Invest Like the Best with Patrick O'Shaughnessy

My guest today is Alan Waxman, co-founder and CEO of Sixth Street, a $130B global investment firm.

Private credit is one of the most discussed topics in markets right now, and there is a lot to make sense of. The current discourse is almost entirely focused on symptoms. Alan Waxman has spent the time diagnosing the root cause.

Alan thinks about the financial system the way a historian would, studying the incentives, guardrails, and market structure that determine how things play out.

In this conversation, he traces the evolution of American finance from the 1929 crash through Glass-Steagall, the GFC, and Basel III to explain how we arrived at what he calls the factory model, the industrialization of liability-gathering and asset deployment that he believes is the root cause of everything happening in private markets today.

This is my second conversation with Alan, our first one is one of my favorites from last year. 

For the full show notes, transcript, and links to mentioned content, check out the episode page ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠here⁠⁠⁠⁠⁠. 

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This episode is brought to you by⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠Ramp⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. Ramp’s mission is to help companies manage their spend in a way that reduces expenses and frees up time for teams to work on more valuable projects. Go to⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠ramp.com/invest⁠ to sign up for free and get a $250 welcome bonus.

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This episode is brought to you by⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Vanta. Trusted by thousands of businesses, Vanta continuously monitors your security posture and streamlines audits so you can win enterprise deals and build customer trust without the traditional overhead. Visit vanta.com/invest. 

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This episode is brought to you by ⁠WorkOS⁠. WorkOS is a developer platform that enables SaaS companies to quickly add enterprise features to their applications. Visit ⁠WorkOS.com⁠ to transform your application into an enterprise-ready solution in minutes, not months.

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Rogo is the AI platform for finance. They're building agents for Wall Street that are trained to understand how bankers and investors actually do work: from diligence and modeling, to turning analysis into deliverables. To learn more, visit rogo.ai/invest.

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This episode is brought to you by⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Ridgeline⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. Ridgeline has built a complete, real-time, modern operating system for investment managers. It handles trading, portfolio management, compliance, customer reporting, and much more through an all-in-one real-time cloud platform. Visit ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ridgelineapps.com.

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Editing and post-production work for this episode was provided by The Podcast Consultant (⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://thepodcastconsultant.com⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠).

Timestamps

(00:00:00) Welcome to Invest Like The Best

(00:02:43) Intro: Alan Waxman

(00:04:35) Financial System Guardrails & Incentives

(00:05:56) System 1: Pre-1933 to 1999

(00:07:39) Glass-Steagall Legislation

(00:10:46) Deregulation & Rise of System 2

(00:12:27) Leverage, GFC, and System 2's Collapse

(00:14:25) Basel III, Dodd-Frank, and System 3

(00:15:32) Why System 3 Could Be the Best Ever

(00:19:04) Behavioral Shifts Starting in 2018

(00:19:52) The Factory Model

(00:24:33) Acceleration of Factory Model

(00:28:25) FRE Multiples and GP Incentives

(00:34:59) Wealth Channel & Asset-Liability Mismatches

(00:36:15) Why This Won’t be the Next GFC

(00:45:31) AI, Creative Destruction & Opportunity 

(00:49:35) Alan’s One-Sheet Brain System

(00:55:01) Lessons by Decade: Hui

(00:59:28) Face the Tiger

My guest today is Sergey Levine, a professor at UC Berkeley and co-founder of Physical Intelligence. The company is building robotic foundation models designed to control any embodied system to do any task in any environment.

Sergey argues that solving robotics at full generality is the right path, and that building systems that learn across many robots, environments, and tasks may be the more scalable approach than building narrow specialists. We discuss how these models can perform new tasks without being trained on them directly, and why everyday human actions remain the hardest problems in the field.

He also reflects on how human trust and acceptance may matter as much as technical breakthroughs in determining when robots become part of daily life.

Please enjoy my conversation with Sergey Levine.

For the full show notes, transcript, and links to mentioned content, check out the episode page ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠here⁠⁠⁠⁠⁠. 

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Become a Colossus member to get our quarterly print magazine and private audio experience, including exclusive profiles and early access to select episodes. Subscribe at ⁠colossus.com/subscribe⁠.

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⁠Ramp’s⁠ mission is to help companies manage their spend in a way that reduces expenses and frees up time for teams to work on more valuable projects. Go to⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠ramp.com/invest⁠⁠ to sign up for free and get a $250 welcome bonus.

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Trusted by thousands of businesses, ⁠Vanta⁠ continuously monitors your security posture and streamlines audits so you can win enterprise deals and build customer trust without the traditional overhead. Visit ⁠vanta.com/invest⁠. 

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⁠WorkOS⁠ is a developer platform that enables SaaS companies to quickly add enterprise features to their applications. Visit⁠⁠ ⁠WorkOS.com⁠⁠⁠ to transform your application into an enterprise-ready solution in minutes, not months.

-----

Rogo is the AI platform for finance. They're building agents for Wall Street that are trained to understand how bankers and investors actually do work: from diligence and modeling, to turning analysis into deliverables. To learn more, visit rogo.ai/invest.

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⁠Ridgeline⁠ has built a complete, real-time, modern operating system for investment managers. It handles trading, portfolio management, compliance, customer reporting, and much more through an all-in-one real-time cloud platform. Visit⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ridgelineapps.com⁠.

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Editing and post-production work for this episode was provided by The Podcast Consultant (⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://thepodcastconsultant.com⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠).

Timestamps:

(00:00:00) Welcome to Invest Like the Best

(00:02:43) Intro: Sergey Levine

(00:03:29) Why Bet on Generality Over Specialization

(00:07:24) What if PI succeeds?

(00:09:05) Pros and Cons of Humanoid Robotics

(00:11:02) Timeline of Major Milestones in Robotics

(00:15:47) Sergey's Personal Journey

(00:18:22) Making General Intelligence Happen

(00:19:57) Understanding Robot Data Collection

(00:22:12) Most Surprising Discovery at Physical Intelligence

(00:24:48) The Science of Common Sense

(00:25:36) Long-Range Tasks in Robotics

(00:27:24) Why Wouldn’t We Have A Robot in Our Kitchen by 2050

(00:31:21) Other Interesting Approaches

(00:32:38) Cool vs. Useful in Robotics

(00:36:48) Form Factor Innovation

(00:38:22) Physical Intelligence Analogy

(00:39:30) Economic Transformation from Robotics

(00:40:48) Controversies in the Robotics Community

(00:42:16) Arguments Against End-to-End Learning

(00:42:34) Compositional Learning Explained

(00:43:25) Last Tasks Robots will Conquer

(00:44:30) Dark Parts of the Robotics Brain

(00:47:05) What Makes a Great Researcher

(00:50:15) Manufacturing and Scale Challenges

(00:51:17) How Companies Should Prepare for Robotics

(00:53:38) Boston Dynamics' Demos

(00:55:43) Converging Technologies Enabling Robotics

(00:56:47) How to Stay Up To Date in Robotics

(00:59:51) Near Term Objectives

(01:00:49) Confidence Level Among Researchers

(01:03:31) Google's Experimentation Culture

(01:04:24) The Kindest Thing

My guest today is Mitchell Green. Mitchell Green is the co-founder and managing partner of Lead Edge Capital, a growth equity firm that has spent 15 years building one of the most disciplined investment machines in the business. 

Unlike most firms chasing power law outcomes, Lead Edge is designed to deliver consistent returns by talking to thousands of companies a year, applying a rigorous eight-point criteria to filter down to a handful of investments, and leveraging a uniquely constructed LP base of world-class executives and entrepreneurs. 

In this conversation, Mitchell walks through every component of the machine, from how they source and evaluate companies to how they think about selling, building culture, and staying competitive in a world being reshaped by AI.

For the full show notes, transcript, and links to mentioned content, check out the episode page ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠here⁠⁠⁠⁠⁠. 

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Become a Colossus member to get our quarterly print magazine and private audio experience, including exclusive profiles and early access to select episodes. Subscribe at ⁠colossus.com/subscribe⁠.

-----

⁠Ramp’s⁠ mission is to help companies manage their spend in a way that reduces expenses and frees up time for teams to work on more valuable projects. Go to⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠ramp.com/invest⁠⁠ to sign up for free and get a $250 welcome bonus.

-----

Trusted by thousands of businesses, ⁠Vanta⁠ continuously monitors your security posture and streamlines audits so you can win enterprise deals and build customer trust without the traditional overhead. Visit ⁠vanta.com/invest⁠. 

-----

⁠WorkOS⁠ is a developer platform that enables SaaS companies to quickly add enterprise features to their applications. Visit⁠⁠ ⁠WorkOS.com⁠⁠⁠ to transform your application into an enterprise-ready solution in minutes, not months.

-----

Rogo is the AI platform for finance. They're building agents for Wall Street that are trained to understand how bankers and investors actually do work: from diligence and modeling, to turning analysis into deliverables. To learn more, visit rogo.ai/invest.

-----

⁠Ridgeline⁠ has built a complete, real-time, modern operating system for investment managers. It handles trading, portfolio management, compliance, customer reporting, and much more through an all-in-one real-time cloud platform. Visit⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ridgelineapps.com⁠.

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Editing and post-production work for this episode was provided by The Podcast Consultant (⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://thepodcastconsultant.com⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠).

Timestamps:

(00:00:00) Welcome to Invest Like the Best

(00:00:53) Episode Intro: Mitchell Green

(00:02:01) Cold Calling 10,000 Companies

(00:03:54) Building the Lead Edge Machine

(00:06:15) Lead Edge’s LP Profile

(00:09:22) Hitting Doubles and Triples

(00:11:39) Knowing When to Sell

(00:15:08) Lead Edge’s Eight Buying Criteria

(00:18:12) The Opportunity in Enterprise Software

(00:24:54) Using Criteria for Filtering, Not Prediction

(00:27:11) Building Relationships with Entrepreneurs

(00:29:16) Improving the Investment Machine at Scale

(00:31:59) Lead Edge’s Culture

(00:35:08) Mitchell’s Schedule

(00:36:37) The Mount Rushmore of Investment Machines

(00:38:40) The AI Readiness Score

(00:40:50) Overhyped, Frothy Markets

(00:42:16 When AI Will be a Good Opportunity

(00:44:29) Lessons from Competitive Skiing

(00:47:33) Starting a Fund & Keeping Score

(00:49:15) The Kindest Thing

William Hockey is the co-founder of Plaid and the founder and CEO of Column, a software company that owns a bank and powers Ramp, Wise, Bilt, Mercury, and others. He funded Column by borrowing against his Plaid shares and has never raised outside capital. 

William talks about what owning 100% of his company allows him to do that other venture-backed founder cannot and the personal risk he took to do so. He shares how Silicon Valley's consensus culture produces consensus founders, and why becoming a founder has become too safe. He believes the best builders are specialists and explains with unusual clarity what it takes to become the best in the world at one specific thing.

William also spends a lot of time in emerging markets which has given him a unique perspective of the power of the US dollar.

For the full show notes, transcript, and links to mentioned content, check out the episode page ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠here⁠⁠⁠⁠⁠. 

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Become a Colossus member to get our quarterly print magazine and private audio experience, including exclusive profiles and early access to select episodes. Subscribe at ⁠colossus.com/subscribe⁠.

-----

⁠Ramp’s⁠ mission is to help companies manage their spend in a way that reduces expenses and frees up time for teams to work on more valuable projects. Go to⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠ramp.com/invest⁠⁠ to sign up for free and get a $250 welcome bonus.

-----

Trusted by thousands of businesses, ⁠Vanta⁠ continuously monitors your security posture and streamlines audits so you can win enterprise deals and build customer trust without the traditional overhead. Visit ⁠vanta.com/invest⁠. 

-----

⁠WorkOS⁠ is a developer platform that enables SaaS companies to quickly add enterprise features to their applications. Visit⁠⁠ ⁠WorkOS.com⁠⁠⁠ to transform your application into an enterprise-ready solution in minutes, not months.

-----

Rogo is the AI platform for finance. They're building agents for Wall Street that are trained to understand how bankers and investors actually do work: from diligence and modeling, to turning analysis into deliverables. To learn more, visit rogo.ai/invest.

-----

⁠Ridgeline⁠ has built a complete, real-time, modern operating system for investment managers. It handles trading, portfolio management, compliance, customer reporting, and much more through an all-in-one real-time cloud platform. Visit⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ridgeline.ai⁠.

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Editing and post-production work for this episode was provided by The Podcast Consultant (⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://thepodcastconsultant.com⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠).

Timestamps:

(00:00:00) Welcome to Invest Like the Best

(00:02:43) Intro: William Hockey

(00:03:49) Column: A Software Company That Owns a Bank

(00:06:46) Finding Ideas in Emerging Markets

(00:11:58) Why Constrained Societies Are More Innovative

(00:16:02) What’s Wrong With Silicon Valley

(00:19:28) Building a Business Without Raising Money

(00:22:48) What Venture-Backed Companies Can't Do

(00:28:39) Getting Margin Called

(00:31:41) Starting Companies Has Become Too Safe

(00:34:23) Why Employees Take More Risks Than Founders

(00:37:09) A Maniacal Commitment to Research

(00:39:09) Finding Boring Problems to Solve

(00:41:45) Why Building a Second Company is Easier

(00:42:36) Missionary vs. Mercenary

(00:45:49) Funding a Company with Cash Flows

(00:50:04) Perspective on the Venture Ecosystem

(00:52:48) The Dominance of the US Dollar

(00:58:37) The Future of Financial Services

(01:02:06) Why Big, Inefficient Brands Win From AI

(01:06:29) The Opportunity for Non-Consensus Founders

(01:08:03) The Kindest Thing

My guest today is Shyam Sankar, the CTO of Palantir Technologies.

In this conversation, we explore the ideas that shape how Shyam thinks about technology, talent, and national power. We discuss the origins of Palantir’s forward-deployed engineering model and the lessons he learned from Alex Karp about identifying people's "superpowers".

We also talk about Shyam’s fascination with the "heretics" of American history, the unconventional builders who challenged bureaucracy and created many of the systems that powered America’s military and industrial success. Shyam argues that the United States must reindustrialize after decades of moving production overseas, and explains what we can learn from America’s industrial past.

In a new Colossus profile, our Editor in Chief Jeremy Stern tells the story of how Shyam became one of the most important but largely unseen figures behind Palantir, tracing his journey from immigrant roots to employee #13 and the architect of the company's success and distinctive culture.

For the full show notes, transcript, and links to mentioned content, check out the episode page ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠here⁠⁠⁠⁠⁠. 

-----

Become a Colossus member to get our quarterly print magazine and private audio experience, including exclusive profiles and early access to select episodes. Subscribe at ⁠colossus.com/subscribe⁠.

-----

⁠Ramp’s⁠ mission is to help companies manage their spend in a way that reduces expenses and frees up time for teams to work on more valuable projects. Go to⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠ramp.com/invest⁠⁠ to sign up for free and get a $250 welcome bonus.

-----

Trusted by thousands of businesses, ⁠Vanta⁠ continuously monitors your security posture and streamlines audits so you can win enterprise deals and build customer trust without the traditional overhead. Visit ⁠vanta.com/invest⁠. 

-----

⁠WorkOS⁠ is a developer platform that enables SaaS companies to quickly add enterprise features to their applications. Visit⁠⁠ ⁠WorkOS.com⁠⁠⁠ to transform your application into an enterprise-ready solution in minutes, not months.

-----

⁠Rogo⁠ is the AI platform for finance. They're building agents for Wall Street that are trained to understand how bankers and investors actually do work: from diligence and modeling, to turning analysis into deliverables. To learn more, visit⁠ rogo.ai/invest⁠.

-----

⁠Ridgeline⁠ has built a complete, real-time, modern operating system for investment managers. It handles trading, portfolio management, compliance, customer reporting, and much more through an all-in-one real-time cloud platform. Visit⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ridgeline.ai⁠.

-----

Editing and post-production work for this episode was provided by The Podcast Consultant (⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://thepodcastconsultant.com⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠).

Timestamps:

(00:00:00) Welcome to Invest Like the Best

(00:02:43) Intro: Shyam Sankar

(00:03:24) Defining Heretics in US Military History

(00:05:01) The Story of Hyman Rickover

(00:09:55) Formative Experiences & Worldview

(00:14:50) Components of American Greatness

(00:17:56) How to Unlock Talent

(00:25:56) Palantir's Distinct Culture

(00:28:15) Origin of Forward Deployed Engineering

(00:34:24) What Does Palantir Actually Do?

(00:36:19) Example: Airbus

(00:40:20) State of the US Military Today

(00:47:33) The U.S. Needs to Reindustrialize

(00:52:19) Perspective of China

(00:55:56) Our Key Asymmetric Advantages

(01:00:57) Executive Orders for a Day

(01:02:37) Negative Aspects of US Culture

(01:04:47) Managing Rapid Pivots

(01:09:17) Where Will AI Value Accrue?

(01:12:37) Undeclared State of Emergency

(01:15:45) Surprising Aspects of Palantir

(01:17:50) To Do or To Be

(01:18:50) Reflecting on Fatherhood

(01:19:46) The Kindest Thing