The oldest trick in the book to make your first million

Shaan Puri

When I googled this family, the words that came up were: "silent dominance, middlemen at planetary scale." Alright, Sam — I have a... I have a **Billy of the Week** for you, an **MFM** classic. This is not just any Billy of the Week. This is one of the biggest billies in America, one that I wasn't really that aware of. I think you will know more than me about this, but I would say most people don't.

MFM

Wait, can I guess?

Shaan Puri

Let me read you—let me tell you **three things** about it. Then you could take a guess.

MFM

Okay.

Shaan Puri

Okay, alright. It is the **largest private company in America** for the last 40 years... It is 88% owned by the family and has produced more, far more billionaires in one family than any other company ever. They generate more revenue than Goldman Sachs, Nike, and Starbucks combined. Oh — is it Mars or Coke? You're in the right neighborhood.

MFM

**Estée Lauder**

Shaan Puri

Okay, you left the neighborhood briefly and came back to the other neighborhood of sort of rich, Redneck families of America. It is **Cargill** — oh yes, the Cargill family. I didn't really know anything about this family. Can I just tell you a little bit about their story and what they do? Because this is a **dominant business story of all time**.

MFM

"Wait—*first*, tell me: why did this interest you? Why did this catch your attention?"

Shaan Puri

Remember when I was at your house and you were like, "There's this closet here, by the way, that we found—there's this extra storage room that we didn't even know about until we lived here for two months"? That's how I felt finding out that **one of the most wealthy families in America** and I don't know their story. That's how I felt as the host of *My First Million*. I just felt like I needed to, right or wrong.

MFM

Okay, I understand. </FormattedResponse>

Shaan Puri

And, by the way, how did I find it? There was a Reddit thread that told me about billion-dollar industries I probably don't know about. The first one was sand, the second one was this, and the third one was **reinsurance**. It's like: there are insurance companies, and then they buy insurance — that's called **reinsurance**. Then the reinsurers have reinsurance companies behind them. It's just insurance all the way down, baby. I was reading through the thread and one of the examples was **Cargill**. I thought, "Oh, Cargill — so what they did..." The story is: back in the day, as America was getting its feet and railroads started getting built, farmers needed to offload their crops, their grain, and they needed to sell it. They could either sell individually — the farm could try to sell to a buyer and figure out how to transport it — or they could work with a middleman. **Cargill** became the biggest middleman on the planet, basically just initially storing grain. They would go right next to where the railroad was and build what's called a *grain elevator*, which is basically a giant storage facility for grain so that it wouldn't spoil quickly. Farmers could come drop it off; they'd get, like, a coat-check — an "IOU" that says "I will pay you when your grain sells" — or Cargill would just buy it at a flat wholesale rate and be able to flip it. As the farmer, you could choose which one you wanted to do.

MFM

This is what *my father*—*my father* does for a living, by the way.

Shaan Puri

"Oh, so maybe you should."

MFM

I've known he does it with onions—onions. But yes, my father's a broker; that's what he does.

Shaan Puri

Does he store it, or does he just call one side and say, "Hey, I got 75 bushels of..."?</FormattedResponse>

MFM

Well, *[unclear: "killers"]*, it's **fresh produce**, so the storage is about a day. But yes—okay, there's a—yeah, there is a place where they sit for like 24 hours before a truck comes and gets it. </FormattedResponse>

Shaan Puri

Yeah, but yes. What's interesting, Robbie, from a business perspective is you always hear this idea of *"you don't want to be the middleman"* — that you can always cut out the middleman. In this case, the middleman became worth more than everybody else. Actually, if you look at many businesses, there are plenty where the middleman becomes quite valuable. So there's an interesting question of why. In this case, it's because the middleman was physically in the middle. They literally built the grain elevators that would store the shit [grain] right next to the railroad. You needed to transport it; you needed to get to the railroad. Who else had it? Nobody else was going to build that. So anyway, they started doing that and then went further and further. At one point they said, "These shipping barges are so inefficient when we're shipping the grain where it's not traveling by rail, so we'll build our own shipyard and our own ships." They ended up producing ships for the U.S. Navy. They bought the biggest poultry company and now control a huge percentage of the meat industry and the grain industry. So they built this empire and nobody really knows them. Basically, it's just a family that owns this thing — 88% is owned by the family. There are like 20 or so billionaires in the family. Now they have this rule called the **"eighty-twenty rule"**: 80% of all profits will get reinvested back into the business; 20% goes out as dividends to the family. For the last, you know, twenty years or so they've had professional CEOs running the company — it's not family-run anymore.

MFM

And the profit per year, according to Wikipedia, I think it's like $5 or $6 billion.

Shaan Puri

Yeah, that was during the peak COVID period, when Ukraine was getting attacked. Ukraine produces a lot of grain, so their prices spiked. I think it's like $3 billion in a normal year right now. Okay — so you're close to $1 billion a year of profit that goes straight to the family, and it's been doing that for like 50+ years. I want to tell you a little bit — this is something interesting. First, I was like, *what do they actually do?* When these corporations get so large, they just have their hand in everything. You'd see comments like, "They're in everything on your plate." Anything you eat in a package, **Cargill** had a hand in it. People think of Monsanto-style, evil companies. So I want to read you this paragraph. Imagine you eat a hamburger: > Imagine you eat a hamburger: **Cargill** probably sold the farmer the seed and the fertilizer to grow the grain. They bought the grain from the farmer and stored it at their grain elevator. They shipped it on barges and ships they own to a processing plant where it's processed into animal feed, and then they feed that to cattle, which they then slaughter. They then store the meat at their meat-packing plants and sell the beef to the restaurant. > By the way, the restaurant has to buy their salt — they sell all of the salt to all of the fast-food chains in the country. The corn syrup they processed out of the corn gets put into the ketchup. The soybean oil that's used for the fries, the starch that's used in the milkshake — that's all **Cargill**. > Isn't it crazy how one company can have a hand in so much of your day-to-day life? When you think you're eating at some *farm-to-table* restaurant, you're really not escaping them, because they control the underlying ingredients: the fertilizer, the seeds, the grains — all of it that gets fed to the cows. It goes back to the source. Isn't that kind of incredible?

MFM

And the family is so big and so profitable, they also own a thing called **Garda Capital Partners**, which is a **$10 billion+** hedge fund.

Shaan Puri

Correct, because they have to hedge commodities on behalf of the farmers and for themselves as well.

MFM

So they own a little bit of everything, including mines, because they need to get their own chemicals and minerals to make all of these things. *This is incredible.*

Shaan Puri

No famous founder. You know, their office was famously this chateau-looking thing on a lake in the middle of nowhere. That was their... it was called "the lake office" if you Google it, and it's just quiet. You know how they say, "money talks but wealth whispers"? This is—this is *wealth whispers*, shit, you know what I mean. Who's the founder? What does he look like? Who's the CEO? What do they talk about? How come they're not on CNBC? Do they do podcasts? No—they don't do podcasts. It is true: **quiet dominance**. Actually, it was part of their strategy for a long time—to be quiet about it, to not attract competition and to build this monopoly position in the logistics industry.

MFM

Dude, this is cool. I've seen their logo, and whenever I look at the largest privately owned companies in America, it's always there. I never entirely understood what they did because it's one of those things where if you say what they do, it sort of makes sense — but it's a *B2B* thing, so you don't fully understand exactly what it does. They say, "they sell chemicals," and I'm like, I don't know what that means; that's so vague. But when you look at the numbers, they do **$150 billion** a year in revenue. That's just so massive. I bet they own many more things that you wouldn't even realize. For example: the Walmart family owns — have you heard of Rafa? It's like a cool bike direct-to-consumer company.

Shaan Puri

They own that.

MFM

They own, like... they're just—"Deal, man, they just *own shit*."

Shaan Puri

"They just go to the website to buy one, and then they just keep pressing the **+** on the quantity until they own all of them. Like... we now have that—" [sentence trails off]

MFM

Seems like something this family would do: you don't realize it. And then, if you wanted to get *conspiratorial* — *which I have not done any research on* — I'm sure there are *ten or twenty* really interesting conspiracies about how they're pulling the strings. It's like there's something going on with this family, which I'm just making up; I have no idea.

Shaan Puri

A journalist once described the family as "secretive, inbred, and suspicious."</FormattedResponse>

MFM

I'm in.

Shaan Puri

Hey, I want to tell you about something pretty cool. We have a database of all the business ideas that have been discussed on this podcast—hundreds of episodes. The team at **HubSpot** went through them and pulled out all the simple, relatable, interesting, profitable ideas that we have brainstormed. They're all available for download for free. Just click the link in the description below. Thank you to our friends at **HubSpot** for sponsoring this podcast and putting together this free resource for you guys. Back to the show. In 1980 they did a survey, and by then **Cargill** was already a dominant company. They found **94%** of farmers had heard of Cargill, but only half of them knew what the company actually did. Among politicians, lawyers, and journalists—who they call "opinion leaders"—**50%** had heard of them, but only **10%** understood what the business was. Because they had this sort of sprawling empire, like you described, people don't really fully understand what they even do; you just sort of know that they're important.

MFM

I had a friend who — I think it was *Cargill* — that she went and worked at, because they obviously make so much profit and were trying to invest in new seed-related, agriculture-related *D2C* [direct-to-consumer] businesses. I think they invested — we had talked about that one D2C milk company. They would look at things like that, anything interesting. She said it was awesome working for them; she said it was a great company. Well, definitely.

Shaan Puri

There's a section called *"the dark side"* in my notes here, so let me just tell you some things from the dark side—just to be fair. When you have global crop production, you're going to have accusations of child labor, like in Brazil or in the Ivory Coast and things like that. They're said to have better intelligence than the CIA. So basically they have a spy network around crops; they know more about the state of crops in real time than the U.S. government does around the world because it's life or death for their business. They've had different E. coli breakouts and stuff like that. Again, if you're touching most of the food supply, then anything bad that can happen in food is going to happen to you. People just generally feel like they're monopolistic, so, you know—do they care about worker safety? Number one: probably not. Probably not in the top, top...

MFM

"They're... [unclear: 'three but days that they care']. They're Midwesterners; they're probably really sweet, but..."

Shaan Puri

It's *crazy* to go from a single grain shed to now controlling 25% of the entire U.S. export market for grains. It's *pretty crazy*.

MFM

So, it started **160 years** ago. You and I did a talk recently, and we were explaining some of our preferences. You said, “I like projects. I like starting something and then potentially selling it. I love the starting phase. I love handing it off to someone, and then I love it potentially ending and starting something new.” I was saying that I love things that could potentially go for **50 to 100 years**. Not that I've actually done that — I've actually done the same thing as you: projects, starting and selling. I'm so fascinated by companies that can last this long. This one in particular seems like they've kept it together pretty amazingly for **160 years**. That's crazy. They started before the Civil War, and it's still around. Isn't that incredible? I just find that so fascinating. Part of me is like, well, when I die, why do I care about **legacy**? We talk about legacy a lot. I was reading something the other day and someone said to them, “Why do you care about your legacy? Who gives a shit — you're dead.” I was like, okay, yeah, I understand that perspective. We can hold that dichotomy: caring about legacy and also thinking, how cool would it be that the thing you create can employ **160,000 people 150 years** after you're gone? I don't know — I think that's awesome. I think it's kind of *romantic* and *exciting*.

Shaan Puri

It's kind of like two people can love running. One person's trying to run the 100-meter, and the other person's running one of these ultramarathon 100-mile races. They're both like, "Yeah, I love running and that's what I do." And that's kind of like, in the business sense, there are different ways to approach it. There's what I call the *projects approach*, which is you kind of go in knowing, like, "Hey, I'm gonna have five great at-bats in my career and I hope each one is a really fun chapter." I'm gonna seek variety in those.

MFM

It's *sort of* like being an author. You're like, "All right — I got five years of research and writing, and then a break, and then I do it again."

Shaan Puri

Exactly. And then there are other people who are *brick by brick* laying a foundation for an empire. I respect both, but I know which one I want to do. And I think you know which one you want to do, too — I think you want the, *like*, empire.

MFM

Yeah, I don't know if I'm going to have the grit to pull it off, but I for sure *love* the idea of the result.

Shaan Puri

Do you think the people who do this—is it a temperament difference? Like they're wired differently, therefore you know, *fast-twitch / slow-twitch muscle-type* stuff. Or do you feel like you might have the base wiring to do it but then need to adopt the systems? For example: it's not like one guy ran this for a hundred years, then he passed it to his son, the son kind of screws it up, and the next son sort of saves it from bankruptcy. By now professional CEOs run it, but they've instilled values, systems, and ownership controls. And now the heirs are marine biologists — they're doing other things; they're not running the company — but the entity lasts. So which one — where do you think you might fail: is it the *wiring* or the *systems*? </FormattedResponse>

MFM

I think the wiring—you start off a certain way, but not always. For example, I think there are a lot of people who would have sold if they could have, but the opportunity just didn't present itself and they just said, "screw it, I'll just keep going." I think what happens a lot of times is a few things. If you had to build a business and you never thought about selling, there's a world where you would do some wacky stuff that would make the business *incredibly profitable* but *incredibly not sellable*. You would acquire assets or businesses that don't entirely make sense to one particular buyer. Then you get big enough to the point where you're like, "this is a hodgepodge of stuff," and it works for us, but no one buyer would ever actually take this. But then I also think that it comes down a lot to the family. I think there's something special around family meetings. We've had Rob Diedrich on here—he talked about that. I actually follow some people on Instagram and they talk about family meetings.

Shaan Puri

Explain what you mean. What is a *family meeting*?

MFM

So the way that I grew up is probably very similar to the way, potentially, you grew up — the way a lot of Americans grew up. Your parents never talk to you about money. If you asked them, "How much do you make?" they would say, "That's none of your business." There was very little transparency and very little *culture creation* in terms of explicit expectations, the family's culture, and our values. What I've been learning about — and frankly like — is this idea of a **family meeting**, where you get the children and everyone in the same room: monthly, quarterly, annually, or something like that. In the same way you run a board meeting, you run a family meeting where you say, "Here are the values that we stand for. Here's how we did last quarter or last month according to what we said we wanted to achieve. And what about the future? What would you guys like to do? Let's talk about this." "Here's the money that we have to spend on whatever dreams and ideas you have, and let's discuss if it fits within our family credo and mission." There's actually a way to do that, and I aspire to do that with my family — *my family only*.

Shaan Puri

Was like taking minutes—taking meeting minutes as a board observer. I just think...

MFM

There's something special about being *explicit* about stuff. I think that, a lot of times when you're growing up, there are these things that you say: "Well, we never really talked about [blank]," but my feeling was this, right? What I would like to experience is saying, "We are actually going to *speak what we intend to do*, how we will do it, and what resources we have to get it done," and then having a conversation about it. I think there's something very special about the families who pull that off.

Shaan Puri

Yeah, I totally agree. I think it's **explicit versus implicit**. It's not even like "don't talk about that"; it's more just that it didn't get said right. It doesn't get said not for malicious or secretive reasons—it's just we were busy. I don't know myself, you know? I'm not sure I really know the answer to all these things, and it's easier to not even think about it. It's like if you ask somebody, "Well, what do you *really* want?"—watch: people immediately start to flounder. It's such a simple question. Don't you think you should know what you really want?

MFM

When I'm meeting new people and I want to make them feel like I care about them... Well, it sounds like I'm being *nefarious*, but I mean, I'm trying to get to know someone. I'll say something like: "Hey, in the next six months, is there anything interesting you want to get done — in life, career, or family-wise?" Half the time, people are like, "I don't know," and the conversation becomes them discovering it. It's kind of exciting.

Shaan Puri

Yeah, exactly. So I think being explicit — I'm an over-communicator. I'll take the negatives that come with that because I think the positives are so overwhelming. But how do you do it in a family? That's kind of interesting. I was at a friend's house and he has this crest on the wall. He's like, "Oh, that's our family crest." I was like, "Oh, my family — we didn't have one. I guess my ancestors dropped the ball." He's like, "No, we made this. I painted that five years ago and we just decided what we're all about." There are four quadrants on the crest and we said it's this, this, this, and this. And this is our sigil — that's our animal. I love that. I was like, you could just do that. You could just be a university. *I could be Hogwarts right now.* I came home and was like, "Shit, I'm gonna start doing stuff like this." I actually haven't made the crest yet, but I have done a few other things. I gave each of my kids what I call a "way." For example, one of my kids has the "Sam way." It's like: try, try, and figure it out — "Oh, that's the Sam way." I've said that so many times that now the great father moment is when he'll just be like, "Well, I just did it the Sam way." He's using it as shorthand for, "I didn't give up — I tried until I figured it out." My daughter has a different one.

MFM

That's really beautiful, and then we...

Shaan Puri

I have one that's about the idea of *gifts*. I told them, "Yeah, everybody has some gifts that you're given." My son loves Pokémon and things like that, so he kind of understands the idea that you have a *superpower* — every character he watches in a show has a special power. I said, "Yeah, well, you have one too." He's like, "Really? What's mine?" And I'm like, "Well, yours is that you're this." I just get to declare it. I give them a reputation to live up to — one they're often inconsistent with today, but there are moments. All I did was highlight those moments. I pretend the inconsistencies don't exist and keep reinforcing that until it becomes their identity. I do that for each of them individually. One downside is I make one sound so good that the other one asks, "Can I have the same?" because then it feels less special. You have to give the other one something equally. It's a little tricky; it's not perfect, but man — this really works. It is really powerful. There's a version of that that's completely non-business related. In creating this family-dynasty idea, it's about how you instill a culture first in the home before you ever try to do it in the office.

MFM

And I think the likelihood that anyone's children ever *want to* work in their business is very low. So, if that even happens and they get along, that's like a miracle. What I've noticed is also important is creating **long-term trust**. I talked about this a little bit with the Hearst organization [Hearst Company], which owns GQ — it's a famous magazine they own — but they also own about 100 businesses you've never even heard of. They even own half of ESPN, or whatever. One of William Randolph Hearst's great inventions was that he created this trust within the family that was pretty **ironclad**, and it was very long-term thinking.

Shaan Puri

Trust — like an actual *legal trust*, or you mean "trust"? Yes... like a...

MFM

**Legal trust.** For example, for him it was: *"You cannot dispute this trust, and if you do dispute it, you're out of the will."* The trust basically says that—Hearst—I forget the exact number, but Hearst hypothetically will have eight board seats. Family members are always two [board seats], I think. It was like: *"You cannot argue with how much money you receive—money is given out equally. If you want more profits, you cannot argue about it; if you do argue about it, you're out."* Things like that. He did these things that were quite good in terms of making the arrangement last for a long time. Same with John Rockefeller—he did it the same way. One of the great things about reading about John Rockefeller is that he was this madman businessman. Think of Jeff Bezos: a polite guy but a ruthless businessman. His son John—also John—was a great dad. They loved each other very much and showed a lot of mutual respect. What I'm noticing about a lot of this stuff is that it's built on mutual respect. It's built on empowering people and having very explicit conversations. That was a big takeaway from reading about them.

Shaan Puri

Yeah, it's interesting. You have to find these *blueprints*. That's kind of what I went back to when I was asking you about the long-term thing. You have to get to know your *wiring*—to know where you're going to naturally have things come easier to you (things that are difficult for others) and other areas that will be difficult for you. You better figure out how you're going to work around that, either by patching up those weaknesses or getting people around you who complement them. And then you have to learn the *systems* on top of it—what are the habits, what are the actual systems—to get the results I want.

MFM

But then there's a *wild card*. For example, I have a billionaire friend whose son is a homeless drug addict. They've tried numerous times to get this kid on the right path—[unclear/interrupted]. They're like, "We're either... we just gotta let you figure it out. Unfortunately, that might mean death." It's a very challenging, tragic situation: the family crest. </FormattedResponse>

Shaan Puri

**Didn't help.**

MFM

Yeah... it's pretty crazy. You could have — I think, what's the phrase? "You're the happiest of your saddest kid." [phrase unclear]

Shaan Puri

"Yeah, you're only as happy as your *saddest child*, yeah."

MFM

I went on this rant about phrases and why they're really important — the phrases we tell ourselves. For example, using the phrase **"I might as well"**, as in, "Well, I've already eaten badly today; I might as well eat." No. That's just a convenient phrase. You should not *"might as well"* do that...

Shaan Puri

**"It is what it is"** is my favorite one. **"It is what it is"** is the complete surrender of power, of agency, of anything. Replace it. Just say, **"It is what I make of this."** Then you say, "Alright, well what am I going to make of this?" You know, like, "It is what it is." It's crazy.

MFM

Can I tell you about a phrase that you unfortunately need to know about? You're going to see it everywhere online. I also want to rebrand it. This thing is called the *Jevons paradox*. Have you heard the Jevons paradox? It's not even a paradox. A paradox means, for example: "Can God heat a burrito so hot that even he can't eat it?" This is more like...

Shaan Puri

Is that paradox the *Rutgers paradox*?

MFM

That's a paradox. This isn't even a paradox; this is just like an economic principle.</FormattedResponse>

Shaan Puri

Okay. Let me read the actual definition: > An economic principle stating that as technology makes use of a resource more efficiently, the total consumption of that resource actually **increases rather than decreases**. So, as something becomes more efficient, you would think you're using less of it because you're being more efficient. But in total you use way more of it because the *demand explodes*.

MFM

Okay, go ahead, and I'll give you a ton of examples. I want to rebrand it to **Javon's Paradox** because...

Shaan Puri

"Give it a little flavor."

MFM

Yeah, well, because it was created by this guy named **James Jevin**, who was a British guy, I think it'd be cool to have a wonderful economic principle being created by an American brother. I want it to be *one of ours, not one of theirs.* So, right around the mid-1800s, **James Watt** creates this new thing. It's a new variation of the steam engine — basically the steam engine that everyone came to love and know. **James Jevin** was basically this guy in the 1800s. He wrote a book in 1865 called *"The Coal Question,"* and he basically says, "I have a feeling that because of how amazing this new steam engine is, Britain potentially is going to get rid of all of our cheap coal and we're going to have a problem. We're going to have a coal shortage." Everyone else was like, "What are you talking about? The steam engine makes things significantly more efficient; therefore there's only a set amount of work that needs to get done, so we're just going to use less coal." And he goes, "No, brother, that ain't gonna happen. We're going to use way more coal because everyone's going to want one of these steam engines." He was exactly right. This is where things get really freaky, and this is actually what I want to talk about. It expands in a way that you cannot even comprehend. Let me give you a really simple example. **Eli Whitney** — he was this guy from Yale, and he was like, "I want to make it rich. I have this idea." So he goes down to the South of America. At the time, slaves would pick cotton, and it would take them hours to separate the seed from the cotton to the...

MFM

Where they could only produce about a pound a day of usable cotton per person, he came up with this little handheld device (the cotton gin) where you can kind of put cotton in, crank it, and it gets the seeds out. Where one slave could produce 50 pounds of cotton, they made it 50 times more efficient. Some people were kind of happy in a weird way. They thought, “Okay, maybe this might mean slavery won't continue to grow and we won't import more slaves.” That seemed like it might be good. The exact opposite happened. Over the next 30, 40, 50 years, cotton got so cheap that in the South of America, particularly in Mississippi, it actually started being called “King Cotton” instead of “King George.” America’s best export was cotton, and it got so strong that they had to import eight to ten times more slaves than they had pre–Eli Whitney in order to keep up with all this demand for cotton. One could argue that the reason slavery in America lasted as long as it did was because of cotton and the demand — that it was our economic engine. This idea of this paradox is quite strong. The reason it’s relevant right now is because what’s one product that AI is making significantly more efficient? Code. Previously, code was very expensive to make. You had to raise all of this money from venture capital, you had to hire a lot of engineers, and you had to wait — hopefully three, five, ten years — until that code actually worked and made a profit. Well, **Jevons paradox** comes into play here. My opinion is this: a lot of people are saying that AI is going to put people out of work. I think it is the exact opposite. I believe that code will get much cheaper; therefore demand will increase a significant amount, too.

MFM

When **Gutenberg** invented the printing press, people thought maybe others would read two, three, or five times more books than they were reading. Gutenberg created the printing press, I believe in the 1400s. On the extreme end, the offspring of that is the idea of the **Kindle**. One could even argue that reading text on a computer screen goes *much* further. It didn't just make five times more books — it made something like infinite. It doesn't create ten times more; it creates a whole new thing. I've noticed this with the **cotton gin** and with the creation of the **steam engine**, which then went on to create the railroads and produced a massive boom in **America**. When technology makes a product that already has some demand more efficient, there is turmoil among those who are directly impacted. For example, have you ever heard of the **Luddites**?

Shaan Puri

Yeah, people who don't adopt technology.

MFM

Yeah, so now it's used as an insult. Back then it wasn't. The history of the **Luddites** is basically this: right around the Industrial Revolution, a machine was invented that allowed people to weave cotton—sorry, wool—into yarn much faster. Previously, there were five or 800,000 people in England who did this by hand, and they were considered craftsmen. When this new machine arrived, they were put out of business. They created a fake character called **"Ned Ludd."** In England, this group went around smashing the new machines, and it started ruining the process of creating this new wool, too.

Shaan Puri

They were like, "on behalf of *Ned Ludd*," right? Like, this was a person that you couldn't attack because he wasn't real.

MFM

It was a fake person, and it was so serious that it was a capital punishment in England. If you got caught breaking one of these machines, they would put you to death. So this idea that there were like 500 or 800,000 people who were willing to risk their lives in order to ruin new technology—that's the history of the Luddites. But my point is when there is a new creation, there is a subset of people who are screwed. For example, when switchboards went away in America in the 1970s, there were about 800,000 telephone operators—mostly women. Those jobs didn't exist anymore. In general, more technology that creates a more efficient process creates new jobs—sometimes because of increased demand, and sometimes because new industries are created that we can't even comprehend. In my opinion, **AI** is actually going to create a net positive, not a net negative, which I previously thought.

Shaan Puri

**First of all, excellent monologue** — *highly informed, highly entertaining.* I enjoyed that. You told me you were reading about the Industrial Revolution because you were trying to figure out, *"history doesn't repeat, but it rhymes."* What happened in the past? What did we say and what did we think then? Does that sound like what we say and think now? And what actually happened?

MFM

Yeah. One that came out about ten or fifteen years ago and is now popular again — which I read a while ago — is called *Americana*. It goes through breakthroughs in American capitalism, covering different inventions, and you'll notice that people have the same fears consistently.

Shaan Puri

So, let me ask you a different question. One of the most dangerous things in business is to think, **"Well, this time it's different."** Those are very dangerous words. However, it's also dangerous to say, **"It'll be just like last time."** You have to almost consider both possibilities.

MFM

I'm not saying that, by the way. What I'm saying is that *human nature is human nature*, and there's something special about the 30- to 60-hour-a-week workweek that has existed for centuries. Time and time again there's an idea I always come back to: I used to be a beekeeper, and bees are really interesting. With bees, if you get one hive with one set of bees, you just stack that over and over and over again. Bees fill up space — they just fill up space. In the same way, whenever someone gets a new home (anyone has experienced this), they go from a 1,000-square-foot place to a 2,000-square-foot place and say to themselves, "I'm never going to fill this place." And then, magically, over the next three years they go, "How..."

Shaan Puri

Do I?

MFM

I have so much junk. That is, like, the human need to expand — to grow, to fill space — is *innate*. It does not go away. So what I'm saying is the same every single time, not the "how." I don't know how this is going to happen. That's sort of the point of my monologue: I don't know, but **I know it will happen**.

Shaan Puri

Yeah — and not to be too abstract here — the one thing I don't get, or the one thing I haven't figured out with that, is this. I buy everything you said: all this new demand will get created. We'll want code in places we didn't have code before, so yeah, it'll be more efficient to get code. But *net-net*, you're going to have way more code and way more people creating code. In this case, if **AI** is so good at doing things — AI is a technology for doing work, generic human work — it's basically a model of the brain. Who's to say that **AI** won't also fill those jobs? Meaning: yes, it creates all this demand, which creates new job opportunities and new industries, but who's to say that **AI** also isn't the one who supplies that demand? You know, the printing press and those were more rigid technologies that could do one thing. **AI** is weird in that it's a flexible, general-purpose thing that can do so many things. So who's to say it doesn't also become the supply?

MFM

There's a few ways to look at this. The first is: you could ask, "Will this be like hot water?" For example, when hot water was invented, the idea that you could take showers every day—like a king—was incredible. Hot water surged, and water heaters were put in every home in America. But you know what happened? We sort of figured out how much hot water we need. We don't actually need that much more hot water today than we did 50 years ago. So it took off and then it kind of flattened. Another example is electricity. When electricity was invented, it basically became a base unit of measurement for life. If something can exist within the laws of physics, there's usually a way to use electricity to make it happen. I think, potentially, **code** is going to be like that: a unit of measurement where you can find infinite ways to get done what you need to get done. I do not think it's going to be like water, where we figure it out and don't really need much more.

Shaan Puri

Well, why are you saying "**code**" instead of "**intelligence**"?

MFM

I'm just kind of working through this, to be honest. I'm still... like, I was trying to think of, like, that's a unit — intelligence is... I don't understand how to quantify it. But now this is actually interesting to me. Potentially, there is always a lot of turmoil with these new technologies. I've been trying to actually break down: is there a formula you can figure out for whether the economy will boom? I think it will — I think that's inevitable — but how long will it take? For example, the railroads came about and there's this weird chart: if you look at how many railroad tracks were laid and how the average person's protein consumption went up. What the railroads did was they made America smaller. They created towns that didn't exactly have to be where they were anymore, and they created this massive booming economy. However, it took 50 years because we had to build the railroads, which is very labor intensive, and we had to create steel, which was an entirely new invention. So there's this equation: the **breadth** of the technology — meaning how many people it impacts — multiplied by the **intensity** of how it impacts you, multiplied by the **time of co-invention**, and that equals the length of turmoil that someone will go through. With ChatGPT growing as fast as it has, there is a world where the tumultuous...

MFM

It is *relatively short* compared to past breakthrough technologies.

Shaan Puri

And if you knew the turmoil — either when, how, or how long — what would you do with it? Because you said there's *like* an opportunity. What's the opportunity? </FormattedResponse>

MFM

"Like, if you knew that it's only going to take us *3 to 5 years* to, like, figure this thing out—to where we're humming again—you can make bets on that." </FormattedResponse>

Shaan Puri

Yeah, actually—one of the ways *Jevons paradox* has played out over the last few years is with **Nvidia**. A lot of people thought, “Hey, people are buying these GPUs, but each training run and each algorithmic improvement the labs make will mean you need fewer and fewer GPUs to train models.” But Jensen Huang [CEO of Nvidia] went on TV and said something like, “You're right—the training is going to become more efficient, but inference is going to go up by **1,000,000x**.” People were like, “1,000,000x?” and he repeated, “1,000,000x.” That's kind of what you were saying at the beginning: when these things diffuse, demand goes up not by an easy-to-understand percentage or multiple, but in a mind‑boggling way. For example, if you tried to market‑size how many people would create text and how many would read text from the time of the printing press to now, you couldn't have predicted Twitter. Twitter would have broken your brain—it didn't make any sense, but that's the kind of thing that happens. So he's been saying that about **inference**—which is when you query AI. When you use AI to do something, you're using inference—and he argues people don't understand how big the world's inference need is going to be. It's mind‑boggling.

MFM

I think what's going to happen over the next six months is—and this is partially for listeners, because I think you potentially might know this—is that the narrative among the popular "smart people" (and I think we're relatively popular; I don't think I'm that smart) is going to change. It's not... and this is in itself serving to have this narrative, particularly if you're a president or whatever, but the narrative is going to change: that this is going to be a **massive net positive**. They're going to cite *Jevons' paradox*, and they're going to excite everything that I've just said, which isn't particularly unique. Nothing I'm saying is unique.

Shaan Puri

"Dude, I see this all the time. It's like, 'yeah, **this [technology] is gonna be great for you if you make it great for you.'" I think people are just sitting back as the recipient of this, wondering, "Is this hand gonna slap me or is it gonna put grapes in my mouth?" Well, it depends. It depends on what you do. Are you learning how to use this shit? Are you paying attention to what's going on? Are you thinking about how you can use this in your field? Are you talking to smart people? Are you moving where the puck is going or not? I feel like people are so passive about what's going to happen, as if everything is happening to them and none of this could potentially be happening for them. They act as if they have no agency to be generative and to democratize this technology for themselves.

MFM

The reason I was studying the *Luddites* is that I think that same movement is already happening right now, and it's going to continue to happen. You saw, at recent college graduation speeches—like Steve's or Solomon's (I forget his first name)—Solomon, the CEO of Goldman, was talking about **AI**, and everyone was booing.

Shaan Puri

"Yeah, people walked out, right?"

MFM

The reason I'm bringing this up is: if you go back and study the **Gilded Age** — which, that's one of my favorite eras, as well as the **Industrial Revolution** — it's all just repeats itself. Everything's repeating itself. It's very, very, very similar over and over and over and over again. This is all quite predictable — not the timing and the how (who knows) — but, like, the general trend: it's all been there, done that.

Shaan Puri

Yeah, yeah — that's crazy to me that it's become, like, a *high-status* thing to do: to be anti data centers and AI and things like that. It's, like, really...

MFM

Really bizarre. That's not fair. I don't think we should dismiss it. I think they're stupid. I understand their sentiment. Can you imagine being 21 years old? First of all, if you're 21 years old, you *fucking* graduated high school during COVID-19 — that sucks. The world changed dramatically over the last four years. You were expecting to get a job at Deloitte or as a law clerk or whatever, and now they're like, "Nah, we don't need you, dog." There is anger, which I understand, but I think that the way that they act...

Shaan Puri

"You're asking me to put my mind in the mind of a *loser*, and I just can't do it. It's just not possible to do this. The 'loser' thing is just not acceptable in my mind, and I'm sorry — I just don't have the ability. Maybe you can; maybe you could go in the mind of a loser, but I... I just..."

MFM

I think they're wrong, but I have empathy for it. I understand that feeling. I also think they're stupid, dude. There was one time when **ATMs** had just been invented. The bank tellers—this was a big job—revolted. They were like, "F this, you're gonna put us out of business," and so on. Do you know what happened? Way more banks opened. Way more branches—physical locations—were created. So if I'm talking to these young people, I would say: *it might suck for a minute.*

Shaan Puri

Dude, **if you're young, you have no excuse.** I can get it if you're like 65 or 75 years old and you say, "Oh my god, there's a lot of change; it's going to be really hard. I've been running my business; it's pretty difficult for me to reinvent right now." I have a lot more understanding for that. If you're 18 or 19, you didn't know anything anyway—hop on this train. This train is exciting; it has so much room to run. You have to look at the counterfactuals. You might say, "Well, it's going to be harder than ever to get a job," or this or that. It's also true that more people than ever are going to create new things, more people than ever are going to become successful, more people than ever are going to become millionaires out of this. So it's entirely possible to have that result if you choose to do the actions that will get you to that result. I guess I just have very little empathy for the younger folks. This should be easier and come more naturally for them. They have less invested, fewer sunk costs, and less rigidity of the past to be tied down to. I don't really understand that. The other side is: is this serving you? Is that attitude serving you in any way? Forget arguing who's right and who's wrong—like, at some...

Shaan Puri

You just have to ask: *does this belief serve me or not?* I don't believe that belief serves you. I also don't believe that you can control it. Just like Ned Ludd and the Luddites found out, it didn't matter how many windows you smashed — this shit's happening. It's like getting mad at the weather. "It's gonna rain whether you shake your fist at the sky or not." You have zero chance of slowing down AI. **The AI freight train has left the station; it is happening.** So all you should really worry about is what you can control, which is your *reaction and response* to the new playing field. Trying to argue that the new playing field is bad is sort of stupid to me — it's, again, like yelling at the weather. You don't get to have a say in that side of things. In New York — who's the governor, the mayor, whoever it was — the person who proudly said, "We have banned data centers in New York State," they were so happy about it. Now, politics is already very performative, but man, taking so much smug pride in banishing the technology that's going to create all the growth in the economy is, you know, pretty silly. </FormattedResponse>

MFM

And one that's being popularized now is the claim that "data centers use electricity and use water." I actually have no idea if that's true or not. But whenever I see these things, I'm like, we should actually learn if that's the reality. I have a feeling that the *Super Bowl* is significantly more inefficient than a data center, and yet we celebrate that.

Shaan Puri

Anybody who has this feeling — and you're like, "Man, Sean's really not empathizing with me; this guy's being a jerk about this. He doesn't understand how hard it is right now" — for me, just watch this clip. You just need to watch this clip of this guy with no legs completing the Last Man Standing race, which is like this insane 26-hour fitness event. He's crawling; he's pulling his wheelchair through the mud using his arms, and finishing this race. Anybody who's got an *"it is what it is"* attitude, go watch this on loop. This should be your commencement speech instead of, you know, just sitting there smug and walking out of it because some guy said two letters you didn't like.

MFM

"I usually think of Sacagawea and Lewis and Clark. That's mine."

Shaan Puri

In moments like this, I...

MFM

"Think, look: they walked across unknown territory for two years with a three-month-old baby. They could do that, and that baby still lived. **I can do this.**"

Shaan Puri

That's what I need, actually. That should be a service when you're in Disneyland as a dad. It's like hour seven and it's so hot. The kids are crying, cranky, after you spent $1,000 taking them to "the happiest place on earth." You're pushing the stroller, and you've got the turkey leg dripping down your arm—the juice of that thing—and you just hate your life. You need the *saka jawiya* example. Yeah, you're like, "Look, kids..."

MFM

The story of *Moby Dick* is real. These guys floated across America on a raft for 90 days before they were discovered. Okay — if they could do that, we can get to McDonald's without crying.

Shaan Puri

Can I tell you a very inspiring entrepreneurial story, just to leave on a high note? Have you ever heard about the "Ice King," **Frederick Tudor**? You know this guy?

MFM

Not personally.

Shaan Puri

Alright, alright. So Frederick Tudor — this guy is known as the *Ice King*. He lived in the northeastern United States, near Boston, where it gets very cold in the winter. There was tons of ice, and he realized that in South America they never had snow and they never had ice. He had a brilliant entrepreneurial idea: *I’m going to sell ice to South Americans.* This was before refrigeration — [pre-refrigeration, before mechanical freezers were invented]. He would cut blocks of ice from frozen lakes, figure out how to transport them on boats to South America, and try to sell the product. He said, "I’m not selling ice — I’m selling winter." People asked how the ice wouldn’t melt in transit. He experimented: he used wool to wrap the ice and discovered that covering it with sawdust would preserve it longer. He might start with 200 pounds of ice and arrive with 70 pounds left, but he would still sell that 70 pounds. When he first arrived, people didn’t know what to do with ice. He sold it, and customers returned complaining, "It melted." He’d say, "That’s what it does — it’s ice, and it’s hot outside." He realized bringing ice alone wasn’t enough; he had to create demand and teach people why they wanted it. So he found a hero product: cold drinks. He went to bartenders and offered them a little ice for free if they started serving rum chilled. Once people had cold rum, they didn’t want warm drinks anymore. Demand for ice grew, and Frederick Tudor built an amazing trade. He pioneered new methods of refrigeration and freezing to transport ice. Ironically, his success helped end the trade: once people could freeze water themselves, the ice trade collapsed. But for a time, Frederick Tudor was the man.

MFM

I'm always—I'm also *always* interested in how you got interested in this, because sometimes those stories are equally as good.

Shaan Puri

Diego and I [sitting about five feet away from me]—one of the things we do is try to read as many books as we can. He's been reading a book called *The Medici Effect*. This was one of his stories, and I was like, "Wow—that's an incredible story."

MFM

"I'm happy you're reading books now."

Shaan Puri

"That's *condescending*, but I like it. I appreciate it."

MFM

**I did not say that.** I mean, I said what I just said, but you previously said that you normally don't make it past the table of contents.

Shaan Puri

I don't know... you said "buy the book" with great enthusiasm, and I really don't even open them. Actually — you'll appreciate this — I'm creating a bookshelf, so you'll see my office is going to change soon. I'm creating a bookshelf that is like a Trello board. It's basically a progress-bar bookshelf. I have all the books I bought in the *icebox* — that's my *pipeline*. Then a book moves into the "reading" phase, and later it moves physically into the "completed" phase. Finally, there's the "hall of fame" of great books: the few, the rare ones I would actually recommend to anybody else.

MFM

It's sort of like—one time, Steph Smith told me she invented a water bottle that reminds her to drink more water. I was like, "Just chug the water. Just sit down and read the book." Like, you sure?

Shaan Puri

My bookshelf not being a progress bar has not been the thing holding me back. That's what I've been telling myself. My old boss, Emmett from Twitch, would tell me this because I have a tendency to *over‑architect* solutions. I convince myself that an elaborate approach will be the solution instead of the obvious one. He would just listen to me talk—I’d spend 15 minutes describing this great idea—and then I’d say, "It's great, right?" He would simply ask, "Have you tried solving the problem? Have you tried actually just solving the problem?" He would also say things like, "The only way out is through, Sean." I was like, "Oh wow—yeah, I'm kind of an idiot." He'd reply, "No. I'm a partner at YC [Y Combinator], and this is the most common advice I give to YC startups." Founders will tell him exactly what they're planning to do, and then he'll ask, "Have you tried solving the problem?" They'll be like, "What?" It's his shock‑value way of reminding you that in many situations *the only way out is through*. If you're trying to find a way around, there is no around—there's only through.

MFM

I waste so much time—charging my AirPods, looking for the holster to hold my iPhone, and making sure all this is right. I'm like, "Dude, you're just going for a 30-minute run."

Shaan Puri

I will buy — I will DoorDash it. I did this the other day. I was going for a run. I DoorDashed the little plastic armband — like a blood-pressure monitor — where you put your phone. I was like, "Well, I certainly couldn't run without my phone, so I guess I'll just wait 45 minutes for this thing to arrive." It's weird. Before I went for a run — a four-minute run — I was gonna run half a mile.

MFM

*I do the same shit all.*</FormattedResponse>

Shaan Puri

It's one song. I could have *just* hummed it.

MFM

What was it like? "Come my lady, come, come my lady, you're my butterfly." Sean's like, running, like, "Is this guy singing Hoobastank to himself?" </FormattedResponse>

Shaan Puri

"Why do people listen to us? Why do they listen to us? *Clearly...*"

MFM

"That's the pod."