You're listening to Math and Magic, a production of I Heart Radio. I'm fond of Jeff Bezos is regret minimization framework of life. It's very simple, and I think we all need simple heuristics at those critical moments in life, and his is simply this, Well, I regret not having done it when I'm eighty years old, and if the answer is yes, he does it, and if the answer is no, he doesn't. For me, the thought of not moving forward was way more painful than the thought of striking out on my own, and that motivated me to jump in. I am Bob Pittman, and welcome to this episode of Math and Match Stories from the frontiers and marketing Today. We have a guest who has a number of important lessons to share. Lessons about the power of a vision, of a conviction, taking risk, thinking big even when you're small, betting at all, when you have the shop, believing in a vision, but adjusting when needed. Listen hard, think smart. He's an entrepreneur, an investor, a thinker, a thoughtful philanthropist and social engineer bridge builder. He heads his own firm, Altimeter, with twenty billion under management, and is in the middle of SPACs, Fun, Snowflake, the Board Challenge, et cetera. He's brag Gershner. Brad grew up in a small town in Indiana. Smart kid in a small environment, but that small environment did not limit him. College junior year to Oxford Law School, lawyer, Deputy Secretary of State of Indiana. Then got off the government path and got his NBA from the Harvard Business School, one of the early folks at the now giant venture capital General Catalyst, and ran some companies, sold them, invested for others, and then started his own fund in one of the boldest and riskiest ways I've ever seen. He's wildly successful in business and gives that same time and attention and innovation to making our society and world better too. He's wildly curious, fun, a surfer, traveler, a good friend and Instagram seven, and even a board member at I heart to welcome Brad. That's the best introduction I've ever had in my life. Bob. Thank you. We've got a lot to dig into today, but before we get started, I want to explore you. In sixty seconds. Ready, let's do it. Do you prefer Indiana or California? California, Boston or Silicon Valley, Silicon Valley, Facebook or TikTok Facebook, salty or sweet salty, I p o or spack, Altimeter, coffee or tea coffee, Law school or business school, business school, boat or plane, plane, window or aisle, file, chocolate or vanilla chocolate, cats or dogs, dogs, dollar or bitcoin dollar, rent or own rent, Apple pie or Apple computer, Apple computer, It's about to get harder. Childhood hero Warren, Buffet technology, you can't live without iPhone? Favorite app Twitter, Most memorable place you've traveled to Nepal. First shop, chief of staff to the founder of Forest River, which ultimately sold the Berkshire Halfway, preferred beverage ve no favorite food, fresh fish, favorite city New York? And the final question, what did you want to be when you're growing up an entrepreneur? Okay, let's get started to set the stage for how vision, conviction and or hard work or at the core of what you do. I want to go back to the founding of Altimeter. Although we weren't really close friends then, we were close enough that I saw the story. It's one of the most inspiring origin stories ever. So let me paint the picture a little bit. It was two thousand and eight you decided to leave a great role at Park Capital and strike out on your own. You had an impressive track record as an investor and had lined up some two hundred and fifty million for your first fund. Then Lehman Brothers goes bankrupt and all but three million of that to fifty backs out, And clearly a three million dollar fund is almost not a fund. You'll have to live in your savings, You'll have to sell everything you have. It'll be a struggle, and getting back to two fifty million is almost impossible. But at that moment, who knew if the world was coming to an end? And yet here's the classic. You, even though you had a young family to support and you had a lot of high paying jobs as other options, you started Altimeter anyway with just three million. Why on earth would you do that? Well? First you were there, and I might not have done it without you, So thank you. I'm fond of Jeff Bezos is regret minimization framework of life. It's very very simple, and I think we all need simple heuristics at those critical moments in life, and his is simply this, will I regret not having done it when I'm eighty years old and if the answer is yes, he does it, and if the answer is no, he doesn't. And I would say I didn't know I was using that framework, but I was. And for me, the thought of not moving forward was way more painful than the thought of striking out on my own. And I suppose a little over confidence and the fact that I had designed my life in a way that didn't require a lot of resource helped. But it was really that idea that if I didn't do this, I would regret it, and that motivated me to jump in. So what is this say about conviction and about a vision? Lots of people have visions of things, products that could improve the world, companies they might want to start, et cetera. The execution is difficult, and the execution is predicated on deep conviction. I had spent a decade preparing for that moment. I had helped start General Catalyst, I had started and sold three other companies. I had been in law school, I had practiced law, and as you mentioned, I'm curious. I'm a student of the game. We made our first trade on November one, two thousand and eight, and I had studied people who I had a lot of respect for Seth Klarman at balt Post who had started in the recession of Night one, or Paul Reader, my mentor from Park Capital, who had started with a similar amount of capital in nine in the SNL crisis and his first investment was into an SNL. Or even you take somebody like Tiger Global and Chase who started in two thousand right after the dot com blow up. So there was plenty of examples in my world of folks who started small during periods of durest, driven by deep conviction in their own capabilities. And so for me, it seems from the outside looking in like I was crazy, but it made perfect sense to me. What did your prism look like? How did it change after this collapse of Lehman Brothers, Because clearly you put the whole plan together before the collapse. Did you change the vision? Well, I have to say I was scared. I had just gotten married ten months earlier. I had just had my first child, Lincoln. We're renting a small basement apartment, which you remember in Boston. Michelle believed in me, but was none too happy about the idea that I walked away from great paying jobs with this young family to do this and I couldn't answer the question definitively as to how long this would last or whether the world really would end. I had set up a small advisory board, and I remember a couple of the people on that advisory board said, you're crazy. Don't do this, go back and get your job. And I had started three other companies, and every time I had started those other companies, it was just a sketch on the back of a napkin. And I was by myself, and so to me, I was familiar with that moment, the founding moment. I had deep conviction in my capabilities, and I'm an optimist. I didn't think the world was going to end. I wasn't sure what was going to happen, but I thought if it did end, this would make a good story to my ending. So this is a recurring thing, but this was one of the best examples of you thinking big when you were really small. How did you get yourself to think big enough? Well, if I really rewind the clock, my dad was a dreamer, first child to go to college, and he ran a small business in a small town that made auto parts in the late eighties, and an acquirer came along and the acquirer said, we want to buy this company, and my dad said, well, everybody in the town works here, and so I'm not going to allow the company to be acquired unless you agree not to lay off the men and women who work here and not to cut their pay. And of course the acquirer agreed to do that, and six months later they renegged on their promise. They fired people, They cut people's pay. In the middle of one of the worst recessions in our country's history. Interest rates were eighteen percent, inflation was fifteen percent. It was a dark time, and my dad was devastated. You know, in a small town, your word is your bond. He had given his word to these people. And so I watched my dad rally those troops and say we're gonna go start a competitor, and everybody followed him. And it was an insane thing for him to do. He was starting an auto parts business. There was not such a thing as venture capital. He borrowed money from the local town bank. He mortgaged our house, put the house up as collateral, the car up as collateral. Everything is collateral. And in the middle of a recession, in the middle of those interest rates, and the Japanese gutting our car industry, and he tried to make it work, and he ultimately went bankrupt because the world conspired against him. But I watched that noble fight and it was heroic, and I was in a late elementary school, early middle school, and I thought to myself, you know, someday I'm going to complete that journey. I went to law school because my grandfather said us kids, none of you are allowed to be entrepreneurs. You all have to be doctors or lawyers or architects. So I honored him. I went to law school, but I always knew in the back of my mind that I was fit to live out that dream. This really is an interesting theme which I want to go through a bit. You've built everything you've got in very interesting ways, and we want to get into your insights, lessons philosophies on everything from business to philanthropy and social action. But let's stick with the childhood era. You were born nineteen seventy one, grew up in Syracuse, Indiana, three siblings. You talked a little bit about your dad, but can you paint the picture of that place and that time of the seventies and eighties what it felt like and how that might have shaped you. Uh, it's a great question. The place. It's a town that was three thousand people in the winter and twenty five thousand people in the summer. It's near the border with Michigan, and as one of the most beautiful natural lakes in the country that I grew up near, and so families from Chicago and Indianapolis that were pretty wealthy would come to the lake in the summertime. In fact, Eli Lilly famously made the lake his summer retreat and had a giant estate there. So I had this window into this world of business and success that I wouldn't have naturally gotten from a small farm town in Indiana. My family had no money, but I never missed money. I thought I had everything. I grew up on the water and racing sailboats and skiing on a small icy hill in the wintertimes, and so there was never a sense that we didn't belong or we were lesser than. But to be clear, they were hard economic times. It was hard on my family. It was hard on my mother, who worked two jobs. But I was deeply observant of what was going on in the world because of this window of my dad's experience. So I was worried about the United States, right like most kids growing up at that point in time, you're worried about an actual war with the Soviet Union. I was worried economically for the country. And so the eighties for me, which was middle school through college, was just a transformational time. You were a smart kid. But how was that nurtured and developed in a small town like this picture you're painting. Well. First, I was the youngest of four. My oldest brothers fifteen years older than me. I had really smart siblings. I had a grandfather on my father's side who was patriarch of the clan, you know, on his bookcase where physics textbooks and biology and texts on politics, and he was all self studied. He couldn't afford to go to school. So study and conversation and debate that was just part of our family. And nobody was taking it easy on the youngest kid around the table. And so I ended up a national debater and state debate him it. But I'll tell you I got really lucky, Bob. The public schools in Indiana, the small rural public school is pretty damn good. I had great teachers in Indiana. At that period of time, there was a push to set up in the public school system gifted in the Talented program, and this would ultimately go on to be politically controversial at a national level. Is it right to pull certain kids out or not? And so I'm not on one side or the other. I'm just giving you one person's experience. So in the third grade, they pulled four of us out of the classrooms one day a week, and they assigned us a Gift in Talented teacher named Connie Bailey, and she ultimately became not just a teacher, but a life coach. I went through some turbulent times, like any teenager does. My parents got divorced, and Connie was often there to challenge me, to bail me out and to make sure that I was thinking big enough. You went to Oxford your junior year, you graduated from law school, You went on to be Deputy Secretary of State in Indiana. Clearly you had aspirations to be in politics, and then you went to the Harvard Business School. What happened to the politics. I was always interested in what was going on politically in the world. I thought politics was a lot of the reason that my dad's business collapsed. And so when I came back from Oxford, our senator, great Senator for the state of Indiana, Dick Luger, who had been a Rhodes scholar, who was a very well known moderate Republican. He and Sam Nunn, the great Democrat senator, helped to denuclearize Russia. And I wrote him a letter and I said, hey, I just had this experience at Oxford. I'd like to come to Washington and work with you on the Senate Foreign Relations Committee and just learned. And he was generous enough to give me a job, and then he would call me a couple of years later after I was out of law school, and he asked me if I would accept an appointment as Deputy Secretary of State Indiana. And that had been a stepping stone for Evan By to become governor, and so it was kind of known that that was a plumb assignment and was giving you an opportunity to become governor or whatever. The problem was. I was poor, and I hated the idea that I was going to spend most of my time asking people for money. I felt like I couldn't be true to my north star if I was beholdened by that process. And so I made a really difficult decision to leave. And I thought to myself, I'm gonna make a million dollars and I'm gonna come back and I'm going to run for governor. And as fate would have it, I left, went to business school, and along the way I concluded that I could have far more positive impact on the world by doing exactly what I'm doing, as opposed to going back and running for office. I want to know if these things came from childhood, if there were the seats in your childhood, what drove you to be that person who can think out of the box, take big risk, and think big even when you have little I think they're two interrelated things. One is I'm curious about everything. I want to know how everything works, and I'm happy to study it. And then I like to talk about it. I like to debate about it, and so that's the formation of conviction, and conviction is the basis for being able to think big or act big. Because what appears crazy from the outside for the highly convicted person. For Elon Musk, Tesla was not crazy. For Elon Musk, SpaceX was not crazy. He was so convicted that the world was going to electrify, right, that starting a company that was going to transform the biggest industry on the planet to electric was not crazy. And on the second hand, it's not risky. And here's why, once you decide that there's something more powerful in life, then the fear of failure. Once you decide that it's not all about the mountain of money you amass or whether everybody loves you, but it's about doing the things that make this a life that matters that when I look back, I'm not going to have regrets. Right, so I have maximum conviction it doesn't appear that risky, and even if it is, it doesn't matter because the very pursuit, the very adventure, is why we're here. And so those two intersecting beliefs I think really formed the foundation. So you finished Harvard Business School, coming out of the background you do wouldn't naturally say you're going to go to tech, but yet you were one of the founding group at General Catalyst. What drove you to tech? What was the path? In an ap English teacher named Joel Robbins. He was a great teacher, and I was so blessed with so many great teachers. But I remember Joel said that we had to write our high school papers using this service I had never heard of, called CompuServe, and I got fascinated with this private computer network where I could communicate with others and I could discover other information. Well, fast forward, I go away to law school and I encountered the Netscape browser, and I remember gathering my friends from law school around the computer terminal. I'm telling them this changes everything, and they all looked at me and said I was nuts. And I graduated from law school in and I couldn't very well find my way to Silicon Valley. But I went back to this big law firm in Indianapolis. I was the only person in the joint that knew anything about the Internet. So they said, you're our Internet guy and our ventor capital guy, which, trust me, in Indianapolis in didn't mean a whole hell of a lot. But I got exposed to all of these software on rerepreneurs Internet entrepreneurs. I got thrown on a case in nineteen ninety six seven where a domain squatter had squatted on the domain named Indianapolis dot com. And it just so happened that we represented the Indianapolis Motor Speedway, and so I was learning some basic things about the Internet, or as much as I could at that point in time, and became pretty convinced by the time I went to Harvard Business School that I had to work in Silicon Valley, and Harvard Business School was a very different place Goldman, Sachs, Mackenzie. They couldn't even get people to show up at the interviews in we were all doing case studies on startups and technology, and as working with David and Joel on a case study to start General Catalysts and invest in their first company that I'd ultimately become the CEO of, And so it was just happenstance. I graduated in May of two thousand. Michelle decided she wanted to stay in Boston. I decided to stay in Boston and help General Catalysts get started. And by May, pretty much the world was already melding down. None of us knew how bad it was about ready to become and I had the good fortune of having chosen to be CEO of an online travel company, and that was about the only thing that worked or survived this period, and so Expedia immediately tried to buy that company. We ended up in a bidding war between Expedia and Barry Diller and his head of M and A at the time, Dara Kasher Shay he now runs Uber and so Rich and Dara and I would find ourselves in May of two thousand and one in Barry's backyard in Hollywood, wondering how the hell we had gotten there. But we had both just sold our companies, Rich Expedia and me n l G to USA Networks that would become I A C. It's a pretty good story, and I want to get into the sphase a little bit. Bloomberg actually at one point called you the online traveling at the time a hell of a compliment. And then you decided to go run some capital at Park Capital. And by the way, I know because I, like a lot of other people, tried to get you to come run some companies I was involved with, and you decided on this other path once again. You take this next career path, it's quite different from what you were on. Why that change? Well, you know, in those intervening years, I thought I was going back to General Catalyst, but a classmate of mine and I started another company called open List that we had sell to a public company in Seattle named Marchex. And then Paul, who had been an investor in that first online company, he said, you know, I think you would be great at this business. And what was interesting to me because he wasn't running a venture capital fund, he wasn't running just a hedge fund. He was running a pool of capital, like Seth Klarman, like David Abrahams in Boston, like Buffet before them. They just invested in great companies. They didn't worry if they were public or private. They sought them out. And I said to Paul, the thing is, I don't really know anything about running public money. I don't know how to build a hedge book. I don't know the sophistication of risk management. And Paul said, I can teach you all of that, and I said, well, I'll do it, but only on the deal that I work for free. Because you're a legend. I don't know if I'm going to bring you any value. I said. Part of the reason I don't want you to pay me is because if I like this, I'm coming in to study the hedge fund business, the public investing business. And if I like it, I'm probably going to start my own and I just want to tell you that on day one, and if you don't want to hire me, that's fine. And Paul said, if I can't convince you to stay here, then hopefully I'll invest in you and will all work out well anyway. And that's exactly what happened. Three years later, I built the technology practice at Park Capital. I lead the series be venture investments and companies like Zillo, where I went on the board. I had learned a lot about Google and this small little company called price Line, and I said, Paul, I just want to put all my money on those two. Come Pannice, and he was fine with that, and so I basically had a very concentrated public book. It was a very essentialist approach to the business. And I ate lunch with Paul every day. I picked his brain about everything in the business. And he was the best mentor, the best friend, the best co conspirator I could have ever asked for. And I learned over the course of two and a half years, not only did I love the business, but I developed my own point of view on how I would evolve that recipe and build a firm that would focus exclusively on technologies. Well, so let's make that jump. Then we began today talking about you starting Altimeter, and I know it's not a simple story, and I don't want to turn it into that. Give us that really simple line of how you went in just a decade from tiny too big and moving from Boston to Silicon Valley along the way. Well, the vision from the Star was to build the most important crossover fund in the world based in Silicon Valley. By crossover fund, it meant a firm that was a life cycle investor doing both venture capital and public market investing, had a very clear vision of what we wanted to build. And I was lacking two things. I was lacking in two thousand eight capital because nobody was going to give capital to a new fund manager. I went to Morgan Stanley and Goldman Sachs. Nobody knew if they were even going to be in business, and so I went to UBS and a gentleman named Mike TERESI said, listen, Brad, I have no idea if we're going to survive, but I like you, and so let's give it a go. And he helped put us in business and enable our first trades. The vision was very clear, from the start. I never doubted for a second that we would get the capital we needed in the fullness of time. Remember, par had gone from three million to well over a billion, so I had the road map as to how the power of good work could get you there. So I just put my head down, went to work, and we delivered great returns in those first few years. I'm gonna make you uncomfortable for a minute, Brat, because I think you have some wisdom to impart on both the business and personal level. And sometimes someone becomes the thing to hit person Taylor Swift, Lebron James, Ralph Lauren, Jackson, Pollock, Steve Jobs, Oprah, Mark Zuckerberg, Martha Stewart, all the stars aligned, and the world notices and puts them on a pedestal to be admired and opens all the doors for them. Now, because of your modesty, you will disagree, but I want you to indulge me just a minute. Arguably, you have hit an IT moment, and you have this unique moment of opportunity. So here's the question. How do you use this unique moment for your business, the good of the world, and for you and your family. I certainly violently disagree with the company you put me in, but I will say this, there is a lot more velocity and momentum an opportunity coming on us today than's ever come at us. And when you set strategy or tactics in life, you have to decide what you're not going to do, and oftentimes that's a lot harder than thinking about the things you are going to do. And I think a lot of those folks that you mentioned, all the incremental opportunities that come their way that distract them, you do them, and it dilutes your own performance, your own success. And it's that dilution and distraction that then leads to unhappiness and you end up doing something every day that you never really wanted to do. Right, just think of it in a simple model where you run a small firm maybe twenty people. You love it, it's a tight knit family, you're growing it, you're doing excellent work, and then all of a sudden, the guns come out and now your capital base goes up by ten acts. You go from twenty people to two hundred people, and now you spend your day managing people. You spend your day dealing with human resource issues, with politics, with all of that stuff rather than doing what you actually love to do, which is meet with the world's best entrepreneurs and figure out how to help them on their growth journey. And so the way we've dealt with that is, first we have a cultural north star at altimeter. It's the book essential Ism, the art of doing less better. It doesn't mean staying small, it doesn't mean refusing to innovate. It just means if something is not a fast yes, then it's a quick no. And I think that for me it probably was embedded somewhere in my d n A. Maybe it's because you're a simple kid from Indiana, but it is now a dominant life philosophy for me, not just a business philosophy. My life is predicated on friends and family and experiences and on this journey they derive a lot of happiness from being curious and trying to come up ways to leave the world better than we found it. And so the art of saying no has been a critical component of that. When I think about how we're leveraging the platform to do what is best, I'm incredibly excited because I think there's a need in a post technological revolutionary world to reconstruct the social contract right. We have massive and growing wealth disparities in this country, and you know, many people are starting to demonize capitalism. They're starting to demonize Bill Gates. I think that capitalism has been the greatest source for good in the world, and I think it's important that those of us who have voiced, those of us who have platforms of scale, use that to architect the world that we all want to live in. From issues of equity and equality, two issues of wealth disparity, two issues of healthcare and education. And so we're going to use Altimeter as an equally powerful platform to fund entrepreneurs who in their very daily acts are changing the world, and to speak out about the issues and to fund the issues that we think are critical to design in the world we want to live in. We'll be back with more Math and Magic with our guest Brad Gershner after this quick break. Welcome back to Math and Magic. Let's hear more from my conversation with Brad Gershner. So you invest in businesses, you coach and advise execs, you build strategies for companies and investments. Let's get into some of your thinking. One of our folks here at I Heeart had a view on corporate culture. Really nice articulation which we picked up and use company wide now, is saying, the corporate culture is the operating system for a company. If it doesn't work well, none of the programs under it will work well either. It's really the foundation. What do you think is essential to any successful corporate culture, and you've seen a lot of them. How do you build it, how do you get buy in, how do you fix it if it's broken? Well, the number one thing, I think there's consistency, taking the time to know that corporate culture is an operating system, and then lots of different operating systems can work. Right. Google had an operating system based upon decentralization twenty percent time, etcetera, which really is about empowerment and trusting the individual. But that required a recruiting culture that was the antithesis of command and control, but they made it work. There were probably command and control cultures that worked. Certainly works in the military, and so I don't endorse the idea that there's only a single operating system, but I think it's essential that you have one that everybody in the organization knows that that culture and your mission and your values are lived every day, that they see them reinforced every day, and that they see the person or the people at the top living them, not just talking them, but living them. And I think if you do that, it leads to this really powerful catalytic effect. And so you have to empower the team to have an intellectual framework to be able to make those decisions in a way consistent with the corporate culture and values and mission without you in the room. So I think for us, there's not a single person in Altimats organization that wouldn't immediately say essential is M, wouldn't tell you what it means, and couldn't apply it in their daily exercise of their job. There also isn't a person in Altimatis corporate culture that wouldn't tell you how important having positive social impact is as part of the fabric of our business. And you reinforce that in big ways and small right. They know that I'm going to give most of my wealth away during my lifetime and we challenge others to do it. They see what we're doing with the Board challenge, they see what we're doing with invest America. They see what we're doing with lowest highest, with give power etcetera. So they you living your principles. You're not just talking your principles. Now, just give you a small example. At the end of last year, we had a good year, and just as a surprise on Christmas Eve, I sent a slack out to everybody in the organization and I said, I would like for you all to give ten thousand dollars away between now and the end of the year to any organization that is meaningful in your life in any way. Sit down with your family on Christmas Day, involve your kids, involve your spouse, and have a conversation and then we'll get it funded. And the stories that came out of that, the conversations that it lit up around the family tables, the really meaningful things that people did that I would have never expected, organizations that I had never heard of. But it's reinforcing that corporate culture in a way that is again living it through action. So let's move from corporate culture to management. If management is about getting results through others, what are the qualities you see and managers who do that the best? You know, it's the job of the coach or of the CEO. The temptation is often to jump in and do it for people. But ultimately, you have to recruit excellence, you have to retain excellence, you have to expect excellence, and then you have to inspire excellence. And so when I'm talking to everybody, helping them understand the mission that we're on, and the mission is not just about making more money for our LPs, although all of that is important and those are all enablers, but the mission is enabling entrepreneurs to do something the world needs. Whether you're funding Moderna that's developing vaccines, or you're funding Zoom, which is developing a video first infrastructure platform that connects families and relatives in the middle of a global pandemic, it's way more important. And so I think you have to set that vision, you have to inspire and then, yes, one of the tough things, whether you're coaching an NBA team or whether you're coaching an investment firm, we make slow decisions on the B player, the B plus player, the B minus player, and I often say to our teams, they can be absolutely fantastic friends, but that doesn't mean that they're the right fit for our team. And we have an obligation to make sure that we're assembling the best team on the floor every day to deliver against the promise we're making not only to our investors, but the promise that we're making to the entrepreneurs and the founders and the social impact we want to have on the world. Let's talk about the idea of change sneaking up on big companies. I look back on the blue chips of the eighties and nineties and compare it to today Apple, Google, Microsoft, Oracle, Amazon, Salesforce, maybe two Telco's Facebook. It's all changed. Is it inevitable? The blue chips because they have such a huge footprint, such a big infrastructure, will eventually be replaced as the world changes working companies of that size pivot. Could IBM have become Microsoft? Could hpter Nokia have become Apple? Could Walmart have become Amazon? For a hundred years of business school history, there was a law of diminishing returns that was taught, this idea that as you get big, innovation slows down and they're diminishing returns to scale. Over the last twenty years we really started to question that orthodoxy, and there's a belief, certainly at altimeter, that there are increasing returns to scale. I remember when people said it was impossible, we will never have a trillion dollar business. We have a business today approaching to trillion. People said Microsoft was dead in two thousands. Microsoft has been reborn in gaming, in cloud computing. Right, the elephant can dance as a question, lou gersoner when he was an IBM of no relation. So to me, I'm a strong believer that there isn't a law of physics around diminishing returns. There isn't a law of physics around big companies. But those decisions that most big companies make, command and control does break down. It does slow down innovation, which is the deliberate cultural decision at Google not to have a command and control system because they didn't want that to happen. There. There are lots of ways to attack that problem. But I'm a believer that innovation can and does happen at scale. If you look at the percentage of the NASDA represented by the top seven companies in the year two thousand and ten, and you look at that same percentage of the NASDAC represented by the top ten companies a two and twenty, I think it's gone up by two x, which means the big companies took an increasing share of the pie, not a decreasing share of the pie, because Apple continued to innovate, because Google continue to innovate. Because Amazon, rather than resting on its laurels and saying books are good enough. You know, two week delivery is good enough, they said, no, we're going to deliver everything and we're gonna get it there in hours. And along the way, we're gonna transform all of computing from data centers and client server to a utility in the cloud. You know, I don't think the innovation is only the domain of venture capital in small companies. So you've made a lot of money for you and others. You've come a long way from your economic circumstances in Indiana. Let's get into personal stuff. Does financial success have much to do with personal success? Well, you know the answer to that one. The truth is mas laws, hierarchy. There is a basic level of safety and security we all need as a prerequisite to be happy, and that is economically linked. For some rich person to say, like they did when I was growing up, money doesn't matter. Money matters, because growing up in a house with a bankrupt dad and a mom working two jobs and losing the house and losing the car sucked. It caused stress, it caused drinking, it caused divorce. Like that's not a fun place to be. But once you get beyond that, you sure as the hell better figure out a definition of happiness that's not predicated on making the next dollar, because the return on that incremental dollar is a contribution to happiness is really low. And so for me, I've kept life really simple. I've had a couple indulgences on things that are passions in my life, but the reality is I look to other sources for my happiness. I'm working as hard as I have ever worked. I have three siblings who are basically retired, and they asked me why I work. I say, because I can have maximum impact and I love what I do every day. And so the way in which it's changed our lives is I don't worry for myself or my family about basic needs, and I know any friend in need we can help, and that makes me feel terrific. But I also feel a deep, burning passion, desire, pressure, responsibility to make the most out of the privilege the universe has dropped on us. And that's not a burden on me. It excites me every day, but it means that you know, that really is the source of my happiness. It's not about going and buying yachts and spending the whole year on vacation and doing things like this. You're the founder of the Board Challenge. It's a movement to improve the representation of black directors and corporate US boardrooms by asking companies to pledge to appoint a black director within the next year. That was done back in September. So where did the idea come from? How's it going? Well, you know, we live in a household and I give a lot of credit to Michelle where issues of social justice matter a lot. We talk about issue us and responsibility and privilege, etcetera with the kids, and so, like so many other people, we saw the events of Black Lives Matter, the needless killing of far too many young black men and women at the hands of police, and so we decided that we would join in a peaceful protest in Palo Alto. An inspiring day. The crowd was everybody in the community. And as we're getting back in the car as with the two boys, Jack and Lincoln, and there's a poster about reparations. And Jack asked me what reparations meant, and I said, you know, think about the base word to repair. It's repairing past wrongs. There's an idea that we could transfer value, we could transfer wealth for past harms. And Jack said to me, well, you know I haven't done anything bad, so why do I have to pay? And his older brother, Lincoln said, you know it was only twelve, so Jack, don't be so stupid it. He said, there's four hundred years of structural racism in this country. Somebody's got to pay. And I would have never dreamed I would have been talking to my kids this year about pandemics and viruses and vaccines and four years of structural racism. It seems like they're far too young to have those conversations, but we did. And then Lincoln turned to me in one of those moments and said, Dad, what are you going to do about this? And it just rattled in my head and so, as you know, Bob, I had a simple idea. I was on a couple of boards and said, well, maybe I should resign from those boards and asked those boards to replace me with a black director. And then I talked to a good friend, Tony West, encouraged me to think bigger. He said, you know, you have voice, you have standing, You're an owner, you're an investor. What can you do? And so before we knew it, we had forty people around the tab able and volunteers and CNBC who wanted to help us launch this. And today we have over seventy companies who took the pledge, you know, from Salesforce to United Airlines, from Starbucks to Altimeter and it's just incredible to see. Right, this is not a talent problem. It's not a pipeline problem. It's a matter of priority. It's a matter of creativity and the board challenge, while it's focused in its first year on a black director, is about all diversity in the boardroom. Right. We don't have enough Hispanics in the boardroom. We don't have enough women in the boardroom. You'll see this movement continuing to expand the play we called in two thousand and twenty one, there are nearly a hundred SMP five hundred companies a hundred that don't have a black director. In the year two thousand and twenty one, a hundred out of five hundred DARVA black director and so I'm going to c e O s across America and I'm asking them to adopt two or three companies in the SMP five hundred and helped to close the gap. I think within a year, every SMP five company could have a black director and we will have totally eliminated that gap. That doesn't solve all the problems of racial inequities or inequality. It doesn't solve the wealth gap, but it is a step in the right direction. And I could turn to Lincoln and when he said what are you gonna do about I said, this is what we're doing about it. You're a burner and you're part of that burning Man culture year round. What does it do for you? What do you get out of it? Well, I have you to thank for introducing me to Bernie Man, well over a decade ago. At this point, what I get out of it has very little resemblance to what most people think. Bernie Man is right. Most people will talk about the raids, the parties, the late nights. Bernie Man is a way of thinking. And there's a reason a lot of people in Silicon Valley ended up at Burnie Man. There's a reason that Larry Page and Sergey Brand, the founders of Google, famously one of the criteria, and hiring Eric Schmidt as he had been the burning Man. Right. There are these principles of burning Man that guide the conduct of Bernie Man. The most important one to me, and it's one I've had to learn and one I really try to practice daily, is no judgment. I think judgmentalism is like one of the basest of human qualities, and it happens every day all around us. And part of the reason we're all judgmental is because it makes us feel better in our own insecurities. And so when we restrain ourselves from making judgment, we open our minds to the possible. And that gave rise to this incredible art installation, right that's not coordinated from the top, but this beautiful, bottoms up creation of seventy person city in the middle of a desert with extraordinary art that reminds you if this is possible, anything's possible. I'm sure that's one of the things that connects the dot between Ellen's out of Bernie Man, Ellen taking people to Mars right, saving the planet through electrification. It requires the suspension of judgment. It requires the suspension of dogmas. It requires open mindedness, and so for me, it's a profoundly important part of how I try to think and set my compass. Every day, I miss it desperately and hope that the community can be back out there in two thousand and twenty one. What advice would you give your fifteen year old self and your year old self if you could. I just give great gratitude in my heart that I have the time to learn every day, and I challenge myself to evolve into a better leader, a better human being, a better dad, a better friend, and so you know, of course I would love to transport and give some of that wisdom to those younger selves. But you know, I don't spend a lot of time thinking about that. I spend most of my time thinking about how can I make the most of this extraordinary journey. We're all just start us. We all suspend disbelief, right. We don't want to think about the fact that our days are finite, but the reality is they are, and so I want every one of them to be a full expression of the best version of myself. And I certainly have bad days, but it's what I aspire to and with friends like you, Bob, the only thing I worry about is running out of time because we have so much left to do. Mathew Magic refers to the analytical view and the creativity that must both be present for any successful business or marketing, and we end each episode with our guests shout out on each because you've seen a lot thinking about people you've seen or heard of or know about. Who gets the shout out for the best on the analytical side, the mathematician, if you will, and who gets it on the creation of side, the magician. I'll start with the creative side, the magician, the mutual friend of ours who has been in my life for twenty years, Rich Barton. He reinvented the travel industry with Expedia. He reinvented the real estate industry was Zillo. He's helping me think about how to reinvent the finance industry. And having somebody like that who's inspired, who thinks about the world differently, happens to go to burning Man as well. That open mindedness, his creativity, his passion to understand the world better in all things just really inspires me. And then on the analytical side, I would give a shout out to my mentor Paul Reader, I would have a lot of ideas, and he would say to me, if all of this stuff in your head isn't in your financial model, if it doesn't show up as part of your future forecast, doesn't show up in your assumptions, then it's not actionable, right. And this discipline around bill any framework for decision making. We all have to make decisions with insufficient information. But really understanding the distribution of probabilities when you can act and when you can't act was eye opening for me and really is part of our formula at Altimeter. And so two very important people in my life over the course of the last twenty years, and both represent the opposite sides of that equation, one art and one math. Brad, you have had and are having an amazing life, deep and broad your force for positive change in business and in the world. Thanks for all you're doing and thanks for joining us today. Thank you, Bob. Here are a few things I learned from my conversation with Brad. One essentialism is the north star of Altimeter, which is simply the idea of doing less better. Brad believes that accepting every opportunity without critical thought dilute your focus and effectiveness. To Brad's recipe for thinking big is first, be curious. When Brad takes hold of an interest, he learns all he can on the subject and interrogates that knowledge. Then he lets that research turn into informed conviction. Three, Brad understands that leaders cannot simply dictate a corporate culture. Instead, Brad reinforces corporate culture through living the company's values. For burning Man taught Brad to suspend his judgment and be more open minded. According to Brad, this mindset is what has allowed innovators to unlock revolutionary ideas. And Five, According to Brad, leaders in technology and entrepreneurship have a responsibility to create a more equitable world. With people like Brad at the helm, we can leave the world better than we found it. Thanks for listening. I'm Bob Pittman. That's it for today's episod old Thanks so much for listening to Math and Magic, a production of I Heart Radio. This show is hosted by Bob Pittman. Special thanks to Sue Schillinger for booking and wrangling our wonderful talent, which is no small feat Nikkiatore for pulling research, Bill Plax, and Michael Asar for their recording help, our editor Ryan Murdoch, and of course Gail Raoul, Eric Angel, Noel Mango, and everyone who helped bring this show to your ears. Until next time,