts of data that clearly told the story of suspicious activity.
Lonsdale said that post 9/11, Palantir and other new technologies have enabled the intelligence community to stop tens of major attacks. This information is not very well known—people don't realize how big a threat terrorism was for years to our homeland—but it should be well known, and it should be well known because people need to know that these things matter. We need great minds and talented people to keep us on our toes. If we don't, as Lonsdale said, "it actually makes everyone think it's not an issue anymore."
Epirus and Anduril: the next generation of defense tech
Two other defense tech companies that Lonsdale is excited about are Epirus and Anduril; both are a part of 8VC's investment portfolio. Lonsdale is a cofounder of Epirus, where it has combined the top talent from both the defense world and that of Silicon Valley. Lonsdale explained that the basic idea behind Epirus is to use electromagnetic pulse weapons (EMPs). What EMPs do is fire a cone of energy at a target and destroy any electronic sense in its path. It essentially allows for the disabling of anything with an electronic chip in it such as cars or trucks built after 1979, boats, drones, and even missiles. It can destroy the guidance system of missiles if you fire it far enough. Epirus takes AI chips, the best of Silicon Valley technology, and combines it with the best of electronic warfare to make the best EMPs in the world. Lonsdale was also telling me that this technology could apply to other areas of defense, including radar.
Anduril is a company started by Palmer Lucky, founder of Oculus, and a few other talented people from Palantir. The name Anduril comes from a sword in J. R. R. Tolkien's Lord of the Rings Trilogy, meaning "sword that defends the West." With that naming, you can get the idea of what Anduril is all about. Lonsdale said about that company that "when you are attracting the very top technologists to any company these days, it needs to be a mission-driven company that those technologists believe in. There are enough great technologists fortunately who are willing to work for the defense company whose job is to defend the West and to defend America."
Talking through the chaotic Afghanistan exit with our eyes on China
You could imagine how someone like Lonsdale would feel after the many years of building companies like Palantir and working with people involved in that defense tech space. I asked him about his opinion on how our country pulled out of Afghanistan and the unfortunate results. Lonsdale expressed his frustration saying, "I generally question a lot of competence in many areas of governments, and question a lack of courage in bureaucracies to speak up when things are broken—but even I was disillusioned to see just how badly it was handled and what kind of dark mark it has put on the current leadership and current lack of courage of our military leaders."
I agree with Lonsdale that it comes down to two reasons why it could have gone so wrong: incompetence and lack of courage. Some people didn't know what was going on, but there were also people we couldn't voice opinions in ways to get heard. Lonsdale described it as endemic and said, "you can't just blame anyone in charge. The person at the top has to take some of the blame, but it is something that should have been discussed even long before this current administration (Biden) by people who are leaders in the military." A big takeaway from this is that no matter what party, race, sex, age, or religious affiliation, we all have a responsibility to our country to work to make it a better place. Otherwise, we find holes and gaps in our country that shouldn't be there. It is scary for our country, and I think Lonsdale hit the nail on the head in calling it a global embarrassment because it makes us look like a paper tiger.
What was really cool to hear from Lonsdale was how he was able to get involved as the crisis unfolded. Lonsdale said he and a lot of his friends found different ways to help. Along with various projects to help evacuate allies hiding in Afghanistan, they were able to help hundreds of women attending the US university in Kabul escape to Iraq and other locations, and to sponsor transportation efforts and room and board for women who were able to get out to continue their education. He mentioned how he helped sponsor friends on the ground in Special Forces groups helping evacuate translators at the Kabul airport. Lonsdale said, "there were a lot of great Americans who did step up, and it was heartening to see that even when our government falls on its face”.
One of the most pressing issues that resulted from the chaos in Afghanistan was that it instilled much confidence in China, especially concerning Taiwan. What is scary is that Taiwan is very important to the U.S.—our highest-end chips, with the exception of Intel, come out of TSMC in Taiwan. We have seen China build an entire island as an air force base in the South China Sea, and there has been a pullback from China in terms of its openness.
When I talked with Lonsdale about China, he said he sees value, for both the world and China, in working with China and supporting each other. I agree. China does have a lot of innovators and people to work hard and better themselves. Lonsdale said, "if we can get China to run in a way that has good principles and good values, it's really good for them and for us." The unfortunate fact is that China is not a free country, and we see what happens when you have a society without the protection of rights. Lonsdale goes on to point out that "the way to understand what's happened in the last year in China is not about us (America), it's about internal forces… the new tech money in China has done extraordinarily well, and they have created tons of value for a decade." Lonsdale gives me the example of what happened to Jack Ma: he could build giant businesses, have tons of influence, help China expand its global financial influence, and then criticize the Chinese regulators and reportedly be kidnapped. On top of this, have his company basically taken away from him.
China is a place where reportedly tens of billionaires disappear, movie stars are eliminated, there is no check on the government's power, and there is no way for us to know what it could be really up to. Lonsdale thinks we need a good leader in America who can rally with other countries and stand up in stronger ways. Lonsdale continued with this point, saying, "It's our duty at this point not to build things in China anymore and to make it much harder for China to do business in the West. At this point, we have to say this is no longer acceptable and this government is evil." Those who disagree with these points do so with the argument that "this is China and they are just different" or "some people have different points of view on the world." The sad reality is that this different-point-of-view-on-the-world China is not the same China that its well-established culture was built off. Lonsdale highlighted that many cultural differences make China wonderfully unique, but there are governmental powers that suppress the people and are polar to the great qualities of China.
What a billionaire considers to be the most exciting technological advancement
As we digress away from China, I asked Lonsdale what sector or area of technology he is most excited about in the near future, and he told me the revolution in biology. Before I jump into why I want to note that the first episode of his podcast American Optimist is with Rick Klausner, where they dive deeper into this topic.
Lonsdale says that he is bullish on the revolution in biology. He sees trillions of dollars of value created and, more importantly, millions of lives saved because of these innovations. Some of the technologies he named included T-cell therapies, gene therapies, mRNA. Lonsdale says these new technologies can be used for all sorts of new ways of attacking diseases and protecting us. I'm sure many people have experienced a taste of this technology, including me, during this pandemic. I received monoclonal antibody treatment when I had COVID, and I went back to work two days later after feeling much better within 24 hours.
A different kind of nuclear
I got to talk to Lonsdale about the most influential people in his life, and I loved his answer. It is his parents, and I think this is an answer that we see less and less. From talking to Lonsdale, he expressed to me how his parents could teach him incredible values that lead to a good work ethic, morals, and successful life. The most influential people to a child will always be a child's parents, both mom and dad. It is the nuclear family that holds together values and raises the next generation of people. After raising three children, I cannot express how large of an impact a parent has and the value and success of the nuclear family.
Lonsdale talked to me about how his dad was a really good coach and always taught him to take pleasure and joy in his brothers' and friends' success. He talked about how his mom always taught him values around integrity, hard work, and ambition. Lonsdale said, "I think a big part of building and succeeding and attracting people is to enjoy taking care of the people you build with and making sure your job is to be loyal to them and to look out for their success." I find this truth fascinating because it is about the virtues that we have under our subjective definition of success. In other words, no matter who you are or what you identify with, the same virtues that Lonsdale's parents taught him—caring for people, enjoying the success of others, building a good work ethic, hard work, integrity, and ambition—are all universal virtues that lead to success. No matter what we think success in life is, these virtues hold to achieving success.
Lonsdale also mentioned Peter Thiel and how he has worked around him and learned amazing things from him and people like him. Lonsdale says he is one of the brightest guys that he has ever met. Successful people surround themselves with successful people.
Joe Lonsdale: American Optimist
His parents and the influential people around him have helped make him successful and have also given him an optimistic outlook on America. Lonsdale even has a podcast called Joe Lonsdale: American Optimist, where he talks to various industry leaders who are confronting and solving real problems in America. The video podcast's heart is his belief that our country can solve every problem facing us today. He views problems through an optimistic lens where every problem has some innovative solution. This quality should not be overlooked and is something that we should all strive for.
In talking to Lonsdale about season two of the podcast, he said that season two would focus on solutions to these problems. He will target eight different problems and spend a couple of episodes on the solutions to give people a better perspective on how it could solve them. He is optimistic that every area with a problem will be fixed within the next ten to twenty years because the right answers are clear.
Joe Lonsdale is an American tech entrepreneur who, unlike many people in our country and around the world, is an optimist for the better of America. Many people who I see do what he does on the patriotic front are over 60 to 70 years old, and he is not even in his 40's.
Lonsdale and I talked about many different topics, from companies in the 8VC portfolio to world events that deeply impact his podcast American Optimist. Lonsdale looks to fill the toughest problems in the world with solutions rooted in optimism and quality virtues built off the American nuclear family.
I believe this country needs more Joe Lonsdales and less pessimists.