Shyam Sankar - Celebrating Heretics - [Invest Like the Best, EP.462]

“Well, I think they're really founders. They're founder figures. They get obsessed with delivering something that it makes no sense because they're fighting, particularly in the military context. You're, like, fighting the bureaucracy. You're going to end your career. You pay extreme prices for it. So there's almost like a pathological obsession with winning, which I really relate to both personally, but also that's what I see in great founders. If you look back at history, the only shit that ever worked, the things that helped us win all the wars were the things that the heretics actually did. Nothing that went through the machine delivered anything.”

“I'd probably pick Rickover's. So Hyman Rick Ober, born in a shuttle in Poland, came to The US when he was six. He went to the naval academy. He was so unlikable that in the yearbook in the naval academy, they've torn out his picture. After the war, he went to Oak Ridge, and he observed the vestiges of the Manhattan Project. And he had this idea. We could build nuclear powered submarines. Talk about chutzpah. Oppenheimer himself thought this idea was gonna fail. So he started on this project, and he built the first nuclear submarine in seven years, start to finish. The navy aided him so much that his first office for this project was literally the women's restroom.”

“Superpowers are effortless. In some sense, it's almost like not even rewarding to exercise your superpower. My analogy for this is Superman could fly. He could see through walls, but that wasn't some sort of arduous thing for him to do. It's just something he could do. That's usually something you learn comparatively. You're like, oh, this thing that's lizard brain, effortless, almost thoughtless for me, other people who are really smart can't seem to do, or I do just way better. Helping them understand, like, hey. All of your contributions to the world are gonna come from your superpower. Everything else is basically a waste of time.”

“Let me start with an analogy. How did Bruce Banner become the Incredible Hulk? It wasn't progressive overload. It's not like he lifted a little bit more weight every week. It was a near fatal dose of gamma rays. Fifty percent chance he died. Fifty percent chance he turns into big green monster. And there's absolutely an element where we're taking people and just irradiating them. Prospectively, you're not sure if they're gonna come out the other end, but you have some belief that they have the raw talent and potential. The maximum rate of learning will be coincident with your maximum ability to tolerate pain.”

“In 1993, there was a very famous dinner at the Pentagon called the last supper. We had won the cold war. So we slashed the defense budget. And in this dinner, the secretary of defense told a subset. I think it was 15 of the 51 primes. We had 51 primes. Today, we have five. They told him you're all not gonna survive. The budget's getting cut. We give you permission to consolidate. And this just set off a merger frenzy that led from the consolidation from 51 down to five. The much more profound consequences, this is the moment of profound financialization and conformity in the industrial base. You lost the crazy people.”

“The biggest lie that we bought from globalization is this concept of we will do the innovation, and they will do the production. Well, you have to recognize that innovation is itself a consequence of productivity. What motivated Google to do the research behind the attention is all you need paper in 2017? If you ask them, they'll say, well, the team was working on an incremental 3% improvement to Google Translate. You cannot think of something more banal leading to something more revolutionary than that. So if you don't have the input stimulus on improving production, you're actually not gonna be able to capture the innovation.”

“The American Calvinist sensibility is structurally positive sum. We're gonna turn the other cheek time and time again, over and over again. But there will be some line. There'll be some point at which we just react. And when we react, the best quote I have from the admiral that I like is it's no longer John Boyds OODA loop, observe, orient, decide, act. It's the American OODA loop, observe, overreact, destroy, apologize.”

“I have narrow ideas. You wanna bring pharmaceutical production back to The US? If you try to do that for generics, the business case will never work. It's too hard. But what you really want is you want to redevelop a skilled workforce that understands how to make drugs again. So why don't we manipulate patent length and say, look, drug companies, if you make your worldwide supply of your branded drugs here in The US, I will extend your patent length such that you recover two X your CapEx investment to go do that. That's a simple business case that every pharma company would underwrite in a heartbeat.”

“There's a great Greg Lamont quote who's a world championship cyclist, and someone was asking about the championship performance. And he almost looked incredulous, and he was like, you know, it doesn't get easier. You just go faster. And so what do you think a championship performance feels like? It feels shitty. It's really painful. It's really hard, and your ability to win is basically, can you survive more pain than your competitors can? So then there's this weird phenomenon where if you're doing something world class, it's really painful. Also, if you're totally failing, it's really painful.”

“So John Boyd's advice to other officers, other uniformed service members was, you can either be somebody or you can do something, but you can't really have both. And if you're gonna be somebody, you gotta play this game and it's all theater, but you're gonna get promoted and you're gonna get the acolytes and you're gonna get the rewards of doing that and you're gonna feel good about yourself. Or you actually do something, and it's gonna feel really shitty and no one's gonna appreciate it, but you're gonna have the intrinsic reward of knowing that you did something.”