The Atlas Society Asks Lars Tvede

May 24, 2023 00:57:56
The Atlas Society Asks Lars Tvede
The Atlas Society Presents - The Atlas Society Asks
The Atlas Society Asks Lars Tvede

May 24 2023 | 00:57:56

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Show Notes

Join CEO Jennifer Grossman for the 153rd episode of The Atlas Society Asks for a conversation with Swiss-based venture capitalist Lars Tvede about his views on Objectivism, entrepreneurship, and innovation. Don't miss it as they also discuss Tvede's latest book, "From Malthus to Mars: How to Live, Lead, and Learn in an Exponential World."

Lars Tvede is a Swiss-based serial entrepreneur and venture capitalist who spent 11 years in portfolio management and investment banking before moving to the high-tech and telecommunications industries in the mid 1990s, where he has been the co-founder of several award-winning companies. He is also a bestselling author of numerous books, including "The Creative Society: How the Future Can be Won," "Supertrends: 50 Things You Need to Know About the Future" and the recently published "From Malthus to Mars: How to Live, Lead, and Learn in an Exponential World."

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Episode Transcript

Speaker 0 00:00:00 Hello everyone, and welcome to the 152nd episode of the Atlas Society asks, my name is Jennifer Anju Grossman. My friends call me Jag. I am the c e o of the leading nonprofit, introducing young people to the ideas of Ayn Rand in fun, creative ways, such as graphic novels and animated videos. Uh, today we are joined by Lars Tave. Before, uh, I even begin to introduce our guest, I wanna remind all of you who are watching us on Zoom, Instagram, Twitter, Facebook, LinkedIn. Uh, you can go ahead and use the comment section to start typing in your questions. We will get to as many of them as we can. Uh, Lars Tave is a Swiss-based serial entrepreneur and venture capitalist who spent 11 years in portfolio management and investment banking before moving to the high tech and telecommunications sector where he, uh, has been the co-founder of an astonishing 13 companies, many of which have been, uh, uh, award-winning. He is also the best-selling author of 18 books. I think that might be a record here on the Atlas Society asks those include the Creative Society, super Trends, entrepreneur, and the recently published from Mal to Morris, how to Live Leave. You Speaker 1 00:01:30 Have It. Speaker 0 00:01:31 Thank you. Um, how, how to Live, lead, and Learn in an Exponential World that sometimes turns you upside down. Uh, Lars, thank you for joining us. Speaker 1 00:01:45 Yeah, it's a pleasure. And thank you for almost <laugh>, almost pronouncing my name. Right? I know, Speaker 0 00:01:51 I'm, I, I need a little bit more practice. So we're, we're going to have to do more of these. Um, so we always like to start with the origin story of our guests. Uh, your origin as an entrepreneur and an investor, maybe some of the ventures you pursued as a teenager and young adult, and what that experience afforded you. Speaker 1 00:02:15 Yeah, I think, um, in many people, the people's lives that the turning points, uh, were certainly it. Uh, you know, it's like you, you, you change direction, you change gear. And for me, uh, everything, I, I grew up in a very normal family in Denmark. Went to a very normal public school. Uh, everything was organized. You know, you had to go to school and all the lectures were pre-planned and you had to take your exams and get your teeth fixed at some point, and so on. Uh, and then, um, my, uh, parents got divorced and my father moved to, to Chile, and he wrote to me, uh, whether I would like to come to Chile. That was when I was 17 years, whether I would like to come for a year. And then I wrote back, uh, if I could bring three friends. And my, my father was, he was so, you know, the nicest person in the universe. Speaker 1 00:03:08 So he said, yes, uh, please do that. And he had a tiny house. So we completely overwhelmed to this house. But, um, that we traveled around in six countries in South America, and we had a personal budget of about $3 a day, which we had earned by working in factories. And I was cleaning toilets in old people's homes and so on. And, um, and we got into all sorts of trouble. Um, I, I got knocked down at the carnival and Rio got attacked by bird, spider in my tent, uh, picked up a snake, which I thought was a piece of wood. Um, and, and blew both of my ears, uh, at, at some point. Um, but oddly, I really, really enjoyed the feeling of nothing was organized for me, and we had to, uh, handle everything ourself. One of the issues, for instance, was we found out too late that you had to be 18 years to cross the borders. Speaker 1 00:04:01 And two of us were seven 17, so we had to hustle at every border, <laugh>. And at one border, we couldn't get a stamp to get out. Um, that was in Bolivia, so we had to sneak in because there was nobody at the border station. So we are sneaking and Stan on passport. Anyway, so there I, I, I realized that that having responsibility for, for myself and having, no, there were no mobile phones, there were no credit cards. I'm that old <laugh>, or we had no credit cards. So, um, we only, we had our money rolled up in our sleeves. And after that, um, my, my life became diff different. So I wanted to, uh, go into the unknown sometimes. So when I was starting, I, I started two things. First, engineering, and, and then in later in parallel, also economics. Um, then I founded with two different friends, two different companies, cuz I wanted to again, go into the adventure. Speaker 1 00:04:59 I, and that went okay, but there was nothing amazing about that. But, uh, since then, I've really had to decide to start things, start companies, and venture into also, when, when I write books, it's not, cause I know a lot about the subject, it's because I don't know enough about the subject that I decide to write a book so I can figure out what the subject is about. Um, so yeah, so I've started, uh, some of, some of 13 companies, some of them with other people and some of them on my own. Um, and, um, and written these books along the way. And I think actually the reason why I'm <laugh> the indirect reason why I'm on this interview is that I wrote this. Oh, you can't see that, right? Can you? Oh, but I wrote this book called The Creative Society, which is about, uh, it was, it was, it was a book I've wrote actually, because I read a book in, in the book that came out and said, I think in, was in 2003 by Charles Murray and what's called Human Accomplishment, where he goes through, um, they, they have a methodology where they take 163 encyclopedias from all over the world. Speaker 1 00:06:09 And then they have a team of up, up to 50 people for five years going through what is mentioned. And then they, they register what is mention, anything that's mentioned in half, at least half of these encyclopedia must be an important achievement. And then they mapped where it happened and when it happened. So they got like this world history of human achievement and, and was quite remarkable that, um, they, they only took the ones where you could put a name to it. So it, there's nothing about who invented the fire and the wheel because we don't know. Uh, but the, they, they made a cutoff in, in, in 1950, but they had 2,850 years before that where they could have put a name to these accomplishments. And one of the many amazing things in the results was that 97 came out of the Western civilization. Speaker 1 00:07:02 And, uh, that surprised me. Cause I was like, anybody aware that China had been ahead of Western civilization, um, had the Islamic nations also had a lead at, at some time. So different areas in the world had been created, but then it had stopped. And he goes into why it stopped. Uh, but I wanted to understand why did it, you know, what was different about the west? And then I started really, um, reading up on it, and I was quite far with the book when randomly somebody sends me an animated map of European borders, uh, spanning many centuries. And, and there you see, after the ro fall of the Roman Empire, uh, it dissolves into a lot of city states. So at one point there were about 5,000 city states in Europe, and this starts to get consolidated, one area after another. But you had one area in the middle, uh, spanning from what is now northern Italy through Switzerland, through Germany, little bit of eastern France up to England, and including in England, and also Benne Luke's, that's, that remained extremely decentralized for 500 years where the rest was centralized, uh, kingdoms basically. Speaker 1 00:08:18 And turns out that it was, it was not only 97% came from the Western civilization, but before Europeans left Europe and started to settle in North America in, that was in 1604, before they did that, if you look at then before that there was on Western civilization was only Europe. So where in Europe did it happen? More than half of it happened within that little area, which is 10% of Europe, which is a tiny, tiny, tiny part of the global land mass. And was also a very small part of the global population. So my book took a turn because then I took Charles Murray had made a map that showed what he called the creative core, this, this area here. And I, I was sitting fiddling with my computer and overlaying the maps of decentralized area at different times and his map. And it was just stunning how they, they all overlapped. Speaker 1 00:09:13 And then I came up, then I started researching that, and then I found a study by the Institute of Economic Research in the US where they had actually studied what happened in all these city states. And they divided them into two kinds, one kind. Uh, they, they called the, the Princelings. That's where one family or one person ruled everything. And the other other parts, I think they call the merchants. And that's where a council of citizens ruled. So more democratic public, uh, uh, rule. And they found that people just systematically vote with their feet. So people would always migrate from the tyran is to the free areas. And, and because of this, you could not kill creativity because when somebody tried to kill creativity through tyranny one place, people would just, you know, the, the, the creative people would just walk to, to, uh, a nearby place where they would be free. Speaker 1 00:10:11 And that is what that, that went on for so long time that you got ignition in creativity and that now it's like everywhere in the world. I mean, it's, well, maybe that's an north statement, but your Southeast Asia is also hyper creative. Israel is, and, and so on. So, but, but, but the, the flame was ignited because you couldn't kill freedom and you couldn't kill freedom because people could not, they could vote with their feed. And you actually have the same sy system right now in Switzerland, which is kind of remnant. You have, if you look at, at Europe, sorry, I'm just talking here, but if, if you look at Europe, uh, there are lots of art remnants from this medieval decentralized age. You have these many states like, uh, Lichtenstein and Monaco and so on. Um, but Switzerland in itself is a remnant because you have the state in Switzerland is what you call a minimal constitutional state. Speaker 1 00:11:09 So it's actually not many people know that. But in the Swiss constitution, it is stated, uh, that how much they, the state can collect in income tax, in corporate tax, and in V A T. And if you add that up, the state cannot control more than around 11% of the economy. So if you then look at the, and, and also they made an amendment to the Constitution, the states that, that, that the state cannot as systematically assume that. So actually the way it works, uh, the, the, the depth as a part of GDP has to trend down towards C which is happening now. So, uh, the state is very limited, but if you look up what is, what is the tax pressure, total tax pressure, all taxes, including the a t as a percentage of G D P in Switzerland is about 33%. So how, how do you get from 11 to 33? Well, those 22% are collected by the cantons and by the counts. And, um, I mean, there, there are literally thousands of counts and, uh, what is it, 26 Canton? I, I should or 20. I can't, I should, I should never forget that. So what happens is that if one of the one county or one of the cantung raised their taxes too much, Speaker 0 00:12:31 People move, <laugh> move. Well, that, and that's, uh, happening, you know, all across the globe. It's actually been happening Yeah. Um, at an accelerated rate here in the United States over the past few years as people Yeah. California, Speaker 0 00:12:44 You know, one, one high tax state or, um, states that had extremely oppressive, uh, policies during the, the pandemic. I, I wanted, I'm gonna, uh, get back to the Creative Society, um, because I did read it and I thought it was fascinating. But first, um, one of the reasons that, uh, you caught my eye was that you recently gave the E rand lecture, prestigious lecture at the, uh, Adam Smith Society, friends of ours there. Um, tell us a little bit about how that came to be and, um, how you discovered Ein Rand and, and how it related to some of the ideas that you've been exploring. Speaker 1 00:13:28 Well, the, well, the first thing was that happened was, um, I gave some speeches in Denmark, right? I live in Switzerland, but I gave some speeches in Denmark about, uh, how I saw the future of civilization. And then there was a publisher who came up after one speech and said, can you write a book about this? And then I didn't have time, but then later, two years later, another one from the same publisher came up and said, let's ask again. And then I did have time and I wrote The Creative Society, and then it was very well received. But this is the book about how this transaction civilizations also nature, you know, how things actually on a basic level work. Um, but then they said, would you like to do a follow up book about the political implications of this? So I wrote the book, which is unfortunately only out in, in Danish, but it's called the, the Goose with the Golden Egg. And it's, it's about the contrast between collectivism and li libertarianism, as you call it, in, in the US and conservatism. Um, so I, I described that, and I, of course, I I, I went into the, the most important thinkers in these different areas. And Anne Rand, of course, is one of the, the important thinkers, uh, for libertarianism. And, um, and then I just noticed that if, if I mentioned, you know, when Speaker 0 00:14:48 I'm Rand Speaker 1 00:14:49 Yeah, no, so I'm an entrepreneur, as you men mentioned. And so a lot of my friends are entrepreneurs, and some of them are very outspoken fans of Anne Renz, and some of them just, uh, they haven't, haven't read this Atlas Rock, for instance, which is huge. It's too much. But they kind of, they, they, they, they think, oh, this is something positive. Interesting. But most people, they, they do like this. Anne ran, no, no, no, no. She's evil. She's evil. So I wrote this article in a Danish newspaper, or it's not a newspaper, but in a Dan newspaper, uh, which if I translate it to an English, it's said some, something similar to Anne Rand, that horrible person. That was the headline. Um, and then I, uh, just to get the attention from the people who didn't like her, Speaker 0 00:15:39 Which is very much like Ayn Rand, you know, she how to, uh, to be sensational in order to command tension. Speaker 1 00:15:48 Um, and then I explained what her ideas actually, I mean, you cannot explain Iron Rant in, in a few pages. Uh, but I explained her main ideas on what they're actually about, and that caught that tension of, um, other people. And then from time to time, you know, I'm getting asked about my opinions about her. So that's how Speaker 0 00:16:09 Well, great, well, welcome to the party. I Speaker 1 00:16:12 Just, I just wanted to just add, I mean, this about entrepreneurs being quite excited about her. I mean, Jimmy Wes, who founded Wikipedia, had an Iron Rand block, Speaker 0 00:16:22 Uh, yes. And he was, he has actually a very long history with the Atlas Society, going back to some of the earliest, uh, summer conferences Yeah, yeah. With founder David Kelly, Speaker 1 00:16:33 Peter Di Manis, who, uh, founded, uh, uh, Speaker 0 00:16:37 University. Yes. Our, our 2020 honoree, um, Peter Teal, our 2021 honoree. Speaker 1 00:16:44 Yeah. Um, and, uh, I, I Mark Speaker 0 00:16:48 Kip Wilson, founder of Lu Lululemon. Speaker 1 00:16:51 Yeah. Yeah. So, so she is generally extremely well regarded, or very often extremely well regarded when you talk with successful entrepreneurs. Um, so yeah, that's part of my entry, Speaker 0 00:17:04 That, that's fantastic. Um, alright, so let's turn now to the Creative Society. Uh, you wrote it in 2015. Towards the beginning you discuss the role of individual creativity and the development and advancement of society's. And it resonate with me because at the Atlas Society, we've earned something of a reputation for creativity, for which I credit the open Objectivist approach, a willingness to take risks, challenge dogma, uh, and learn from mistakes. From your perspective, what kind of cultural attitudes, whether for an organization or a country, can help to cultivate the fertile ground for flourishing? Speaker 1 00:17:50 Well, uh, the, the cultural attitudes are also some organizational passions. But, um, the one, I mean, the, the lightning beacon of creativity in the world has for a long time being Silicon Valley. Now it's many different places, including Silicon Valley. But one of the, one of the elements of, of the mentality is that, is that it's okay to fail. And, um, and Anne ran, did not know about, um, the book called Mindset, uh, cause it came up long after her. Uh, but it's, that book is written by <inaudible>. Um, and she wrote about, she was quite old when she wrote it, but she wrote about studying the mindsets of people who have success in life and people who don't, uh, where we should be very clear that success can be about money, but it doesn't have to be about money at all. Um, and, and, and she said that successful people had something she called growth mindset. Speaker 1 00:18:59 And growth mindset is the idea that you can change yourself. So you, you actually, psychologists say that you cannot change your personality very much, but you can change your mentality entirely. And she talks about mentality. And, and, and so one element of that is that you, you should not assume that your intelligence and your skills and your physique or almost anything about you, except your personality, cannot be mold and changed completely. And we can see it, you know, some people can run a marathon and some people get, uh, exhausted by ca getting out of this sofa after Netflix, as though they could be a big difference in what you get out of, uh, the cast that you've pintel <unk>. And, and then it's, it's a very, very important book, um, because he says that people who have growth mindset, they will always try to, you know, in order to grow, you have to push yourself to your limit. Speaker 1 00:19:57 Um, if you, if you wanna run at marathon, you, you have to push yourself many, many times to a limit in order to develop that, uh, capability. But also in intellectual work, in, uh, in your social behavior and many other things. You have to do that all the time. And when you push yourself to the limit, you will sometimes stumble and fail. And so you stumble and fail your way to success. And this is what became understood in Silicon Valley because it <laugh> people. Were, you know, startup companies, entrepreneurs, they fail all the time. So, uh, in the book that I co-wrote with authored, which was called Entrepreneur, um, there we go through some statistics about growth startups. Speaker 0 00:20:45 75, um, 75% of all companies receiving VC investment do not give a profit to their investors. That was one of the statistics I picked up. Another study that you mentioned was that out of over 2000 Israeli startups, nearly half went out of business, two thirds of those which had received investment failed. Do these kinds of figures actually line up with your experience? Um, and when you are looking for where to invest your money, uh, what are some of the things you're looking for? Are you looking for that creativity? Are you looking for mindset, and how do you Yeah, figure it out? Speaker 1 00:21:28 Yeah, there are many different, uh, ways to invest, but of course, when I start searching startup companies and invested time and money in my own startups, uh, but I also, one of my startups was a venture capital fund, and that's kind of what, um, I was, I was only there in the investment period of the first fund. Um, but, um, there we invested in 22 companies and, um, about a quarter of them failed, or almost failed, which is actually, we were lucky that it was not a higher number. Um, but if we look at the statistics today, four companies constitute probably 97% of the value. Uh, and if we can even remove the three and save one company, really, really make the fund, so the fund is up about 10 x a thousand percent. Uh, but if we had not invested in, in that one company, it would've been a good fund, but not a great fund. Speaker 1 00:22:25 And if we had not invested in those four companies, we would have returned a hundred percent. And, and that's not good. So, um, there's, there's enormous uncertainty, and there's, it's not only about skill. It's not only about the size of the market and the quality of the entrepreneurs and so on. There's also an element of luck in what you do. I mean, you, you can be very, there are times where you are very fragile, and if one client drops out, one investor drops out, you get a recession, you get a competitor, you're just, at some points, you are too weak to handle that unless you have stumbled up, up upon something extremely unusual. So, so that, that's, um, that's how, how it is to be an entrepreneur. And so, going back to your question, the culture has to accept that growth mindset. Really, the growth mindset has to be embedded into the culture. Speaker 1 00:23:20 And it is in some cultures and in, but in, in other cultures, uh, to fail is seen being seen as an enormously shape. Um, and, uh, uh, fortunately, I mean, in Europe, in my life, I have seen, I've seen many things go the wrong way, but I, on this particular, I issue, I, I think it's gone the right way. So there's a bigger understanding of what entrepreneurship is about. And that most hunts entrepreneurs, even if they work like crazy, even if they're very skilled, most of them, most of the projects actually fail. Yeah. And then they get and start again. And many of the ones that, you know, you know, as super successful entrepreneurs have failed three or four times before they made it. Speaker 0 00:24:07 I, I think it's very interesting running a nonprofit think tank, you know, and having been in the nonprofit world 25 years ago at the Cato Institute, um, the, the mindset in those kinds of organizations can be different. They're a little shielded, or at least they think they're shielded from competition. So I always, um, encourage my staff, uh, to not purposefully go out and make mistakes, but that if they're not making mistakes, they're either not, uh, trying hard enough or they're not trying new things. And it's only by taking, taking risks, trying new things, that you're able to have these creative breakthroughs. Um, and that also means being comfortable with sometimes falling on your face. So I like to say, you know, we, we take our ideas seriously, but we don't take ourselves too seriously. Um, another interesting tidbit from your book, uh, the Entrepreneur you mentioned, when you give speeches to entrepreneurs, you sometimes tell, you, sometimes ask the audience, uh, how many of them own a dog? Tell us what you found and what it means, <laugh>. Speaker 1 00:25:23 Yeah. It's because in early in the creative society, I, I, I actually taught write a lot about biology and, um, and how species evolved. And the reason I ask about the docks is that, that depending on, on how you count it, probably around, I don't know, 160 different kinds of dogs, but they can all meet with each other. So it's actually all the same species, and that's same species as the gray wolf. So there might be one exception, but, uh, the rest of the dogs come from the gray wolf. And so they, they have gone through, um, a, uh, civilization civilizing process through selective breeding, of course. So, uh, humans have always liked the ones who were more friendly. Um, and I, and, um, that takes me to the civilizing process that goes on in society. So the, uh, until Speaker 0 00:26:22 Just before I leave that anecdote, didn't you find that, when you ask these entrepreneurs how many own a dog that they would say No, none of them are very few. They Speaker 1 00:26:32 Don't own Yeah. They, they can't own docs, because it's impossible when you're an entrepreneur. It's a Speaker 0 00:26:38 Yeah. Yeah. I, I think it, it's, it's interesting, um, I think sometimes people have very outsized ambitions, but they aren't always, um, realistic or don't have perspective on, on the enormous amount of work that it takes. And which is why you also, uh, lean towards encouraging people if they can, to start their entrepreneurial journey early. Right. Um, to make those mistakes early. Yes. Speaker 1 00:27:10 Yeah. Speaker 0 00:27:11 Yeah. Which, which also, uh, got me thinking, um, my last guest on the Atlas Society asks, uh, was Professor Jean Twangy, uh, she's the leading expert on generational differences, and she found that among Generation Z, those born after 1997, they have this preoccupation with safety risk aversion, and that that is resulting in fewer young people interested in embarking on the, um, an entrepreneurial path compared to previous generations. Is that a trend that you've observed and is it a cause for concern? Speaker 1 00:27:52 I have, yes. Um, so I, so I spent most of my time in Europe, so I, I I, perhaps she was more studying what happens in the us, but there's definitely been a, a trend towards less entrepreneurship. Having said that, though, I see signs of it reversing, uh, in some places. And, um, it's, it's a part of, you know, generations don't change. What changes is that you get new generations. That's, I think, something that sociologists and marketing people are, are fairly familiar with. So, um, there is a counter trend, uh, in Scandinavia, for instance, where more and more young people actually admire, uh, entrepreneurs and risk taking, it's kind of a rejection of your parents. It's kind of this healthy <laugh> where you say, uh, I wanna do something, which is different from what the previous Healthy Speaker 0 00:28:47 Rebellion, Speaker 1 00:28:48 The Health Healthy Rebellion. Yes. And I act, I, I, I can't say for sure, but I actually think, um, what, what's it called in the us the Dragon den, these TV programs, uh, where entrepreneurs come in and pitch to raise money. Speaker 0 00:29:05 Oh, like, uh, yeah, shark Tank. Yeah. Things like that. Speaker 1 00:29:08 Shark Tank. Yeah. It's called different places, things in different, uh, places. I, I, I think that has inspired a lot actually. It's been very useful. Um, Speaker 0 00:29:18 Another thing, uh, sorry to to interrupt, but, um, I, I saw in, uh, reading and having on, on this show, um, uh, guest, uh, Rainer Zeidman, who's done a lot of studies about the rich and public opinion, uh, and in fact the Atla Society is, is bringing, um, that book of his to audio shortly, he did surveys of attitudes towards, uh, the successful, he did them in countries all over the world, um, in the United States, in Europe. And one of the big eye-openers for me was that while generally there's less envy in the United States compared to some European countries in the United States, it's the younger generations that are more likely to, uh, to be envious, to have Chardon Freud to, um, uh, assign bad motives to, uh, the successful. Whereas in Europe, it was, it was reversed. Yeah. Yeah. Speaker 1 00:30:25 Okay. So that's new to me, but that's very interesting. And I just said, yeah, again, go back to what the perspective of what this is, because in the Mindset book Cal Dre's book, um, one of the things she says is that people who have growth mindset, when they see other people who do better in some way, they think, Ooh, I would like to learn from that. That's very inspiring. But if you have fixed mindset, you think, ah, they have stolen from the society, they have, you know, gathered more of the cake. Interesting. And it's, it's two cons contrasting views, uh, of, of society. So some people, they view society as a cake, and you have to slice the cake evenly, and others view it more as a bakery. And so you have to create an incentive. So more cakes are being baked, and that if you do an effort, you'll get more cake to eat. Um, and Speaker 0 00:31:18 I love, I love that, uh, that analogy. Um, I don't have, uh, I, I have, uh, maybe cooks in the kitchen. We've got a lot of people that are lining up to ask you questions. And, um, I usually jump into this earlier, uh, but I've been having so much fun and so fascinated by this discussion. But, uh, we do have to get to some of these audience questions. And there's, there's quite a, a few good ones. Mm-hmm. <affirmative>, um, Candace Marinna on Facebook asks, what do you think about people in America who constantly say places like Switzerland is a model socialist country? Speaker 1 00:32:00 I've never heard <laugh> anybody say that Switzerland is a model socialist country. Speaker 0 00:32:06 You know, I mean, they say that, uh, Denmark is a socialist country that, uh, you know, Sweden is a socialist country, but by some markers, um, Switzerland certainly, uh, has more economic freedom than, than the United States. And, uh, Speaker 1 00:32:23 Yeah, so just, I mean, just, so, um, I spent half my life in Denmark and half my life in Switzerland, apart from traveling. Uh, so I, I have very good perspective on the difference between the two. So Denmark is a very collectivist, uh, place. Um, it's called a wonderful culture, and, and, uh, great people, lots of them are entrepreneurial and so on. Uh, but I left, when I left Denmark, I paid 80% of my income in tax, which sounds, it sounds really high, but I paid 50% in direct income tax. But then there were 25% b a t, you had 180% tax on cars, you had taxes on this and pension on <laugh> energy and everything. And I moved to Switzerland, and I had exactly the same income in the beginning, but I, then I paid 20% of my income in total taxes. Um, so, but Switzerland's a very, very free country. So I've never, I've, I've lived here in 31 years. I've never received a letter from the government. I get almost no communication from the Kang or the county. Um, it's, I, I, I regard it as a very free country, at least, uh, compared to almost any other country. There's a very high degree year of freedom here. Speaker 0 00:33:40 Steiner 9 0 3 on Instagram asks, uh, Laris, do you think people put too much stock on programmers and Silicon Valley and tech and don't pay attention to the potential of tinkerers and inventors? Speaker 1 00:33:57 Yeah, so some, what what happens in, in programmers with software is that you have these, this ability to create massive success in no time. And this is also what the reason why venture capitalists, they focus on this. Because normally they have to divest. So they, on, on average, they have to sell within something like six years. Same with the Fundi co-founded. So you're looking for something that may go really well, really quickly, otherwise it doesn't work for you. Um, but we, we are in the intersection between different economies. So the last 200 years we've had the industrial company, we still have that. It's <laugh>, Tesla X space, uh, largely industrial. Uh, but then we have the precision economy, which started around 1980 with, uh, it telecommunications, biochemistry. Um, but we also, and now we are entering into the, the hyper-intelligent economy, but across this will less and fair, you have seen the experience economy grow and grow and grow. Speaker 1 00:35:08 So people spent more and more of their money on experiences. And for instance, when we started our, our venture fund, that was in Denmark, and so the first draft prospectus was about investing entirely in tech. And then I, I said, why don't we look at the best exits that have been in Denmark the last 30 years? And we did that, and we found out that the most of the best exits were not technology companies, it was Jayna baker's. It was, uh, either dance, it was a legal, you know, before that legal playhouse and so on. So it was lifestyle. And I think that rela as a, as a proportion of the economy lifestyle, uh, companies will just become more, more, more and more profitable simply because people spend more and more of their money on that. Speaker 0 00:35:58 Interesting. Okay. Facebook, again, Jack Stein. What do you think is the biggest impediment to an entrepreneur's success today? Speaker 1 00:36:09 Um, I think, so I, in, in our book Entrepreneur, we wrote based on statistics, combined with personal expense, we wrote about that. So we actually look at the statistics, so, um, that some, I'll, I'll tell you what, you know, what typically goes wrong, and I've tried some of it myself. So speak <laugh> with authorities Speaker 0 00:36:29 Speaking from experience. Yeah, yeah. Speaker 1 00:36:31 Clever failure. Uh, so, um, you have disagreement between the founders that's in some studies, it's the number one thing that goes wrong. And I've been involved in this myself several times. It's really painful. Then you, um, you, you, you normally say nail it before you scale it, so get the product right. Find out how to sell it before you ramp up the organization. And I've, at least twice, I've tried to ramp up way too early. So now I'm much more careful, um, save the money until I really know it's, we got it. But then you scale, um, you also got uneven scaling. So, um, the sales is ahead of the product, or the product is ahead of the sales, or the marketing is ahead of everything. So, or, or the business is ahead of the financing. So it, you, you cannot run any company at all without having some unbalance where something is too weak for some other parts. But in startups, normally at some points, it gets completely absurdly extreme, how uneven your performances and different things. And this is something that, uh, very often kills companies. So these are some of the typical reasons, and I could tell you, I've been kind of trying, trying out them all. Speaker 0 00:37:54 So you just referenced the, uh, lifestyle, the growth of lifestyle companies, opportunities, the experience economy. Um, in a couple of your books, you make frequent reference to Maslow's hierarchy of needs and trends with regard to moving up that, that hierarchy with regards to work and other things, would love if you would share that, um, dynamic with the audience. Speaker 1 00:38:23 Yeah, so it, it, this is something that's really relevant. Um, so I mean, the, probably most of the audience have heard about it, but Mala is that, you know, your first priority in life is to get shelter and food and sex, and then it moves up, and then, uh, then you want, uh, more and more sophisticated stuff. And then the entry want meaning, um, and, uh, this is reflected in the job market. So if you go 200 years back, most people were, were working with, with reducing food and shelter. And so very, very ba and, and also military defense. So basic security. And now, for instance, in Switzerland, right now I'm sitting in a ski resort in Switzerland. And, and yeah, so here, there you had these mountain farmers. Now you have way more jobs, but they are mountain guides, <laugh>, uh, ski guides, mountain guides, um, and people, you, you, you people go and get massage and, and, uh, all these, uh, mindset, uh, courses and so on. Speaker 1 00:39:28 So, so jobs just flow up, uh, towards the top of the manslow pyramid. And actually, the interesting thing is that that flow accelerates every, every time we get a boom in innovation, uh, which is quite relevant now because we are probably, uh, at the beginning of a boom in an innovation cause of ai right now, uh, I, I've seen different studies of this. Francis Goldman expect that the average productivity increase per year in the US will more than double the next 10 years because of ai, and probably last longer than the next 10 years, probably at least 20 years and so on. So we will see at a kink in the growth curve, in the economic growth curve, at least in all the developed, uh, world show. So economic growth will accelerate for quite some time, and then people say, ah, uh, it will make us all unemployed, but research shows that whenever we have a boom in innovation, we get more jobs, not less so. Yeah, it's just, it just creates a rush up in, in the ma uh, pyramid because the technology creates wealth and the, this wealth is being spent as something called MAs laws and general economics law, the wealth is spent on something. So, uh, the wealth you get from when you can feed all of Switzerland with 20,000 farmers instead of millions of farmers, uh, it releases wealth for the ski resource. And, and so this just goes on and on. So we'll have lots of jobs and lots of wealth and very low inflation probably, Speaker 0 00:41:06 And, and no need then, uh, you know, a lot of people are pushing this basic income thing and they're, you know, the, these are techno, oh, I don't know if they're utopians or, uh, pessimists, but, um, so if, if you are predicting that we're actually gonna have more opportunities for employment, more economic opportunities, uh, what about the need or the desirability of basic income? What are some of the trade-offs as you see it? Speaker 1 00:41:38 Yeah, that's a very interesting question because, uh, there are, there are some big questions where I am divided, so I'll give you both sides of what I think. So, I mean, the document, uh, we just made the document for not having basic income, right? That there, there will still be lots of jobs, actually, more jobs cause of technology booms. But I, I also have, um, a counter argument, which comes from my experience of living in a extremely elaborate welfare state, which is stema. And that is that a lot of people actually get caught in the welfare system, uh, because you have once, once you, you go and ask for money, you have to, to show that you need the money. So you have to show your week, uh, you are incapable of handling, financing your own life, and then they manage to get the money, and then they get into a, uh, uh, Speaker 0 00:42:31 Cycle, Speaker 1 00:42:32 An evil cycle where they, they continue to portray themselves as being weak, and that actually has psychological consequences. So they become weak by doing that. And this is also something, if you read about the positive psychology, it's, it's quite easy to understand the dynamics that happens. So you get a divided population where some of them are, are caught in this system. And, and I think that for some of them, if they had a, a basic income, but a low one, you know, one where it's not very fun, but you can survive, then they would, any work they would do one, even one hour would improve the economic situation. But if they, you are in the welfare system and you, and then you come and say, I can actually do some work, then you will keep penalized for it. And that's why they say I cannot do anything at all. So that's my counter argument. And I, I don't, I, I, in my opinion, only experiments can show which of the two arguments is a better one. That's how I see this. Speaker 0 00:43:32 All right. Um, now I, we just got about 14 minutes left, and I wanna make sure that we talk about this spectacular new book, uh, from Mals to Mars, how to Live, lead, and Learn in an exponential world. You write, um, that quote, the evolution of humanity has and will continue to be unidirectional toward increased tolerance, open-mindedness, equality, and cooperation. Um, of course, this progress is not guaranteed, and in any case, it's full of hiccups, uh, as we just saw in Ukraine. So what are some of the potential threats to this more open, more abundant future? Speaker 1 00:44:17 Um, yeah, so, uh, the, uh, the, the statement definitely needs to be qualified as suggested, because there are hiccups. Um, so there was, uh, a German who called, who was called, uh, Ilias Norbit, and he came out with a book called The Civilizing Process, where he wrote Why, how, like, like the case with the wolves becoming darks, that how how humans had become, had civilized themselves. Uh, they had domesticated themselves over the centuries, over the millennia, actually. And that's something I go into in the creative society that happens because when people, they move from an extractive economy where you need to get resources that are out there, like steal land from your neighbor to get the resources on that land to creative, uh, economy, where, where you think about things and you use entrepreneurship, then when you think about things and you trade and you use entrepreneurship, then you have to become very good at doing voluntary win-win transactions with other people. Speaker 1 00:45:21 And that creates the civilizing process. But on the note of hiccups, the book came out in, in 1939, so the year before World War II really broke out. So, uh, there was Stephen Pinker, he came up with a book, which is really a much, much more elaborate and well documented follow up on that, which is called the Be Angel of Nature, where he goes very, very deep into the reasons why you have this underlying civilizing process. So that's still going on, but with hiccups. And so, you know, okay, so the war in Ukraine is definitely a, a, a big hiccup. Um, not as big as World War Two so far, uh, but, but you also have the, the vote, vote culture, I think is also a hiccup. Um, and, and censorship, pardon me, censorship, uh, cen against free speech. I mean the, the, the principle of the cancel culture and, uh, which is censorship, which is that if I don't like what you do, I'm not going to, I'm, I'm trying to destroy your livelihood. Speaker 1 00:46:27 That that is very much against what has happened since the medieval age, because that's what, how it was in the early medieval age. But then we developed this where, okay, I respect you have other opinions, but we can still cooperate and this now we are moving 400 years back. Um, the other thing is, uh, you that you cannot make fun of things. You know, you know the expression disarming humor, right? Yeah. Cause why is it, why is humor disarming? Because in if, if you go back four, 500 years, when you insulted, you had, you had an insult culture. So if you was criticized somebody, it was seen as an insult. And, um, and then you, you would, people would challenge each other to jewels. And we still have it in western movies, right? And then you shoot each other and then, uh, and you had, uh, did ETT also, you know, somebody insults somebody from my family. Speaker 1 00:47:23 I then shoot that person, then that family shoots some somebody in my family, and then it goes on and on on. And then, uh, the rule of law combined with, uh, the mutualist respect for other people's opinions, but also combined with humor, disarmed the whole society and made it more peaceful. And this is what we are now seeing being rolled back many hundred years. And the reason why I, I I, I think this is not completely undoing the civilizing process, is that I think it's a minority counter movement that will, uh, has captivated a part of one generation. I don't think the next generations will, will do the same. Uh, and if you want a per perspective for this in, so in general, if you want to have a good perspective, I rand I think it, there's a lot to find in positive psychology and life. He, he books, uh, for that matter. So there's something called Carbon's Drama Triangle, uh, which is about, uh, where you, you have a drama screen, an offender, and a rescuer and a victim, right? Mm-hmm. <affirmative> or Hollywood movies are built on that. Politics is largely built on that, you know, you, you go out and tell one part of the population, you have been, you have been offended, oppress, yeah, Speaker 1 00:48:42 Oppress or something like that. Uh, and you've been oppressed by these people who are then the bad people. And we are the saviors. The Catholic church in the old days at least, you know, had the same. So a lot in society is built on that. And so go and read, uh, stra Triangle. You can find it, you know, super easily described, uh, many places on the net, and then think about what this is. But because the, the, the Vogue culture and all that comes with this, it's that it's, it's the institutionalized, uh, amplification of, of Carbon's drama triangle. And it's something that psychologists say now, when they would sit, sit with a client and say, the reason your life is going bad is that you are involved in that drama, you have to get out of it. You have to become an independent person, take responsibility for yourself, and then become really, really good at doing voluntary win-win transactions with other people and signal all the time that this is what you are good at and this is what you want to do. So treat people with a respect no matter what, how they are. Then you are signaling that I'm open for voluntary, uh, win-win transactions. But if you evoke and you signal, um, that other people groups or people are, then you, it's very difficult for you to be, become really good at making voluntary win-win transactions. Speaker 0 00:50:04 Yeah. Our founder, David Kelly, uh, has talked a lot about benevolence as a self-interested objectivist virtue that, um, you are signaling that you are open to business and that you view people as potential partners and traders rather than, uh, you know, enemies or adversaries. Wanted to ask you about something, talk as well about in, um, your most recent book, e s g funds, investment supported to advance environmental, social governance, governance Factors. Do you talk about the growth of this kind of investing? And I'm curious about how you view the growth, uh, this growth impacting innovation and the growth needed to solve future problems. Um, we'd mentioned Peter Teal before he was the Atlas Society's 2021, uh, gala honoree. And he's highly critical of this trend. He, he called E S G, quote, a hate factory. It's a factory for naming names. We should not be allowing them to do that. When you think E S G, you should be thinking Chinese Communist Party. Is he wrong? Speaker 1 00:51:21 Uh, everybody choose their, their own way to express this. But, uh, <laugh>, I, I think I have a lot of sympathy for his views. Um, so, uh, last year I was, I was just invited to meet the c e o of one of the biggest companies in Scandinavia and was just like a social visit. I, I had no idea what we should talk about, but very quickly he started talking about Africa and he said that they did a lot of business in Africa, but he said, it's such a pity with Africa because nobody does invest in it, in, it's because there's a lot of corruption. You have, uh, dubious, uh, you know, work protection, you, some companies pollute a lot, they don't follow the rules and so on. So if you're a big company, you go in that you are extremely likely to unwittingly by mistake, get involved in something that violates your E S G rating. Speaker 1 00:52:15 And because of that, we don't invest. I mean, most, most companies don't invest. So, uh, AF Africa ought to get a hundred times more investments than they do. Fortunately for Africa, the Chinese don't care so much about e sg, so they're in there and building RA railroads and so on. But it would've been far better if, uh, the western nations, western companies, um, they, that they also invested there. But I don't because of e esg. So e ESG is holding that back, but it's, it goes far beyond that actually. Cause, um, there's also, I mean, the idea that you only, you can only do things that signal virtue. Um, I mean this maybe is sort of the, the, the most extended ation of the E S G mindset. Um, and, and, and other things are unworthy of, of investments. But if you think about how come, why, why are, why is Africa not sending money to help Switzerland or Europe or, or the us? Speaker 1 00:53:13 Why, why are the money flowing the other way? It's because Africa is poor. Okay? So why is Africa poor? It's poor because on a billion levels it doesn't work as well as, uh, economically as Europe and the US Why doesn't work at, you know, at a billion different levels because people are not so, uh, as good at making like the glasses you put on, on the books that are on your bookshelf and making that bookshelf or that sculpture to behind you or my shirt. But what makes a society successful is the combination of billions of small things. And they're not glo, they're glorious at all, and some of them in the early days that some of them pollute and so on. But it's the ability to lift everything, the whole fabric, economic fabric of society at the same time that makes, makes it efficient. And that is the reason why Africa is not sending money to the West, but the West is sending money to Africa. So E s G is, I think a lot of it is virtual signaling, and some of it is very, very superficial. Uh, for instance, assuming that we can get rid of fossil fuel straight away, it's completely naive. If you look at, if you look at, uh, statistics of the global energy consumption, do you know how much comes from, uh, solar and wind today of the global energy consumption? Speaker 0 00:54:40 Okay, sir. One, one per less than 1% <laugh>. Speaker 1 00:54:43 Uh, we have bit de depends how you measure it, but like three or 4%, there's no way that it all could, could come even in, within 150 years from solar and wind, simply, of course, we don't have enough industrial, we cannot get industrial missiles out of the ground fast enough, so we need to do something else. So if we just shut down first, your, you know, billions of people will probably start to death. You will have wars every everywhere. So pe you have to be realistic, but it's much easier not to be realistic because then you can signal that you're very good person, and there's a big difference between doing good and feeling good. And so a lot of it is about feeling good, but it's actually not doing good. It's doing bad, feeling good by doing bad. And so to that extent, I think Peter Shield really is quite right. Speaker 0 00:55:30 Well, that, Speaker 1 00:55:31 So that doesn't, it doesn't mean that I exclude everything in e s g from having some purpose, but I think that has become, to some degrees, a problem for society. Speaker 0 00:55:43 Uh, that brings us to the top of the hour. This has been really, really fun. Um, I just, I would give you a chance if there's anything that, oh, well, I'm sure there's a lot that we haven't covered 18 books, uh, all of your companies, but any, any final words or any word about what you may be turning your sites to next? Speaker 1 00:56:04 Yeah, so I'm, I I, I am kind of lining up, but it will take three years or so. But I, I want to write a, a book of the history of innovation, because I have a company called Super Trends where we are doing research and mapping innovation. So we have 13,000 innovations maps for 3.3 million years. So back to be human age. Um, so that's one thing I will work on. Uh, and then another thing, general remark, I think that, um, people who are interested in, in Anne Ranch should really try to combine her ideas with what they find in science, science-based psychology that is very, very interested in Interesting. Speaker 0 00:56:44 Well, and how can we keep track of you? You are a man on the move. Um, a newsletter or social media, or the setup, or Google alert. Speaker 1 00:56:52 You can, you can find me every, uh, I, uh, unless you're trying to sell me something horrible, then you, I I connect with people on LinkedIn last Tweeted mm-hmm. <affirmative> LinkedIn. I think I'm the only one in the world with that name. Or the, maybe there's one more, but, uh, you'll find me. Speaker 0 00:57:07 Fantastic. Well, thank you, Lars. Uh, this has been just absolutely Magni magnificent. I learned so much. Um, everyone, you've, we've got the links to his books, uh, in the chat streams. So, um, do yourself a favor. Go out and check them out. Uh, and I wanna thank all of you who joined us today. Uh, thank you for your questions. If you, uh, enjoyed this interview, if you enjoy our other materials and programming, then please don't just walk on by consider making a tax deductible donation to support our [email protected]. Uh, and then be sure to tune in next week when radio host, um, very elder longtime friend of the Atlas Society will be our guest. See you then.

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