#277 - Liberty RPF - Exploration As a Service, Creator Value, Constellation Software, AI/ChatGPT

Chris Powers: I wanted to start with, you go by Liberty, RPF. How did you come up with that name, and what does that mean? 

Liberty RPF: First of all, thank you for having me. Okay. So, I grew up in the nineties online. The BBS was at first, and then the early web, and back then, nobody used their real names. So, it was very typical not to use it.

I know many people, especially on financial websites, for compliance reasons. They're using es, but it was just like on gaming and music forums. Everybody used the name when I was about to create this account around 12 years ago. I am deciding what to pick. So I looked at my bookshelf, and one of the books had the word Liberty in the title.

And that's a good word. Right? That's an excellent word to reclaim somehow. Because it got politicized, and everybody's trying to use it. But the general concept is very close to my art. I've greatly optimized my life for independence, Liberty, and control over my time.

So that's why I picked it. But I had to add something when I went to get a URL, liberty.com, and all that was already taken. And one of my heroes is Richard P Feynman. So RPF comes from his initials. And my oldest son is; his middle name is Feynman. 

Chris Powers: I love it. Okay. If you had to describe to a second grader what you do for a living, how would you tell him what you do?

Liberty RPF: That's a big challenge because I have a second grader, and I wonder if he understands what I'm doing. I tell him I'm interested in many things, and most people are also curious, but they have to specialize in getting ahead in life, right? That's the dominant strategy, which is to specialize in something and do it all day long.

So you become perfect. So I'm on the other side looking at 50 different seven-a-thousand things. And I picked the most exciting stuff and compiled them so that these people who don't have time to look through everything can still find, look at the results, look at what I've found, and hopefully like explore through me, right?

Exploration as a service. And at first, I was writing over it became a podcast too. It helped me meet tons of people, and it's a nice flywheel where I put stuff out, and then a lot of it comes back to me. People point me to other exciting things, and I meet interesting people who still need more stuff to write or talk about.

My notes of stuff to write about are growing faster than shrink. So it's trending toward infinity, and It's my biggest problem.

Chris Powers: It's the most fantastic job in the world. You call it on your website, and you call it exploration as a service. Do you want to expand, or did you nail it right there?

Liberty RPF: I didn't come up with it. This one was David Kim or someone I was talking to, and they used it, and I just loved it. Another one that someone used was the SK engine. So it's all about, like, I have this theory that for most people, their favorite thing is out there, but they have yet to find it.

But they need to explore more. They may never find it. So I'm trying to help them along, and then, have you looked at this? Have you looked at that? Do you know this exists over there? And something may strike a chord with someone. And, if I help someone discover their new favorite album TV show, their next significant investment, or just a whole new subculture.

The great thing about the online world is that everything is a world in itself. There's a channel where people talk all day long about Japanese kitchen knives or every tiny niche as a group of excited and passionate people. But if you don't know, they even exist.

That's the starting point to finding your own thing. So I'm sharing what I find. 

Chris Powers: I love it and resonate with a lot of it. So you've done 400 of these, and I'm getting close to my 300th podcast. There's a lot I've learned about podcasting from when I started, but you've now written 400, which are very in-depth newsletters.

You put a lot of thought and care into them. What have you learned from your 400th newsletter that you still needed to learn about when you did your first one? 

Liberty RPF: My number one role? I've learned the most to keep it fun for myself. If I lose that, if it starts to create a job for myself that I don't like, if it feels like some obligation, I'm on some treadmill, I have to pump out content that I'm not excited about.

I'm just going to quit at some point. And because almost everything good that comes out of something like this is interaction and compounding over time. If you, if you quit, you'll never. Get all the good stuff that will come out in year five or ten. Just longevity in itself is a great goal to have because everybody quits at everything way too quickly.

 Having 20 podcast episodes puts you in the top 1% of all podcasts, right? With a sub stack, it's similar. And so, many people could become significant and build a. But because any exponential curve looks like nothing for a long time looks flat, they quit, and they never get to the part where it starts to get traction.

So keeping it fun, that's, that's, that's been my north star. And I was lucky because I wrote daily for a long time in a different life, and I think I got a lot of bad words out that way, right? Because it's like mileage. You have to, and you have to do the reps. But that part of my life also taught me I could do it, right?

I could keep going if I wanted to. And this is the hard part too. Most people start something, and there's the honeymoon period, where it's all new and exciting. There's the adrenaline. You already know your following five ideas, right? And so let's go. And then you get over that. And now it's just like the grind, right?

Then, discipline, perseverance, grit, and grit sometimes don't work. And what do you do? And you, there are problems, and that's when people quit. Proving yourself that you can do it is more important than being great at the outset. Even if, if, even if you don't do your best work every time, keep going, and at some point you'll, you'll build up the skills to get there.

If you start a new one, I need to find out how people kind of. If they're too hard on themselves or did they have the wrong expectations, if it's the outer scorecard versus the inner scorecard thing. But there's a way to think about these things where you have to get intrinsic value from doing it.

And it doesn't matter if nobody's reading it or if you need to make more sense of it. 

Chris Powers: I love that people sometimes say, why I keep going at the podcast and my honest answer is because a lot of it's for me, I get to learn and scratch my itch. And other folks want to do that too.

You just said the best work. How do you know you've done your best work? Are their times when you walk away from the computer, and you're like, damn, I nailed it. And are there times you walked away and you're like, I could have done better? I've had that on the podcast where there are some episodes where it's like, man, and I could have talked all day.

And then sometimes there are ones where I needed to have my stuff. How do you know as a writer that you laid it all out on the table?

Liberty RPF: Another great question, and as I was saying it, I had a background process in my brain that was thinking like, Do you know what you're saying? Right? How do you know?

Right. There are two things. Sometimes you can feel it, like, this is a good one, right? I'm more excited about this one. But I firmly believe you should always look back at your stuff and think it was crap. Looking back, you're like, I was great then, and you've probably stagnated.

You're not growing enough. You're not pushing yourself. Anytime you look back, and you're like, this is better than what I'm doing now. It would help if you changed something. Find a new avenue for growth or something. Because as I said, any of these processes is like compounding something.

If your best stuff is behind, that means you're, you're not on that curve.

Chris Powers: I want to move the conversation to what you're interested in right now. I know that he has covered as much as you have. And so I just came up with some topics, and we can discuss them.

And we will get to David Sinner's question, which is, we'll start there. Shout out to David. What is, if you had to invest a hundred percent of your net worth in one company, public or private, what would it be?

Liberty RPF: So, the obvious answer, if I want to be a kiss-ass, would be to say that I want to own a hundred percent of the founders' podcast.

But that wouldn't make sense because if I owned a hundred percent of it, David would've no incentive to keep doing it. So I believe in revealing preferences. So I could try to come up with something in the abstract. But in practice, my most prominent position is Constellation Software, a company I've owned for over a decade.

It's one of the companies I understand best. And so I'd feel comfortable if it was my whole thing for many reasons, but one of them is that it's incredible, diversified internally. So it's one company, but it's probably 800 business units worldwide, Europe, North America, in all kinds of industry verticals.

They may do software for mini pot clubs or governments or hospitals or all kinds of stuff. They're very good capital allocators, and they're very shareholder friendly and very aligned. I'd have trouble thinking of a company that will be better than that, especially since this is my most prominent position.

To see if I could quickly think of something better, I should invest in that instead. Though I'm sure there are excellent private companies that I need to think of, they would be even better if I could invest in them. But apart from Founder's podcast or Ford Capital, we'll be Constellation.

Chris Powers: What do you think about Constellation? What is their competitive advantage today? Where do they stand? Where they can't be replicated in theory.

Liberty RPF: It's easy to buy a bunch of VMS software companies, and for those unfamiliar, VMS is vertical market software suitable.

So there's a tiny niche somewhere very specialized, and some small company makes software for them. So if you're a school district and you have to manage your fleet of yellow buses, someone comes to you and says, we've made what you need, and it's all customized for your exact need.

And so, That type of software is niche enough that the big players don't come into these niches. Microsoft will not make yellow school bus software and make a couple of main like its surrounding era. So there is little competition from the outside. So it tends to be all these small niches where there's usually some oligo poly where two or three players and maxes are fighting an outcome station, which will often consolidate the space.

And so they have all these tiny moats around these tiny niches. And so, that's one of the things that makes them hard to compete with. Because even if you could attack one of these moats, they have hundreds of them all over. And the way the company is structured, it's a fractal, where at first it was just the head office and allocating capital.

They buy many software companies, and the cash returns to the head office because they have no capital needs. And so they buy more and rinse and repeat. But then the company got so big that they created a bunch of mini constellations under the head office.

So they have these working groups that are super decentralized, and they buy a bunch of companies. But now these groups got big enough to have portfolio managers managing 25, 30 businesses. And so they figure out a way to scale, capital deployment, which is the big problem as you get bigger.

The last thing most other companies, like big acquisitive PE firms or big software companies, want is to do a hundred deals a year for 5 million each. It's often as much work to do one of these small deals as to make a big 80 or a hundred million deals since many of these small companies are mom-and-pop and need to be more professionalized, right?

They still need investment bankers and books. So it's tons of trouble. But that's why Constellation wins this: they've created a process to do hard work. They have a CMS, and a CRM, with probably over 50,000 businesses that they track worldwide, and they have yearly relationships.

They call these people like, are you thinking of selling? Are you interested in that? And this hard work is what is hard to scale and that others are having a hard time replicating. And because they buy all these tiny businesses that not many others want to buy, they may get a 25 or 30% Right on this. Well, if they were trying to scale by buying bigger and bigger businesses, then the market gets much more efficient, and now they're getting much lower. So they're getting more competition. Their model is known, and people are trying to copy it. But the hard part of copying is the discipline and having 30 years of base rates for small VMSs in the books to be their best buyer.

Right. Do you know what you can improve? What do this type of company and this type of niche usually do? So I don't know. They got their competitive advantage the hard way, and they earned them. 

Chris Powers: Yeah. Do they have a playbook of what they will do once they buy a business?

Or is it industry-dependent or business dependent, or do they have a core set of tenants? When we buy a V M S business, we do these three things every time, which gets us the extra juice. 

Liberty RPF: I'm sure they do, and they try to keep much of that secret. They probably have multiple playbooks depending on what they're buying because another advantage is that most companies, especially public companies, care very much about what the market sees.

The aggregate number consolation will often buy distressed companies, companies in the runoff, which depresses their organic growth. So the market, looking at just the whole picture, looks at the aggregate of the 800 businesses. They only grew 2% this year but may have bought a gigantic distressed company for one-time EBITDA.

And then they stabilize it and get a great return even if the optics are bad. So being willing to do things that look bad on the surface but create value is another part of their differentiation. And so if they buy a disruptive business like that, I'm sure they have a playbook.

They have to figure out the right size of cost. The business could be doing professional services and selling hardware at no margin. So they'll cut that and keep the high-value creation software. Sometimes they'll buy great businesses growing fast, and I'm sure they have a playbook to accelerate that too.

But they buy so many businesses that they look into that base rate book I mentioned and ask, okay, what are the most similar businesses we bought so far? Okay, we have 25 businesses that fit the mold. What did we do that worked? What did we do that didn't work?

Because that's the cool thing in every acquisition, they track it forever, separately. And so they have this vast knowledge base that nobody else has in the space, which makes them better buyers. And they also promise, like Berkshire, we'll keep you forever.

We don't plan to do PE and buy you, lever you up seven times or something, maybe not today with the interest rate, but lever you up, cut everything, and then sell you back at five years and then rinse and repeat. And because of a lot of these companies. Founded by founders that care about the business and the employees, and sometimes PE will offer a bit more money, but consolation feels like the buyer of choice because they will take care of the business.

Chris Powers: If you think about what could take Berkshire down, it's almost hard to fathom what could take Berkshire down. And he's notorious for, and he's had some bad deals. A notable one, he'd bought Dexter shoes for like 400 million or something, and it went out business like had in stock.

Liberty RPF: He's the opportunity. The cost of Dexter is tens of billions by now.

Chris Powers: 10 tens of billions. If you had to think about, like, what, is there anything at this point, how could Constellation make a terrible decision from your perspective? What would throw them off of the track they've been on?

Because it's, it is a remarkable story.

Liberty RPF: Hmm, I can think of two things. So, recently, they've changed their minds on bigger deals. They used to mostly shy away from them because they didn't want to use any leverage. Mark Leonard doesn't like leverage at all, right? But to be competitive with PE and more effective strategies, they have to do some leverage at the deal level for the bigger deals.

So they change their minds on that, and they're starting to deploy more capital into bigger deals. And that's always a chance to make a more significant mistake than before because if you buy a $3 million company, it doesn't work out. That sucks. We've learned something. But it matters little and is not too material.

But if you buy a 400, 500 million company and you think you can, I don't know, it's this distress, and you think you can turn it around or at least get a good return on it, but you make a colossal mistake or, or, It could be an external factor, right? Something in the market changes overnight, and everything is different.

All of a sudden. That could be a way that could hurt them, but I don't think it would kill them. The leverage is segregated per these deals. So if it blows up totally, it's not going too much to affect too much the rest of the company. The other most significant challenge for them will be more on the artistic and talent retention sides.

Maybe it will be more accessible now that all the big techs are doing layoffs and the markets are not as others were. But the war for talent and engineers, like, I don't think Constellation was in the best position to pay people as much as they could have gotten elsewhere. And so they probably lost some talent there.

Has Mark Leonard successfully uploaded his cultural DNA to the company? When I went to the AGM, you can listen to all of the group heads speak, and it's like, You could be CEO, you could be CEO. The bench is very deep. But over time, if Mark retires, if some of these group A retires, there's always the chance that something gets lost in the DNA because it's very much about how they execute the model. So that would be where I'm worried. It would be most worrisome if I start seeing signs that they're losing that part of it.

Chris Powers: All right. Let's have fun if David's listening to this because you said I'd buy the Founders podcast, but you probably meant it. How valuable do you think pod founders are? When you think about founders, getting to know David over the last year has been just a treat, and the more I think about what he is building, it's a unique tool.

What do you think about founders? What does it mean to you, and where do you think this that type of brand is headed?

Liberty RPF: Okay. So, when I talked about how the internet is good at eventually finding something good, it can take a while. I have a lousy sense of time, so I don't have exact dates, but I discovered founders; I didn't know four or five years ago, and I'm not sure.

And I was like, this is amazing. And I kept posting on my Twitter about it. I wrote about it in a newsletter and got these blank stares, and I had never heard of it. I may check it out. And it's like nobody knows it. And recently, it's indeed exploded. And I'm super happy to see that.

And it will improve so many lives because this is precisely the content that everybody wishes. They could read biographies like David's all week, but most people still need to. And this is the next best thing. And it's even better than just the next best thing.

It's a different animal because, By the time it would take me to read one of David's books, David has read five, right? And so if I get the big ideas of five different books, it's like the 80-20 rule, right? I may be getting more than if I'd read just one of the books.

But then, as I keep listening to David, some of these books are like, oh, this one is great enough, and I want to read the whole thing. So he's helping me pick books I may have yet to experience and giving me much value the rest of the time. And he's doing more than just a summary of the book.

He's not about just like, I'm going to give you the cliff note. He's filtering it through his experience, a database of hundreds of books and connections. And now he's meeting like Samsel, and he's so deep into the founder world that he will find stuff in the books that I would not find if I read them myself.

So he's adding a ton of value. And the beauty of this model is that if something is timeless enough to have the book written about it, then his podcast episode is evergreen. So the archive is growing and growing and growing. So the total value of the archive is going up linearly or more exponentially because of all the connections and the 400-hour conversation he's having.

So as he's saying something in episode 200, it could make episode 100 more valuable because when you listen to it with the context of what he said later, you get more out of it. So he's got a great business model, and the podcast is becoming more valuable over time in audiences.

Everybody that wants to build something that, from a 20-year-old, would be a start-up founder to, I'm sure, some 85-year-old titans of industry. Everybody can get something out of it, and I wonder why it would be word it, but because David also understands how podcasts can be businesses.

So the vertical integration that he's doing, and I'm seeing him doing it more and more. The podcast is ad-free, so it reaches the most people possible. But then, in the podcast, he's selling some of his stuff. So there is his members-only podcast where he does AMAs, and this quick read highlights what he's doing.

And I'm sure he will experiment with all kinds of other stuff. Some of that stuff can be spun out as other side businesses he doesn't necessarily have to run, but he will be the distributor. And so he's going to create a bunch of value inside of founders and probably has a bunch of satellites over time around it.

And the sky's the limit. If I had the capital, I'd make an offer but won't sell. And it's so based around the brain that I would only want to own a portion. Right. I'd be fine being a minority partner with him, but he has to stay aligned for it to work.

So anyway, I know that was rambling all over, but I love what he's building. I've gotten so much value out of it, and he's making the world a better place by taking all that stuff on a shelf somewhere inside a book that's not in the minds of all these people.

And all of a sudden, he's uploading it to tens and tens of thousands of people and exactly the people who can most benefit from it because they will be able to apply it in their businesses.

Chris Powers: Just talking to him gets you energized. He is a joy to talk to.

You said you were beating the drum for four or five years, saying everybody needs to listen, and then there was a tipping point. And you're seeing many of those tipping points due to what you do, where things, you may have an insight that this could be big, but this is the first time anyone else has caught onto it.

Is there any pattern you've seen of what makes something tip? Was there anything that you recognized with David that was a tipping point or anything else in the world that you saw coming that took on and, maybe, the following patterns of when something's ready to explode?

Liberty RPF: The first thing that comes to mind is at some point, If you put stuff out there long enough, you get a core group of evangelists around you. And these people do a lot of the work of getting you to the next level. And so I remember when Patrick OSI asked on Twitter, Oh, any good podcast?

And then there are all of David's fans in there; You have to check this out, you have to check this out, you have to check this out. And there are a lot of choices out there. Hundreds of thousands of creators are on YouTube and in podcast newspapers; cutting through that takes a lot of work.

But if you have a core group of super passionate people like I was about David, who was like, I have to tell about everybody because this is great. I'm helping you by telling you about it. Or if you inverse it, if I'm not telling people about it, I'm doing them a disservice because I know how good it is.

It's the same thing with direct marketing if you know you have something great. And you are too shy, or you don't enjoy being promotional. So you never talk about it, and you don't push it. You're doing yourself; you would be customers a disservice because the thing is excellent.

It's going to help them. So that's how I feel about many of these creators who get to a point where it feels like any time something around that feeling, that topic is mentioned, there's always a bunch of people coming out and mentioning them, and that cuts through the noise. And Patrick mentioned how he discovered him when he did a partnership with David.

At first, it was like David had his paywall and had all this friction. He was hard. Get him to know, but enough people can't keep telling you about it. And David Al even mentioned that some of his biggest fans bought. Maybe it was you, and I don't know. They bought dozens and dozens of subscriptions to a podcast, and they gave them away to their employees or their friends.

When you have these types of evangelists around you, something will happen. At some point, it can't stay static. It's good you stop it, and it dies there, or you break out at some point.

Chris Powers: You said using the podcast, but you might be able to do this with your newsletter, and you're starting to see it, even the latest news on like Ryan Reynolds, where you are using something that has made you well known and then pointing that attention at other businesses or things that you have equity in.

And that's the new model. It's no longer, hey, we're going to get some famous person to advertise our product. The new model is that person's either going to own part of her business or start that business. What do you think about that? Are we at the beginning of this shift in how business is done?

And, when I think about this podcast over the next ten years, and people ask me about it, I'm thinking so much further along as, like, this is the tool that is going to be used as my main driving force for every other thing I do in business, personal, whatever it may be. And you certainly know what that's like with the community that you've built and what you might be able to offer them, and the value that you'll get down the road. So what do you think about that from where we're headed in the business world?

Liberty RPF: I want to say five things at the same time. That's my curse, and I wasn't going in five directions. It's super interesting, and there's been an inflection point a few years ago, but now people realize it when they say that Kat is the new brand—a customer-exciting cost. So in the old days, there were three TV channels and a few big magazines.

Everybody sees the same things. You're a big CPG brand, and you buy some ads in there and reach everybody. You are in the middle of the bell curve, and that's fine. That doesn't work anymore because everything has fragmented into a million small niches. Getting people's attention is more valuable than ever because it's more complicated.

You only reach some people if you advertise on one of the big channels, and you may need to reach the ideal customers for what you're doing. And so if you can find someone with a relationship with those people, their attention is much more valuable to you because it's much more targeted.

It's not randomly in the middle of the bell curve where you're talking about cars to 12 years old, yet you're missing the mark if you have an audience you've earned because you give them tons of value. You're building goodwill with that audience. And so you have a paid product or newsletter or whatever, and you get some of that value back and make a living from it.

But the best creators give so much more value than they extract. That's why when someone that you like so much has a product. Jocko Willink makes jeans, boots, and books; you'll pay extra. But that's part of the goodwill that they've given me.

They've been entertaining me or educating me or whatever for years. I'm reading Liberty's newsletter, and I feel like he's saving me many hours a month because he's finding good stuff that it would take me a long time to find, or maybe there's a 10-page article, and it will give me the highlight in one paragraph, so I'm saving time that forced something on me.

So it's building goodwill over time. And maybe I have no plans for that, but if I start something else and people are like, ah, I want to support you generally, and this is a way to support you. So there are going to be people that are becoming channels, right? So, someone, a third party, will come to you and say, I want to reach our audience. It makes a deal.

But the highest use of this is people like Reynolds or Joe Rogan has done this with most ads are companies he has equity in. And so it's like David's advertising his subscription podcast. If you're aligned and can vertically integrate that, you're going to be able to not only create something better for your audience because you know them intimately.

So the third-party advertiser may fit, but it's going to be less attractive to the audience than if you're going to do something extraordinary for them. So Jocko knows his audience, and when he is making jujitsu gear, that's a great fit.

The market for programmatic advertising is getting much more efficient. So a few years ago, you could buy a bunch of Facebook ads, and your app will get tons of downloads, and you get tons of value. But over time, as these channels get more and more known, these platforms in the middle are extracting almost all of the value there.

It's like the rant is rising and rising until you almost make no money. So, trying to get an audience through these platforms is not a dead end, but it will only be as good as organically growing your audience. So what do you do if you're in real estate and want to talk to people interested?

The best way to build your podcast and have a direct relationship with all of these people interested in the same thing you are. So there's a great future ahead for creators who can genuinely get to the top of every single niche and has their little power law.

It used to be the giant power law where everything was on ABC and CBS. But now it's all fragmented, and if you can get to the top of your tiny niche, that will be incredibly valuable because the absolute number of people may be small. Still, the relationship's intensity and affinity with the people will be incredibly high.

So, I'd much rather have, as Kevin Kelly would say, a thousand true fans than a hundred thousand random followers casually interested that's not very valuable anymore.

Chris Powers: You nailed it on the power law. And we can talk about media, we can take it whichever way, but I was reading some tweets; one was on your website, and somebody said, I used to subscribe to the Wall Street Journal, the Atlantic, and ABC or CBS.

Now I subscribe to Liberty. What are these huge companies that did have all the power? What is happening to them? Are they becoming increasingly irrelevant by the day, and it's just a matter of time before they're done? Can they reinvent themselves? Or we've passed the tipping point where folks like you and David and people with real influence will grow exponentially.

Joe Rogan, Joe's showed us more than all the shows combined and the significant media combined. So where are we in that world?

Liberty RPF: Many media companies used to think that they had great content, but they only had distribution. There used to be so much friction, and you needed to own trucks, printing presses, and relationships with all these tiny retailers to have some shelf space somewhere.

That was the moat. But I can think that, No! People read us or watch outs because we have great stuff. It's like, and there's no alternative because it's impossible to get anything out there. So now they're finding out some random guy with a sub stack may be writing better stuff than some prominent columnists at whatever.

So what's going to happen is there's going to be nothing left in the middle, too. You're on one side, like a super generalist and professional. You go in there and read the Wall Street Journal, and they have people covering all kinds of stuff around the world, and that's very hard to do for any single, tiny kind of independent media thing.

And so you're going to have some of that still. And then, on the other end, you're going to have a bunch of people that are a lot more. I call it personality based. So on one side, you have utility. I want to read this to learn about it and get some utility. I may make an investment and want to learn about some; I read some trade publications.

That's the utility. The way humans are wired, and we care a lot about the personality side. And we lie to ourselves. We say, okay, I read Ben Thompson for the utility. I want to understand big tech, and I'm going to make investments, and I read Ben Thompson. It's like 80% of people like Ben Thompson.

They find him fascinating. He writes about exciting stuff. They've heard him on the podcast a bunch. And so they have this Para social relationship where they know and like the guy. And so they follow him for the personality with the optionality of utility. And I feel like if you're a great writer at The Atlantic, you have to go through a bunch of middlemen, middle person, to get to your audience, and the Atlantic owns the audience unless you can differentiate so much and be at the top of the path. So by going out on your own and starting your podcast or something, well, maybe you don't have the prestige of the great brand, and maybe you don't have the automatic distribution because you're bundled with other writers more popular than you are, so people can find you that way, right?

There's some advantage to that, but the relationship with your readers will be much better and more direct. It all accrues to you. Your work accrues to you over time, and you can build something where, because you don't have someone in the middle taking 80% or something of the revenue, you can make a great living, probably a better living, with a lot less readers that are much more interested in you.

The affinity and intensity of the relationship I discussed will be much more powerful there. And so almost everybody that's more personality-based will get out of all the old media and start on their own and all the utility stuff. A lot of it will probably stay in these significant publications and people trying to be in the middle, trying to like a random sub like me, but trying to sound professional and buttoned up and sound like a Financial Time article that's not going to go anywhere.

That's part of why I write about my family, and that makes stupid dad jokes and which TV show I've been watching. That's because that's what I'm doing all day, and that's what I'm thinking about. And over time, if you get to know me and you're like, oh wait, yeah, I overlap with that guy.

We have similar interests. That's a way to build trust where because there's implicit trust. When you subscribe to someone, I give you access to my inbox. And so I'm giving you access to what I will think about in the future. That's powerful.

It's like following someone on Twitter; it shouldn't be done lightly. You're giving someone access to your brain. And so I'm trying to build the implicit trust that I know you enough, and the stuff you find interesting is what I find interesting. So, you have permission to send me stuff.

That's sacred, in a way. That's very powerful. But you can't get there if you're trying to be bland and sound like everybody else. Every seeking alpha writer sounds the same, right? So, that's what I'm trying to avoid.

Chris Powers: Yeah, I think you nailed it. The personality, there's the way, and now that if I read your newsletter and then I go read something on, pick one of them.

You don't, you write in a way that people talk and converse, but if you go to the central station, they write in a way that you would never talk to someone that way at a dinner table, similar to a podcast versus a news anchor. Those are such manufactured conversations, and nobody talks that way to each other yet.

For decades, we were told this is how you receive information. And now you watch Joe Rogan, a dude in a hoodie smoking a joint, talking about some of the most incredible things in the world, and everybody can go. I can relate to that; I could have that conversation anywhere.

If you pick a news anchor, that's just a skit, and it's not like a real thing. And I think we're living in a world, at least I feel this way, and you do too, where we are craving authenticity and genuine people at levels we've never seen before. And there's a lot of reason to be optimistic that that will continue and be the path we take as a world.

Liberty RPF: Yeah. There's a saying by the Naval that I love. It's escape competition through authenticity. And so what I'm trying to think about is who's my competition with the newsletter? I am still determining who it is. Who's going to be more Liberty than Liberty? A bunch of people may be better writers, more interesting, and have more profound knowledge in the same type of field that I cover, but I need to see someone doing it quite the way I'm doing it.

And one of my goals is writing. And I love when you mentioned you write as you talk. That's the goal. I don't know any rules of grammar, and I don't know any of that. But I've developed an ear for dialogue over time. My favorite show is Deadwood. 

If my newsletter can be like good dialogue, if you could cut and paste it into a Word document without a by-line, without any graphics and color scheme that would be recognizable, I could email that to you. You read it and say, oh, that sounds like Liberty, and my job is done. And on the podcasting side, what you say is right on the money.

For decades and decades and decades, we've heard fake types of voices. All the time on tv and the radio, it's all people speaking in a way that nobody speaks, but podcasters allow the actual human voice to come back. And we've evolved for this. We're sitting around the campfire, talking to each other, telling each other's stories, and making each other laugh and all that stuff.

And that's the authentic human voice. And there are some podcasts that I've been listening to for ten years, and I know I've had the three hosts talk in my ears for longer than anyone except my wife. And so I know them more profoundly than some close friends I don't get to see as much as I would.

And so that's why when two podcasters that listen to each other's podcast meet for the first time, they already know each other very well. That's the quickest relationship that I've ever seen. And it's beautiful because it's okay if it's two podcasters. But when you've been listening to a podcast, it's still a real relationship, even if it's one way.

You can't fake being someone for 500 hours over years and years, and you can fake it for a while but can't get to know the natural person over time. And that's why I love it. When I meet or speak to people like David or Jim, or people I've heard in my ears for a long time.

And then I speak to them, and they're the same person on a Zoom call. There's no fake persona, and it's not a character that they're playing. It's like, it was true, and it's you. That's very cool.

Chris Powers: Speaking of authenticity and being you, I'm going to now go to a topic that is like all the rage right now, which is chat GPT, which is not, which is what now people are using.

If they're trying to write an email or communicate now, they might be going to Chat GPT. So, if you go through many of your recent newsletters, you talk a lot about it. So what is your thought on Chat GPT?

We've just talked about authenticity, and now we're going to something that is not very authentic. You're using some computer's words to become yourself, which could make a lot of people all sound the same. What do you think about that? 

Liberty RPF: I wrote something recently about how it looks pretty dystopian to me to imagine a world where your Microsoft Outlook is writing an email for you and the person, on the other hand, has their own AI reading the email and replying to the AI and it's a bunch of AI. It is sending back and forth a bunch of bureaucratic crap.

That sounds terrible. It's a tool that's extremely powerful, and it's incredibly fuzzy. So we are still determining what it can do. It's changing so fast that it's already something else by the time we figure something out. GPT four, which just came out now, is a visual aspect.

You can understand text and vision as input. So that changes everything. Again, like most tools, it will be how you use them. So if a bunch of bureaucrats wants to send back and forth crappy emails and memos with it, it's going to take something terrible, to begin with, and amplify it.

It's instead of shoveling crap with a shovel. Now you have a bulldozer. It's more crap, but it's more powerful too. The most exciting thing is when you point that tool in the direction of more creative aspects. I feel like for the longest time. Creativity has been a bundle where you need someone that has great ideas, inspiration, the life experience that's interesting to others.

But if you only have that part, nobody will know about it. You need the execution too. And so you need someone who's a great painter and spend 15 years practicing their craft to become a great painter, sculptor, or writer. All that stuff is tough. The unbundling will happen where some people with great ideas cannot go to some AI and say, can you execute that for me, please?

So when I go into sound diffusion, I've done a series of digital paintings of lighthouses. I love a lighthouse on the coast with waves crashing in the rocks and looks beautiful to me. I could never draw that. I do stick figures, but now I've got a bunch of foam backgrounds I created.

Nobody else has them. They're unique paintings I made. So it's unbundled that part of creation. Images came first, but it's going so fast that text is now starting to be the next. And so when you go and Chat GPT, you write something and tell it. Can you expand on this idea?

Can you give me five ideas? It can help you kick-start some ideas. That's much more interesting, this hybrid, than if you go and say, please write the whole thing for me, cut and paste. And that won't be differentiated or enjoyable because it's only the execution, but it probably needs more personality than we were talking about.

That seed has to be there. But like how I've been using these models so far, I made many images that I use in the newsletter sometimes to illustrate some of my stories. And because I publish three times a week and don't have much time, I use an app called Barely.AI, made by a friend of mine, a trunk fan.

And he has a co-founder too, and that's a front end for GPT four. So I use the grammar and correction feature they have in there, and I'll cut and paste a few paragraphs, and it's going to find this word, or this sentence structure could be better.

And I still make the final call. I don't take all the suggestions, but this has helped make me more productive with something that would be more work than creative. If I can do that part faster, I can spend more time reading, listening to more stuff, getting more ideas, writing more, and hopefully, more people will use it to automate a bunch of low-value work.

A bunch of lawyers are filling out forms and templates. They could automate part of it to spend more time on the higher-value part of their legal practice. They are making more decisions, giving advice, and all that. But like most tools, It can be used like hitting someone on the head with a hammer.

So, not necessarily good, and it's not just a hammer but incredibly powerful, but this is the part where I'd be careful because some models can do computational protein design. You can do some biology stuff with it. Well, someone with bad intentions can make all kinds of creative stuff with some of these models, right?

That's the part where I'd be careful because the power is so great, but the power for good is also gigantic. Let's get as much as possible from the creative side and the good side and mitigate as much as possible the other potential lousy stuff.

Chris Powers: Are there going to be no multiple chat GPTs within the same company but multiple companies doing the same thing? And I'll bring up maybe a lightning rod of a topic, but where I'm going with it is if you go on Twitter, you've seen a lot of this where if you type into chat GPT about Donald Trump, it responds like, we can't tell you anything. He isn't a good guy. Sorry, we cannot write about him. Now, that could be true. But what I read from that is, okay, this is AI made by humans with emotions and thoughts. So then my question becomes, will there be another chat GPT at another company where if you were to type in about Donald Trump as like he is the most fantastic guy that ever lived, how do we get to a place where there's one AI that's talking for everybody or will.

We start to niche down and have whatever you want to hear from the AI, and you go to that Chat GPT that's telling you what you want to hear. Does that make sense?

Liberty RPF: It's already starting to fragment. Open AI was like the first big splash on the market, but we're already seeing, like, there's a model that's similar to GPT made by Facebook that leaked out.

They were sharing it with researchers for educational purposes, but someone just copied it and leaked the torrent of it, and now it's out there. Everybody's running. It's called lama, and it's a great name. And so everybody's running little lamas on their desktops, computers, and the cloud, and they're tuning it differently.

They're even, through the Chat GPT API, stealing some of the reinforcement learning that Open AI did, and they're giving it to the lama model for 600 bucks. So open AI spent millions and millions of Microsoft cloud time to train their model and then fine-tune it, and someone else can, just by having the two models talk to each other, learn from the other.

So there will be a ton of these models. Some will run in the cloud with the big companies, and Google will come out with its own, but there will also be open-source models. There will be small models, and this will prevent a lot of this one big company from having all the control and trying to tell everybody what to think.

That's probably the escape valve. And the market will decide if your model has these benefits, but I hate what you're doing over there. So I'm going to use this model that has these downsides but is more open or more accessible, and there's a good chance that, because there's an alternative, these pressures are going to force some of the big guys to be more open, and more transparent about what they're doing.

 It's also likely that. We have yet to see some of the stuff in the lab right now, and so NVidias just had a big conference where they announced a bunch of new models, and they want to be a model foundry as a service. So they will offer many companies to come with them and run everything in the cloud.

You can upload your company's private data. The model will be trained for just your company with your parameters. What do you want it to do? What are the limits? So this infrastructure will exist for more people to experiment with these models that don't necessarily have a lab full of AI researchers, but they still have a use case for it.

Or they have a vision for what the model could be doing. Some may create companions like in the movie HER, and some may create purely tools that take input, and there's an output on the other side. There's a wide range of stuff that you can do with these, and we're just starting to figure it out.

Chris Powers: Is it a coincidence that all these companies are now starting to release their AI simultaneously? You Facebook, I know Google came out with something the other day, open AI and Microsoft, or is that just a by-product of the speed of innovation? Everybody got to that finish line around the same time, or at least where they're releasing these new products.

AI's been around for a while, but now it seems like that moment where there's a tipping point. It's just like one big company releases something new every day. Is that a coincidence? 

Liberty RPF: Partly, but there's a difference between the technology and the product.

Chat GPT is primarily based on a model that has existed for two years, and it's based on the GPT tree line, GPT 3.5. There are a few sub-models like Da Vinci and colleagues, but all that stuff existed, and a bunch of people were playing with it, which was super powerful. But most people can chat with it until you put it into a product.

It remembers what we said before. Just make a few product decisions. And suddenly, the same tech explodes and has a hundred million users in a month or two. And Open AI did have unlocked this product. And now all of the other labs have the same tech and can package it similarly, and now it works and gets traction. 

Sound diffusion did the same thing with generative visual models. And so you had DLI that first, like, oh, make me an avocado chair and proof the image pops up, and that's cool, but. It was a private beta, and nobody had access to it. And then Mid Journey comes out and, like, oh, that's very cool.

It's more accessible, but you still have to log into Discord. It's complex. And then Stable Diffusion comes out. It's open source, and you can do whatever you want. And the community builds many ways of using it and many graphical interfaces. It's hosted on tons of sites. And now it's so accessible that it was the product moment basically for this type of AI.

And now the adoption has gone vertical. So there's going to be other product moments. We've done years and years of research on the technical side, and we've been growing the models, and now we must build the Steve Jobs side.

What's the interface, and what's it doing? How do people get to have a mantle model of how it works? Because if you give someone like, Hey, install Python and write command lines about it, nobody will use it. But If you do that, check GPT. All you need is a browser.

There's no friction. 

Chris Powers: Interesting. We'll come down towards the end here, but what are three things, or it could be 1, 2, 3 things that you are interested in, that you've been researching that the common folk would not know exists? Is there anything on your list of things to write about or things at the top of your mind that you go to, that you're interested in, and that it still needs to hit a tipping point?

These are things that we, a year from now, if we recorded, or five years from now, would be obvious, but they might be obvious to you given the level of research and in-depth work that you do to find this stuff. 

Liberty RPF: That's a good question. I'm never good with, like, what's your favorite album? What's your favorite movie?

But one that comes to mind is that It depends on where you are. So some of your listeners may say it's the most obvious thing in the world, but only in some places, especially not in North America. But saunas are about to become a lot more popular. I've been diving into the research, and Rhonda Patrick has done a great kind of summary review of all this science on this, but tracking people in Finland where like everybody has a sauna and some people use it like five times a week, seven times a week, two times a week.

And the amount of difference it can make to your health is incredible. For extensive users, they find a lower incidence of Alzheimer's disease and cardiovascular disease by like 40%, or 50%. It's as powerful as exercise, which is probably the best thing you can do, but it's a sauna that mimics cardio exercise.

It's easy for most people to do right there. There's a bunch of people you may not get to run and then go on a treadmill or bike for a few hours a week, but sit in there, and relax. And so the aspects for sleep quality, there are great results for people with depression, mental health, and if you have sleep quality and fix depression, it's all tied together.

If you sleep better, your immune system is better, you're going to be healthier, and you're at lower risk of Alzheimer's and all that. And so it seems like a random thing. But if you could give me a pill and my risk of Alzheimer's and cardiovascular diseases and all kinds of stuff, my sleep would get better, and my mood would improve, I would pay a lot for that pill.

My wife and I want to be able to sun in the backyard.

Chris Powers: I literally, it's so funny you say that. I was just on spring break, and I was down in Mexico, and I was sitting at dinner with a gentleman, and he was actually at a different table, and somehow we got the talking, and he said, you want to know what the secret to life is?

And I said, what? And he said, every morning, you get in a dry sauna for 15 minutes, then you walk straight out of that and get into a cold plunge for five minutes. I had never done either, and I've been in a wet sauna and never been in a dry one. So I said, all right. The next day, I woke up, walked straight to the spa, got in that dry sauna for 15 minutes, and then got in the cold plunge, which was unbelievable.

I did it again that night, and I did it four or five times before I left. So I can't sit here and say I've had all these remarkable health changes yet, but there was something about the experience and how I felt the rest of the day that was mind-blowing. And so I think you're onto something with that one because I had heard of a sauna, but nobody had ever told me this is the trick to life.

And now my wife and I are discussing how we'll get a sauna at our house. So is there anything else that you're on? I think you, number one, won that one. Is there anything else?

Liberty RPF: Well, I'm sure there are, like, I'm trying to think. I recently wrote about it, which is a small one, but it goes back to something we discussed.

 I've been looking around my house at everything I do every day and trying to add little bits of fun into these things that I want to do more. Right? And so, my wife and I cook a lot, and so I've been trying to. Okay. We had some bottles to pour the oil into the pan. And now I have a squeezy bottle like the chef's, which is much more fun.

I got an excellent knife, super well sharp. So anything you can do to reduce friction and make stuff more fun that you want to do more of seems like a tiny thing that shouldn't matter, but over your whole life, as it compounds, maybe you cook 5%, 10% more because it's more fun. And then you learn to be a better cook.

And then you eat better, it tastes better, but it's also better for your health. All that stuff compounds over time. It's the same with you wanting to exercise. Your home gym could be more attractive in some ways. You can put excellent art on the walls. Or get more fun or cooling equipment when you look throughout history at how cities were designed or even random artifact tools. You go somewhere or during an era, and everything is super dull. A bunch of Soviet buildings, soviet cars, and clothes, and everything is super dull. And you look at other times, Italian Renaissance, everything is excellent. Everything is colorful.

Everything has little details that are cool to fidget with. And so these periods got it right. They got the psychology of things, and we go through these cycles where we forget, and we're just utilitarian's the max. And this is making life more challenging than it should be.

Chris Powers: All right, my man, this has been a fantastic conversation. How can people find you? Subscribe to your newsletter, and listen to your podcast. How can people get in touch?

Liberty RPF: The best way is to go to libertyrpf.com. RPF like Richard p Feynman. So, libertyrpf.com is the sub stack, and the podcast is part of the sub stack.

So it's all in the same place. You can click the links at the top and see the podcast, which is the best way.

Chris Powers: Thank you very much for today. It was awesome. 

Liberty RPF: Thank you so much. I had a great time.

Chris Powers: I just got done recording with one of the most exciting men on the internet. He goes by Liberty RPF on Twitter and has an excellent newsletter, and he describes himself as somebody that provides exploration as a service. He has my dream job: getting on the internet and scouring it for the most remarkable things.

And he was then writing about them. This man writes about finance, technology, health business, and you name it. And so one of the most interesting people, his thinking is incredible. And today, We talk about AI and chat GPT and how that's impacting the world. We talk about our mutual friend David Senra and why his podcast founders are becoming one of the most valuable in the world.

We talk about a business. If he had to invest a hundred percent of his net worth, which one would he put it into and why? We talk a lot about how the new way of doing business is for creators. Like himself, folks with podcasts, folks with newsletters, influencers, how they're changing, how business is done, and how they're using their audiences and attention to start businesses, participate in businesses, gain equity, and how that is going to be more common in the future.

We talk about the death of many mainstream media outlets and why their lack of authenticity and being genuine is not what people want today. And he has a great quote. Escape your competition through authenticity. The world craves authenticity, and you'll find in this episode that we cover a lot.

So thank you for continuing to listen and enjoy the episode.