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Ep 13: Arianna Simpson – The Bitcoin Believer

 
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Shaan Puri: You said you listened to an episode or two?

Arianna Simpson: Yeah.

Shaan Puri: What did you think?

Arianna Simpson: Yeah, it was great. I was so funny because, I just like randomly came across it and then like, you messaged me like the next day or something. Within days. Like it was wild. No, I thought it was super interesting. I actually listened to the episode with Sam and it’s always interesting to hear people who just had some idea and then just build it up and what they actually did in terms of like steps because to your point I think there’s a ton of like, Oh, then I did the thing and it’s like, yeah, but like what things did you…

Shaan Puri: Right.

Arianna Simpson: … actually do? That’s why even I was asking you all these specific questions around the podcast. I’m just curious about like steps. I’m very much a fan of the kind of entrepreneurial hustle. I have like always taken them less paved road. And so I think it’s always fascinating to see the stories of other people who have done that as well. In totally different environments.

Shaan Puri: So I was looking at your Twitter beforehand. Because I’m like, the best way to do research is just to read someone’s Twitter feed because they’re posting all of their thoughts and so you can see how they think. And you had a tweet, which was good, which was like, “I feel like in college everybody should be required to take a test that makes you do a 20 second intro of yourself. This should be required. It’s shockingly bad. Just like introducing themselves simply.” So I’m going to put you to the test. You’re going to have to do your 20 second intro here and, no pressure and let’s see how it goes. For the audience, who is Arianna Simpson?

Arianna Simpson: Sure. Yes. So my name is Arianna Simpson. I’m an early stage tech investor. I’ve been involved in crypto for about six and a half years, which practically makes me a dinosaur. And prior to that I worked at Facebook and a couple other tech startups. Yeah, I love investing. I think that’s simply what I’m going to be doing for the rest of my life. So I think that’s like a pretty strong part of my identity at this point.

Shaan Puri: Did you think you were going to do investing? Like when you’re growing up, you’re in college. Were you’re like, that’s the path I want to go down or you just stumbled into this path?

Arianna Simpson: No. If you look back, you can kind of see the seeds of it at various points in time. But it was not obvious at all. My parents are teachers, now professors. Have no interest in anything financial. But I always did. I like numbers. I like money. I thought it was interesting and I like things that are quantifiable and specific and that’s just kind of how my brain works. And so I was always interested in kind of reading financial history books and things like that. And so that was kind of the impetus for it.

Arianna Simpson: But in terms of my academic trajectory, I studied international relations and Spanish and history and thought I was going to go work at the UN or for the state department, and then realized I was probably not very well suited to bureaucracy, given my lack of patience in general. And so I kind of started thinking about technology. And it’s kind of a bizarre story how I ended up there. But I got a grant from the National Science Foundation right as I was about to graduate from college, and went to South Africa to do ecology research for a couple months there.

Arianna Simpson: And when I was there, I had an idea for an app that would basically help botanists, ecologists identify various plant species there. Because I was roaming around the forest, literally in downpour rain situations with this book, trying to figure out what trees I was looking at and don’t recommend it. Not a fun activity.

Arianna Simpson: And basically I was like, well it’d be a lot easier if I could just like take a picture of a leaf or a bark and figure out what it is based on that or at least have some guidance. And so I started working on this idea. Obviously now there’s a lot of apps that do that, but this was a number of years ago and so it wasn’t really a thing. So I started working on that with a couple of guys I knew from college and we decided to kind of go out and build this thing. Got accepted to an accelerator in Princeton and started working on it.

Arianna Simpson: And then at a certain point I was like, wait a minute, I don’t really want to spend the next five years of my life on this problem. So we’ll keep the team, but we started working on some other ideas. And so that was kind of my very random meandering into tech.

Arianna Simpson: The crypto piece is even weirder in the sense that, my second time in Africa, I kind of fell in love with the region the first time I was there. I’ve never felt more alive in my life, because there is no higher density of things that can kill you. Maybe Australia, but Africa’s pretty high. And so, I just had an incredible time there and I was like, I definitely want to come back when I have some free time.

Arianna Simpson: So I went back the second time. I spent time in South Africa again, but I also was in a number of other countries including Zimbabwe. And this was early 2013 and the country was just coming out of kind of the worst of their hyperinflation. And I saw kind of how much economic devastation they’d gone through, and the fact that they’d had to switch over to the U.S. dollar to restabilize the economy. So when I came back I was thinking a lot about non-state run currencies and all of that.

Shaan Puri: The hyperinflation, because I’ve seen a Zimbabwe like trillion dollar note or something like that.

Arianna Simpson: Yeah.

Shaan Puri: Then there’s something ridiculous like here’s a million dollar like Zimbabwe dollars or whatever it is. So tell me what was going on, what was causing the hyperinflation and what did you see? I’ve heard some crazy stories about what was going on.

Arianna Simpson: Absolutely crazy stories. So basically what happened is the President slash dictator Robert Mugabe, who actually just passed away last week, effectively started recklessly printing money to pay off his military cronies. And so what this caused was massive hyperinflation, which at its peak had the currency devaluing by 50% on a daily basis. So basically people savings we’re completely evaporating, stores we’re not able to keep any merchandise in stock, hospitals could not stock medicine. Doctors were not getting paid, people were dying from very preventable things. So, the whole country kind of just spiraled downward as a result of that.

Shaan Puri: So you were there when this was going on.

Arianna Simpson: I was there a couple years after the worst of it. But these things obviously take many years to kind of recover from. And so, by that point what they’d done, they replaced the Zimbabwean currency, which had gone to a point of no return effectively, with U.S. dollars.

Shaan Puri: I see.

Arianna Simpson: So when I got there, I was no expert in various currencies at that point in time. And I got there and I was like, “Oh, this is interesting. People are using dollars.” And so then I started kind of doing some research and talking to people and really understanding what had gone on there. And yeah, it was a really, really crazy situation.

Arianna Simpson: But that kind of experience was really what sparked my interest in the potential of cryptocurrencies and that whole universe. Because I came back to the U.S. and a friend of mine was like, “Oh, well you’re talking about like non sovereign currencies, like have you looked at Bitcoin?” And I was like, “Oh, no, what’s that?” And so I read the white paper and then I was like, “Oh, my God, this is insane.” Like if this works-

Shaan Puri: So this is like 2013, 2014?

Arianna Simpson: Early 2013. Yeah. And I said, you know, if this works, this is like the biggest invention of my lifetime. And yeah, I just became fascinated in it. And so started investing there and then the tech piece and the financial piece sort of converged in Bitcoin, which is one of the reasons why I find it so interesting.

Shaan Puri: Yeah. So you got bit by the Bitcoin bug.

Arianna Simpson: I did.

Shaan Puri: And who’s the friend who introduced you to Bitcoin?

Arianna Simpson: His name is Ryan Shea. He is the founder of a project called Blockstack. But this was even before he started doing that and we were just next door neighbors and we’d just kind of, drank wine and shoot the shit from time to time. And he was like obsessed with it as well and explained it to me. I was like, I don’t really get it. I read the white paper and then I was like, aha, epiphany moment.

Shaan Puri: Right. So you got it. And then at this time, where were people talking about Bitcoin? Was this just in the forums? Was the hacker news. Because Bitcoin went from like a very small circle of, essentially like anarchists, to tech enthusiast and kind of people who are interested in new radical ideas. And then it got more and more mainstream and now, you watch CNBC and there’s a Bitcoin ticker on the screen. So like, where were we in that, going mainstream of Bitcoin at that time?

Arianna Simpson: We were really early. I was living in New York at the time and there were kind of certain small, really sketchy meetups, which were inhabited by individuals who looked like they hadn’t emerged from their mother’s basement except to attend these meetups in about a decade. I’m kidding. There were also some normal people, but a lot of interesting characters.

Shaan Puri: And how many other females were in the room at those meetups?

Arianna Simpson: Yeah, great question. One. No, generally it was like zero or one. I’m still very good friends with most of the ones who were there. Yeah, I mean I had some horrible experiences. I actually wrote a blog post which went super viral. My 15 minutes of fame about my experience as a woman at a Bitcoin meetup. Like, I am not a delicate flower. If you piss me off, it means you really went overboard. Just people being like, well, women aren’t interested in these things and women don’t understand efficiency. And I’m like, literally I’m sitting here talking about-

Shaan Puri: Yeah, I’m in the room.

Arianna Simpson: Or, just people groping you. I mean the whole gamut really. But you know, in general I was like, well, whatever. I’m just going to keep showing up and onwards. And so yeah, it was a weird moment in time. I think there was small community of people who saw the potential and were excited about it. But like most people, even very smart, knowledgeable people about tech and finance, were extremely skeptical. And you know, to me the last year has been really kind of crazy in the sense that a lot of the people who were saying, “Oh, you know, Goldman Sachs would never touch this. Like none of the big players would ever do anything in this camp.” You know, now a lot of those players have a desk that trades it or they’re building financial products around it, or they’re members of the Libra Association. So there’s just a lot of stuff that’s happening.

Shaan Puri: Yeah. The skeptics have become sort of converts now.

Arianna Simpson: Exactly.

Shaan Puri: In many ways?

Arianna Simpson: Yep. Totally.

Shaan Puri: And so you were getting introduced here, you read the white paper. Obviously technically savvy enough to like sort of read a white paper and understand what the implications of it is. But for most people, and maybe a lot of people listening to this podcast, they’ve heard of Bitcoin, but on a very surface level and don’t fully have a grasp of it. And I’m the type where there’s like 10 things where, I’ll hear the term 50 times to the point where I’m like, yeah, I think I know. But if somebody was like, “Hey, can you explain that real quick?” I’d be like, “Oh, yeah, I need to Google real quick, let me be right back.” So if you were explaining Bitcoin today to a cousin or an aunt of yours who’s heard of the term, but doesn’t actually understand what it is, what’s your like simple way of explaining, what is Bitcoin and why is it interesting?

Arianna Simpson: Well, I think in its most basic definition, it’s a digital currency, which is scarce by design. So you can’t print infinite money or things like that.

Shaan Puri: You can’t do what Mugabe did?

Arianna Simpson: Exactly. And that’s I think a big part of the value. It’s defined as sound money, which means there’s a certain supply and there’s a number of other characteristics that define it as such. But it’s not issued by a government, which is a key difference. We haven’t really seen non-state issued currencies in our lifetime for the most part. And it’s censorship resistant in the sense that, I can’t really shut down the network. Nobody can, which is I think one of the key elements there. And I own my money in a way that I don’t in the traditional financial world. So right now, I have an account at Chase. If Chase says we’re freezing your account, like, cool story, I can’t move my money.

Arianna Simpson: Whereas if I have a Bitcoin wallet and I own the private keys, which gives me the ability to actually transact or move that money, nobody can really take it away from me. And if one wallet provider or whatever decides to not support something, you can migrate to another. And so I think that is the key distinction. You’re not reliant upon other middlemen or third parties in the way that you are in the traditional financial system.

Shaan Puri: And so, when you were getting interested early 2013, 2014, what was your first Bitcoin purchase? When did you first sit down you’re like, okay, I want some of these Bitcoins for myself. How did you get your first Bitcoin?

Arianna Simpson: I went on Coinbase, which was a very new company at that point in time, and I just bought it on there. I’d also like received some from people who paid me back for something in Bitcoin. It’s kind of-

Shaan Puri: It’s like a $50,000 payback.

Arianna Simpson: Yeah. Exactly. I’m like, well, good thing I just held onto it. Yeah, so some of that kind of transactions with friends and things, but the bulk of it was just buying it. To me, I’ve always felt that it was more interesting to have explosive upside potential than managing downside risk. And so I was like, okay, I’m quite young. I don’t have that much money to begin with. I think this is incredibly powerful and important and most of the world has not yet caught onto this fact. And if it goes to zero, well, whatever, I’ve lost half of my net worth, but it wasn’t that much to begin with and I’ll make it back over the course of my life slash career. And if it works, if I’m right about this thing, like this is huge.

Shaan Puri: Yeah. You could-

Arianna Simpson: And so that was kind of the rationale.

Shaan Puri: You could make a fortune, but you couldn’t lose a fortune.

Arianna Simpson: Exactly.

Shaan Puri: Do you remember the size of your first Bitcoin purchase? Did you dip your toes in the water with like a 100 bucks, or was it a 1,000 or 10,000. What did you do?

Arianna Simpson: I won’t say the number, but it was 50% of the money I had in the world at the time.

Shaan Puri: Okay.

Arianna Simpson: Which is a pretty aggressive move.

Shaan Puri: So you cannonballed into the water?

Arianna Simpson: Yeah. Honestly, it was just very clear to me that this was distinct from anything else I’d ever seen. And that if it worked, again there was a large percentage likelihood that it didn’t work. But if it did, it was going to be huge and it was going to be kind of a binary outcome. Like, it was unlikely to go from $100 to $200 and kind of be done there. To me it was like, this either goes fucking huge or it dies.

Shaan Puri: Yeah.

Arianna Simpson: I wasn’t in the wealth preservation stage of my life. I was in the like, well, let’s see what happens here.

Shaan Puri: Yeah.

Arianna Simpson: I found the tech to be so interesting and so transformative, that I was like, if this works, like this is huge.

Shaan Puri: Right. Yeah. I did the same. When I first bought Bitcoin, I put eight grand into Bitcoin and I had a rule. Bitcoin at the time, the price was like somewhere between a 100 and 200 bucks. And when I bought it, I just publicized it. I put this on Twitter, I said, “Bought Bitcoin today, 10,000 or bust.” And I was like, I’m going to hold it until they’re at $10,000 per coin, or I’m going to hold it till it’s $0 dollars per coin. And that’s how I’m going to play this game. I’m not going to look at the price on a daily basis. And at the time when I was saying 10,000, I thought that was the like home run. I thought, well that’s the crazy outcome-

Arianna Simpson: Yep.

Shaan Puri: If this thing goes from 100 bucks to $10,000 per coin. And ironically, like today, the price is basically like $10,000 per coin.

Arianna Simpson: Yep.

Shaan Puri: I didn’t actually hold true to my rule because, at some point, I think Bitcoin was like 3,500 bucks. I went to the East coast for like a wedding or something. And my aunt, who I can say this because, no way she listens to this. No way she knows what a podcast is. She was talking to all the other aunties at this Indian party, and she was telling them, she’s like, “Oh, yeah, Ethereum. Ethereum is really good.” And I was like, wait, did she just say Ethereum? Like how does my aunt know about Ethereum? She doesn’t even know, like she still has like an AOL email address. And so I was like, “Did you just…,” and she’s like, “Yeah, Bitcoin is great but you know, Ethereum is where you got to be.” So she was like already past Bitcoin and was slinging Ethereum as like the new thing.

Shaan Puri: And I was like, Oh, my God, this is a bubble. If my aunt who doesn’t understand why she thinks Ethereum is good, but just thinks it’s good because you put your money in and it makes you more money. I was like, that’s like I think what a bubble is. So I tried to sell everything that day. And Coinbase has like a limit. So you can only sell like I think 20 grand in a week or something like that. And so I was trying to sell and then like eventually I sold like half of it and then the other half I kind of like, I calmed down by then. I was like, okay, I’ll keep holding that-

Arianna Simpson: Let it ride.

Shaan Puri: Let the second half ride. But that was my journey into buying Bitcoin.

Arianna Simpson: Yeah, I think honestly a lot of people have similar situations. In some cases worse. It sounds like at least you kept some on the table. I know a lot of folks who started buying it round when I did and then were like, “Oh, I made 10 X my money. Like amazing. I’m out.” And that’s true. But I think my position on it was still like, if this works, this literally can compete with state run currencies, which is an enormous market. It’s tackling the market of money, which is by definition the largest market. Like trillions of dollars. And so to me, again, I was like even at 10,000, like there’s so much upside potential from here, that like, I’m holding.

Shaan Puri: Yeah. Price has kind of played out. So I’ll switch the topic soon. But for those of you listening, there are people who believe in Bitcoin though. Somebody like Tim Draper. There are people who believe in Bitcoin and they say, look, if this is digital gold or if this is the global reserve currency, which is like if Bitcoin achieves its vision, that’s what it will be. The market for those is in these sort of like, multiple trillions and trillions of dollars. Therefore, every Bitcoin will be like a 100K, 250K. There’s some number where every Bitcoin will be worth a lot of money. Do you have a mental model that you like that’s like, here’s what if it achieves its vision, here’s what I think it would be worth, based on my logic. Do you have kind of a max upside of what you think this gets to?

Arianna Simpson: Well, I mean, you can back into some numbers. For example, the gold market is about seven to eight trillion depending how you count it. And so, if you say, okay, if Bitcoin becomes that size, then you can back into a number of per coin, et cetera. I tend not to have super specific price targets for some of these things because, I just think there’s so many moving parts. It may not even be relevant because maybe it takes Bitcoin my lifetime and a half to actually get to the size of the gold market, if it goes there. So it’s hard to kind of give it a particular number.

Arianna Simpson: I also think Bitcoin is dominant. I’m very long Bitcoin. But I think there is to expect that other currencies will not improve on it or potentially take market share away from it over time is silly. And so, the overall market for cryptocurrencies might be twice the size of gold, but Bitcoin might end up being a quarter of that.

Shaan Puri: Right.

Arianna Simpson: There’s just so many kind of factors that are up in the air. I think one thing that is an interesting kind of analysis and body of work on this is a paper by a guy named John Pepper, who was a partner at KKR, the private equity firm. And he wrote, it’s called, “An institutional Investors take on crypto assets,” or something like that. And basically he does the math, looking at what does M1 money supply. What if Bitcoin achieves 10%, 50%, 100% penetration of these various kind of segments of the money sphere that you could look at. And he backs into a 200 to 800Kish prediction, or potential.

Arianna Simpson: And so if you think about it that way, it’s less about like is it 200K or is 800K, but more is it like on a risk adjusted basis? Do I think this has the makings of a potentially really interesting investment, because the upside is quite large. The downside is whatever you put in. If you look at it through that lens, if you have a certain appetite for risk, then it seems like a no brainer.

Shaan Puri: Right.

Arianna Simpson: Not obviously all of your assets, but with some percentage of it.

Shaan Puri: So you put 50% of your assets in at the time.

Arianna Simpson: I did. Now I’m much higher than that in terms of crypto percent.

Shaan Puri: Right. So you’re all in essentially.

Arianna Simpson: Yes.

Shaan Puri: And at the time, your parents or your friends, did anybody sort of sit you down and say, “Hey, this is a little bit crazy,” or nobody really knew what you were doing? You just did it.

Arianna Simpson: Everyone has always thought I’m crazy. Until it turns out I’m right about some things. I’ve kind of always gone my own direction. I think for me, if I have conviction in something, it doesn’t really matter what anybody else thinks. I’ve definitely had moments where I was like, “Oh, my gosh, am I totally wrong about all of this?” But at the end of the day, I think my [lens 00:19:37] has also been, I’m going to learn a lot more. I’m going to be exposed to a lot more interesting thing.

Arianna Simpson: And yeah, no, I’ve definitely had people who are extremely smart, extremely knowledgeable, you know, at the time, decades older than me saying like, this is crazy. What are you doing? Dah, dah, dah. Both in terms of like, how I’ve allocated my money but also like career choices I’ve made and things like that. And in retrospect, I think I regret none of it. Fortunately a lot of it has worked out quite well, but even the things that didn’t, in the near term I think have been extremely useful and great learning experiences for me and kind of helped me move through my career more quickly than I might have otherwise.

Shaan Puri: Got you. And so, let’s walk through some of those career decisions. You were at Facebook for a period of time.

Arianna Simpson: Yep.

Shaan Puri: You decided to leave there? And we’ll talk about why you were there, why you left. Then you were at BitGo, which is a crypto platform for institutional investors. And you were like number three at BitGo. And then you left there. Now you’ve raised your own fund, which is awesome and congratulations. Give me the like TLDR on like Facebook, like what were you doing, what was it like and why’d you leave?

Arianna Simpson: I went to Facebook because I’d previously been at a Y Combinator startup called Shop Teaks working in New York. And I was basically running sales and ops, which is a lot. But it was a very small startup. That was my first job out of college. Nobody really had time to train me. So I was just kind of figuring things out on the fly for the most part. And with Facebook, I really wanted to go somewhere to, quote on quote, learn how to do things properly. Because I was like, well I’m just kind of making up how to sell. But maybe there’s like processes and things like that, some skills that I should pick up. And I wanted a logo to be honest. I was like, okay, I think it will be useful for my further career progression to have-

Shaan Puri: Have the stamp.

Arianna Simpson: Exactly. Yeah. And that’s exactly what I got. I mean, frankly, the hardest part of working at Facebook was by far the interview process. So there were about 1,800 applicants for the job I ended up getting, which is, very, very low percentage hit rate. But I think, the job itself was a lot easier than what I’d been doing at the startup. Because when you’re at Facebook, you’re selling a known thing. It’s like, okay, Coca-Cola, are you going to invest 1 million or 2 million in this ad campaign. It’s not like, should we buy this at all? I think it was a lot easier in terms of the actual job. The eight rounds of interviews and all of that where the hard part.

Shaan Puri: Yeah.

Arianna Simpson: Once I was there, I was like, okay, this is not that hard. But yeah, I think for better, for worse, when you go to a place like that, people then assume you’re smart and, it’s definitely not the only way to do it, but it’s certainly helpful. In the same way that you get that signaling from a Harvard or Stanford or whatever.

Shaan Puri: Right. So you’re there for about a year and most is very easy. And now I’m at a big tech company, so I can tell you. It’s very easy to get comfortable at a company like that. There’s a lot of different stuff you could do. A lot of smart people around, they take care of you, they feed you, they do your laundry.

Arianna Simpson: Oh, my gosh, yeah.

Shaan Puri: They do everything to make you very, very comfortable so that you stay. And you didn’t stay. So why did you decide to leave?

Arianna Simpson: I remember waking up every morning terrified that I was going to make nothing of my life in terms of what I wanted to do, because I would get too complacent. It was a distinct, like every morning I had that feeling and so I knew I needed to leave. I think I probably wouldn’t have left as quickly as I did, if I hadn’t gotten really into Bitcoin.

Arianna Simpson: And so that was like, I tried to do some stuff internally. I started organizing a lunch meetup for engineers to talk about these topics and kind of do teachings and things. I wanted the company to do something. Obviously it took them like six years to actually do it. But this year they got around it. I think I just was so worried that I would get comfortable, because I was like, well, right now is the time in my life where I should be taking the most risk. I don’t have any kids. I’m young, I have no debt, whatever. It was really this driving fear that I had that I would just be too comfortable and never want to leave.

Shaan Puri: And so it was like, someone was like tap into your potential, like, I’m making the most of my time. Is that kind of the fear or how would you have thought about that thought in the morning?

Arianna Simpson: Yeah. I felt like I could do more. Like I could see, I looked at the people who were me in five years in the company. Like if I proceeded along my current path and I did well, what would that look like? And I was frankly unenthused. I was like, okay, great. I’ll be making 300K a year and I’ll have pretty good work life balance. Most of my life is expensed. I literally lost my wallet when I was there and I didn’t notice…

Shaan Puri: It didn’t matter.

Arianna Simpson: … for a week. I didn’t use money during the week. So it took me until the weekend to figure it out. And I was like, I mean that’s kind of awesome, but also a little bit terrifying. Like they kind of own my life.

Shaan Puri: Right. The umbilical cord is like attached.

Arianna Simpson: Yeah. Exactly. And so I was like, this is kind of like, it feels a little dystopian in some ways. I was a little concerned about that as well.

Shaan Puri: Yeah. The thing you just said. The very first guest on the podcast, got silly when I asked him, he started off in Microsoft and then he quit and did his startup. I was expecting him to be like, Oh, that’s a big company. It sucked. And so I wanted to leave and I was bored and it was bureaucratic, blah, blah, blah. But he was like, no, actually, like, it’s a good company. They treated me well. I was interested in the project I was working on. I was like, why’d you leave?

Shaan Puri: And he said the same thing. He’s like, well, I looked at my boss, essentially this guy who’s been there for 10 years, and he said that they had like a product launch, where the year’s worth of effort. They launched the product, they had a party and the boss got up and he started crying, talking. He was so proud of the product.

Shaan Puri: And he just looked himself and he was like, I will never feel that way. And I don’t want to feel that way about Microsoft’s products, and so I need to get the hell out of here because if that’s success, then if that doesn’t fit my model of success and I don’t want it. Then I’m playing the wrong game. I’m playing a game, or if I win, I lose. And that sounds like you kind of had a similar thought around these people who are, you know, above me and these few levels above, I don’t want to be them and therefore why am I playing this game?

Arianna Simpson: Exactly. Yeah. No, I think that’s really it. I don’t have a lot of patience for political games and things like that and especially at that point in time. You get a little bit older, a little bit wiser, you calm down a little bit I think.

Arianna Simpson: But I definitely was like, I just want to do my job. Like why do I have to do all this internal bullshit I got. Especially coming from a three to 10 person startup where basically I could work on anything I wanted. There were certain things I had to do, but if I had other ideas or I wanted to create new things, like I could just do that. Here I had to get approvals for all these things. And I was in flagrant violation of a lot of them. I was supposed to get approval to speak or to publish. I just did it. Nobody ever cared. I think I just felt very constrained and I didn’t like that.

Shaan Puri: Yeah. I’m not supposed to do this podcast. Actually I think this is property of Amazon. Technically, according to my contract, this is crazy. Okay, so you decide to leave, you take the leap. You go from making good money in a cushy place, to no money essentially. Is that how you made the leap or did you have something lined up?

Arianna Simpson: No, I mean I was just like, I need to move to San Francisco and then I’ll figure it out from there. Because at that point in time, most of the stuff that I thought was interesting in crypto was happening in San Francisco. And I wanted to work with a team that I thought could accomplish something interesting and ideally had a little bit of funding. And if you looked at the crypto space, there were like three teams that met that definition at that point in time, one of which was BitGo.

Arianna Simpson: And so actually what happened there is a funny story, I was blogging. So basically what happened is, I was spending all this time doing research about the space and I wanted to have an output. And to your point earlier, I think the best way to understand if you really get something, is to explain to somebody else.

Arianna Simpson: And so I started kind of publishing and I would explain various topics, whatever. And some of them were more technical, others less. But one of the things I wrote about was multisignature wallets. Which basically help with the redundancy issues. So, for example, if you lose your key or if it’s stolen, somebody can’t just run away with your money or your money’s not lost forever. But basically you need two out of three keys in order to move money. So it kind of protects you from user error or from theft.

Arianna Simpson: And BitGo was basically the first company to commercialize multisignature wallets. And so I wrote a blog post about it and mention the company in the post. And then because I’m a little bit shameless, I just emailed it to the CEO and I was like, “Oh, you might want to publish this on your blog.” And they were like, who is this girl? And so then they’re like, “Oh, this is quite good. Would you like to come have lunch”? And so I had a meeting with the CEO and then with the other two co-founders in two separate instances. In the second meeting, they were like, “Great, when can you start”? And I was like, “Oh, I didn’t know this was job interview, but okay, let’s chat.”

Shaan Puri: [inaudible 00:27:52]

Arianna Simpson: Yeah, exactly. I just moved. I didn’t have a job. I didn’t really have a plan, but I was like, I’ll figure it out. Which has always been kind of my approach. I think I have a high degree of belief in my ability to figure it out. And so far it’s generally works pretty well. So yeah.

Shaan Puri: The things you’re saying, I’m like nodding because it resonates with me. Like I did the same thing. I just moved to San Francisco and I said, “I’ll figure out.” After that I just knew this is like the Mecca of startups. It’s like, if all the other smart people who are doing what I want to do are here, well then I don’t even need a startup idea. I just need to get there first.

Shaan Puri: And that just worked out for me. And then, same sort of thing where a high level of conviction or confidence that I can figure something out once I get there. And I’ve realized that, that’s in short supply and, it’s just a decision you make really. It’s like, I believe in myself to figure things out. And what I’ve seen is that that is something that more people need to do and it will serve them well.

Shaan Puri: And so if you’re listening to this and you’re one of those people who, if you have that, just know that, that’s actually a really valuable asset. And if that doesn’t describe you, I encourage you to adopt that because if nothing else, that will get you ahead of 90% of people, because they don’t have that unshakable confidence in themselves to just figure it out. They think, I need to know X or do X before I can have Y and instead you just need to say, I am enough to get why, just give me enough time and I’ll figure it out.

Arianna Simpson: 100%. I couldn’t agree more. Like my approach has generally been, what is the minimum amount of knowledge and or credentials I need in order to accomplish this thing, rather than the other way around. And I think, the world has room for a lot of different types of approaches. But I think oftentimes, that is lacking is confidence more than any actual skills. And I see this, I think particularly often in women, but in people in general. It’s just like, you can do it. And so if I have like one sort of altruistic mission, it’s really to help people kind of do the thing that they already can do, which is make them feel like they can do it. Because I think that’s half the game, you know.

Shaan Puri: How are you helping them do that? So obviously, a conversation like this helps because you’re just putting your thoughts out there, and a 100,000 people could hear this and say, some of them could go rise up from that. Are you doing anything else towards that mission I guess?

Arianna Simpson: You know, I think a lot of it is, I make an effort to speak at certain kinds of events and things like that. And I didn’t realize initially. I just did it because I thought it would be interesting and I want to practice public speaking and all these sorts of things. But I’ve had so many people like, particularly like college age women or people like that, or even men, come over and be like, wow, like I didn’t know that this was a thing I could do. I’m so inspired. And then they go and do all these incredible things that like, I had no idea how to do. I mean they’re way better than I am. But it’s just like sometime, just seeing someone. And again, I think back to the women thing, like because there are not that many women in this kind of investment role or whatever, just seeing that like someone who looks like you, can do something is surprisingly powerful.

Shaan Puri: Powerful. Right.

Arianna Simpson: Yeah. And so to me I’m like, well, I’m just doing what I want to do. But if that gives you the feeling like, the license to go and do your thing, like that’s incredible. There’s a lot of other ways in which I try to be helpful, but it seems like even just that is surprisingly powerful.

Shaan Puri: Right. And I feel like, I don’t know this, because we just met. But I feel like you have a little bit of a life hack around this public speaking thing. Because I’ve seen you’re like tracker. You’ve done a lot of different public speaking events. You’re some ways known for that. Invited to do certain things and there’s two ways to do that. One is, you’re just so accomplished, that people when they are trying to fill their event, they think of you and they bring you in. But when you’re up and coming, that’s obviously not going to be the case. That’s not a reliable way to get started. That’s like go become ultra successful first, and then of course, people want to have you speak at their thing. I’m guessing you probably did some things proactively. Reaching out. I think you manufactured that for yourself. Am I right? If so, tell me how you did it.

Arianna Simpson: Yeah, I think some of it was luck or happenstance and some of it was a little bit of strategy on my part. And I think that is kind of a good description of my entire life. So if you are young and you want to start doing this kind of thing, I think you start with smaller events. You don’t obviously go to, TechCrunch Disrupt stage one on the first go. But you just kind of start getting some practice and then people see that you’ve done it. And so you kind of start to come to mind as a speaker for bigger and bigger events.

Arianna Simpson: I think the industry and expertise that you have is a huge part of it. So for example, if I had wanted to become a well known speaker on the enterprise SAS circuit, as a 22 year old, like no chance.

Shaan Puri: Right.

Arianna Simpson: Okay. Unless I had happened to also found a very successful company. Unless you’re like the founder of Dropbox, probably not going to happen. So in my case, because I was interested in Bitcoin and crypto and there were like four people-

Shaan Puri: No experts yet?

Arianna Simpson: No experts. Exactly. It was a much faster ascent, if you will, because, if you knew some stuff and you had done your research, which I to be clear, it’s not like-

Shaan Puri: You have to know your stuff.

Arianna Simpson: Yeah. Exactly. I had genuine interest in that. That was a big part of it. But I think you kind of have to put in the time to get to know the topic really well. But if you have a niche, that really helps. And I think that helps you stand out in any category, because people like to put things in buckets. And so for example, my Twitter is almost, there’s some reading, some general tech, but it’s almost all crypto. So people follow me because they’re interested in crypto.

Shaan Puri: Right.

Arianna Simpson: And that I think is really helpful. Whether you’re public speaking or whether you’re on Twitter or whatever.

Shaan Puri: So picking your niche, owning that niche. And it can be small, but if that’s your corner, you’ll be the known person.

Arianna Simpson: Yeah.

Shaan Puri: You went to like kind of a new emerging thing, where there are no experts and therefore you can research your way to being-

Arianna Simpson: An expert.

Shaan Puri: An expert. And whereas in other things, if it’s super well established, there’s just going to be somebody who’s done it for 20 years and is actually, has a track record that you cannot fast forward through. So those are two elements of it. When did you do kind of your first public speaking gigs? Do you remember? What age were you?

Arianna Simpson: I was, let’s see. I was at [Fee 00:33:39], I was 22.

Shaan Puri: 22?

Arianna Simpson: Yeah. Immediately after college.

Shaan Puri: So if you’re listening to this, like clearly like an expert at 20. Nobody’s an expert at 22 of anything, except for maybe like expert of college. But you were able to build up your knowledge and start doing maybe smaller events at that time to get going.

Arianna Simpson: Yeah. I think a big part of it is also like, I was very authentically me. Like I swear on stage. I call it like it is. And so I actually think it’s fascinating. Some of the things that I felt were, that I had to damp in or squished down about my personality at Facebook, were actually the things that made me more successful on the speaking circuit.

Arianna Simpson: So for example, like I’m very direct and I’m very honest and that can be great. It can also be abrasive. And so at Facebook, I was like, okay, this is clearly a terrible idea. Like, why don’t we move onto the next one and that, you know, sometimes rubbed people the wrong way. And obviously I tried to be nice about things, but like, I felt like I was like, let’s not beat around the bush. Chop, chop, we’ve got things to do. And especially at 23, as the lowest person on the totem pole-

Shaan Puri: Not always receive [super 00:34:40] well?

Arianna Simpson: Exactly. But in this kind of environment, you don’t want to go to a panel and listen to somebody who like says everything that’s politically correct and like adds-

Shaan Puri: Softens everything.

Arianna Simpson: [crosstalk 00:34:50] caveats. Exactly. It’s fucking boring.

Shaan Puri: Hedges. Yeah.

Arianna Simpson: So I think I was just more able to be myself. And like as I spoke more, I became more comfortable. That kind of came out more and more. And so I think that resonates with people, because at the end of the day, people want to listen to people. They don’t want to listen to like a pre-written, boring script.

Shaan Puri: Yeah.

Arianna Simpson: You have to figure out your style, right? There’s many ways to be yourself and like that’s me. But others will be extremely successful, potentially far more successful than me just by being themselves in whatever form that is.

Shaan Puri: I think they call, like zone of genius or something like that. It’s basically the overlap between, when you’re doing what you naturally want to do and it’s being received as like, wow, thank you [friend 00:35:33] for doing that. And you’re like, “Hey, what? I’m just doing what I do.”

Arianna Simpson: Yeah.

Shaan Puri: And that’s like, that’s the sweet spot. If you ever find that, like hold onto that. And so it sounds like, you know, whereas at Facebook you needed to turn the volume down to four, on the speaking circuit it was like, hey, turn this knob to 12. Like that’s what we want. That’s what the people are responding to here.

Arianna Simpson: Exactly. 100%.

Shaan Puri: I have a friend. It’s so funny. You raised a fund recently. Like shout out the fund name, what it does and tell us how much you raised for your fund.

Arianna Simpson: We don’t disclose that, but we raised two funds. One is called Crystal Towers Capital and that one was raised in 2015. My business partner and I started working together because we were both really interested in crypto. But at that point in time really, wasn’t enough investible material to do that.

Arianna Simpson: So we raised a fund, we did a lot of autonomous vehicles, healthcare, Enterprise SAS, a few different categories with a focus on Y Combinator companies, because that’s kind of our network. And then in 2017, as kind of the ICO explosion started, there was just a lot more happening in crypto. I was like, “Ah, finally all this stuff that I’ve been talking about is starting to happen.” It just made sense to have a fully focused fund and so my second fund is called the Autonomous Partners and it’s technically structured as a hedge fund, but we invest with kind of more of a [VC 00:36:42] lens anyways. We just do significant portion of that in coins and tokens.

Shaan Puri: Got you. So I was going to say, so I have this friend and his friend is very smart, very young guy. He’s like 22, 23 years old. Extremely smart guy. Wants to invest. He’s been investing for a couple of years, but now he wants to raise his own fund.

Shaan Puri: And so we were like, great. Hey, we support you in doing this. How are you going to do it? Seems like, if I wanted to go raise a fund, I’d either need to have already built a network of people who trust me over a number of years, but I’ll also probably need to go to some new people and explain to them why they should trust me as a new person who doesn’t have an established track record to give me their money to invest. And that seems hard. And so we were telling him, we were like, you should blog, you should tweet, you should put your thesis that you have, that’s actually pretty compelling, you should be putting it out there at all times. And he was like, well, why? I don’t think someone’s going to read my blog and invest. And-

Arianna Simpson: That’s false. I’ve had [LPs 00:37:32] from Twitter, I’ve had investments come from Twitter. Honestly, I could describe 25% of my career success at least to Twitter. And Twitter is my channel. I mean, if I were more inclined to blog, what I found is like initially I forced myself to blog really. But it just became such a process. And as I had less time, like I can put out a Tweet storm, which has the [See 00:37:53] like kind of core.

Shaan Puri: [inaudible 00:37:55]

Arianna Simpson: Yeah. And that’ll just do on a regular basis. So I’d rather do 75% of it and actually do it, rather than say, “Oh, I haven’t written my Magnum Opus and therefore I’m just going to sit on the idea.” So yeah, tell your friend to do it.

Shaan Puri: So we were telling him and he was pushing back on it. He’s like, “No, I don’t think this is how it works.” I was like, “No, that’s definitely how it works.” And he’s like, “You know, I just feel like my time I should be using it on meetings and whatnot.” Okay, fair.

Arianna Simpson: No.

Shaan Puri: What we realized at the end was like, there’s two types of people. There’s one type of person who wants to look through a window. And a window, obviously like this one over here, you can see through it and what’s on the other side is, you can see it right there. And so I was like, you’re the type of guy who is looking through windows. You’re looking for a direct line of sight to the outcome you want. And that’s great. That serves you well in many cases because if you see it, you’re willing to go straight for it.

Shaan Puri: But the problem is, like a lot of things in life, are not directly visible. They’re more like doors. And you kind of got to knock and you got to open the door and you got to see what’s on the other side. And before you do the action, you don’t know what you’re going to get. I was trying to tell him, I was like, you’re so focused on this windows only, where you have to be able to see the outcome in order for you to take action, that is paralyzing you. And you really got to know that, like, sometimes in life there’s these doors, where you can’t see the exact result on the other side. But you know, I got to be opening doors in order for something good to happen. And so that’s what I was telling him.

Shaan Puri: And, for me, you’re a great example of somebody who’s willing to work on doors, right? Like, it’s not always clear looking through a window that there’s some direct benefit that’s going to be there. When you were speaking at conferences, you were blogging, you were Tweeting, you’re meeting people, you’re doing all kinds of stuff without trying to measure the direct outcome or say, “I’m only going to do this if it pays off.” It doesn’t seem like that was your strategy.

Arianna Simpson: No. A. I love that analogy and, B, I think that’s exactly right. I don’t think you can control for everything. So you have to be doing things that have a high likelihood of bringing something good. What audience are you speaking to? At the beginning maybe you take whatever you can get, but later you try to be a little bit more thoughtful. And so, you’re just kind of increasing the surface area for potential positive outcomes. But like life is so random. Sometimes I’ll do one thing and I’ll do it five times and four times nothing comes of it. And then one time, it’s just like massive-

Shaan Puri: Everything comes to of it.

Arianna Simpson: You’re like, Holy shit, what? That’s amazing. But I had to have done the other four because like, A, that’s how you get better at whatever it is. And you just kind of have to, you never know when it’s going to hit. So I think you put in the work and you kind of have to… That’s why I think it’s so important that you work on something that you like because, I tweet because I think it’s fun. Like I’m not like, “Oh, well if I send seven Tweets…

Shaan Puri: [inaudible 00:40:31]

Arianna Simpson: … then I’ll get an LP or I’ll find a founder. That’s really cool.” I mean you don’t know. So I think that’s why working on something that you find compelling is most important. But for example, for me, again like blogging felt like a chore, whereas tweeting is fun and so I’m much more likely to do something if I think it’s fun or interesting.

Shaan Puri: Who are some other people you’ve seen that do this well? Who are some people you’ve seen on twitter or blogging, where you’re like, that person is really hustling their way to success. What are some of the other examples that [inaudible 00:40:58]?

Arianna Simpson: Yeah, I have a good story about that. So a good friend of mine now is this guy Zach park, who is one of the founders of a company called Cubcoats. They make these like adorable, little stuffed animals that reverse into a hoodie. And they started about two years ago. They’ve grown like crazy. They now have like deals with Disney and Marvel and all this stuff. They’ve gone super viral. I met Zach because I cold emailed him. He had basically built kind of a presence for himself online, because he’d raised many millions of dollars for various Kickstarter campaigns. He kind of had this background like a-

Shaan Puri: I’ve reached out to this guy because he owns that corner-

Arianna Simpson: Oh, no way.

Shaan Puri: I’ve done a bunch of Kickstarters.

Arianna Simpson: Oh, yeah. That’s awesome. Yeah. This was, let’s see, I was at Facebook. So it’s 2013, and I just thought he seemed cool. I had been kind of toying with the idea of like starting a side business. Because again, I wasn’t like totally engaged at Facebook. And so I was like, Hmm, what should I be doing? And he was clearly a hustler. Like how he had done the Kickstarter stuff. It was just obvious from all of his web presence.

Arianna Simpson: And, I sent him an email and I was like, “Hey listen, I would like to learn from you about these things. Here are the things that I can help you with. So like, let’s do a trade or you know, whatever.” And he wrote back within a few minutes and was like, “I get hundreds of cold emails. Like nobody ever offers anything back.”

Shaan Puri: Right.

Arianna Simpson: And that was why he reached out. And so we ended up meeting and became very good friends. Now I’m an investor in the company. It was just such a funny story from the internet. But I think he was a great example of someone who had a skill, worked on it, worked his ass off. I mean, remains to this day one of the hardest working people I know. I’m actually sad because now that the company’s doing so well, like I see him less as a friend, I’m like, damn it, I’m going to do really well from this deal. But like I miss you as a person, you know, I’m like, great, sell the company and then we can hang out again.

Arianna Simpson: I think you see these people who really put in the work and then do a good job of like showcasing it online. And by the way, I think again, there’s a million different ways to do this. Like Zach is much more introverted. He’s like much shyer. So his presence is very different from mine. But you know, you can do this in a million different ways.

Shaan Puri: Right? And so to wrap up, I want to leave people with some recommendations from you on some reading, some homework. If I want to get into Bitcoin more, if I want to understand it better, you get to the level of understanding you have. What do you recommend? Who are some people I should be following or what’s some books I should be reading or a YouTube talk. Give me the like one or two best resources you would direct people to for Bitcoin specifically.

Arianna Simpson: Sure. Andreessen Horowitz has a really good kind of compilation of crypto resources that begin very basic and proceed into more advanced territory. If you search Andreessen Horowitz Crypto Canon online, you’ll find it. I think Andreas Antonopoulos has been kind of a really good resource for the community in terms of like educating people. I think he’s like very, very reasonable person. So he’s definitely someone I would recommend following.

Shaan Puri: His story is pretty remarkable. Right? So he’s like the Messiah. He’s like goes around and he preaches the gospel of Bitcoin, but he doesn’t do it to sell. He does it because he believes and he’s very like measured in what he says. He’s just trying to explain the facts and what’s exciting about it without overhyping and overselling and having some personal angle on why he’s doing it. So I love that.

Arianna Simpson: Yeah.

Shaan Puri: But there was this cool story that happened, right, where he’s such a believer in Bitcoin that he tried to essentially live his life through Bitcoins. So he would take his payments and consulting gigs in Bitcoin. He would buy coffees with Bitcoin. He would basically run his life through Bitcoin as if the world was where he thinks it’s going to go in 10 years, where that is the main currency.

Shaan Puri: And because of that, he kind of missed out on some of the price boom that happened, because he’s got a family and he basically spent the Bitcoin that he had to run his life, in order to be like a model citizen of the Bitcoin community. And so he was kind of getting mocked online by somebody who was saying like, look, you’re the Bitcoin guy. You’ve been at this from the beginning. And like somehow you didn’t get rich off Bitcoin. Like, how did you do that wrong?

Shaan Puri: And then what happened was kind of remarkable. Like crypto, Twitter came to his rescue and basically donated him like a million dollars of Bitcoin overnight, which I just think is amazing. Did I get the story right?

Arianna Simpson: Yeah. No. That’s right. I think some people have made ungodly amounts of money from crypto. And so I think members of the community feel positively about him, because he has done so much work evangelizing and I think just being generally a good advocate for the community. And yeah. People were like, here you go my friend, which I think is super cool. And you know, I think if I were to pick someone in the community who would deserve it, he’s definitely on that list for sure. So, no, it was such a funny event.

Shaan Puri: Amazing.

Arianna Simpson: Yeah.

Shaan Puri: Okay. So, that’s Andreas Antonopoulos, I don’t know how to spell his name. Don’t like try, it’s a Greece class name.

Arianna Simpson: [inaudible 00:45:28][crosstalk 00:45:28] Yeah.

Shaan Puri: What about on the sort of investing side? You said you wanted to get into investing, you liked that job, you liked that craft and you’ve basically built a life for yourself being able to do it. What are some like must-reads on the investing side for somebody who’s like you, they’re 21 and they want to start learning?

Arianna Simpson: Yeah, I think I really like the guys at Placeholder, Chris and Joel and Brad and they have a lot of good stuff on their blog. They write about their investment thesis. They write some general pieces about kind of where they think this [place 00:45:57] is going. I would definitely follow them. In terms of something that’s a little bit more metrics-based of each [aisle 00:46:03] at Electric Capital. They’ve put out some really good work looking at kind of developer adoption and things like that. So if you want to get into a little bit more of the nitty gritty around where is developer activity happening? How is that changing over time? Which projects are seeing a lot of it? That’s a good resource to start.

Shaan Puri: And if people want to follow you. If they listen to this and they’re like, hey, she’s great. I want to get to know her more, I want to reach out to her, whatever. Where should people find you and who should reach out to you? What type of person should reach out to you?

Arianna Simpson: Yeah, I think twitter is the number one place. My DMs are open. Please don’t send me a message that just says hi. I probably get hundreds of those a week. I’m like, just say something. Anything literally. Don’t do that. I think if there is a specific question [inaudible 00:46:46] that I can answer, I’m always happy to do that. I would encourage people not to say, “Hey, let me pick your brain.” Because I think that’s a little overplayed. And I think if you start with a specific question, it’s a better way to kind of build rapport and kind of go from there. But yeah, I mean if for book recommendations, I always have a lot of those. So…

Shaan Puri: What’s your Twitter handle?

Arianna Simpson: @ariannasimpson. A-R-I-A-N-N-A.

Shaan Puri: Awesome. Cool. Well thank you so much for doing this. I appreciate you making time quickly on your trip here to San Francisco. So it’s been great. Thank you so much.

Arianna Simpson: Awesome. Thank you.

 

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