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The Winklevoss Twins Discuss Gemini and Facebook · Masters in Business

0:02
Speaker 1: This is Masters in Business with Barry Ridholts on Boomberg Radio.
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Speaker 1: This week on the podcast, I have an extra special
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Speaker 1: set of guests. Cameron and Tyler Winklevoss are the twins
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Speaker 1: who have been behind some of the most fascinating developments
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Speaker 1: in technology, cryptocurrency, venture capital. UH. You might be familiar
0:26
Speaker 1: with them from the way they were depicted in the
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Speaker 1: Social network. They were the folks who had the original
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Speaker 1: idea behind Harvard Connection, which later became a predecessor company
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Speaker 1: that theoretically Mark Zuckerberg lifted some of the ideas from
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Speaker 1: and used to launch UH Facebook. We talked about that,
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Speaker 1: We discuss the variety of different opportunities that exist in cryptocurrency,
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Speaker 1: in bitcoin, in Gemini, which is the exchange your vault
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Speaker 1: in exchange they set up. We talked about other venture
1:04
Speaker 1: capital work they do. It's really a fascinating conversation that's
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Speaker 1: wide ranging and covers a ton of different stuff. If
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Speaker 1: you are at all remotely interested in anything from vcs
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Speaker 1: to start up to crypto, you will find this conversation fascinating. So,
1:21
Speaker 1: with no further ado, my conversation with the Winkelvy. My
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Speaker 1: special guest this week are Cameron and Tyler Winklevos, better
1:35
Speaker 1: known as winkle Vye. Is that plural? Do you guys
1:37
Speaker 1: like that? Or is that just a tired joke you're
1:39
Speaker 1: sick of? Okay with it? So in case you are
1:44
Speaker 1: wholly unfamiliar with who they are, They most famously worked
1:48
Speaker 1: on the predecessor at Harvard UH to Facebook with Mark Zuckerberg,
1:54
Speaker 1: who they subsequently sued for stealing their intellectual property. That
1:58
Speaker 1: case was settled for tens of millions of dollars. They
2:02
Speaker 1: now run winkle Voss Capital, a VC firm, and have
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Speaker 1: been aggressive investors in crypto, blockchain, bitcoin, etcetera. They also
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Speaker 1: founded Gemini, a cryptocurrency exchange. Cameron and Tyler winkle Voss,
2:18
Speaker 1: Welcome to Bloomberg. Thanks for having us than you, And
2:21
Speaker 1: by the way, you guys have to just feel free
2:23
Speaker 1: to jump in. I don't know which one of you
2:25
Speaker 1: to look at. You are my first set of twins
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Speaker 1: as interviewees. So it's a little confusing, but but quite
2:33
Speaker 1: intriguing and I think we'll have a little fun with it.
2:35
Speaker 1: So I have to start with the obvious question. You
2:39
Speaker 1: guys must be recognized wherever you go. Is that a headache?
2:44
Speaker 1: Is it a hindrance? Does it help? How do you
2:46
Speaker 1: how do you deal with your fame from from the
2:50
Speaker 1: whole Facebook debacle? So, you know, we're not recognized, So
2:56
Speaker 1: we've we've always been recognized, well in the sense that like, oh,
2:59
Speaker 1: there's two of you, So there's always been this thing like, wait,
3:02
Speaker 1: are you guys twins? Way before any of all that,
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Speaker 1: does anyone really ask you if you're twins? I mean,
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Speaker 1: you guys kind of look like identical twins more than
3:12
Speaker 1: you think, And a lot of times they ask if
3:14
Speaker 1: we're identical or like brothers, Um, well brothers, really, I'm
3:20
Speaker 1: not sure if you guys are related. That's just shocking
3:23
Speaker 1: that anyon would say that. But the it kind of
3:26
Speaker 1: depends where we are. We can at least it feels
3:29
Speaker 1: like we can kind of blend in a little bit,
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Speaker 1: but it's it's definitely harder being six four, six, five
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Speaker 1: six or five twins. That's almost harder to disguise than like, oh,
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Speaker 1: those are the guys from the social network. So it
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Speaker 1: kind of depends where we are. If we're at like
3:46
Speaker 1: a business school event or something, um, you know where
3:49
Speaker 1: people sort of read trade magazines, or a cryptocurrency event, um,
3:53
Speaker 1: but if we're just kind of walking down the street,
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Speaker 1: it doesn't feel like a lot of people necessarily recognize us.
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Speaker 1: But maybe we just don't see it. And and Manhattan
4:02
Speaker 1: is pretty chill about that for the most part. Is
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Speaker 1: for the most part. I mean, we've definitely been asked
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Speaker 1: to take selfies just because we're twins. Yeah, the person
4:10
Speaker 1: had like no idea who we were and probably figured
4:12
Speaker 1: it out after the fact or whatever. Um so the
4:15
Speaker 1: twin thing gets a lot of eyes for sure, especially
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Speaker 1: because we're you know, not you know, we're older twins.
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Speaker 1: Usually you know, twins sort of separate, live in different cities.
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Speaker 1: We kind of work together where we have similar routines.
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Speaker 1: So we might be like walking together down the street
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Speaker 1: and people sort of turn around and say, oh, those
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Speaker 1: are two guys that are tall, that look people appreciate
4:37
Speaker 1: the fact that we still get along and we're like
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Speaker 1: in our later thirties. I think they expect to sort
4:43
Speaker 1: of see twins, you know, ten year old twins like
4:46
Speaker 1: hanging out with lollipops and all right, So let's let's
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Speaker 1: move forward from I'm sure you're tired of that question.
4:52
Speaker 1: You must get all the time. So undergraduate Harvard Business
4:55
Speaker 1: School at Oxford. Was the plan always to go into finance,
5:00
Speaker 1: to be entrepreneurs? What was what was the thinking when
5:03
Speaker 1: you were mapping out your academic and professional careers. I
5:07
Speaker 1: think the idea was I think we thought we would
5:10
Speaker 1: always be entrepreneurs because our dad is an entrepreneur and
5:13
Speaker 1: he has a technology company and has been building software
5:16
Speaker 1: for thirty years. UM. He was a professor of actual
5:20
Speaker 1: science back at Wharton. And then when Offen became an entrepreneur.
5:24
Speaker 1: So we we grew up UM in a startup tech
5:28
Speaker 1: office environment, and we always wanted to sort of be
5:32
Speaker 1: like that. UM, and then we discovered the sport of rowing,
5:37
Speaker 1: and one thing led to the next, and said, oh,
5:40
Speaker 1: maybe I can be good at this in high school,
5:42
Speaker 1: and then got pretty good, made junior national team, and
5:46
Speaker 1: said maybe we can row in college. And I don't
5:50
Speaker 1: see what happened how you ended up on the Tarles River.
5:52
Speaker 1: Was it from high school rowing? Yeah? I mean that
5:55
Speaker 1: was Harvard was Harry Parker was this legendary coach. He
5:58
Speaker 1: coached for over fifty season and by the time we
6:01
Speaker 1: were applying to college, he was a guy that you
6:03
Speaker 1: would aspire as a as a high school rower to
6:06
Speaker 1: to row for and then we got to college and said, hey,
6:09
Speaker 1: maybe we can make the varsity and then we did that.
6:12
Speaker 1: We're undefeated national champions in two thousand three, two thousand four, UM,
6:17
Speaker 1: and then we said, hey, maybe we should try our
6:19
Speaker 1: luck at the national team and try the Olympic level.
6:22
Speaker 1: So it was one of these things that just I
6:24
Speaker 1: kind of call our our sports career a bit of
6:26
Speaker 1: a detour because we didn't grow up in this jock household.
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Speaker 1: My parents played sports, but you know, the house and
6:33
Speaker 1: revolve around that. It actually really revolved around entrepreneurship in
6:37
Speaker 1: business ideas. So rowings sort of started off as this
6:40
Speaker 1: thing that became a fifteen year detour, but I think
6:43
Speaker 1: we always knew we'd get back into startups. So so
6:46
Speaker 1: let's talk about startups. You guys run Winklevoss Capital. What
6:50
Speaker 1: sort of companies do you invest in? What are you
6:52
Speaker 1: looking for? Uh? In a startup? So we invest in
6:56
Speaker 1: early stage startups with the technology focused really, but we're
7:01
Speaker 1: somewhat agnostic. UM, We've definitely invested in consumer brands and
7:06
Speaker 1: and things that we like. UM. It's a private investment firms,
7:09
Speaker 1: so we kind of make the decisions and call the shots.
7:12
Speaker 1: We don't have outside money UM yet. UM. We could
7:16
Speaker 1: potentially raise it some later point, but currently it's private. Yeah,
7:19
Speaker 1: and I think that there's just a big focus on
7:22
Speaker 1: UH software technology, although as Cameron said, we've definitely done
7:27
Speaker 1: CpG type stuff. UM. So it is it is really
7:32
Speaker 1: up to us that that is the fun about it,
7:35
Speaker 1: and that has actually been one of the greatest advantages
7:39
Speaker 1: is the agility and the nimbleness because when we saw
7:42
Speaker 1: bitcoin originally, UM, we could invest in it because we
7:46
Speaker 1: called the shots versus a lot of vcs they can
7:49
Speaker 1: only invest in C corps. So they had structural problems
7:53
Speaker 1: with their UM you know, private offering documents where even
7:57
Speaker 1: if they wanted to invest in bitcoin they could, they
8:00
Speaker 1: had to invest in companies and the partners a lot
8:02
Speaker 1: of them UH saw the opportunity and personally invested in bitcoin,
8:06
Speaker 1: but could invest their funding. It interesting. So sticking with
8:09
Speaker 1: portfolio companies, you had a firm you invested in Love
8:13
Speaker 1: Begins with l was just acquired by Procter and Gamble
8:16
Speaker 1: are crunch Base says you've already had thirteen exits. Is
8:20
Speaker 1: that more or less accurate? Lucky number thirteen? So thirteen though,
8:26
Speaker 1: but where's the denominator in crunch base thirteen out of
8:29
Speaker 1: how many companies have you guys actually been that successful
8:32
Speaker 1: with already? I think we've invested in over seventy at
8:35
Speaker 1: this point. UM, So that's a good percentage to have
8:38
Speaker 1: about with an exit already. I think at this life cycle, UM,
8:43
Speaker 1: it's still pretty early. Like we started investing UM about
8:47
Speaker 1: five years ago, and UM, I think most venture capital
8:51
Speaker 1: funds have about a ten year lifespan. So you could
8:55
Speaker 1: argue we're about halfway through, and there's there's a number
8:59
Speaker 1: of great stories that are playing out as we speak,
9:01
Speaker 1: and then there's there's some that you thought were going
9:04
Speaker 1: to play out a little bit longer and get snatched
9:07
Speaker 1: up UM pretty quickly. I think one a good example
9:10
Speaker 1: as this company Chariot, which is building basically ride sharing
9:14
Speaker 1: and it was taking more of a group model, and
9:17
Speaker 1: so they got these big vans from Ford and had
9:20
Speaker 1: these roots and an app and UM there you know,
9:24
Speaker 1: their equipment supplier was Ford, and Ford eventually was like, oh,
9:26
Speaker 1: let's you know, we should just acquire these guys because
9:29
Speaker 1: we're not gonna go build and you know, experiment this way. UM.
9:33
Speaker 1: So that exit I think happened maybe a year after
9:36
Speaker 1: our money was wired um, and it was a great
9:38
Speaker 1: return we probably you know, I thought it might have
9:41
Speaker 1: played out over a couple more cities another year or two,
9:44
Speaker 1: but um, it was. It was a great outcome for us.
9:47
Speaker 1: And we're seeing a lot of that were um. You know,
9:50
Speaker 1: we we invest in brands, they start getting traction and
9:54
Speaker 1: then a large UM consumer company comes and just basically
9:58
Speaker 1: acquires it because they've got all the distribution, but they
10:00
Speaker 1: don't have that innovative thing going on. So I want
10:04
Speaker 1: to come back to bitcoin in a little bit because
10:06
Speaker 1: there's a ton of stuff to go up with you.
10:08
Speaker 1: But I have to ask you something about the Winkle
10:11
Speaker 1: Voice Capital website. You have on that home page a
10:15
Speaker 1: fascinating painting that I've been in trance with by Jack
10:19
Speaker 1: Crossing on Sixth Avenue. What motivated you to put that
10:23
Speaker 1: on on your home page? Are you on sixth Avenue
10:26
Speaker 1: or what? What was about? And if you've never seen
10:29
Speaker 1: the picture the painting, it's an astronaut and full full
10:34
Speaker 1: um space suit on fire Crossing sixth Avenue. Yeah, I
10:40
Speaker 1: think I think we really like the image because a
10:42
Speaker 1: we're New York based, UM, so it really spoke to
10:45
Speaker 1: us in that fashion. B it's an astronaut and a
10:49
Speaker 1: lot of these companies, including you know bitcoin and cryptos
10:52
Speaker 1: pushing that frontier right going into space moonshots exactly, and
10:57
Speaker 1: then the flames you know represent I think, uh, the
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Speaker 1: risk inherent with with these entrepreneurs and what they're trying
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Speaker 1: to do and and um, you know people often you
11:07
Speaker 1: know they dare to like think big, but you also
11:10
Speaker 1: have to dare to know that, like you know, you
11:12
Speaker 1: could fail in a big way. Um. It just may
11:14
Speaker 1: not work. You might put years of your life on
11:17
Speaker 1: the line for no guarantee, no return. Um. And that's
11:21
Speaker 1: just important, you know, being able to take that risk
11:23
Speaker 1: and being comfortable with it and if you fall, getting
11:26
Speaker 1: right back up and going at it again. What what's
11:29
Speaker 1: the Jeff Bezos quote If you're not failing, you're not
11:31
Speaker 1: taking enough risk or something to that effect. That sounds right. Um.
11:36
Speaker 1: You know, we had a rowing coach in high school
11:39
Speaker 1: that said, if you meet all of your goals, you're
11:40
Speaker 1: not setting them high enough. So there's probably a lot
11:44
Speaker 1: of ways to skin that saying. But I think Cameron
11:47
Speaker 1: makes a really good point, Um, being comfortable with the
11:50
Speaker 1: concept of huge failure. UM is really the essence I
11:55
Speaker 1: think of of entrepreneurship and risk taking. UM. I think
12:00
Speaker 1: that that astronaut picture really embodies that and and sort
12:05
Speaker 1: of the the essence of what it means to be
12:09
Speaker 1: an entrepreneur. And and yeah, it's not for everyone, and
12:12
Speaker 1: it's uh, it's certainly not an everyday thing. And those
12:16
Speaker 1: are the type of individuals and teams we're looking to
12:19
Speaker 1: back and it's a very specific person UM, and I
12:24
Speaker 1: think that that sort of captures the the kind of
12:27
Speaker 1: astronauts were looking for. Harvard Connection. Was that a fun idea?
12:31
Speaker 1: Was that really going to be a business? What was
12:33
Speaker 1: the thinking when you guys first heat that up? So
12:37
Speaker 1: it's definitely UM a lot of fun thinking about this,
12:40
Speaker 1: but we always thought this could be a great business
12:43
Speaker 1: as well. There's actually Harvard Connection that was rebranded to
12:46
Speaker 1: Connect to You UM, but the idea was to help
12:49
Speaker 1: students connect UM more easily on campuses. We went to
12:54
Speaker 1: Harvard for undergraduate but in in Boston alone, there's at
12:57
Speaker 1: least fifty schools. There's so many different students, but by
13:01
Speaker 1: junior year, we hadn't really met many people from outside
13:04
Speaker 1: of your walk of life. You you know, you're in
13:06
Speaker 1: sports team, you're you do, you have your major, and
13:09
Speaker 1: you don't really like connect outside of your bubbles, like
13:13
Speaker 1: life's too busy and geography constraints whatever. So we sort
13:17
Speaker 1: of said, like, let's let our fingers do the walking,
13:20
Speaker 1: and let's put real life social networks online and let's
13:24
Speaker 1: use email addresses to filter people into networks within networks.
13:29
Speaker 1: So if you go to Harvard, you have a Harvard
13:32
Speaker 1: dot E d U email address. Um, you can't get
13:35
Speaker 1: that unless you're actually a student. Um, the registrar gives
13:38
Speaker 1: you one, and they don't issue you more than once.
13:40
Speaker 1: You can't just give one an X one to a friend. Um.
13:43
Speaker 1: So and the same thing if you go and you
13:45
Speaker 1: work at a company. Let's say you go to work
13:47
Speaker 1: at Golden Sacks, you get a Golden Sacks. Uh, you
13:50
Speaker 1: know email address. I can't get one because I don't
13:53
Speaker 1: work there. And so all of a sudden you can
13:55
Speaker 1: start building some order online. Um. You know, the predecessors
14:00
Speaker 1: to connect to Facebook where my space uh friends stir.
14:05
Speaker 1: But they were just one network, a home morass of people.
14:08
Speaker 1: You couldn't really find people based on their schools or
14:11
Speaker 1: where they were, and that was really the breakthrough that
14:14
Speaker 1: we that we had that later was uh, you know,
14:18
Speaker 1: pushed into into Facebook. So here's the obligatory social network question. Um,
14:25
Speaker 1: what do you guys think in the movie? Did they
14:27
Speaker 1: ever consult with you? Were you sort of surprised by
14:30
Speaker 1: how you were depicted? What? What was your experience with that? Like? So,
14:35
Speaker 1: we we liked the movie. I think we're the only
14:37
Speaker 1: people depicted in it that actually went to the premiere. Um. Uh,
14:43
Speaker 1: so you know, I think they did, did you right? Yeah? Um?
14:47
Speaker 1: I think they did a great job of telling a
14:49
Speaker 1: story and three different sides of the story, but not
14:53
Speaker 1: drawing a specific conclusion. So the conversation really starts as
14:58
Speaker 1: you leave the theater, and based on how they told
15:01
Speaker 1: the story, you can sort of take any any of
15:04
Speaker 1: the sides of the different characters. Um. But I think,
15:08
Speaker 1: you know, there was a ton of information in the
15:10
Speaker 1: public domain, believe it or not, at that point, so
15:13
Speaker 1: they could do a ton of research without even actually
15:16
Speaker 1: talking to the subjects. Um. I think it probably should
15:20
Speaker 1: have won Best Picture. I remember one that year it
15:24
Speaker 1: was well that was made for the Oscars. Yeah, it was.
15:30
Speaker 1: It was sort of packaged and feel that you know,
15:32
Speaker 1: you're fick like campaign. I think they got the Queen
15:37
Speaker 1: of England to sort of endorse it. They just you know,
15:40
Speaker 1: ran an incredible and it's a movie you can you
15:43
Speaker 1: can watch with your grandparents and younger kids. It's it's
15:46
Speaker 1: feel good, you're kind of rooting for the king even
15:49
Speaker 1: though he's a king. Um, and you know, the social network.
15:53
Speaker 1: I think a lot of people get to the end
15:54
Speaker 1: of that movie and you sort of feel like, wow, okay,
15:57
Speaker 1: this is this is not a happy world. Um, it's
16:01
Speaker 1: not you know, um, there's you know, necessarily that feeling
16:05
Speaker 1: to it. So it was the original business model of
16:08
Speaker 1: Harvard Connection. Let's spread fake news and affect the presidential campaign?
16:14
Speaker 1: Or did that come later that that's funny? Um? I mean,
16:19
Speaker 1: so when we were thinking about this idea, we were saying, like,
16:22
Speaker 1: if this works on the Harvard campus, there's no reason
16:25
Speaker 1: it doesn't work on every campus, you know, every like
16:28
Speaker 1: micro network in the world at that time, So as
16:32
Speaker 1: long as you have a single identifying email address, that
16:34
Speaker 1: can't be fake, right. I mean, so at that point,
16:37
Speaker 1: people were still almost not being themselves online and using avatars,
16:41
Speaker 1: and then this was really the first time where people
16:43
Speaker 1: were saying, hey, I want to be identified as Cameron Winklevoss.
16:46
Speaker 1: I want people to be able to find me, I
16:48
Speaker 1: think today now because if you go back to like
16:51
Speaker 1: the a LL like a well, the chat rooms, no
16:54
Speaker 1: one was themselves right nobly it wasn't Yeah, and then
16:59
Speaker 1: all of a sudd um there was this flip um
17:02
Speaker 1: sort of cracked the identity problem on the Internet and
17:05
Speaker 1: then everyone's like, wait, I'm gonna be my real self online.
17:09
Speaker 1: And that was really interesting to see that sort of movement.
17:13
Speaker 1: So net net was the social network good for you?
17:17
Speaker 1: Did it? Was it? Do you to come away from
17:19
Speaker 1: it with a positive experience or did you think of
17:22
Speaker 1: this as well? They kind of you know, told the
17:25
Speaker 1: story and and played a little fast and loose with
17:28
Speaker 1: the truth and and made some people out to be
17:30
Speaker 1: good guys and bad guys. So I think that we've
17:35
Speaker 1: made it good for us. I think ultimately you have
17:38
Speaker 1: to like take these things and try and you know,
17:41
Speaker 1: make them positive for you. Um, it's a at the
17:45
Speaker 1: end of the day, it's a piece of art and
17:47
Speaker 1: entertainment first and foremost, as opposed to a documentary that's
17:52
Speaker 1: hard hitting, uh, investigative reporting. And you know, we certainly
17:57
Speaker 1: understood that difference, but a lot of people don't. They're like, oh,
18:01
Speaker 1: that's like exactly how things went as opposed to that's
18:05
Speaker 1: sort of a composite storytelling. Um. But yeah, I mean
18:09
Speaker 1: I think overall it was super exciting to sort of
18:12
Speaker 1: watch it unfold and happen. It was flattering that people
18:15
Speaker 1: cared about our story to some extent. Um, And like
18:20
Speaker 1: Cameron says, it's a lot like it could have been
18:23
Speaker 1: a really bad movie, um, a really bad portrayal. Um,
18:27
Speaker 1: it happened to be like a great movie when we
18:30
Speaker 1: can show our grandkids kind of things. So you can't
18:33
Speaker 1: take yourself or it too seriously. The funny thing is, though,
18:38
Speaker 1: is like a lot of other people like take it
18:40
Speaker 1: more seriously than at least we do. Well, it sounds
18:43
Speaker 1: like you guys have a healthy attitude about it. We try, um,
18:46
Speaker 1: but people will come up on the street and they'll
18:48
Speaker 1: be like, I'm so piste off or like you know,
18:51
Speaker 1: they're like really exercised about the movie or what happened
18:54
Speaker 1: or this or that. Um, it's like, dude, calm down,
18:57
Speaker 1: Like it's okay, it's just a movie. Well, so let's
19:01
Speaker 1: talk about real life a second. So you're working on
19:04
Speaker 1: Harvard Connection, you hire Zuckerberg to do some coding for you.
19:09
Speaker 1: At what point did you start to get an inkling, Hey,
19:12
Speaker 1: this guy is uh not really being all that transparent
19:16
Speaker 1: with us. We got our first inkling when we read
19:19
Speaker 1: the Harvard Crimson at the dining room table and we're started.
19:24
Speaker 1: It was like surreal, like you're reading you know, this
19:28
Speaker 1: this alternative reality, and we're like, well, wait a second,
19:31
Speaker 1: maybe there's like another gone on campus with the same
19:34
Speaker 1: name who's thinking about, you know, the same thing. And
19:37
Speaker 1: it was just a very surreal moment, and that that's
19:40
Speaker 1: when we sort of realized what what had happened, right,
19:44
Speaker 1: so that the Harvard Crimson's the student newspaper um. But
19:47
Speaker 1: then when we obviously were shocked, we're like, what like
19:52
Speaker 1: Mark Zuckerberg launched the Facebook. We're like reading our own
19:55
Speaker 1: obituary and it's like so super surreal. Uh. Then sort
20:01
Speaker 1: of looking back as we sort of uncovered or thought, like,
20:04
Speaker 1: there was fifty two emails exchange, and it was clear,
20:08
Speaker 1: as we learned later on, that he would say he
20:11
Speaker 1: was doing stuff and then tell his friend like, I'm
20:13
Speaker 1: sandbagging them effectively. So so yeah, it was it was
20:17
Speaker 1: like this. It wasn't like all of a sudden he
20:20
Speaker 1: went his own way and said, see guys like good luck.
20:23
Speaker 1: It was sort of this methodical, premeditated sandbagging, which was
20:28
Speaker 1: really the basis of of the lawsuit, which was fraud.
20:32
Speaker 1: So you pursued proceeded on two levels. One was the lawsuit,
20:37
Speaker 1: but there was also UM a Harvard Code of Ethics
20:41
Speaker 1: that the claim was, hey, you have an obligation as
20:45
Speaker 1: a student here to maintain the highest levels of ethical standards.
20:50
Speaker 1: How did that play out in real life? It was
20:52
Speaker 1: depicted in a certain way. It did because in the
20:55
Speaker 1: movie it's a whole discussion with the president of the
20:57
Speaker 1: university and that that turns out to be kind of
21:01
Speaker 1: artistic license. Larry Summers wasn't that interested in the the
21:05
Speaker 1: Ethics handbook, so so that the part is accurate where
21:10
Speaker 1: we go to student office hours and sit in line
21:13
Speaker 1: like everyone else and say, look, you know, the handbook
21:16
Speaker 1: says this a student you know, uh, interacted with us
21:20
Speaker 1: in a way that's in violation of that UM. And yeah,
21:24
Speaker 1: the truth is the fact is that that the university
21:28
Speaker 1: UM in present Summers just didn't care UM. So that
21:32
Speaker 1: was disappointing. Um. I think you know, as young students,
21:36
Speaker 1: you know, wide eyed, bushytail like entrepreneurs. I think we thought,
21:42
Speaker 1: we naively thought that like the student handbook had some
21:45
Speaker 1: teeth or would sort of um protect us. We we uh,
21:50
Speaker 1: we certainly approached him as a fellow student, not some
21:53
Speaker 1: random stranger. Um. And so that was an eye opener.
21:58
Speaker 1: And I don't want to say a loss of innocence,
22:00
Speaker 1: but oh gosh, like you know, um, it just felt
22:04
Speaker 1: like we we had a different idea or perception of
22:08
Speaker 1: what actually the reality was. You had expectations of better
22:11
Speaker 1: behavior from a fellow Harvard student. Is that a fair
22:14
Speaker 1: way to sum it up? I think? So when did
22:17
Speaker 1: you guys first get involved in in bitcoin? So we
22:21
Speaker 1: we first got involved in the summer of and we
22:26
Speaker 1: first learned about it on vacation in Abisa. So I
22:32
Speaker 1: gotta think bitcoin is like ten bucks then, is that
22:34
Speaker 1: about right? I think it was just under ten. It
22:36
Speaker 1: was high single digits um, which which at that point,
22:41
Speaker 1: if you talk to bitcoiners, was like, oh, it's getting
22:44
Speaker 1: really expensive, right it used to be like pennies, you know. Um,
22:51
Speaker 1: So we're on vacation and a guy who we didn't know,
22:55
Speaker 1: but it had mutual friends in common. Came up, introduced himself,
22:59
Speaker 1: said like, basically, have you what have you guys thought?
23:02
Speaker 1: Have you guys thought about bitcoin digital currency? And we
23:05
Speaker 1: hadn't UM and we had just started winklebos capital Um
23:10
Speaker 1: a few months earlier. We had just been we retired
23:14
Speaker 1: from rowing. We had rowed for fifteen years. We competed
23:17
Speaker 1: in the two eight Olympics and decided to hang up
23:21
Speaker 1: um our oars, and so we were just starting to
23:24
Speaker 1: get into entrepreneurship UM again basically via angel investing, and
23:29
Speaker 1: so we were totally all ears for new ideas and
23:33
Speaker 1: we stayed in touch and then met some UM bitcoin
23:37
Speaker 1: entrepreneurs in New York as soon as we got back
23:40
Speaker 1: to the States and the rest of sort of history.
23:42
Speaker 1: Did you start by buying bitcoin or start by putting
23:45
Speaker 1: money into other crypto related UM startups? So that was
23:51
Speaker 1: kind of a debate we had internally, Um, what's a
23:54
Speaker 1: better investment the coin or the company built on top
23:57
Speaker 1: of it. We ended up actually doing both UM. But
24:02
Speaker 1: I think in a lot of these cases for cryptocurrencies,
24:05
Speaker 1: the ultimate bitcoin bat is bitcoin, because Bitcoin's gotta work
24:09
Speaker 1: first before a company that is built on top of
24:11
Speaker 1: it works. So we we sort of like came to
24:14
Speaker 1: the sequencing that UM buying the currency is it's sort
24:17
Speaker 1: of like buying a piece of the entire Internet or
24:21
Speaker 1: the ecosystem. UM. And so imagine if you could go
24:24
Speaker 1: back in time and buy a piece of the Internet,
24:27
Speaker 1: Like you don't have to bet on Amazon versus pets
24:29
Speaker 1: dot com if you own the Internet, UM, as long
24:32
Speaker 1: as you know, as long as you would be a
24:34
Speaker 1: part of Amazon's growth. I remember when Network Solutions, which
24:38
Speaker 1: was the registrar for domains that was officially approved. I
24:42
Speaker 1: remember when that stock went crazy, and it was the
24:45
Speaker 1: exact same argument. Hey, you don't have to pick a winner,
24:48
Speaker 1: pick the one company that gets to get a little
24:50
Speaker 1: piece of every company online, just like sort of like
24:53
Speaker 1: bet on the racetrack, not trying to pick the horses.
24:57
Speaker 1: And as long as there's horses racing, you'll be a
25:00
Speaker 1: part of the pot. So Bitcoin goes pretty vertical, starting
25:06
Speaker 1: in with a couple of big pullbacks, but ultimately towards
25:12
Speaker 1: the end of I want to say it was about
25:15
Speaker 1: nineteen Is that about right? That's about right, And I
25:19
Speaker 1: think that the first sort of big inflection point we
25:23
Speaker 1: saw was in I think it was March of when
25:27
Speaker 1: there's the Cyprus um financial crisis and the government did
25:31
Speaker 1: a bal in so basically they trimmed anybody with deposits
25:35
Speaker 1: above a hundred thousand euro. They just took it, and
25:40
Speaker 1: right people started, you know, bitcoin sort of hit and
25:43
Speaker 1: mainstream consciousness at that point and people realized, wow, this
25:48
Speaker 1: is like a global asset that um, it's fascinating. It's
25:52
Speaker 1: it's literally a digital gold. I've been calling it libertarian
25:56
Speaker 1: gold because the philosophy of the government shouldn't be able
25:59
Speaker 1: to do what is so appealing to that right. And
26:03
Speaker 1: one of the things though we also realized as as
26:07
Speaker 1: it sort of entered mainstream consciousness was that, you know,
26:11
Speaker 1: the Cypriots, the ship had sailed for them, right, they
26:15
Speaker 1: weren't going to get into bitcoin, and it already happened.
26:17
Speaker 1: But there's a lot of people who saw that who
26:19
Speaker 1: then said, hey, how do I get into bitcoin? And
26:22
Speaker 1: the only option at that time was a was a
26:25
Speaker 1: site called Mount cox Um, which is mt g o X.
26:29
Speaker 1: It stands for Magic the Gathering Online Exchange. So prior
26:33
Speaker 1: to being a bitcoin exchange, it was a Magic the
26:35
Speaker 1: Gathering Online exchange for literally magic cards, and they did
26:39
Speaker 1: one of the greatest pivots of all time into bitcoin,
26:44
Speaker 1: and so we actually acquired a lot of our bitcoin
26:47
Speaker 1: on Mount Cox. Thankfully we weren't caught up when it imploded,
26:51
Speaker 1: we had already left the exchange. But through that sort
26:55
Speaker 1: of experience and all the risk, UM, we built our
26:58
Speaker 1: own cold storage system. We basically private keys, shartered them,
27:02
Speaker 1: cut them in basically into pieces, and then distributed across
27:06
Speaker 1: the country in banks. Um, and some banks like they
27:10
Speaker 1: kind of figured what we were up to, Like they
27:12
Speaker 1: knew we were involved with bitcoins, so they're like, no, like,
27:15
Speaker 1: you can't open up a deposit box. Um, we got
27:18
Speaker 1: turned away by a number of banks. I would think
27:21
Speaker 1: anyone could walk into any bank and say, Hi, I
27:23
Speaker 1: want to open a safety deposit, you would think, But
27:26
Speaker 1: I think that's kind of how it works, right, because
27:28
Speaker 1: when you open one up, then the bank person leaves
27:33
Speaker 1: and gives you that privacy. They're not really supposed to
27:35
Speaker 1: ask you. Yeah, but apparently it's not you know, contraband
27:40
Speaker 1: why would you're not supposed to put dollars in? Okay?
27:43
Speaker 1: I think you could potentially argue that we were putting value,
27:47
Speaker 1: But but you know, a shart of a private key
27:50
Speaker 1: in it of itself is not value, it's the quorum
27:53
Speaker 1: of those keys, so it's it was a really interesting
27:56
Speaker 1: kind of experience, and we lived on planes for you know,
27:59
Speaker 1: the better part of a week UM, and we're like,
28:02
Speaker 1: we're really motivated to do this great, but how do
28:05
Speaker 1: we really get people into this system? And how do
28:08
Speaker 1: we create an on ramp? And that kind of led
28:10
Speaker 1: us into um the gap, which is that in order
28:15
Speaker 1: for this to really work, we've got to have regulated
28:18
Speaker 1: infrastructure that's licensed, compliant, built with like a security first mentality,
28:23
Speaker 1: and that was the genesis of Gemini Are, our online
28:26
Speaker 1: platform that we started building, we launched, and we've been
28:32
Speaker 1: running in building since since then. UM. And the simple
28:37
Speaker 1: value prop is really by sell and store initially Bitcoin
28:41
Speaker 1: now ethereum z cash, Bitcoin cash, light coin, and we'll
28:44
Speaker 1: be adding more UM. And then once we built that
28:48
Speaker 1: trusted platform, you know we we didn't, we launched mobile app,
28:51
Speaker 1: so you can download the Gemini Mobile app and the
28:53
Speaker 1: Google Play or the Apple um iOS store and literally
28:58
Speaker 1: travel with your crypto at your your tips and you
29:00
Speaker 1: can trade and do whatever you need to do effectively
29:03
Speaker 1: mobile UM. So that was that's what we've been working
29:07
Speaker 1: on for the better part of the best for or
29:08
Speaker 1: five years. Let's let's talk about wink decks, because I
29:11
Speaker 1: haven't really gotten to that. This is effectively your UM
29:16
Speaker 1: custom index of various cryptocurrencies. Is that a fair way
29:20
Speaker 1: to describe it. So it is a blended price index
29:25
Speaker 1: of UM bitcoin prices UM. So it's just one of
29:28
Speaker 1: the products we've been building over the past couple of years.
29:31
Speaker 1: When you say blended, is it multiple cryptos or is
29:35
Speaker 1: it just one, Well, there's one for memo correctly, bitcoin
29:41
Speaker 1: and ether. So the risk profiles of exchanges very a
29:46
Speaker 1: lot because every crypto exchange is also custodian, so when
29:50
Speaker 1: you trade somewhere, you've got to commit your capital there.
29:53
Speaker 1: And some exchanges are like mount Cox and some exchanges
29:57
Speaker 1: are like Gemini they've never had an incident. So UM
30:02
Speaker 1: prices can differ in the industry quite a bit from
30:05
Speaker 1: different exchanges because of the risk profile of how they custody,
30:10
Speaker 1: whether or not you can get Fiat dollars in or
30:13
Speaker 1: out UM. So the idea of the win de x
30:15
Speaker 1: was to try and create a price because there's a
30:19
Speaker 1: lot of disparate prices UM and understand what that sort
30:24
Speaker 1: of blend is similar to stocks where you have things
30:27
Speaker 1: trading on the New York than AZDAC that you go
30:30
Speaker 1: through all the list of different exchanges, very often you'll
30:33
Speaker 1: have a different price across this. You want to come
30:35
Speaker 1: up with, here's the actual price of bitcoin at this moment.
30:39
Speaker 1: That's that's correct. Yeah. So the question that that I
30:44
Speaker 1: find intriguing from an institutional perspective is I've heard and
30:50
Speaker 1: read various parties say it's challenging to get liquid and
30:54
Speaker 1: bitcoin for size, meaning hundreds of thousands of dollars. Has
30:59
Speaker 1: that changed? Is it going to change in the future
31:02
Speaker 1: If someone wants to move a million dollars in and
31:04
Speaker 1: out a bitcoin, can you do that quickly? Or were
31:07
Speaker 1: we not quite there yet? So the when we first
31:11
Speaker 1: got into bitcoin, UM dollars was hard to move into
31:16
Speaker 1: the market and actually acquire UM at a market cap?
31:19
Speaker 1: Would you move the price if you were buying did
31:21
Speaker 1: it in a way you know? You could definitely impact
31:24
Speaker 1: the market um it was a hundred million dollar market
31:27
Speaker 1: cap UM world that that when we first got in UM.
31:32
Speaker 1: I think what people one of the common misconceptions about
31:35
Speaker 1: bitcoin today is the liquidity. There's a lot more than
31:40
Speaker 1: people think is there. UM you could move a million
31:43
Speaker 1: dollars in and out UM relatively easily UM, and so
31:48
Speaker 1: very very quickly, very quickly, and a lot of times.
31:52
Speaker 1: Because these exchanges are full reserve UM, the depth of
31:57
Speaker 1: the order book looks shallower than it actually is is.
32:00
Speaker 1: But Gemini, for instance, we have UM the world's biggest
32:04
Speaker 1: liquidity providers outside of crypto their customers. So if you
32:08
Speaker 1: can think of a name UM of a market maker
32:12
Speaker 1: on New York Stock Exchange, there's a really good chance
32:15
Speaker 1: there on Gemini. So we have the same amount of
32:18
Speaker 1: UM liquidity in a sense, the same UH players are there. UM,
32:25
Speaker 1: they just don't show as much because it's full reserve,
32:29
Speaker 1: but it's meaning it's dollar for dollar back up. The
32:32
Speaker 1: prime brokers haven't haven't totally moved into the space yet
32:35
Speaker 1: so UM, but they're they're all sitting there and if
32:38
Speaker 1: they see orders come onto the order book, they're going
32:41
Speaker 1: to move funds and and try and add liquidity and
32:44
Speaker 1: take the other side of that trade, assuming it makes
32:46
Speaker 1: sense for them. What what do you make of Fidelity
32:49
Speaker 1: investments being so aggressive so early moving into the crypto space.
32:54
Speaker 1: The rest of Wall Street had kind of a let's
32:57
Speaker 1: wait and see what's going to happen fidelity. Maybe I
33:01
Speaker 1: wonder if they missed the E T F boom or something,
33:03
Speaker 1: but they appear to have said, hey, this is the
33:06
Speaker 1: next big thing we want in early. I think it
33:09
Speaker 1: makes a lot of sense and it's a smart move.
33:11
Speaker 1: Um there. You know, they see the opportunity today. It
33:15
Speaker 1: may not make you know, the business case may not
33:17
Speaker 1: be there today, but it will be there tomorrow. And
33:20
Speaker 1: as these businesses work, um, you know, getting there first
33:24
Speaker 1: is an advantage for sure. Um. I think a lot
33:27
Speaker 1: of Wall Street got really close in seen and we're
33:32
Speaker 1: about to take the plunge. Maybe they set up a
33:34
Speaker 1: trading desk with one individual thinking they would scale that out.
33:37
Speaker 1: I think Goldman Sachs, you know, built started to build
33:40
Speaker 1: a trading desk, and then it seems to be a
33:42
Speaker 1: little bit on pause, and you know people have backed away.
33:46
Speaker 1: But there are going to be first movers and there's
33:48
Speaker 1: gonna be a lot of value that accrues to them,
33:50
Speaker 1: I think because of that. So so I love the
33:53
Speaker 1: ad campaign that you guys have put together for Gemini
33:56
Speaker 1: because it's so counter to the sort of wild West
34:00
Speaker 1: early days of crypto, So just a full When I
34:05
Speaker 1: was doing my homework, I I saw a couple of things.
34:08
Speaker 1: The revolution needs rules was one crypto without chaos, which
34:13
Speaker 1: certainly makes sense for people who seem to have lost
34:16
Speaker 1: cash when something implodes or a company loses their their key.
34:21
Speaker 1: It just seems insane that that happens. Money has a future.
34:25
Speaker 1: You guys are trying to take this exchange and make
34:29
Speaker 1: it like a regular mainstream currency exchange. Or am I
34:33
Speaker 1: over selling that? I think that's that's right. I mean,
34:37
Speaker 1: we we enter the space when it was a wild West.
34:40
Speaker 1: We know what the revolution looks like without rules. Um,
34:44
Speaker 1: it usually ends up with catastrophic failures. UM, people really
34:49
Speaker 1: getting injured, a lot of value being lost. And you know,
34:53
Speaker 1: you would never put your money in an unregulated bank. UM,
34:57
Speaker 1: it would never cross your mind. And yet in crypto,
35:00
Speaker 1: like that's that's the sad reality of the market to
35:02
Speaker 1: some extent. UM. I mean like we were there five
35:06
Speaker 1: years ago, Like I don't miss that. I'm not nostalgic
35:09
Speaker 1: for the early days of of of bitcoin or crypto. Um,
35:13
Speaker 1: it wasn't as interesting as it is today. The best
35:17
Speaker 1: entrepreneurs weren't in the game. UM, and I think that
35:22
Speaker 1: the you know, the regulation is brought in certainty, it's
35:26
Speaker 1: brought in more money there for investment, therefore better entrepreneurs UM.
35:32
Speaker 1: It's sort of been this incredible great cycle UM. So
35:36
Speaker 1: we lived that wild West firsthand, and it was scary
35:40
Speaker 1: and a lot of people got burned. And uh we
35:44
Speaker 1: created Gemini in the wake of all of that as
35:47
Speaker 1: a solution to that problem so people could engage with
35:51
Speaker 1: crypto in a way that was felt is you know,
35:55
Speaker 1: safe and compliant as you know, opening a bank account
35:59
Speaker 1: at g P. Morrigan or whatever, UM. And so we
36:04
Speaker 1: we know what that's like and you know, so I
36:08
Speaker 1: think we're pretty informed on on you know, the shortcomings
36:12
Speaker 1: of it. And I think the Money as a Future
36:15
Speaker 1: really plays on this idea that most of the payment
36:19
Speaker 1: mechanisms that we grew up with UM our decades old. UM.
36:23
Speaker 1: The fed wire system is ancient. UM. Credit cards I
36:27
Speaker 1: think came from the fifties and sixties. And I remember
36:30
Speaker 1: the first days of eBay UM when I ordered some stuff,
36:33
Speaker 1: I did a money order through through the post office.
36:36
Speaker 1: So you go to the post office, you give them
36:38
Speaker 1: a Hunter bucks, they give you like a slip that's
36:40
Speaker 1: basically credit you put an envelope, you mail it off,
36:43
Speaker 1: you get your good and then PayPal came out and
36:46
Speaker 1: you're like, wow, that's amazing. It just made a life
36:49
Speaker 1: so much easier. But then you realize that it's still
36:52
Speaker 1: sending value through the existing system and protocols. It's really
36:56
Speaker 1: not a global payment system. And then you discover Bitcoin
37:01
Speaker 1: and you're like, oh my god, um, this is truly amazing.
37:04
Speaker 1: You can send any amount of money for very cheap
37:08
Speaker 1: um anywhere in the world pretty much instantaneously. UM. And
37:13
Speaker 1: and so that fast forward to the past year. We
37:17
Speaker 1: built the Gemini Dollar, which is a stable coin peg
37:20
Speaker 1: to the dollar UM on the Ethereum network, and now
37:24
Speaker 1: with the Gemini mobile app, I can send literally proxies
37:28
Speaker 1: for U S dollars to anybody in the world, um, instantaneously.
37:31
Speaker 1: We've literally brought dollars onto the blockchain. And that's like
37:35
Speaker 1: the future of money. You know. It's kind of like
37:38
Speaker 1: it's so counterintuitive, isn't it. Yeah. I mean it's sort
37:40
Speaker 1: of like what Skype did for for voice. UM. I
37:44
Speaker 1: remember when I was a kid, long distance calls were
37:47
Speaker 1: a thing. Yeah, Like my mom would be like, like
37:51
Speaker 1: your aunt's calling from California and we lived in Connecticut
37:54
Speaker 1: at the time. It's like expensive as a big thing,
37:57
Speaker 1: and that's what moving money has been for a long time,
38:01
Speaker 1: since the beginning of time. Up your banker. You have
38:03
Speaker 1: to put in these wire instructions. It's like these ancient protocols.
38:07
Speaker 1: Mad you send a wire on Friday, Um, it in
38:10
Speaker 1: there's a bank holiday on Monday. You know, from New
38:12
Speaker 1: York to London, it's probably getting there on Tuesday. Um,
38:17
Speaker 1: did you put the numbers in incorrectly? It's going to
38:20
Speaker 1: be sitting in limbo for a long time. So that
38:22
Speaker 1: the joke and crypto is you're better off getting um,
38:25
Speaker 1: going to a plane on JFK and flying from New
38:28
Speaker 1: York to London with a bag of cash because they
38:30
Speaker 1: would get there quicker. So crypto, the ideas crypto is
38:33
Speaker 1: basically making money, sending money and value as easy as
38:37
Speaker 1: sending email. Um. So that's kind of the That was
38:41
Speaker 1: our aha moment um five years ago and it still
38:45
Speaker 1: is today. So you describe it as amazing. A lot
38:48
Speaker 1: of other people in shared that enthusiasm. Did you feel
38:54
Speaker 1: in like bitcoin had blown up into a full on bubble? Like,
38:59
Speaker 1: how are you looking? Having been there? So much earlier.
39:02
Speaker 1: How are you looking at going We were in this
39:05
Speaker 1: at eight dollars, this thing is now a thousand, five thousand,
39:08
Speaker 1: ten thousand. At what point did you say this is
39:11
Speaker 1: starting to get out of hand? Well, I think we
39:13
Speaker 1: we so seventeen we felt like, okay, we've seen this
39:17
Speaker 1: movie movie before UM, because it was like, I don't
39:21
Speaker 1: know that the twentie bitcoin bubble um where people said, oh,
39:25
Speaker 1: it's out of it's way ahead of itself, it's going
39:27
Speaker 1: to explode and be worth nothing. But each time the
39:32
Speaker 1: excitement gets ahead of itself, it tends to stabilize at
39:36
Speaker 1: a better floor than it than it was before. So
39:39
Speaker 1: if you look at the instead of looking at the
39:41
Speaker 1: fifty two week highs, look at the fifty two week lows,
39:45
Speaker 1: and each of them are stepping up into the right direction. Now,
39:49
Speaker 1: the way we get there is kind of a wild
39:51
Speaker 1: ride in between. UM. But we've sort of lived through
39:55
Speaker 1: this before, and now people call it a crypto winner,
39:59
Speaker 1: and this is like the third or fourth winner we've
40:02
Speaker 1: been in UM, so we've sort of seen this before.
40:05
Speaker 1: It's pretty typical of early stage technology. People get over excited,
40:11
Speaker 1: it recorrects, then entrepreneurs come and continue to build great
40:15
Speaker 1: stuff and then it will go again. So we we
40:18
Speaker 1: fully think that there will be another wave, UM, and
40:22
Speaker 1: it should be probably more exciting than the last one.
40:25
Speaker 1: So on paper, in your bitcoin investments scale up to
40:30
Speaker 1: over a billion dollars? Is that fair number? That? That's
40:34
Speaker 1: that's what I read. I don't know how much hyperbole,
40:36
Speaker 1: isn't that? What is it like when you're saying, I
40:39
Speaker 1: know this is a little crazy, but there it is
40:41
Speaker 1: on paper, it's a billion dollars Or do you just say,
40:45
Speaker 1: we know this is gonna come back down to earth
40:47
Speaker 1: and well let's just ignore it and keep working. I
40:50
Speaker 1: think the latter. I mean we we definitely ignored it
40:53
Speaker 1: and keep working. Um. If you look at the price
40:56
Speaker 1: a year ago, it was close to twenty. If you
40:59
Speaker 1: look at the price to a it's it's a fifth
41:01
Speaker 1: of that. UM. And yet over the last year, if
41:04
Speaker 1: we think of like what we've achieved as a business
41:06
Speaker 1: as Gemini in terms of building our company, We've launched
41:11
Speaker 1: mobile apps. UM, We've launched a stable coin, We've added
41:14
Speaker 1: three new assets to the platform. Were about two hundred
41:18
Speaker 1: employees strong. Uh, we're shipping two employees really, so this
41:22
Speaker 1: is a not insubstantial company, and you're really thinking about
41:27
Speaker 1: this as a longer term play, not hey, look how
41:29
Speaker 1: much we're worth, hits a bid and let's go on vacation. Absolutely,
41:33
Speaker 1: I mean we we UM, we're trying. We we say
41:36
Speaker 1: internally that we're building a centurion, a hundred year plus
41:40
Speaker 1: company UM in the valley. People often talk about the unicorn,
41:44
Speaker 1: and that's the company valued at a billion dollars. And
41:47
Speaker 1: our view is that, like, look, let's try and build
41:49
Speaker 1: a sustainable business. If you look at the people in
41:53
Speaker 1: the financial world that that we respect UM, like the
41:56
Speaker 1: State Streets of the world, the Bank of New York,
41:58
Speaker 1: these are two hundred year old plus institutions. So that's
42:01
Speaker 1: what we're trying to build is longevity, and we think
42:04
Speaker 1: the value, the valuation part will really take care of itself.
42:08
Speaker 1: And so the last year for Gemini has really been remarkable.
42:12
Speaker 1: We've never sort of built so much, built so fast,
42:15
Speaker 1: and done so many things. And when you look at
42:18
Speaker 1: the price UM at a fifth of where it was,
42:21
Speaker 1: it just it kind of is a reminder how it's
42:23
Speaker 1: it's just one metric and it often lags. It's it
42:26
Speaker 1: can be obviously too too far ahead and too far behind.
42:30
Speaker 1: And and one of the anecdotal things I will say
42:33
Speaker 1: is that UM, as the price was rushing up to
42:36
Speaker 1: twenty thousand, I was getting tons of texts and questions
42:39
Speaker 1: from people like should I buy? Should I buy? And
42:41
Speaker 1: I'm like, I don't know. I mean, it feels like,
42:43
Speaker 1: you know, there's a there's a lot of froth here.
42:45
Speaker 1: But now I'm getting the questions again because people are
42:49
Speaker 1: seeing it at four thousand and sitting there and it's
42:52
Speaker 1: been there for I think we're going into like thirteen
42:55
Speaker 1: month thirteen of the bear market. People are starting to
42:57
Speaker 1: say it's starting to look like, uh, that's interesting, Yeah,
43:01
Speaker 1: like cheap right. Um, but if you zoom out enough.
43:07
Speaker 1: UM our view, at least with bitcoin is that is
43:09
Speaker 1: a digital gold, and so um that thesis is the
43:15
Speaker 1: qualities that make gold valuable. If you break them down
43:18
Speaker 1: um scarcity. For instance, bitcoin is actually fixed divisibility, portability,
43:25
Speaker 1: bitcoins like sending email, uh, fungibility. So all of the
43:30
Speaker 1: characteristics that make gold valuable. Bitcoin has those characteristics that
43:34
Speaker 1: either equals them equals gold or better better's gold, so
43:38
Speaker 1: we call it gold. Two point oh and bitcoin's market
43:42
Speaker 1: cap I haven't checked today, but let's say it's a
43:44
Speaker 1: hundred million dollars then golds at seven trillion. If it's
43:49
Speaker 1: a better gold, it's got to get that high as
43:52
Speaker 1: a market cap. So we think, uh, you know, bitcoin
43:56
Speaker 1: is better at being gold and gold, so therefore, uh
43:59
Speaker 1: it it has a lot of room to appreciate. Blockchain
44:03
Speaker 1: originally was touted as unhackable, and now we're starting to
44:06
Speaker 1: see some articles about small hacks not into the wallets,
44:13
Speaker 1: but to blockchain itself. Is that a genuine issue or
44:17
Speaker 1: these just really little fringe situations that don't undercut the
44:23
Speaker 1: main premise of blockchain. So a lot of the early
44:27
Speaker 1: hacks were actually company hacks or entrepreneur failures. Uh, they
44:31
Speaker 1: weren't failures of the bitcoin protocol, which has never been hacked. UM.
44:36
Speaker 1: So there are smaller coins um that have had issues
44:42
Speaker 1: because they don't have a large mining community around them. UM.
44:46
Speaker 1: So you know, I think that this stuff is overblown.
44:50
Speaker 1: It makes good good headlines, but I don't think it
44:54
Speaker 1: tells that all the full picture, just like price is
44:58
Speaker 1: not the full picture. So I think you need like
45:00
Speaker 1: dig deep and do your homework on this stuff. But
45:03
Speaker 1: this space is here to stay. Cryptocurrency is not going away.
45:06
Speaker 1: It's going to power and re architect the future Internet.
45:11
Speaker 1: People talk about Web one point oh two point out.
45:14
Speaker 1: We're on the um beginning of Web three point out,
45:17
Speaker 1: so it's something you should totally learn more about and
45:20
Speaker 1: take seriously. Can you guys stick around? I have a
45:22
Speaker 1: bunch more questions as we have been speaking to Cameron
45:26
Speaker 1: and Tyler Winklevoss, founders of Gemini, a crypto exchange, as
45:31
Speaker 1: well as Harvard Connection and winkle Voss Capital. If you
45:36
Speaker 1: enjoyed this conversation, be sure and come back for the
45:39
Speaker 1: podcast Actors, where we keep the type rolling and continue
45:42
Speaker 1: discussing all things crypto. We love your comments, feedback, end
45:47
Speaker 1: suggestions right to us at m IB podcast at Bloomberg
45:51
Speaker 1: dot net. Check out my daily column on Bloomberg dot
45:55
Speaker 1: com slash Opinion. Follow me on Twitter at Rid Halts.
45:59
Speaker 1: I'm Battery Rihults. You're listening to Masters in Business on
46:02
Speaker 1: Bloomberg Radio. Welcome to the podcast, guys. Thank you so
46:19
Speaker 1: much for doing this. I've been really looking forward to
46:21
Speaker 1: chatting with you, and you have not disappointed. There are
46:25
Speaker 1: so many questions I did not get to um, and
46:30
Speaker 1: they'll have to wait for another time because I have
46:33
Speaker 1: to ask you my favorite questions that we ask all
46:36
Speaker 1: of our guests. UM. These are always in interesting and
46:40
Speaker 1: revealing of people's um history and background and personality. So
46:45
Speaker 1: let me jump right into this. Tell us what is
46:49
Speaker 1: the makeyearin model of the first car you guys owned?
46:54
Speaker 1: I think we shared a an SGV, a land Rover.
46:59
Speaker 1: I think that's right, first car, and you guys will
47:02
Speaker 1: split We split it down the middle. You guys were
47:04
Speaker 1: living in Grantwich, Is that right? So you had a
47:07
Speaker 1: really interesting up upbringing and I wanted to to ask
47:11
Speaker 1: you about that, but well, if we have time, we'll
47:13
Speaker 1: we'll circle back. So tell us the most important thing
47:17
Speaker 1: people don't know about the Winklevoss twins. Um, So Tyler's
47:25
Speaker 1: right handed Cameron's left handed? Is really is that true?
47:28
Speaker 1: That's it? Is that common amongst twins? Or is that
47:30
Speaker 1: relatively rare? So? I think that it's in identical twins
47:35
Speaker 1: are mirror image. UM, and I think it's when the
47:39
Speaker 1: egg splits later. Right, That's quite fascinating. I had no
47:43
Speaker 1: no idea about that. UM. Who are some of your
47:46
Speaker 1: early mentors? You mentioned your dad who affected your career
47:50
Speaker 1: and your entrepreneurial desires. I think for sure. Parents, UM,
47:57
Speaker 1: I would say early coaches were important. UM high school
48:02
Speaker 1: rowing coach James Megan, this irishman who really helped us
48:07
Speaker 1: explain the sport to us and help us fall in
48:10
Speaker 1: love with it, UM and sort of believe in ourselves
48:13
Speaker 1: that we could achieve these things as kids in high school. UM.
48:18
Speaker 1: So I'd say those are those are big ones early
48:20
Speaker 1: on that really helped, um, you know, affect the trajectory
48:26
Speaker 1: of of our later years. What what about you guys
48:29
Speaker 1: as venture capitalists and investors, who has influenced the way
48:34
Speaker 1: you think about that work and the way you put
48:36
Speaker 1: money at risk? I think, well, our father is an entrepreneur,
48:40
Speaker 1: so I think we through osmosis sort of being in
48:43
Speaker 1: that that household. Um. He worked with computers back in
48:47
Speaker 1: the sixties, prior to even monitors, when it was like
48:49
Speaker 1: punch card and is using a univact that the computer
48:53
Speaker 1: I don't think it would even fit in in this
48:55
Speaker 1: floor of the studio was probably three times the size
48:59
Speaker 1: of the studio. So we'd already always been around sort
49:02
Speaker 1: of technology and ideas and taking risks. And then I think,
49:06
Speaker 1: you know, I believe or not the sport of rowing.
49:08
Speaker 1: I feel like it's informed so much of how we think, UM,
49:12
Speaker 1: build building teams, UM, you know, day and day out,
49:16
Speaker 1: just consistency. UM. You know, it was a fifteen year
49:20
Speaker 1: journey for us. UM. When we stepped in the boat house,
49:23
Speaker 1: I don't think we thought we would be on you know, Olympians,
49:26
Speaker 1: But fifteen years later, UM, we were. And it was
49:30
Speaker 1: just a lot of work for you know, day and
49:32
Speaker 1: day out. UM. And I think that's most of you know, entrepreneurship. Uh.
49:37
Speaker 1: It's easy to look at the big numbers and the
49:39
Speaker 1: I p o s. But if you look at most
49:40
Speaker 1: of these companies, they've been at it for uh well
49:44
Speaker 1: over a decade and just you know, plugging away. Quite interesting.
49:48
Speaker 1: Tell us about some of your favorite books, be they
49:50
Speaker 1: investing or general interest fiction non fiction? What do you
49:53
Speaker 1: guys like to read? So? I think Zero to one
49:57
Speaker 1: is a great quick read. It's ter Teel's book on investing.
50:02
Speaker 1: There's a lot of counterintuitive ideas and examples in there. UM.
50:07
Speaker 1: It's I think it's something like eighty pages. It's a
50:09
Speaker 1: really quick, straightforward read. UM. And then it really captures
50:14
Speaker 1: the art of of startups and entrepreneurship. It's it's a
50:18
Speaker 1: really good quick way to understand how that world works,
50:22
Speaker 1: because you don't learn it in a classroom. Usually, you
50:25
Speaker 1: don't learn it in a liberal arts education. Uh certainly,
50:29
Speaker 1: usually not in high school. So I think that's a
50:31
Speaker 1: quick way to kind of get up on it. What else,
50:34
Speaker 1: what else do you guys read? So? I think snow
50:36
Speaker 1: Crash by Neil Stevenson is phenomenal. UM. I think it
50:40
Speaker 1: was written in the eighties and he UM pretty much
50:43
Speaker 1: like UM depicts virtual reality UM in an amazing way. Uh.
50:49
Speaker 1: So that's a great, great book and just becoming more
50:52
Speaker 1: and more relevant by by the day. And then I
50:55
Speaker 1: think Kryptonomicon, UM, I knew you're gonna go there. Yeah,
50:58
Speaker 1: also by Stevenson by Stevenson, and it basically you know
51:02
Speaker 1: bitcoin is you're reading and you're like, this is bitcoin.
51:04
Speaker 1: You know how incredible he this guy? He predicts VR
51:10
Speaker 1: and predicts UM bitcoin. So if people are decades in advance,
51:15
Speaker 1: not even like right before ahead like UM. And so
51:20
Speaker 1: if you've read Ready Player one, it's sort of like
51:22
Speaker 1: the newer version of snow Crash UM. But those are
51:25
Speaker 1: really fun, incredible, there's so much more than just like,
51:29
Speaker 1: oh he predicts bitcoin and VR. But also I think
51:32
Speaker 1: you're going to see this, um conversions of the two
51:35
Speaker 1: worlds of VR gaming and crypto and payments. UM, that's
51:41
Speaker 1: going to be fascinating to see play out. So these
51:43
Speaker 1: are great books to kind of go back to where
51:45
Speaker 1: it all started. Quite interesting. Tell us about a time
51:49
Speaker 1: you failed and what you learned from the experience. It's
51:53
Speaker 1: a great question. I mean, I think a lot of
51:55
Speaker 1: times when people think of failure, they think of some epic,
51:58
Speaker 1: you know, decision or thing that went wrong. And I think, um, certainly,
52:03
Speaker 1: you know, if you're in the game long enough, you're
52:05
Speaker 1: going to have those. UM. I think we sort of
52:08
Speaker 1: learned early on how to pick your partners wisely. UM.
52:11
Speaker 1: But I think you know, in the sport of rowing, uh,
52:15
Speaker 1: a lot of times you go out and you have
52:16
Speaker 1: a bad practice, UM, and you feel pretty bad about
52:20
Speaker 1: the performance, but um, it only lasted long until the
52:24
Speaker 1: next practice, and so you build this this you sort
52:27
Speaker 1: of live with failure in a way. UM. And most
52:30
Speaker 1: of you know, the Olympians and gold medalists that we
52:33
Speaker 1: know lost a lot more races than they won. So
52:36
Speaker 1: you really learned to embrace failure, to process it, um,
52:40
Speaker 1: and then just keep moving on and realize that you know,
52:44
Speaker 1: as you push forward, it's just going to be part
52:46
Speaker 1: of that that experience. UM. And I think the people
52:50
Speaker 1: who stay in the game, whether it's entrepreneurs or investors
52:54
Speaker 1: through the long haul like they do well, it's the
52:56
Speaker 1: people that that sort of fail or or you know,
52:58
Speaker 1: leave after a year or two. Um, they kind of
53:02
Speaker 1: miss out on on all the other stuff. What do
53:04
Speaker 1: you guys do for fun? M hmm, that's a good question. Um,
53:10
Speaker 1: everybody wants to wants to start a start up, and
53:13
Speaker 1: then um, when you get any you realize how much
53:16
Speaker 1: work it is. Uh, there's not too much time for fun.
53:19
Speaker 1: But if there's downtime. We've been doing some skiing lately. Uh,
53:23
Speaker 1: really enjoy getting out in the mountain. The energy workouts.
53:27
Speaker 1: Very social, it's fun. Um. Love reading, love watching movies. Um,
53:33
Speaker 1: you know, simple things that just are sort of relaxing,
53:36
Speaker 1: seeing friends. Um. But but yeah, when you when you
53:40
Speaker 1: start a company, it it definitely, Um, it's all consuming.
53:44
Speaker 1: That the thing I would equate it to most And
53:46
Speaker 1: I don't have kids, but I imagine it's like having
53:50
Speaker 1: a family having kids. You don't just you know, check
53:53
Speaker 1: in from nine to five it's a seven thing that
53:56
Speaker 1: you live with, and it's all encompassing. There's really it
54:00
Speaker 1: blurs between you know, work time and non work time.
54:04
Speaker 1: It's sort of like always there. I think that's a
54:06
Speaker 1: generational thing because the current generation or helicopter parents go
54:11
Speaker 1: back thirty or forty years and the latch key generation
54:15
Speaker 1: the parents would occasionally check in. But your point is
54:18
Speaker 1: well made. So within crypto and or venture capital, what
54:23
Speaker 1: are you most excited about? What do you think is
54:26
Speaker 1: really the most interesting disruptive thing that's going to come
54:29
Speaker 1: out of those spaces. So I think crypto is gonna
54:33
Speaker 1: usher in web three point oh. Right now, we have
54:36
Speaker 1: basically an Internet that's built up of a few centralized services,
54:40
Speaker 1: and I think we're gonna see sort of the decentralization
54:43
Speaker 1: of many of these services UM and and users are
54:47
Speaker 1: going to realize that they should really be getting compensated
54:51
Speaker 1: for their their content. Right now, we were all part
54:53
Speaker 1: of these social networks and we are the product, and
54:56
Speaker 1: we're creating tons of content and not getting anything for
54:59
Speaker 1: it UM. So I think that there's going to be
55:02
Speaker 1: a huge shift UM in that direction, and cryptocurrency is
55:05
Speaker 1: going to be part of that solution. And ushering in
55:08
Speaker 1: the web. Three point oh. And then what we're seeing
55:11
Speaker 1: is a lot of you know, it's building a brand
55:13
Speaker 1: these days, is it's really fasting because you can just
55:15
Speaker 1: go direct to consumer. You don't need the fixed costs
55:19
Speaker 1: of a brick and mortar. Um. We're in one company
55:21
Speaker 1: called Dirty Lemon where literally you just order it through text.
55:24
Speaker 1: It's SMS. It's super simple, and they have a store
55:28
Speaker 1: uh downtown that's not even manned by any um individuals.
55:32
Speaker 1: You you go by, there's a there's a camera, you
55:34
Speaker 1: you put in your order and you just take take
55:37
Speaker 1: what you want. Um, it's truly automated. Um. And then
55:40
Speaker 1: there's lots of other brands that I think are gonna
55:43
Speaker 1: you know, innovate and then get scooped up by larger incumbents.
55:46
Speaker 1: So um, it's a it's a really interesting time to
55:49
Speaker 1: be building brands and things like that. If a millennial
55:52
Speaker 1: or a college student came up to you and said,
55:54
Speaker 1: I'm interested in filling the blank startups bench capital crypto,
55:59
Speaker 1: uh sort of advice would you give them? So? I
56:02
Speaker 1: think that the uh, the big piece of advice I
56:04
Speaker 1: would say is that whatever you choose to do, you
56:07
Speaker 1: should definitely look at crypto, but I feel like crypto
56:11
Speaker 1: that's fine, um, but you should be looking at the
56:14
Speaker 1: minimum of a four year cycle. Um. We see in
56:18
Speaker 1: our shop at Gemini that it takes about six months
56:21
Speaker 1: for an engineer to get up to speed and be
56:23
Speaker 1: truly productive at that optimal level, and then you know,
56:27
Speaker 1: you it takes another six months to just sort of
56:30
Speaker 1: learn and and and understand how the company were. Where
56:33
Speaker 1: the cold brew is all those things. You gotta know
56:35
Speaker 1: where the coffee is, right, um. And I think a
56:37
Speaker 1: lot of times people they're the horizon that the patients
56:41
Speaker 1: isn't there, um, and they're looking to just sort of
56:44
Speaker 1: switch in a lot of like quickly. And when we
56:47
Speaker 1: look at like our you know, like historically we did.
56:50
Speaker 1: I mean, we were in the sport of rowing for
56:51
Speaker 1: fifteen years and it wasn't until the eleventh year where
56:56
Speaker 1: we thought, you know, hey, maybe we could potentially make
56:59
Speaker 1: the Olympics. Um. And it took you know, it wasn't
57:02
Speaker 1: it wasn't months, it wasn't it was over a decade.
57:06
Speaker 1: So I think, you know, what we've learned is like
57:09
Speaker 1: patients is huge. Um. We've only been in cryptocurrency, and
57:13
Speaker 1: I say, only for five years. Most people would think
57:15
Speaker 1: that's a lifetime, but it's sort of like dog years cryptocurrency.
57:19
Speaker 1: So yeah, um, but like how long when when this
57:22
Speaker 1: is mid two thousand's right, so it's not like there's
57:24
Speaker 1: a fifty years totally and and a lot of people
57:28
Speaker 1: they look at the crypto winner right now and they say, wow,
57:30
Speaker 1: this is like so bad. And honestly, most of the
57:34
Speaker 1: time we've been in it, there's been winter Gemini. The
57:37
Speaker 1: first two years of Gemini. Uh, people weren't thinking about crypto.
57:42
Speaker 1: They didn't really you know, weren't paying attention, and all
57:44
Speaker 1: of a sudden boom, they're paying attention. But I think
57:47
Speaker 1: patients overall, if that's the t l d R of
57:49
Speaker 1: my comment, I mean, there's such a dearth of engineers,
57:54
Speaker 1: and then if you go to security engineers or like
57:57
Speaker 1: infrastructure engineers, it's even harder to find them. So if
58:01
Speaker 1: you want job security, like become an engineer and learn
58:05
Speaker 1: how to talk to machines. Um. But I also think
58:08
Speaker 1: the with that movement um being able to think creatively,
58:14
Speaker 1: being like artistic and following things, that's sort of um
58:18
Speaker 1: foster that in you is going to be super important
58:21
Speaker 1: because you're gonna have AI, You're gonna have um machines
58:25
Speaker 1: and all this automation. Um, but machines aren't good at
58:29
Speaker 1: being creative. Humans are so really tapping into the creativity
58:33
Speaker 1: of of being human in the human spirit. Um. And
58:36
Speaker 1: understanding how to like how to intersect with machines is
58:40
Speaker 1: going to be like paramount to navigating the future. And
58:44
Speaker 1: our final question, what do you know about the world
58:47
Speaker 1: of investing, the adventure capital, crypto or what have you
58:51
Speaker 1: that you wish you knew ten fifteen years ago when
58:54
Speaker 1: you were first getting your legs under you. Hm hmm,
58:58
Speaker 1: that's a good question. Um, well I always wish I
59:01
Speaker 1: had a crystal ball. Um, I think you know. But
59:04
Speaker 1: what Cameron said before is patients is so big. Um.
59:10
Speaker 1: Rome wasn't built in a day startups when we built
59:12
Speaker 1: in the day. We we talk about like, um, the
59:16
Speaker 1: timelines of building a company in the nineteen thirties. Uh,
59:20
Speaker 1: we're so much more longer long than the than the
59:24
Speaker 1: ones today. Um. But whether you're investing like you can
59:27
Speaker 1: have a long term vision, but if you don't have
59:29
Speaker 1: the patience or the conviction to wait it out, and
59:32
Speaker 1: if you're just quartered a quarter or day to day. Um,
59:36
Speaker 1: then you can get pinched. Um. So you know, the
59:39
Speaker 1: markets are are rational and efficient in the long run,
59:42
Speaker 1: but in the short run they're not. And the same
59:44
Speaker 1: thing as an athlete. You're just not going to make
59:47
Speaker 1: become a different athlete like overnight. And so I think
59:50
Speaker 1: the wisdom the common sense of sort of patients get
59:54
Speaker 1: rich slowly is another thing I like to think about. Um,
59:58
Speaker 1: all of that, you know, true value type investor mentality. Um,
1:00:03
Speaker 1: you know, I think that's super super important. Um, it's
1:00:07
Speaker 1: easy to forget. But you know there's also I love
1:00:10
Speaker 1: to saying, if you want it bad, you get it bad.
1:00:13
Speaker 1: Don't like I think the Navy seals don't say like,
1:00:15
Speaker 1: don't run to your death. Um. I think patients and
1:00:19
Speaker 1: just having a long a long term long ball type
1:00:23
Speaker 1: mentality is pretty much any everything in investing, entrepreneurship and
1:00:29
Speaker 1: life quite quite fascinating. We have been speaking with Cameron
1:00:35
Speaker 1: and Tyler Winklevoss of Winklevoss Capital and Gemini a crypto exchange.
1:00:41
Speaker 1: If you enjoy this conversation, well look up an intran
1:00:44
Speaker 1: down an inch on Apple, iTunes, Stitcher, Overcast, Bloomberg dot com,
1:00:48
Speaker 1: wherever your final podcasts are sold, and you can see
1:00:52
Speaker 1: any of the other two hundred and fifty or so
1:00:55
Speaker 1: such conversations we've had in the past. We love your comments,
1:00:59
Speaker 1: feedback and suggestions right to us at m IB podcast
1:01:03
Speaker 1: at Bloomberg dot net. I would be remiss if I
1:01:06
Speaker 1: did not thank the crack staff that helps us put
1:01:08
Speaker 1: together these conversations each week. Medina Parwana is my producer.
1:01:14
Speaker 1: Taylor Riggs is our booker slash producer. Attica val Bron
1:01:18
Speaker 1: is our project manager. Michael bat Nick is our head
1:01:21
Speaker 1: of research. I'm Barry Ritolts. You've been listening to Masters
1:01:25
Speaker 1: in Business on Bloomberg Radio.