{"id":13159,"date":"2026-06-11T23:28:52","date_gmt":"2026-06-12T03:28:52","guid":{"rendered":"https:\/\/parmaks.com\/Resources\/the-tim-ferriss-show-transcripts-max-levchin-paypal-and-affirm-the-path-from-the-soviet-union-to-building-multi-billion-dollar-companies-plus-real-world-socialism-vs-capitalism\/"},"modified":"2026-06-11T23:28:52","modified_gmt":"2026-06-12T03:28:52","slug":"the-tim-ferriss-show-transcripts-max-levchin-paypal-and-affirm-the-path-from-the-soviet-union-to-building-multi-billion-dollar-companies-plus-real-world-socialism-vs-capitalism","status":"publish","type":"post","link":"https:\/\/parmaks.com\/Resources\/the-tim-ferriss-show-transcripts-max-levchin-paypal-and-affirm-the-path-from-the-soviet-union-to-building-multi-billion-dollar-companies-plus-real-world-socialism-vs-capitalism\/","title":{"rendered":"The Tim Ferriss Show Transcripts: Max Levchin, PayPal and Affirm \u2014 The Path from The Soviet Union to Building Multi-Billion Dollar Companies (Plus: Real-World Socialism vs. Capitalism)\u00a0(#869)"},"content":{"rendered":"<p> <a href=\"https:\/\/hop.clickbank.net\/?affiliate=infohatch&amp;vendor=J1R2C\"><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-10614 aligncenter\" src=\"http:\/\/parmaks.com\/Resources\/wp-content\/uploads\/2025\/05\/profit-gen400px.png\" alt=\"Profit Gen\" width=\"400\" height=\"217\" srcset=\"https:\/\/parmaks.com\/Resources\/wp-content\/uploads\/2025\/05\/profit-gen400px.png 400w, https:\/\/parmaks.com\/Resources\/wp-content\/uploads\/2025\/05\/profit-gen400px-300x163.png 300w\" sizes=\"auto, (max-width: 400px) 100vw, 400px\" \/><\/a><br \/>\n<\/p>\n<div>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin<\/strong> (<a target=\"_blank\" href=\"https:\/\/x.com\/mlevchin\">@mlevchin<\/a>) is a serial entrepreneur, computer scientist, philanthropist, and active investor in more than 100 startups. He is the founder and CEO of <a target=\"_blank\" href=\"https:\/\/www.affirm.com\/\"><strong>Affirm<\/strong><\/a>, the payment network that empowers consumers and helps merchants drive growth. He is also the co-founder and chairman of <a target=\"_blank\" href=\"https:\/\/glowing.com\/\">Glow<\/a>, a data-driven fertility company. Max was one of the original co-founders of PayPal, where he served as the chief technology officer until its acquisition by eBay in 2002. In 2002, he was named to <em>MIT Technology Review<\/em>\u2019s TR100 as one of the top 100 innovators in the world as well as Innovator of the Year.<\/p>\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/tim.blog\/2026\/06\/10\/max-levchin-2\/\">Max\u2019s full bio<\/a><\/p>\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/tim.blog\/2026\/06\/10\/max-levchin-2\/#:~:text=SELECTED%20LINKS%20FROM%20THE%20EPISODE\">Books, people, tools, and resources mentioned in the interview<\/a><\/p>\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/tim.blog\/2026\/06\/11\/max-levchin-2-transcript\/#Max-Levchin-transcript-legal-conditions\">Legal conditions\/copyright information<\/a><\/p>\n<div class=\"podcast-player\">\n<div class=\"podcast-player-inner-wrap\">\n<p>Max Levchin, PayPal and Affirm \u2014 The Path from The Soviet Union to Building Multi-Billion Dollar Companies (Plus: Real-World Socialism vs. Capitalism)<\/p>\n<p><noscript><iframe src=\"https:\/\/www.art19.com\/shows\/58dacbdc-646e-4585-9914-19c3de11d1ba\/episodes\/2730eb98-86f8-483f-b2fb-4083f032f5b2\/embed?type=micro\" style=\"width: 100%; height: 30px; border: 0 none;\" scrolling=\"no\"><\/iframe><\/noscript><\/div>\n<\/div>\n<h3 class=\"wp-block-heading\">Additional podcast platforms<\/h3>\n<p class=\"wp-block-paragraph\"><strong>Listen to this episode on\u00a0<a href=\"https:\/\/podcasts.apple.com\/us\/podcast\/869-max-levchin-paypal-and-affirm-the-path-from\/id863897795?i=1000771943053\" target=\"_blank\" rel=\"noreferrer noopener\">Apple Podcasts<\/a>,\u00a0<a href=\"https:\/\/open.spotify.com\/episode\/3zwuxSvZ6HrxK2WI65t5cM?si=S1rNAOAXQpqcicBwDfmBaw\" target=\"_blank\" rel=\"noreferrer noopener\">Spotify<\/a>,\u00a0<a href=\"https:\/\/overcast.fm\/+AAKebvXPYWw\" target=\"_blank\" rel=\"noreferrer noopener\">Overcast<\/a>,\u00a0<a href=\"https:\/\/podcastaddict.com\/podcast\/2031148#\" target=\"_blank\" rel=\"noreferrer noopener\">Podcast Addict<\/a>,\u00a0<a href=\"https:\/\/pca.st\/timferriss\" target=\"_blank\" rel=\"noreferrer noopener\">Pocket Casts<\/a>,\u00a0<a href=\"https:\/\/castbox.fm\/channel\/id1059468?country=us\" target=\"_blank\" rel=\"noreferrer noopener\">Castbox<\/a>,\u00a0<a target=\"_blank\" href=\"https:\/\/music.youtube.com\/playlist?list=PLuu6fDad2eJyWPm9dQfuorm2uuYHBZDCB\">YouTube Music<\/a>,\u00a0<a href=\"https:\/\/music.amazon.com\/podcasts\/9814f3cc-1dc5-4003-b816-44a8eb6bf666\/the-tim-ferriss-show\" target=\"_blank\" rel=\"noreferrer noopener\">Amazon Music<\/a>,\u00a0<a href=\"https:\/\/www.audible.com\/podcast\/The-Tim-Ferriss-Show\/B08K58QX5W\" target=\"_blank\" rel=\"noreferrer noopener\">Audible<\/a>, or on your favorite podcast platform.<\/strong><\/p>\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n<p class=\"wp-block-paragraph\">Transcripts may contain a few typos. With many episodes lasting 2+ hours, it can be difficult to catch minor errors. Enjoy!<\/p>\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>Max, it\u2019s nice to see you. And I wanted to kick this off with a thank you, believe it or not, from what you put into my last book, <em>Tribe of Mentors<\/em>.<\/p>\n<p class=\"wp-block-paragraph\">And it was in response \u2014 you had several responses to this, but it was in response to the metaphorical billboard question. What would you put on a giant billboard? Anywhere with anything on it, what would it say and why? Any quotes you think of often or live your life by? And there was one that I had never come across because I had never seen the movie <em>Ronin<\/em>, and the line was, \u201cWhenever there is any doubt, there is no doubt.\u201d And I have come back to this after watching the movie so many times, it\u2019s hard for me to even give you an accurate account or even estimate of account, but perhaps we could give people some context.<\/p>\n<p class=\"wp-block-paragraph\">Why was this one of your answers to that question?<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>It\u2019s a great quote. I love that quote.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>Yeah, it\u2019s so good.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>The next line in the movie, \u201cthat\u2019s the first thing they teach you.\u201d I\u2019m showing off. I guess I love that quote so much too. It\u2019s a great quote. Encapsulates so many different flavors, right? It\u2019s like don\u2019t doubt yourself. The real meaning here is you know the answer. You may be too scared, too embarrassed, too unprepared to sort of embrace the fact that you know the answer, but you know the answer. So let\u2019s not mess around. You know the answer.<\/p>\n<p class=\"wp-block-paragraph\">So that\u2019s layer one. Layer two is, make a decision already. Layer three is, even if it\u2019s unpleasant, you\u2019re going to have to do it anyway so don\u2019t delay. There\u2019s just like so many flavors of the same idea over and over again, encapsulated beautifully in just a few words. And so I think it\u2019s a great, succinct line. The other thing, I\u2019m a huge fan of studying leadership.<\/p>\n<p class=\"wp-block-paragraph\">Fan of leadership sounded weird. So I love leadership related lessons, and there are two movies where leadership I think is \u2014 I\u2019m sure there are more than two, but like two of the movies that I fall back on for leadership content is <em>Ronin<\/em> and <em>Seven Samurai<\/em>. And <em>Seven Samurai<\/em> is hard to quote because it\u2019s in Japanese, and you quote a translation, unless you\u2019re a native speaker, which I\u2019m not. But <em>Ronin<\/em> is in English and so it\u2019s great to quote. There\u2019s a lot of other great lines, but that\u2019s the best one.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>And one of the layers of explanation that you added to it, which I ended up applying, it made it very concrete for me, which I think you\u2019ve already done, but it was, \u201cWhen you aren\u2019t sure\u2026\u201d I\u2019m quoting from what you put in the book here is, \u201cWhen you aren\u2019t sure about a key employee or a co-founder, odds are exceedingly low your mind will be changed for the better.\u201d And the way I translated that for myself and I kept thinking of this, and I modified it slightly for myself. If there is any doubt, there is no doubt, just to say that if you are analytically trying to convince yourself of something that doesn\u2019t feel right, you have to cross-examine that \u201cintuition\u201d sometimes, but chances are you know the answer, particularly, at least in my experience with employees and hires. It\u2019s always, \u201cI should have done that a lot sooner,\u201d at least in my very limited experience, you have infinitely more experience with that. So thank you for that.\u00a0<\/p>\n<p class=\"wp-block-paragraph\">And on the Japanophile angle of things, having lived there, I\u2019m still very close to my host family who I stayed with when I was 15. I\u2019m no longer 15, I think some people will realize, but I was wondering, have you ever seen the movie <em>Paprika<\/em>? This is an old anime. It\u2019s from 2006, I believe, and if you haven\u2019t, it might be interesting.<\/p>\n<p class=\"wp-block-paragraph\">It will be not too much of a spoiler because there\u2019s so much around it, but here\u2019s the basic premise. \u201cPsychiatrists invent a device called the DC Mini that allows therapists to enter and record patients\u2019 dreams and then when the prototypes are stolen by an unknown dream terrorist, A, B, and C starts to happen.\u201d<\/p>\n<p class=\"wp-block-paragraph\">What\u2019s crazy about this is that there are actually researchers in Kyoto, in Japan, who have been using fMRI and waking dream subjects to try to use machine learning to then correlate brain activity to content. And they\u2019ve made some surprising progress with being able to do that. It\u2019s still very, very low resolution, but I don\u2019t know how far away we are from being able to do something like is depicted in <em>Paprika<\/em>, which is pretty crazy.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>I used to be a voracious consumer of both manga and anime and it turns out that time is still a zero-sum game for most things. So I\u2019ve drifted off my weekly supply of Japanese content production, but I will definitely make room for that one. The thing with fMRI and brain modeling, at least last I looked and before I sort of picked to do the thing that I\u2019m doing now with Affirm, I actually looked pretty seriously into \u2014 I\u2019m a huge sort of a closet fan of brain computer interface and all sort of surrounding ideas and opportunities.<\/p>\n<p class=\"wp-block-paragraph\">So I\u2019ve looked on and off at fMRI and all the other sort of stuff in the domain, and it just seems that your cranium is too dense. It\u2019s hard to get signal other than like very superficial connectivity from \u2014 and you have to like shave your head, which you\u2019ve done, but \u2014\u00a0<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>Yeah, I faced that one.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>I\u2019m not yet prepared. And of course you have to experiment on yourself. Otherwise, what\u2019s the point? But I\u2019m actually pretty excited about some of the newer things happening in brain computer interface, specifically in things like ultrasound, because I think we\u2019re finally looking at \u2014 penetrating is a scary term. I don\u2019t mean that like physically penetrating, but getting into a few inches into your brain versus just scanning the current of the top of the skull is exciting.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>Yeah, for sure. And looking at neuromodulation, things like focused ultrasound could hit, say, the nucleus accumbens for various substance abuse issues or addiction issues and so on. That\u2019s pretty exciting.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>That is definitely front and center of a lot of really cool research. I feel like we\u2019re hanging around within the same \u2014 pseudoscientific also sounds wrong, but probably hanging out in the same circles.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>Yeah. So I want to actually stay on the fiction thread for a minute because I was actually hanging out with one of our, I suppose, many overlapping connections, Luke Nosek and I asked him what I should ask you since you guys go way, way, way back. And here\u2019s a question. So this is from him. Well, first of all, I mean, obviously he\u2019s a huge fan. Oh, man, so many early memories. I miss working with him, but here\u2019s the question. Something I always wondered is that we all had <em>Cryptonomicon<\/em> as required reading. So I want you to explain that. I love that book. Went to the financial crypto conference, Max wanted to use cryptography to make a new money system.<\/p>\n<p class=\"wp-block-paragraph\">How close were we to really solving the same problem as the Bitcoin algorithm, or something along those lines? So maybe you could just provide some backdrop here for people who have absolutely no context to put this together.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>So that was one of the weirder dual track, like, am I in a dream? Is this a simulation? Experiences of my life. So full context, so Luke and I were classmates. I think he was ahead of me by a year in school, but we were at University of Illinois together and worked on a couple of failed startups together there. So we go way back. We\u2019re really close friends.<\/p>\n<p class=\"wp-block-paragraph\">And as we all made our way to Silicon Valley, I hung around campus because I actually really wanted to do research in cryptography, which back then crypto meant cryptography, not cryptocurrency, but I\u2019ve always thought that there was interesting opportunities in currency to be invented, powered by cryptography. So I was obsessed with things like David Chaum\u2019s work in anonymizing signatures and DigiCash was a thing back in prehistoric times \u2014\u00a0<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>And in prehistoric times, like what year, roughly?<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>I graduated U of I in 1997, DigiCash, which was the granddaddy of all cryptocurrencies, I hope I\u2019m not offending anyone\u2019s prior art, but I believe it was probably the very first attempt to make a real digital currency using cryptography. I believe it went bankrupt in the summer of \u201998, the year I moved to Silicon Valley. I actually went to the \u201cpouring one out on the curb party\u201d held on, kind of somewhat less explicably, one of the picnic grounds at Stanford University, but I just happened to be there.<\/p>\n<p class=\"wp-block-paragraph\">And it was actually a really good lesson. I sort of took that away with me to PayPal where there was a bunch of people, some people you know today, people who are very active in cryptocurrencies now, but also just like interesting famous people, famous today, they were all very young back then, and the conversation was around this idea like how the world is not ready for this yet, like the DigiCash and digital currencies, like people aren\u2019t ready.<\/p>\n<p class=\"wp-block-paragraph\">In \u201998, this is like 10 years before the Bitcoin paper, so I\u2019m sure they were right, but the conversation was really around how it\u2019s obviously the right thing to do, the right way to do it and people just don\u2019t get it yet. And as a sort of naive, freshly minted computer science graduate, I was like, \u201cWell, or the user interface sucks.\u201d It\u2019s really hard to have this very, very slow RSA computation happening on your crappy laptop if you\u2019re trying to pay for a cup of coffee. It\u2019s just too slow. And people are like, \u201cAh, heathen, you don\u2019t understand what you\u2019re talking about. No time too long to wait for a digital signature, non-repudiation.\u201d<\/p>\n<p class=\"wp-block-paragraph\">Okay, great, but seriously, I just want a cup of coffee. So it was kind of an early moment like, I feel like some of these things are not like the others.<\/p>\n<p class=\"wp-block-paragraph\">Anyway, but I had literally within days of that event, I met Peter Thiel at Stanford. He was giving a lecture. I was hanging around Stanford campus. Luke was actually the connective tissue. He knew Peter and he went to school with me, and so he was kind of like, \u201cOh, yeah, you guys should know each other. This was great that you ran into one another.\u201d So the origins of PayPal story were literally being made that summer. And I was still like, \u201cSure, I\u2019m going to start a company in Silicon Valley doing something, I don\u2019t know what,\u201d but I was still going to scientific conferences. So there was this one conference called Financial Cryptography. It was held in Anguilla, which is kind of a small island off sort of a British West Indies, and there\u2019s all sorts of interesting characters, who probably deserve its podcast one day, but it\u2019s an interesting, hilarious, bizarre story.<\/p>\n<p class=\"wp-block-paragraph\">I\u2019m 99 percent confident whoever Satoshi is was probably going to the same conference at the same time as we were. But Luke and I were there and then another year Peter and I were there, and after PayPal was already a thing, I presented something basically saying, \u201cHey, so we built this thing. It has a great user interface. And I was there when DigiCash failed and I think it failed because of user interface.\u201d And this was now a couple of years into PayPal and we were definitely doing well, and DigiCash was definitely dead and people were in the audience going like, \u201cBoo, you totally don\u2019t get it.\u201d And I\u2019m like, \u201cOkay, clearly maybe there\u2019s a reason why we\u2019re succeeding.\u201d<\/p>\n<p class=\"wp-block-paragraph\">Anyway, as we were doing all this stuff, Neal Stephenson publishes the first 100 pages of <em>Cryptonomicon<\/em>. And so as we\u2019re coding and I\u2019m literally coding 24\/7, steam comes out of my ears every day because I don\u2019t eat, I don\u2019t sleep.<\/p>\n<p class=\"wp-block-paragraph\">The six of us are just in the office together, and three of us are basically just typing code as quickly as we can because we have this thing we have to build. And the only thing we take breaks for is we\u2019re trying to read <em>Cryptonomicon<\/em> and the more we read, the more we\u2019re like, \u201cWe think he\u2019s writing about us.\u201d The first few chapters of <em>Cryptonomicon<\/em> is like this development of digital currency using cryptography, and he\u2019s like literally talking about, I think he actually references DigiCash and he\u2019s referencing user interface sucks and somebody needs to build something more user-friendly. So we\u2019re like, \u201cAm I in a dream? Is this real?\u201d<\/p>\n<p class=\"wp-block-paragraph\">I remember sitting next to Russ, one of our earliest engineers who I also went to college with us, also another Luke Nosek friend, and I\u2019m like, \u201cIf we didn\u2019t know any better, this is all just like a big brain and a bad experiment. We just don\u2019t know whose brain it is because it\u2019s being described to us in a book that\u2019s being published online.\u201d And then we ran out of pages and it wasn\u2019t published for a little while longer. Like, \u201cHow will we know what to build next? We don\u2019t have the book anymore.\u201d That\u2019s like the extended <em>Cryptonomicon<\/em> story.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>Wow. And for folks who have never heard of this book, it\u2019s an incredible read. I mean, it\u2019s in retrospect, I suppose quaint in some ways, but so prescient in so many other ways, just phenomenal. I remember ripping through that book and like all Neal Stephenson books, it\u2019s like 5,000 pages long.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>This one is only 4,000. It\u2019s a great book.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>It\u2019s so good. It is so good.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>My college life was shaped by <em>Snow Crash<\/em>, probably the thing that really put him on the map. I read that, there was like a dog-eared version of it hanging around one of the offices that I sort of hung out in college and I was like, \u201cThis is the most amazing thing ever.\u201d This book sort of shaped my, at least software engineering life. And then <em>Cryptonomicon<\/em> was the next one. I was like, \u201cAll I need to do is just read more Neal Stephenson and he\u2019ll show me the way.\u201d<\/p>\n<p class=\"wp-block-paragraph\">There were some really long books after, which sort of were quite challenging to get through, but then we got to <em>Reamde<\/em>, which was another gift. So I\u2019m reviewing my preferences here.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>Yeah, he\u2019s like the digital Nostradamus in the world of fiction.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>Totally.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong><em>Snow Crash<\/em>, for people who also are not familiar, is where the term, I believe it\u2019s where the term \u201cmetaverse\u201d was first coined.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>Yep. Exactly.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>And those Boston Dynamics, I think that\u2019s the company with the cute\/terrifying, possibly soon-to-be-weaponized robotic dogs, go check out <em>Snow Crash<\/em> there in that book.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>Yeah. <em>Snow Crash<\/em> basically presented an alternative to <em>Neuromancer<\/em>. <em>Neuromancer<\/em> was this dark, dystopian \u2014 also, by the way, first book I read when I came to the US \u2014\u00a0<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong><em>Neuromancer<\/em>?<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>Yeah. So two things. So actually this is extremely \u2014 are we in a simulation? So I come to the US July 16th, 1991, six weeks, I think, before Soviet Union fails. But I leave Soviet Union and I come into this dream land of America, and then six weeks later my passport is a passport that doesn\u2019t have a country anymore.<\/p>\n<p class=\"wp-block-paragraph\">So I become a man with no state, and et cetera, et cetera. Makes for an interesting travel existence, but I\u2019m like an ultra, ultra nerd, and I was like the king of the nerds in my prior life, and this is the summer so I don\u2019t know how and where I\u2019m going to find my people. But like six weeks go by, Soviet Union fails and I start a public high school in Chicago. And I\u2019m sort of like casting around from my people and I run into these guys who are still really good friends of mine and they\u2019re like, \u201cOh, you\u2019re one of us. We have a word for this. You\u2019re a nerd. It\u2019s great. You like science fiction? Great. You love science fiction. Have you read <em>Neuromancer<\/em>? Have you seen <em>Akira<\/em>?\u201d<\/p>\n<p class=\"wp-block-paragraph\">And I\u2019m like, \u201cNo, it hasn\u2019t made it to Soviet Union yet.\u201d I was fluent in English. It was not a difficult conversation to have, but they were like, \u201cOkay, here\u2019s a VHS of <em>Akira<\/em>, here\u2019s a copy of <em>Neuromancer<\/em>, go home and don\u2019t come back until you\u2019ve been completely filled with these things.\u201d<\/p>\n<p class=\"wp-block-paragraph\">And I was like, \u201cOkay, one, these are going to be my friends for life,\u201d which turned out to be true. It\u2019s been 30 odd years and we\u2019re still talking to each other every day, and it\u2019s like the beginnings of a complete different science fiction consumption experience. That said, for the next few years I was like, <em>Neuromancer<\/em> and everything that came after <em>Neuromancer<\/em> is the dark, sort of plug your brain in and future, and <em>Snow Crash<\/em> offers this like hilarious, completely different consumerist, satirical version of the plug-your-brain-in, versus this like dark corporations rule the world, ninjas in skin suits and like kill you while you\u2019re plugged into a deck trying to hack your way into some corporations.<\/p>\n<p class=\"wp-block-paragraph\">Anyway, but if you\u2019re like walking me down the memory lane, some fun recesses.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>Well, there are a few pieces of commentary on it. Number one, you\u2019ve got to watch <em>Paprika<\/em>. This is \u2014 it is very adorable in its attempt manually to do what we could do with CGI and so on now, but it is all the more impressive for what it is able to accomplish with hand-drawn cells.<\/p>\n<p class=\"wp-block-paragraph\">I mean, it\u2019s just bananas. So it\u2019s worth checking out. <em>Neuromancer<\/em> also, and I believe, and I\u2019m not alone in this, that sci-fi is a great place to go looking for the future, right? But it\u2019s also a great place to go looking for philosophy.<\/p>\n<p class=\"wp-block-paragraph\">So I wanted to share a couple things from William Gibson, and these are the kind of quotes that will stick with you. \u201cWhen the past is always with you, it may as well be the present. And if it is the present, it will be the future as well.\u201d Noodle on that for a minute.<\/p>\n<p class=\"wp-block-paragraph\">And I\u2019m going to get this paraphrase wrong, but I\u2019m going to get it, as they say in Silicon Valley, sort of directionally correct, which is,\u201dThe future is already here, it\u2019s just not evenly distributed,\u201d right? Something along those lines.<\/p>\n<p class=\"wp-block-paragraph\">In any case, I\u2019m getting off track. You probably weren\u2019t anticipating, nor was I, that this was going to be like a roll call of fiction, but I want to come back to something that you had in <em>Tribe of Mentors<\/em>, and it\u2019s related to books. I asked you what book or books you\u2019ve given the most as a gift and why, and on that I\u2019ve still not read, I\u2019m very embarrassed to say this, is <em>The Master and Margarita<\/em>.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>You\u2019re missing out.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>\u2026 hoping that you\u2026 Yeah. So this is now on my to-do-list. I\u2019m going to let you fill in the blanks here, but you said, \u201cI usually buy M&amp;M,\u201d which even though literally five lines above it, it says, \u201c<em>The Master and Margarita<\/em>.\u201d I was like, M&amp;Ms in batches of five? But you give it as gifts to new friends.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>I do.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>You always have copies on your desk at work in case someone wants to borrow one. Why? What makes this book so special? Who\u2019s the author? What\u2019s the background?<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>It\u2019s a great book. It is well translated by a couple of different translator teams. So you can almost not go wrong buying one of the last three translations. There\u2019s about six that I remember exist in English anyway. I would not bother with the first three, because \u2014\u00a0<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>One is Pevear, I\u2019m not sure I\u2019m pronouncing-<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>Pevear Volokhonsky is the canonical great translation into English. The book is actually in Russian originally. There\u2019s now a new one, but Pevear Volokhonsky is a fantastic, very, very, very good translation. Anyway, it was written by Mikhail Bulgakov, who is arguably the greatest Russian language writer of the 20th century in my biased opinion.<\/p>\n<p class=\"wp-block-paragraph\">There\u2019s a lot of great Russian language writers, so it\u2019s a fish in a barrel type situation, like who\u2019s a great Russian author. And there\u2019s some fantastic science fiction Russian authors incidentally, but he wrote many books and all of them are really good. The premise for <em>Master and Margarita<\/em> is \u2014 so it\u2019s set in kind of an early 1920s Moscow. Soviet Revolution happened. The Russian Civil War ended. The place is now socialist and is sort of slipping into the socialist bureaucracy building mode, and yet it\u2019s a socialist paradise in the making.<\/p>\n<p class=\"wp-block-paragraph\">And so The Devil, like the Prince of Darkness, visits socialist Moscow in the summer of 1925, let\u2019s say, with a coterie of characters, like from what you would expect The Devil to hang out with, and wreaks absolute havoc on the socialist paradise.<\/p>\n<p class=\"wp-block-paragraph\">So first of all, it\u2019s a book within a book, which is one of my favorite plot devices. The main character, the eponymous Master, is a writer who wrote a book about the last days of Christ. It\u2019s a book about crucifixion and it\u2019s beautiful. A lot of it is in the book. It\u2019s interspersed with the chapters of the original, and obviously Bulgakov wrote both, but he\u2019s very much referencing himself.<\/p>\n<p class=\"wp-block-paragraph\">So he was in Moscow during the revolution and on, and very quickly ran afoul of Stalin and was also, because he was such a prolific and brilliant author, was Stalin\u2019s favorite author, was persecuted, ultimately asked for permission to leave the country because he couldn\u2019t be himself, he couldn\u2019t write. Stalin apparently permitted it, but then he died before this could happen. So this is a little autobiographical story of the writer himself. It\u2019s a story of The Devil making a mockery of socialist paradise.<\/p>\n<p class=\"wp-block-paragraph\">It\u2019s a story of Christ and his last days on Earth told by an amazing writer. Both the author of the book and the book\u2019s author, also known as The Master, it would take many hours and at some point I\u2019d be like, \u201cWell, you should just go read the book because it\u2019s so amazing.\u201d<\/p>\n<p class=\"wp-block-paragraph\">But it is one of the best portrayals, certainly the earliest brilliant portrayal of Homo Sovieticus, the what happens to the human mind when exposed to rampant socialism. And it is funny as hell because, having grown up there, spent 16 years there, the insanity of living in a socialist paradise and yet you don\u2019t have enough to eat. It\u2019s tragic, obviously, but it\u2019s also very funny, and the book does it amazing justice and it\u2019s like super-duper supernatural, sort of science-fictiony in what\u2019s possible. There are flights, there are witches, there is a Devil Sabbath, there\u2019s all kinds of crazy shit that happens there. It\u2019s amazing.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>Something for everyone.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>It\u2019s an amazing book.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>And it\u2019s shorter than most Neal Stephenson books, is my impression \u2014\u00a0<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>It\u2019s like a quarter length or fifth of a short Neal Stephenson product. So it\u2019s definitely very accessible. It\u2019s also incidentally, not to overshare, it is the reason I am married to the woman I am.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>Okay. I\u2019m not going to let that pass. Yeah, please expand.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>We met completely randomly through a sheer accident and both were predisposed to be like, \u201cWho is this weird person? Why am I talking to whoever this girl or whoever this guy is?\u201d And then I thought she was quoting <em>Master and Margarita<\/em> and I was like, \u201cBefore I bound my way out of this conversation, I\u2019ve got to find out. It\u2019s my favorite book. It\u2019s always been my favorite book. How can I not\u2026\u201d So because I know the book as well as I do, because we\u2019re speaking in Russian, I quoted the next line and she\u2019s like, \u201cOh, my God, <em>Master and Margarita<\/em>. That\u2019s my favorite book.\u201d I\u2019m like, \u201cNo, it\u2019s my favorite book.\u201d And it\u2019s been 27 years and two children, and a very happy life together.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>Incredible. That\u2019s incredible.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>So it\u2019s a book that many things in my life are owed to. By the way, to give credit where it\u2019s due, she\u2019s the one who said, \u201cOh, my God, that is the best line I\u2019ve ever heard in a movie,\u201d referencing, \u201cWhenever there\u2019s doubt, there\u2019s no doubt.\u201d So she deserves full credit for this.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>Full circle. Oh, boy. Yeah. The brain in the vat question just keeps popping up. Let\u2019s actually talk about your wife for a second and your relationship for a second, because I was texting with another mutual connection, Sami Inkinen, who is also an absolute monster endurance fan, and we were texting back and forth about that.<\/p>\n<p class=\"wp-block-paragraph\">I was chatting with him, and I know you\u2019re an investor in Virta Health, which people should check out also. Let me just pull it up here because he shot me over a couple of different options for questions that I asked him the same thing. And I\u2019ll give you a sampling and then I\u2019ll indicate the one that most caught my attention.<\/p>\n<p class=\"wp-block-paragraph\">So I asked him about what it\u2019s like to cycle with you and he said, \u201cWell, if you\u2019re going to be riding with him, just know he pretty much goes all out always for the first 90 minutes, no matter who he\u2019s riding with. So enjoy.\u201d And I was like, I\u2019m not going to be riding with him. Don\u2019t worry.\u201d And then he had a number of questions. Grew up a super intense engineer, now a well-rounded CEO leader. What did it take to go from one to the other?<\/p>\n<p class=\"wp-block-paragraph\">Cycling, why did he go fully all in a few years back? Which is actually kind of an interesting question because I know that\u2019s been part of your life really, really consistently on a near daily basis for much longer than a few years. But third, this is the one that caught my attention. He\u2019s essentially working with his wife on sci-fi, his family office VC. What\u2019s his advice after years of experience regarding working with a spouse? So that\u2019s the one that I wanted to hit next.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>Totally. You\u2019ve got to marry right, otherwise it\u2019s hard to work \u2014\u00a0<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>Yeah. Well, what are your thoughts on marrying right? I mean, do you have thoughts on that?<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>I do. Actually, I\u2019ve spent a lot of time thinking \u2014 I spend a lot of time thinking about all kinds of random stuff and this is no exception. The line \u201cmarry up\u201d is a line people use all the time and I think that\u2019s cute. And I agree with it, I just think it deserves unpacking.<\/p>\n<p class=\"wp-block-paragraph\">I was asking myself actually a question like, why is our relationship as good as it is? And it is really good. And is there anything to learn about co-founding companies? Like you\u2019re co-founding a family when you marry someone, you get together with someone, and are there parallels? And I was contemplating all this stuff. And I sort of realized that I\u2019ve had many co-founders over the years and some were amazing relationships and others didn\u2019t work out. And it\u2019s always tempting to sort of blame yourself, but you obviously have to examine it through the lens of like, what fell apart as a relationship between two co-founders.<\/p>\n<p class=\"wp-block-paragraph\">And I realized that the secret for my marriage is I\u2019m still trying to impress this girl. Every day I roll out of bed thinking like, \u201cOne, how did I get this?\u201d This is definitely better than I should have gotten. So clearly, I\u2019ve got to work on this. I can\u2019t let her find out that she married down. And so, the attempt to impress your mate on a daily basis is the secret to the best marriage. And I think that the good ones are where both sides are secretly thinking, \u201cI definitely lucked out. This is so much better than I should have gotten.\u201d And so, if the feeling is mutual, you\u2019re going to go very far together, just constantly trying to grow and come up with new tricks, new ideas, new \u2014 you don\u2019t let yourself be stale because you\u2019re watching the person next to you grow and become more well-rounded, more intelligent, more successful, etc, etc. So, that\u2019s the secret to our relationship.<\/p>\n<p class=\"wp-block-paragraph\">And everything I\u2019ve accomplished in my life since we\u2019ve met has been modulated by her. We keep on referring to this her, so her name is Nellie. I think, I suspect, many of our mutual connections refer to her as the actual reason behind anything that I\u2019ve done successfully in my life. So, and it is true. She\u2019s been extraordinary at both calling my BS out when there is some, and pushing me at the things like whenever there\u2019s doubt, there\u2019s no doubt situation, saying like, \u201cHey, trust your gut, make a decision. This isn\u2019t the right person. This isn\u2019t the right idea, etc.\u201d And so on.<\/p>\n<p class=\"wp-block-paragraph\">One fun fact, after PayPal, so we met in a very early days at PayPal. So that same, the summer of \u201998 is when the seeds were in the ground for PayPal, early \u201999 is when we started. My wife and I met in mid \u201999, so exactly a year after I moved to Silicon Valley. And so, she witnessed the entire PayPal saga first, from the front row of seat. After PayPal, anything but financial services, I\u2019m going to go build some other stuff, but I can\u2019t allow my sophomore act to be in the shadow of my freshman act. And she sort of said, \u201cDo whatever you want. Obviously you have a right to come up with anything, but I\u2019m just going to tell you, man, that\u2019s clearly what you\u2019re meant for.\u201d And so, \u201cYou go on.\u201d So seven years later after I\u2019ve been meandering through the desert, she\u2019s like, \u201cI think I said it before, but I just want you to know \u2014<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss:<\/strong> Still true.\u00a0<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin:<\/strong> \u2014 maybe you should go do what you\u2019re good at.\u201d<\/p>\n<p class=\"wp-block-paragraph\">And Affirm is very much a product of that conversation. I was like, \u201cI think she\u2019s right. I think I\u2019m a one trick pony.\u201d And the trick is a good trick though, so here it is. Anyway, but trying to impress your mate, trying to impress your co-founder every day, because you can see the other person progressing in front of you and get better and smarter and more intimidating by way of just being so much sharper, so much more interesting than they were when you met is a great motivator. It keeps you on your toes, makes you work harder at improving yourself.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>And on top of that, what have you learned about working with a spouse or collaborating with a spouse? Because sometimes spouses can be often very well-matched and have a dynamic like the dynamic you describe, but they have some compartmentalization or separation. And I\u2019ve met so many friends and even have some neighbors where they\u2019ve just quote, unquote \u201cattempted\u201d to retire, sort of like a failed retirement. And then one neighbor was describing this to me, his wife is also very active, has got tons of big projects she\u2019s working on and he doesn\u2019t know what to do with himself. So he\u2019d like sit down at the breakfast table while she\u2019s on her laptop and he\u2019d be like, \u201cSo what are you up to today?\u201d And she took off her glasses very slowly and she said, \u201cI\u2019m not used to checking in with you every morning. You need to get a job.\u201d So working together is a very different thing when you have that and maybe I\u2019m overstating the extent to which you guys sort of collaborate in that way, but any thoughts or recommendations for people who are entering that type of relationship with a spouse?<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>It could definitely get hairy, for lack of a better term, if you\u2019re not thoughtful about it. So you have to think through, you have to talk through what makes sense, what doesn\u2019t. We\u2019re well-matched because I am quite technical, have lots of interest in sort of the technical depths of matters that we work on together, or she works on, I work on, et cetera. And she has an extremely strong finance background and understands business models and kind of just a philosopher of business these days. And so our conversations are very rarely about checking each other\u2019s work, which is where I think you could really end up with like, \u201cWhy are you checking my homework?\u201d<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>Nitpicking. Micromanaging.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>Don\u2019t micromanage what I\u2019m good at. And she also, she\u2019s an incredible empath. So whenever, and I\u2019m not. I frequently be like, \u201cSo I\u2019m dealing with this in my day job. Why is this person unhappy? Can you explain it to me?\u201d And she\u2019s incredibly good at that. And so I think because we are such kind of non-overlapping areas of strength, we end up being very complementary. If anything, we tend to be like, \u201cWait a second, we\u2019re on your stuff. Why are you bouncing to mine? We need to finish that thread.\u201d Both of us have pretty active professional lives and so we are constantly discussing them, but we don\u2019t I think ever run into or step on each other\u2019s toes.<\/p>\n<p class=\"wp-block-paragraph\">She doesn\u2019t ask me, \u201cWhat\u2019s your token budget?\u201d Anymore than I ask her, \u201cHow did you make this hiring decision?\u201d I know she\u2019s very good at \u2014 or like, \u201cHow did you decide that this was a bad investment opportunity?\u201d I\u2019m pretty sure she looked at it with all the tools she\u2019s gotten, they\u2019re better than mine. But you have to be prepared to communicate and it does not hurt to be direct with one another. So you have to be able to take on directness without hurt feelings. But a great one-liner, another gift from my wife, she didn\u2019t come up with it, but she read it somewhere and she\u2019s like, \u201cHere\u2019s a new model for our family unit: don\u2019t go to bed angry. Stay up and fight.\u201d<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>So you guys put that into practice?<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>We don\u2019t fight too often, but we definitely don\u2019t let things fester. For a few, prevent us from hashing out whatever it is our difference are at the moment, but yeah, we try very hard not to let things fester and that works really well. If you\u2019re going to overlap familialy and professionally, you\u2019d better deal with conflict or disagreement quickly because you\u2019re accruing areas of negative overlap faster than most people do. You\u2019re like, \u201cI hate the way you chew, but I love you all the other ways.\u201d We\u2019ve got to talk about that, but it\u2019s not an important thing. It\u2019s like, \u201cI hate the way you chew and by the way, you\u2019ve belittled me by checking on my token budget.\u201d You\u2019re compounding frustrations and marriages fail because people just don\u2019t say out loud, \u201cHere\u2019s the thing that I\u2019m not sure I\u2019m prepared to put up with.\u201d Just got to stay up and fight, get it out there.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>Stay up and fight. It\u2019ll be the title of this podcast, \u201cMax Levchin<strong>: <\/strong>Stay Up and Fight.\u201d You mentioned earlier, time is the zero sum game. I want to talk about obsession and analysis and tracking for a second because ultimately the question is, how do you choose what to track? And this is pulling from a <em>Men\u2019s Journal<\/em> piece that came out in 2018. So some of it is dated, but, \u201cToday, if you can name it, Levchin has quantified it. Food? He spent weeks using his iPhone to photograph all of his meals and snacks and later gauge and nutritional values.\u201d Sidebar from Tim, I did that too. I still can\u2019t believe that the Dexcom app doesn\u2019t give you some estimate of caloric content or macros. It\u2019s just like, \u201cYou ate chicken.\u201d I\u2019m like, \u201cThat\u2019s not helpful.\u201d<\/p>\n<p class=\"wp-block-paragraph\">Anyway, coming back to, \u201cSleep? As an overtaxed entrepreneur, as the parent of two children under the age of five, Levchin determined his minimum rest threshold by shaving five minutes off of each success of night. Interpersonal relations and time management? Levchin says he once spent a month grading every business and personal meeting on a scale of one to 10 on several metrics like usefulness, intellectual stimulation, and social stimulation.\u201d It goes on and on.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>It sounds like a weirdo, but I feel like, that\u2019s all true, man.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>So I\u2019ve done lots of this too. I\u2019m just curious how you have over time determined what to track and maybe what you\u2019re paying attention to outside of Affirm business metrics and things internal to Affirm, and we\u2019ll get to Affirm, but I\u2019m just wondering for yourself outside of that company professional context, how do you choose what to track?<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>I\u2019ve definitely gotten much better at deciding what matters, what doesn\u2019t. So when this article was written, I\u2019m sure no metric looked dumb, no metric looked superfluous. I was like, \u201cGreat. Counting the number of times I trimmed my fingernails, what if there\u2019s signal in that?\u201d As you age, you replace raw compute and willingness to engage in raw compute with pattern recognition and occlude paths that you don\u2019t need to travel down because you know there\u2019s nothing there. There\u2019s absolutely no value in tracking your fingernail clippings or rate they\u2019re off. So I\u2019ve become more focused on tracking sleep because there\u2019s more and more science showing that that\u2019s really important.<\/p>\n<p class=\"wp-block-paragraph\">Even that, I sort of used to obsess over a bunch of metrics and I think at this point the sort of reasonably cutting edge, and you know better than I do, I think these days resting heart rate and heart rate variability are the two really good anchors. If you keep one down, keep the other one up so long as \u2014 that predicts your recovery, predicts your intellectual capacity for the day really well. So I track that pretty obsessively. I try to stay in bed some right number of hours. I\u2019m a lot less obsessed with I don\u2019t need to sleep more than X, so better be bullet out of bed by X plus one second. I\u2019m also not precious about, \u201cYou know what? I don\u2019t feel like I need any more sleep. I\u2019m just going to go and tool around and do more stuff.\u201d So I\u2019ve relaxed a bunch on things that I found to be less impactful to my own life, but I have the benefit of spending a bunch of years obsessing over everything and deciding, \u201cWell, it doesn\u2019t seem to matter that much what I eat.\u201d For example.<\/p>\n<p class=\"wp-block-paragraph\">So for a long time I was obsessed with the exact sort of caloric and macro targets and then at some point I had to travel a lot more than I used to. And obviously it goes out the window because you can\u2019t bring your favorite yogurt with you everywhere you go. And so you end up like, \u201cWell, I\u2019m just going to have to have some fermented foods from the assortment available in this geography.\u201d And it turns out that basically your gut health is going to be okay so long as you\u2019re having enough fermented foods versus the fermented food you\u2019ve selected for yourself. So you relax some constraints and move on to spending less time thinking about them. I track sleep. I\u2019m still an obsessive cyclist so I track every metric you can imagine. I become more obsessive as a cyclist.<\/p>\n<p class=\"wp-block-paragraph\">Actually bothers me a little bit, but because I\u2019m unwilling to believe that I\u2019m ever going to age properly, I keep on looking for marginal gains by obsessing over the exact crank length adjustments I can put myself through just to return some of your marginal watts that I lose with age. I\u2019ve gone from believing that all you need is cycling to widening my physical training routine too. So it\u2019s maybe slightly more brain allocated to like what\u2019s the right day to lift heavy weights versus the right day to not do that.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>I\u2019m curious when, and I\u2019ve never asked you this before, but when cycling entered the picture, because in doing some research for this conversation, well, I can just pull, this is from I believe an alumni magazine, but behind the curtain of Soviet-era Ukraine, and then your full name, which I cannot pronounce, is born to a family of physicists. As a child, you struggled to overcome life-threatening respiratory diseases and your parents are told you won\u2019t live past childhood and with your mother\u2019s urging, a determined young Max begins playing the clarinet to build lung capacity. So I mean, that doesn\u2019t seem \u2014\u00a0<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>It\u2019s a true story.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>To have the makings of a serious cyclist, when did you embrace cycling and what does it give you also?<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>So there\u2019s an interesting origin story that actually kind of intertwines Ukraine and clarinet and everything. So I did have some fairly gnarly respiratory stuff when I was a kid and I think my parents probably were scared into kind of throwing everything and the kitchen sink into it. As a nice Jewish boy from Ukraine, I probably should have played the violin, but clarinet is a reasonable close second. They\u2019re like, \u201cOh, but lung capacity, great, let\u2019s do that.\u201d So that\u2019s how I got into clarinet. It was literally something that will feed the stereotype, but also help with the lung capacity development. And so I think my VO2 max at the time must have been in the single digits or something because I remember just trying to open up my lungs and breathe in and it didn\u2019t work.<\/p>\n<p class=\"wp-block-paragraph\">And then everything else I do like, \u201cOh, well, I can just obsess in measuring it.\u201d And VO2 max is definitely not a thing Soviet Ukraine really measured, but they did have the basic approximation of blow into a tube and see how far it can push the ball, like all the physics equivalence of lung capacity measurements. And so I was already looking at quantify itself from a lung capacity perspective as like a seven-year-old kid or something. All of this while living in an apartment complex that overlooked Kiev\u2019s only outdoor velodrome.<\/p>\n<p class=\"wp-block-paragraph\">And so my platonic ideal of a manly man who was like a sports phenom was these dudes who would get on the boards of a Kyiv velodrome and just put their watts down and go for an hour or two just ripping through this thing. And I was like, wow, one day when I\u2019m not a scrawny little kid with a clarinet, I\u2019m going to be like that. So I used to sneak into the velodrome when it was closed and try to ride my bike there, except the crank would touch the wood boards. One of the worst accidents of my childhood was I had a giant wood splinter in my butt, because I crashed at the top of the velodrome trying to do loops and slid down. Of course, these weren\u2019t well finished boards and it was outdoors so the elements rained on it.<\/p>\n<p class=\"wp-block-paragraph\">Anyway, probably not PG-13 after this, but anyway, so I always thought like cycling, I didn\u2019t grow up with a ton of sport in my life. Like, soccer\u2019s prevalent obviously in Eastern Europe, but cycling was right there on display every day. If I wanted to see someone who looked just full of life and vigor, I would see a cyclist. So I always rode a bike as a kid and always rode a bike in college. And as I got into busier and busier where this notion of like, how do you stay sane became an important part of the consideration. If you\u2019re going to work for three days straight without sleep, you\u2019ve got to offset it somehow and you can\u2019t just sleep it off. You also need to do something to your body versus your brain.<\/p>\n<p class=\"wp-block-paragraph\">I sort of naturally looked at cycling and then back to Nellie, when I left PayPal after we got acquired by eBay, I definitely hit a very low point where there\u2019s nothing going on in my life that was worth staying up all night for. And she pointed out that I have this amazing bike hanging on the wall that I had since, I think before we met. She\u2019s like, \u201cWhy don\u2019t you get back on the bike and see if you can find joy in that?\u201d And then she knew my stories of rolling around the Kyiv velodrome. And so I got on a bike and it was one of these moments where I went for a ride with a bunch of people and they were all like very serious \u201croad jewelry,\u201d as the saying goes.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>I\u2019ve never heard that.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>If you\u2019re buying more of a bike than you deserve to ride, that\u2019s road jewelry you\u2019ve got there. So I was on a beater bike, relatively speaking. I think I brought it from college, actually. And I sort of dropped everybody on the first hill and I was like, \u201cOh, yeah, I know how to ride a bike. I have big lungs. That clarinet really paid off.\u201d And so that was like, I should really invest some time into getting better at this thing. And that\u2019s how I got into it. But I am exactly what they call a hammerhead. So if I see a road, I can\u2019t not go fast or at least try to go fast.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>What does it give you in terms of dividends just on an ongoing basis?<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>A couple of different things. So it\u2019s definitely, it\u2019s great. I mean, it\u2019s a low impact sport so you can ride a bike for six hours and no part of your body will be like in absolute shreds the day after if you at least somewhat know what you\u2019re doing. So it\u2019s a great, just if you have the time and if you\u2019re interested in it, it\u2019s not a self-destructive sport, which some sports are more and others are less. This is definitely one of the less self-destructive on the actual physiology. Part of why I like to go hard on the bike is it actually allows me at least to clear my head. It\u2019s one of the few times when I\u2019m not constantly playing with some work related concept or thinking through some feature ideas or whatever. It\u2019s a moment where everything gets tuned out and it\u2019s just me and the pain in the legs and you\u2019re telling yourself go harder or manage your energy, but there\u2019s not enough time or cycles left.<\/p>\n<p class=\"wp-block-paragraph\">And also, \u201cWhat if we went to this market now?\u201d So it\u2019s a moment to go into a pure moment of flushing the whatever\u2019s left in the head. And it does keep you healthy. It\u2019s a great way to stay alive and be healthy. And then more and more these days, it is a lifestyle sport of CEOs and leaders and people who sort of read the same kind of books. And it\u2019s another form of a community where if you don\u2019t have the time to join clubs and I\u2019m not a big foodie, I\u2019m not a big drinker. I don\u2019t have a ton of time for these protracted social events. I try not to go to too many conferences and yet I\u2019m human, I enjoy human company. And so riding a pack of people who are interested in similar things is another form of staying engaged.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>So I imagine that\u2019s a being near people, not a talking with people type of situation if you\u2019re going as hard as I suspect you\u2019re going, right?<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>Part of the trick is if you can still talk and they cannot, then you\u2019re doing it right. Cycling takes place over hours and so you can spend some time talking. There\u2019s also the, an important part of cycling culture is the coffee shop ride where you hammer to a coffee shop and then everybody falls in their chairs and gets their pinkies out and sips espresso. And I love coffee almost as much as I like bikes.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>If we have time, we\u2019ll come back to coffee, because I did dig into that in the research. Two other quotes that you gave for your potential billboard answers, you said if it were in Marin County, and I\u2019m going to mispronounce this so you can correct me, but it\u2019s either Jens or Jens Voigt, I\u2019m not sure, but you can correct me in a second. So two quotes from him, legendary cyclist. Number one, \u201cWhen my legs hurt, I say, \u2018Shut up legs, do what I tell you to do.\u2019\u201d That\u2019s the first. The second is, \u201cIf it hurts me, it must hurt the other ones twice as much.\u201d That\u2019s a great one. It\u2019s so applicable in so many contexts. Am I saying that name correctly? Probably not.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>I think it\u2019s Jens.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>Jens.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>I think he\u2019s East German, Jens Voigt.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>Voigt. Okay, got it.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>One of my proudest moments on a bike is I rode with Jens a few years ago now, but he used to hang around Northern California. He has a lot of fans, actually. He\u2019s transcended the very specific sport of cycling into having a fan base worldwide because he\u2019s such a character. The, \u201cshut up legs\u201d I own multiple pieces of clothing with \u201cshut up legs\u201d that I did not personally produce. So he\u2019s famous for that line, but he\u2019s a very funny, he\u2019s now primarily a commentator by races, but he is a great embodiment of this culture of endurance, pain with a smile, if you will.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>Pain with a smile. Before we move on, because I do want to ask you a bunch about Affirm and broadly how things you\u2019ve done with Affirm reflect your thinking and ability to see things that others don\u2019t see perhaps. But before we get there, I wanted to come back to M&amp;M. This book we were discussing earlier and for people who were like, \u201cOh, yeah, I meant to write that down.\u201d <em>The Master and Margarita<\/em>. You wrote here, just to reiterate some of what you already said, \u201cIt\u2019s a fairly short novel, remarkable in its exceptional depth, exploring everything from fundamentals of Christian philosophy to the fantastical and hilarious satire of soul corrupting 20th century Soviet socialism.\u201d So I don\u2019t think I\u2019m \u2014\u00a0<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>My God, that\u2019s really well put.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>Yeah. I don\u2019t think I\u2019m alone in watching some of what\u2019s happening in the US and elsewhere with respect to this embrace of socialism or things that go by the name socialism, perhaps you could apply other labels and while capitalism is not a panacea for all things and there are plenty of warts and risks and, humans respond to incentives as someone who came here at 15 or 16, I would just love to hear you speak for a few minutes on what you\u2019re seeing and what your thoughts are.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>I\u2019m pretty worried. Not to sort of go all dark immediately, but I think people without the questionable benefit of growing up in the \u201ccollectivist paradise,\u201d to quote the current mayor of New York, don\u2019t understand just how corrupting it is. The ideas of socialism are amazing. Me for my fellow men and share and share alike and do the right thing because it\u2019s the right thing to do, not because there\u2019s a financial incentive to do it. All those things sound amazing. And so it\u2019s seductive, the idea of a worker\u2019s paradise without the greedy lenders, capitalists, bankers, all the sort of things we were fed as children or I was fed as a child in Soviet Union. At first blush, you\u2019re like, \u201cYeah, it makes sense. People who work hard should have more and people who are great, even though they\u2019re not capable of producing valuable things in society because they\u2019re good people, should have everything that I have, even though I\u2019m working harder than they are.\u201d And those things sound pretty good, but they inevitably require a bunch of structural change that just does not work thanks to human nature and many obvious things like it.<\/p>\n<p class=\"wp-block-paragraph\">For example, one of the greatest kind of mental images I have from growing up in Soviet Union is if you went to a government owned store and every store was, of course, owned by the government, you would very quickly notice that the people whose job was to sell you things from behind the counter were always very fat while everyone you knew in your life was always very skinny and you sort of like, \u201cThis doesn\u2019t make any sense. How do these people who happen to work in food stores are always really well-fed?\u201d It\u2019s like, \u201cWell, because they\u2019re stealing. They get access to the food.\u201d And it expands that notion of this idea of everybody just pools all the work product into one big pool and then someone\u2019s in charge of fairly distributing it to everyone who needs it.<\/p>\n<p class=\"wp-block-paragraph\">From each according to their abilities to each according to their need is kind of the socialist\/communist motto and it works great except people who are doing the actual redistribution get to keep a lot for themselves and doesn\u2019t matter how honest they begin that journey, by the time they get to real power, they become profoundly corrupt and steal and keep and redistribute primarily to themselves. And so that alone is just like an indictment of socialism that you cannot get around, but it gets worse because markets, free markets, capitalism, whatever term you want to use, inherently forces competition. If you believe you have a thing that you can sell at a lower price than the other guy, you get the market\u2019s attention, you get the business that\u2019s available to you because the thing is worth buying by someone, you\u2019re going to work on creating a margin for yourself by lowering the cost of production, finding efficiencies, finding some ways of making the thing cheaper for you or cheaper for the buyer so you can compete on price.<\/p>\n<p class=\"wp-block-paragraph\">So all those things cannot do not exist in socialism because it\u2019s all centrally planned. We\u2019re going to make this many widgets and then we\u2019re going to have someone redistribute them to all the right people full stop. And what happens is there\u2019s never the pressure to improve. And so you always make stuff at the government mandated cost and the government mandated price is what\u2019s being used to sell it. And so you have natural stagnation. You have a system that rewards graft, gives power to people who are most likely to become graft driven and prevents anyone else talented or otherwise from trying to innovate and improve the efficiency of the system itself. And so it just does not work.<\/p>\n<p class=\"wp-block-paragraph\">And the thing that worries me in the US and the world, this isn\u2019t unique to us here, is the headlines that make you feel like, \u201cWow, I would love to live in the world where everyone is fed and everyone gets more or less the baseline of good living.\u201d Is very compelling. It is easy to agree with. The recipe for that remains to be, the best recipe we know, the best recipe we\u2019ve discovered as humanity is capitalism, a force for constant creative destruction where you build the next thing better than the other guy. And yes, his business may be put out because your business thrives, but the beneficiary is the buyer or the user of the product, the buyer of the widget because you\u2019re constantly working to make the whole thing more efficient.<\/p>\n<p class=\"wp-block-paragraph\">If you eliminate the ability to, or you eliminate the need to create efficiencies, you just stagnate. And the death of Soviet Union was a surprise to exactly zero people because we knew, as people who lived there more than most, that nothing ever changed for the better. Everything was the same price, the government mandated price and we were still using phones that looked like they were made in 1950s and when I moved to the US, I was like, \u201cOh, you have buttons on your phones? That\u2019s amazing. We still do\u2026\u201d the clickety \u2013<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>The rotary.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>Yeah. And so anyway, so I can\u2019t say enough how the seductive story of socialism really appeals and I can understand why, but if I didn\u2019t have my day job, I\u2019d spend a lot of time screaming from every street corner, \u201cDon\u2019t fall for the trap. It\u2019s a sure fire way of getting to no progress at all.\u201d<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>So Affirm on some levels is a, I don\u2019t want to say response, but it\u2019s a solution that replaces potentially predatory practices and we\u2019re going to get to that, but I\u2019m wondering if there are, how you would explain the current apparent wellspring of attraction to, just to keep it simple, socialism in the United States. Are there structural or systemic problems that have contributed to that? Is it mostly sort of demagogues using whatever talking points they think they can leverage to attract votes, et cetera? What is the cocktail? What are the ingredients in the cocktail that are contributing to this current phenomenon in your mind?<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>I\u2019m confident I don\u2019t know every strand of this particular disease. So it\u2019s a complicated issue. I think it is definitely the case that the brochure looks great. The storytelling of, \u201cDo you know someone who\u2019s poor? Do you know someone who deserves better? Do you know someone who\u2019s been laid off?\u201d It is the case that capitalism can be profoundly unfair at least to an individual. As a system, as a way of improving the world, it works amazingly well. We\u2019ve not created anything better. But you get thrown off the bus if you build something that gets outmoded or out competed by another participant in the market and it can hurt. Definitely for the entrepreneur, it looks like failure, which we are wired to accept, but it still hurts. For a worker, it looks like being laid off, which could be catastrophic for a family. For people who sort of misinvested their money or something went wrong, it doesn\u2019t taste good. And so the idea of social safety net, the idea of welfare is natural. You hate seeing your fellow men and women starve or not do well.<\/p>\n<p class=\"wp-block-paragraph\">So I understand the definition of the problem and the notion of income inequality and all the things that we see in Silicon Valley firsthand is very real. It\u2019s not like, \u201cHow are you complaining?\u201d There are a lot of people who are not doing well and every new disruptive change from the industrial revolution to the AI revolution, there\u2019s always someone on the receiving end of the efficiency because their work is no longer required or their products or their ideas are no longer relevant. And socialism is a compelling story of how to protect those people, how to prevent them from suddenly being on the outskirts of society or worse.\u00a0<\/p>\n<p class=\"wp-block-paragraph\">And I think \u2014 there\u2019s definitely a lot to do to make sure we don\u2019t leave our fellow humans behind. I don\u2019t think, certainly my love of capitalism and free market does not obviate my humanity. I care about people just because I am also human and I see it as part of my job to ask the question, can we do better? Can we provide the social safety net for everyone? We\u2019re creating more and more efficiency, we\u2019re creating more and more value. There have to be ways of helping people who are thrown off the bus to make sure they don\u2019t end up in a gutter.<\/p>\n<p class=\"wp-block-paragraph\">So I happen to have some solutions that I love and solutions that I think are worthless. The idea of let\u2019s concentrate it all in the hands of the government, give a handful of people the right to redistribute it all and we\u2019ll do better doesn\u2019t work, and I lived to tell the tale. I do think that things like philanthropy is profoundly important and the more disruption we\u2019re going through as society, the more important philanthropy becomes. And I think in that sense, I\u2019m not an especially outwardly religious, but I think religion provides a really useful set of frameworks around how to think about it. Every organized religion has a version of what it means to be philanthropic and the older I get, the more I start respecting the thought that\u2019s been aggregated over the thousands of years that most religions existed. So I think that\u2019s super interesting and important and worth participating in.<\/p>\n<p class=\"wp-block-paragraph\">On the other side of it is I think capitalism, in particular, has created opportunities for products to develop where the optimizing up and to the right of the most profit at lowest cost ends up building products that are actually devolved from not just their economic platonic ideal, but societal ideal. And I don\u2019t think we have to compromise by saying, \u201cWell, you know what? I don\u2019t actually care that this is harmful to someone because it\u2019s the most profitable, market efficient thing to do.\u201d And my theory for a long time has been that you can build products, certainly in financial services that are optimal not just from the lens of most profitable but also most societally beneficial. And that\u2019s not uniformly distributed. There are plenty of products that look like predatory lending and all the other things or just make money because the underlying customer doesn\u2019t understand what\u2019s going on, doesn\u2019t have the capacity to deal with the complexity of the math involved.<\/p>\n<p class=\"wp-block-paragraph\">And Affirm is the answer to that question. In some ways what we are doing here is trying to say, \u201cLook, you can optimize a product beyond just making the most money.\u201d In fact, it\u2019s okay to make a little bit less money if you are able to create something that\u2019s societally more successful, more important because in the long-term, I think you will have retention that consumers will not go to a cheaper product or a product that is less profitable for its shareholders because it\u2019s so societally important. And so I am, to at least some extent, embracing the ideas of pro-social product and engineering. I just choose to do it strictly through the lens of capitalism.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>So I\u2019d like to go to early, early Affirm. And this is parallel to PayPal, which looking back at say early fundraising for PayPal, it wasn\u2019t exactly like every door at Sand Hill Road was opened with a red carpet. I mean, it was incredibly hard going. People were like, \u201cYeah, no way. Impossible. Not going to work.\u201d I mean, I\u2019ve had conversations with Reid Hoffman about this, just like, \u201cYeah, no, at every turn, no chance.\u201d And I mean, ultimately with Peter pulling from the hedge fund and stuff, I mean, it\u2019s a hilarious story and incredible.<\/p>\n<p class=\"wp-block-paragraph\">Affirm early on, similarly, it was not obvious. A lot of folks would be of the opinion, credit card\u2019s just fine, late fees too profitable. And what I\u2019m wondering, this applies elsewhere to your investing and involvement with companies like Yelp and so on, what are you seeing? What gives you confidence? And of course there\u2019s a bit of a, in the phrasing of the question, a survivorship bias, right? I mean, but so putting that aside for the moment, but what gave you, we could use Affirm as the example, but like what gave you the confidence to keep driving? What did you see that other people didn\u2019t see or what were assumptions you made or hypotheses that you felt just were worth continuing to hammer on and test because you had some degree of confidence? And what does Affirm do? Maybe you should explain that first.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>Well, there\u2019s this acronym, BNPL, buy now, pay later. We invented the genre about 15 years ago and the basic idea is at the point of sale, most of us pull out a debit card or a credit card and those who pull out a debit card, generally speaking, think themselves financially responsible and think, \u201cIf I can\u2019t afford it, I\u2019m not going to pay for it. So if I don\u2019t have enough of my bank account, just not going to buy right now, I\u2019m going to save up or maybe buy something cheaper.\u201d If you pull out a credit card, the minority of us who are, for all intents and purposes, are independently wealthy, you just say, \u201cSure, I\u2019m going to put on my credit card because it\u2019s easy and then I\u2019m going to pay it off at the end of the month and I\u2019ll get some free float on that, but I\u2019m not going to pay interest to pay over time.\u201d<\/p>\n<p class=\"wp-block-paragraph\">There\u2019s a huge percentage of Americans that pull out their credit card and say, \u201cI\u2019m going to add it to the giant pile of revolving debt that I already have and I\u2019m going to pay interest on it and I don\u2019t really know how to calculate that and I have no idea when I\u2019m going to be out of debt, but I need that thing and I\u2019m not disciplined enough to pay for it with cash or I just don\u2019t have the cash and I need the thing.\u201d And sometimes the thing is like, \u201cWell, I need a new bicycle, which we can maybe postpone.\u201d And sometimes the thing is like, \u201cI need a pram to put my baby in and yeah, I\u2019m just going to have to buy it one way or the other.\u201d<\/p>\n<p class=\"wp-block-paragraph\">And so the idea of Affirm was and is, and it\u2019s worked amazingly 15 years in, that what if there was a third way? Where, what if you could have the same transparency and responsibility and clarity of a financial decision making with a pay over time product that you do have with a debit card? So what if we added the idea of I want to pay for this over time, but I don\u2019t want it to revolve and I definitely don\u2019t want to be confused as to when I\u2019ll be out of debt, essentially turning every transaction into a simple plan, pay for my baby pram for over six months, let\u2019s say $100 at a time, doesn\u2019t break the bank. Exactly six months out, I\u2019m done, that\u2019s it, not revolving, I\u2019m not paying any more interest or anything like that.<\/p>\n<p class=\"wp-block-paragraph\">And as we describe the idea, well, if you\u2019re going to do it right, how about you build it so that there is no revolving possible. There\u2019s a fixed schedule only, that every transaction is pre-priced. So if you\u2019re paying interest, you know exactly how many dollars of interest you\u2019ll ever pay. Even if you take longer, that can\u2019t change, that shouldn\u2019t change. And if you\u2019re late, there shouldn\u2019t be any late fees. You should just be motivated to pay us on time because if you take too long and you\u2019re late all the time, maybe we won\u2019t lend you next time.<\/p>\n<p class=\"wp-block-paragraph\">And so it was almost like a too simple, too black and white, a way to lend money as an alternative to credit cards, which is a very long way of answering the question, but it is available now at three quarters of all e-commerce checkouts in the US and Canada and rapidly expanding into UK. And we\u2019ve announced we\u2019re going to go to a bunch of European countries and there\u2019s now plenty of competitors that do the same thing, but we were the first, I think. There were some obviously logical and spiritual predecessors to this idea, but we purified it down to no fees, no revolving, simple schedule, everything is pre-priced, everything is super transparent, and this year we\u2019ll do almost $50 billion of these transactions. So it\u2019s definitely, it\u2019s worked out.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>Seems to be working. Seems to be working.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>It seems to be working. We\u2019re publicly traded, it\u2019s quite profitable, have been profitable for a bunch of time. The last 10 quarters we grew 30 plus percent year over year or faster. So it\u2019s both very big, growing really well, still never charged a penny of late fees, never charged a penny of revolving interest. So we\u2019re still true to the idealistic nature. And so as I was describing the product, I talked to a bunch of banking people who laughed at me and be like, \u201cOkay, dude, you don\u2019t get it. You\u2019ve obviously never lent money for a living. Late fees is where the profit is. Half the profit comes from late fees, so you just cut your profitability opportunity by half. So putting that aside, if you don\u2019t revolve, what are you going to do when people take too long to pay you back? You want them to take forever. You want them to make minimum payments so the principle keeps being big and then interest will compound into principle, it\u2019ll be amazing.\u201d<\/p>\n<p class=\"wp-block-paragraph\">Yeah, all that sounds crappy. None of this sounds transparent. None of this makes any sense. And people in Silicon Valley who, generally speaking, don\u2019t need these services, don\u2019t get just how significant the cost is on your regular consumer that doesn\u2019t have a seven digit salary, et cetera. So as I was trying to raise money for this idea, I would talk to VCs and they were like, \u201cI don\u2019t know, why can\u2019t they use their Platinum Amex?\u201d Because they don\u2019t have a Platinum Amex. I was like, \u201cYeah.\u201d They\u2019re like, \u201cWhy don\u2019t they get a Platinum?\u201d I\u2019m exaggerating, but only slightly. And anyway, the difficulty raising money for this financial services company, unlike PayPal, was I couldn\u2019t convince anybody this was a thing that normal people would use.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>How did you land on this, though? How did you even get to the point where you\u2019re like, \u201cThis is the deck I\u2019m going out with and this is what I\u2019m pitching.\u201d<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>So the earliest version of this thing is actually pretty funny. So abridged, since it\u2019s a colorful story, and actually Luke is involved. Weird Luke makes an appearance.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>I like colorful stories. We\u2019re not in too much of a rush. Yeah. Take your time.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>So right after PayPal went public, Luke and I \u2014 I mean, Luke is a wild and crazy guy. You\u2019ve met him. I think he talked to me, I\u2019m going to go with he talked me into, but I\u2019m already dating Nellie and I\u2019m trying to impress Nellie. I\u2019m still trying to impress Nellie every day, but I decided the way to impress Nellie is to get a really cool convertible. And so Luke and I find this convertible. Mercedes just launched their first hard top convertible. So we fly to L.A. with a view to buy these two identical \u2014 we debate, we can\u2019t have the same color, so we need to pick who \u2014 anyway, so we get to L.A., we go to the dealership, we want to buy this cool hard top convertible from Mercedes, mechanical folding hard tops. It\u2019s like a thing that\u2019s like a <em>Transformer<\/em> car becomes a hard top or a convertible if you press a button. Super cool.<\/p>\n<p class=\"wp-block-paragraph\">So we get there and they\u2019re like, \u201cOkay, Mr. Nosek, here\u2019s your auto loan, go. Here are your keys, Mr. Levchin, your credit sucks. So we\u2019re not going to sell you a car today.\u201d And I\u2019m like, \u201cWait a second. We literally just took PayPal public and I\u2019m okay. I\u2019ve paid off my student loans and everything.\u201d \u201cYeah, but your credit score is really, really bad. So if you want to buy a car today, you\u2019re going to have to wire the total amount of money,\u201d which is like my future wife then girlfriend is like, \u201cOoh, okay, you didn\u2019t tell me that part of your biography.\u201d When we just started getting to know each other, \u201cWhat did you do?\u201d I\u2019m like, \u201cI started this company in college with Luke Nosek,\u201d who\u2019s in the room. And he knew and I didn\u2019t, that if you don\u2019t pay your credit card bills on time, it\u2019ll come and show up on your permanent record.<\/p>\n<p class=\"wp-block-paragraph\">So anyway, so I had to, in fact, wire money. And as this dealership was wrapping up on the day, they\u2019re like, \u201cOh, yeah, we finally got your wire. Okay, here\u2019s your keys.\u201d So we drove from L.A. to San Francisco on 5, basically racing each other at some ungodly speeds and got pulled over at 2:00 in the morning and the cops were very upset with us, but actually let us go because they were similarly fascinated by these cool new cars. So we didn\u2019t actually get into a lot of trouble, but got into a minor amount of trouble for going way too fast at 2:00 in the morning. But the story stuck with me because I was fine financially, better than fine. I was my mid-twenties and just never needed to work a day in my life. And yet the car dealer who knew who I was, he figured, I mean, he looked us up and was like, \u201cOh, yeah, I know you guys, you\u2019re PayPal kids. Cool. Yeah, you can\u2019t buy a car. Sorry, your credit sucks.\u201d<\/p>\n<p class=\"wp-block-paragraph\">And I\u2019m like, why does my credit report or my credit score not reflect the fact that I\u2019m basically independently wealthy now? And that really stuck with me. And so I had a version of this conversation, including the, and then Luke Nosek had a sweater wrapped around his head because it was really cold on [the] 5 [freeway] in the middle of the night and cops were really worried about him. Anyway, and so the story comes up or came up over and over and over again and it\u2019s something like, I should do something about this. There\u2019s got to be a credit score to be built around came to the US as a teenager with no record of any kind and $600 for a family of five and now independently wealthy Silicon Valley entrepreneur. It was like a five or seven year window between those two events. So it\u2019s not weird, but it\u2019s super weird. It\u2019s seven years. Hello, I\u2019ve got a computer science degree. I was imminently employable. I started a bunch of companies, not all of them failed and why did it not catch up to me at all?<\/p>\n<p class=\"wp-block-paragraph\">In fact, it seems to have had no bearing on my ability to borrow a fairly modest amount of money relative to everything else. And that\u2019s been sloshing around my head for years. I finally sat down. Another Luke Nosek friend from U of I was like, \u201cWhat if we built a better credit score?\u201d And so we\u2019re like, \u201cYeah, it wouldn\u2019t be too hard.\u201d So all of us are CS majors. We all have some number theory background, therefore machine learning, therefore AI. And so we built a score and it was like, just use some publicly available data, a little bit some other secret sauce. So we built the score and like, \u201cOh, well now we should make people lend money using our score because it\u2019s cool.\u201d And so I talked to some bankers, which is how I began the, \u201cOh, you\u2019re doing wrong kid conversations.\u201d And like, yeah, no one\u2019s going to lend money using a score that no one else is lending money against. What if it\u2019s a bad score? What if it doesn\u2019t work?<\/p>\n<p class=\"wp-block-paragraph\">And so if you tell an entrepreneur over and over again, \u201cThis thing will never work unless someone does X,\u201d the natural response is, \u201cWell, I will do X and see if it works.\u201d And so like, \u201cI guess we\u2019re going to lend money.\u201d And so I\u2019m just going to go and get into a lending business, at which point, I was like, \u201cOh, I\u2019ve got to understand how this stuff works. I\u2019ve never actually looked at lending very carefully.\u201d And that began the journey of like, okay, so how do credit cards really work? How do I manage to mess up my credit at the ripe age of 18 by missing three payments? How did that happen? And so a year later I was like, \u201cOh, my God, this whole thing is so broken and no one even knows it.\u201d Revolving on $1,000 draw and finding yourself with a $3,000 debt a couple years later and you can\u2019t explain it or getting a zero percent loan, but not realizing that if you are a dollar short or a minute late, it will compound retroactively from the time it was written to you.<\/p>\n<p class=\"wp-block-paragraph\">So there are all these things that the industry built over the years that are just profoundly anti-customer. It\u2019s one of the only industries in the world, actually a great way of thinking about it, I think I heard someone else explain this to me this way, but it\u2019s the industry where you and your service provider face each other and you\u2019re like, \u201cHey, I want to borrow some money.\u201d<\/p>\n<p class=\"wp-block-paragraph\">Goes like, \u201cGreat, I\u2019m going to bet on you failing. I\u2019m going to give you a loan, but I want to believe that you\u2019re not going to fail completely, but you\u2019re going to be really late. Ideally, you take forever to pay the loan back because I make more money that way. Optimally, we sneak in a few things you don\u2019t notice and it\u2019s all in a fine print, but I hope you don\u2019t read it.\u201d So it is a very, very strange vestigial \u2014 capitalism\u2019s supposed to get to efficiency. This got us into a bad part of the decision tree. It was like, what if I took a bunch of steps back into the branching point where you could have done the more consumer friendly thing and just did that over and over and over again? What product would I end up with? Oh, I ended up with Affirm, and that\u2019s how we got here.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>And what was your confidence in market adoption? So going out, you\u2019re pitching Affirm for fundraising and, I mean, there\u2019s so many questions I could ask, right? You\u2019re at a point where you could probably self-fund for a while, but what were some of your assumptions, correct or otherwise, that underpinned turning it into a business? So you have identified perverse incentives and predatory fine print and so on. So there\u2019s a problem, right? But then there are the bankers who are saying, \u201cHey, look, this will never work.\u201d But you\u2019re like, \u201cWell, if I have to do X and get into the lending business, I\u2019ll get into the lending business.\u201d So maybe that answers the fundraising question, actually. But how did you have confidence that there was a there there from a business perspective?<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>I would pitch this idea in its various forms. First of all, I did have to fund for a while on my own, which I didn\u2019t mind doing because I was getting completely obsessed with the idea. So as such things go, that was a small price to pay, relatively speaking. But I would keep on telling the story to somebody who was like a CEO or a former CEO of a bank or somebody who managed a credit card portfolio and they\u2019d be like, \u201cOkay, you\u2019re doing it wrong. All the money\u2019s in the late fees, the money\u2019s in delinquencies,\u201d just like, come on. And I had two ideas that both turned out to be amazingly right. By the way, every business is like, there\u2019s like a moment of luck where people\u2019s like, \u201cYeah, I don\u2019t really want to admit to it.\u201d Affirm had two.<\/p>\n<p class=\"wp-block-paragraph\">And there were ideas that I\u2019ll claim some ownership over, but I had no idea if I was right. And the first one, I read this study that said that Millennials hate banks and I didn\u2019t really explain why. It was just like Millennials hate banks, they hate a lot of things. Millennials and every generation has a list of things they want to complain about and like, these complaining Millennials, I\u2019m not a millennial. I\u2019m a relatively, I guess, young Gen Xer, but Millennials were, definitely like, oh, they\u2019re such whiny people. But they were willing to participate in some study where they ranked all the things they hate. And the number one thing they hated, like 70 percent of Millennials, according to that study, hated banks.<\/p>\n<p class=\"wp-block-paragraph\">And so every time I would ask a banker, \u201cWhy can\u2019t this exist? Why can\u2019t there be a lending product that doesn\u2019t take advantage of people\u2019s unwillingness to read fine print and do exponential math?\u201d They\u2019re like, \u201cBecause banking is the stickiest thing in the world. You bank where you live and like, yeah, you like your bank. It\u2019s where your parents banked. You go to marble hall and the vault and you like it. It\u2019s likable.\u201d \u201cI\u2019m reading a study here that says that they hate you. All the people that are going to be shopping and buying stuff 10 years from now, five years from now, they hate you. 78 percent of them think banks are terrible. They should go kill themselves.\u201d<\/p>\n<p class=\"wp-block-paragraph\">And so none of these people are like, \u201cYeah, I don\u2019t know. I don\u2019t believe that study.\u201d Okay. I mean, they surveyed like 10,000 people, that\u2019s a pretty stat sig study. So if I\u2019m right and I do a thing that\u2019s like even slightly better than the existing thing, I have a ready-made audience of people that are going to be like, \u201cCool, I hate the other one anyway.\u201d And at some point I need an explanation beyond just like they hate it. And so what I realized, and I think this is the part that I was lucky because I didn\u2019t know any better in the beginning, but I\u2019ve since confirmed this to be true, Millennials were early teens during the great financial crisis. And so if you are getting booted out of your house in \u201908 and you\u2019re like an impressionable youth and you\u2019re asking your parents like, \u201cWhat\u2019s going on? Why do we have to live in a motel now?\u201d Parents are like, \u201cBecause the bank, they just took the money, they took my house away.\u201d<\/p>\n<p class=\"wp-block-paragraph\">I mean, the embarrassment and the horror of telling your kids we\u2019re going to move to a smaller house or to a rental or to like, we\u2019re going to live on the streets, God forbid, that\u2019s a horrible impression to have in your most impressionable years. And so I think there\u2019s a lot of people who are actually quite genuine in the, I am willing to try anything but the thing that my parents got the sharp end of the stick for. And so that was luck number one.<\/p>\n<p class=\"wp-block-paragraph\">I really believed that from the very beginning, and it turned out to be true, but if we build something that\u2019s good, normally you have to market it, you have to convince people to trust you and all that. I think they don\u2019t need any of that. They just need the belief that there\u2019s a better thing out there that exists and they\u2019ll give it a try because they are predisposed to not liking the other part and that turned out to be completely true. The other part, so if you are unwilling to profit from all the wacky externalities of financial services, you better be good at underwriting. So if you\u2019re lending money to someone, you are paving over underwriting mistakes or lack of underwriting or credit score.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>Define underwriting here.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>When somebody shows up and says, \u201cI\u2019d like to borrow $100,\u201d and you want to respond to them in real-time, you have some giant machine learning model or a small machine learning model, decide yes or no. And what that practically means is it has to take whatever available data that person is willing to share, be it public or private data, run it through some form of classifier or, these days, all kinds of interesting architectural ideas exist in underwriting and say yes or no, but yes or no is actually not enough. What you really want is a price of risk. So it\u2019s some, for simplicity, expected value or expected loss. If I give you money today, what are the odds, what\u2019s the expected value of you bringing it back to me with the appropriate amount of interest, if that\u2019s what the price of the transaction is? And so underwriting is the discipline of doing that at scale, in our case, completely in real-time.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>Right.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>That\u2019s the score we built. The underwriting score, the credit score was that. And the theory that I had was credit scoring is hard and you would have to have the absolute best people working on it. And yet most of the time when you encounter people working on underwriting or credit scoring, they\u2019re not as impressive as people I\u2019ve met in my wandering of Silicon Valley up until that point. And like, why is that? It\u2019s an interesting problem. It\u2019s quite mathematical. There\u2019s some very smart, mathematically inclined people I know and the best I could get to was it\u2019s embarrassing to talk about that you\u2019re working on loan and credit underwriting stuff at cocktail parties. When somebody asks you, \u201cWhat do you do?\u201d You\u2019re a math genius. You went to school for applied math or computer science. What do you do? One answer is, \u201cWell, I went to Wall Street and I build real-time trading models.\u201d That\u2019s cool. Yeah, maybe it\u2019s not societally important, but you\u2019re doing something interesting.\u00a0<\/p>\n<p class=\"wp-block-paragraph\">And there\u2019s all the other answers. \u201cI worked with the NSA and I break codes.\u201d That\u2019s cool. That\u2019s what I wanted to do when I was in college. If you\u2019re like, \u201cI make lots of loans and I make sure that they\u2019re underwritten well. And by the way, I make most of my profits by charging people late fees and sneaking in nasty terms.\u201d<\/p>\n<p class=\"wp-block-paragraph\">So there\u2019s got to be a latent pocket of talent of people who would absolutely work on underwriting, because it\u2019s a really hard and really interesting problem, but they won\u2019t join the industry until someone shows up and says, \u201cI\u2019m going to strip it of all the gunk. I\u2019m going to make it completely transparent. I\u2019m going to be super pro-consumer. I\u2019m going to take a lot of pride in the brand that we have, which stands for transparency and honesty and all the good things you can do if you would just take a broom to the whole thing.\u201d And so as I formulated the product, I\u2019m going to get my unfair share of really brilliant mathematicians because they\u2019re not going to go to Wall Street because it\u2019s a soul hollowing thing to do to squeeze pennies out of the market.<\/p>\n<p class=\"wp-block-paragraph\">They\u2019d rather come to work for me and build underwriting models with me, trying to help people in normal America borrow money and not feel screwed or not get screwed. And they\u2019re totally, exactly right. We have people who\u2019ve been here for 10, 11, 12 years doing that job who are like still, \u201cI\u2019m so proud of what I do. I\u2019m a mathematician and I\u2019m putting my big brain to work on making honest financial products.\u201d So those two things were like, I mean, they\u2019re good ideas, but they\u2019re also a lot of luck.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>Those quarter-on-quarter growth rates that you\u2019re mentioning are kind of nuts. I mean, seems really remarkable. And I\u2019m wondering, looking through your scrying ball into the future, what do you think e-commerce looks like? This could be as it relates to Affirm, it could be more broadly speaking in two to three years, who knows, right? Let\u2019s just pick that as an arbitrary timeline.<\/p>\n<p class=\"wp-block-paragraph\">And does agentic commerce, if that\u2019s actually going to be something that takes hold quickly, if you think, really affect Affirm, or do people state preferences in advance? So not really, right? It\u2019s just maybe the way that people purchase things change, but honestly, for you structurally, things don\u2019t really change. I mean, how do you think about the future of e-commerce?<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>First of all, the reason the growth rates are compounding at an almost $50 billion mark, 30 plus percent a year over year, quarter after quarter after quarter is pretty awesome. It is a staggeringly good growth rate. It is made better by way of noticing that our credit-related losses are super consistent. It\u2019s easy to grow. I mean the top line, I\u2019ve lent more money this quarter than I did last quarter. Great, but will it all come back? It\u2019s a really important question. And the way you measure the success of these underwriting models is you ask the question, \u201cOkay, so you made a bunch of loans last quarter, last year, average half life of our loan is like five months.\u201d So five months back, you get a pretty good picture of how good are you, relative to today\u2019s macroeconomic reality.<\/p>\n<p class=\"wp-block-paragraph\">And if you look at our lost numbers, our delinquency numbers, whatever metric you want to choose, they\u2019re really, really consistent. So we are, in fact, very good at underwriting. And yet, even at 50 billion, we are but a footnote. So the overall credit card debt in the US, last I looked, was like 1.3 trillion. So we\u2019re scratching at the total size of just a credit card debt. And like not all credit card transactions become debt and there\u2019s plenty of debit card transactions. So the overall size of commerce is enormous, relative to where we are. And so our growth is not a surprise, in a sense that what may have been a surprise at some point was people actually like this product. There are reasons to believe or reasons to say that this product is harder to use. So credit cards and debit cards, for that matter, is the single best financial interface ever created.<\/p>\n<p class=\"wp-block-paragraph\">If you think of the level of complexity that takes place when you take out your card and tap a checkout counter and just walk off with your cup of coffee, there\u2019s a lot of stuff that happens underneath. There\u2019s an acquiring bank, there\u2019s an issuing bank, they\u2019re talking through a network, there\u2019s all kinds of complexity just at a technical level and then there\u2019s credit and blah, blah. There\u2019s layers and layers and layers of many decades worth of innovation that make an incredible single transaction happen in a tap and off you go. And so when you introduce buy now, pay later, which is this idea, every transaction is separate. You\u2019re conscious of every transaction. You understand how long it\u2019s going to take to pay this transaction off, you\u2019re actually creating friction. You are giving people more steps.<\/p>\n<p class=\"wp-block-paragraph\">So one counter argument to why this thing makes any sense at all, why would you want to trade the beauty of tap and go with this like open your app and do some stuff? And the answer is simple. The industry devolved and you don\u2019t really trust what\u2019s going to happen to you after you tap. So you hesitate and you\u2019re like, am I going to really be able to afford it? Or is my card going to work? Am I going to get declined? Or am I going to go into debt that I probably shouldn\u2019t go into? Affirm offers the antidote of you go into the app, you look at your purchasing power, you know exactly what we are comfortable lending to you. You get explicit approval. Next transaction is guaranteed to work. And by way of saying we\u2019re not going to charge you late fees or change any of the pricing, we\u2019re actually telling you, you should feel very good about this transaction.<\/p>\n<p class=\"wp-block-paragraph\">We are going to make less money if you\u2019re a minute late, we\u2019ll make no money if you don\u2019t pay us and we feel good about lending you this money. So what we sell or what we offer to the consumer end of this is certainty and sense of control by way of creating some incremental friction. Fast-forward a couple of years, I don\u2019t know if I have enough of a clear crystal ball to know exactly what agentic commerce looks like, but I know a lot of it is happening already and I think a lot more will happen. The discretization of transactions and this incremental friction will be reduced.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>Right.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>You don\u2019t actually have to do all the manual labor we are putting you through right now because your agents will do it for you, and so today, we\u2019re offering a thing in exchange for some friction. In tomorrow\u2019s world, we\u2019re offering the thing that obviously works, 50 billion dollars can\u2019t be wrong, but the friction will go away or largely go away, which I think is just going to accelerate this whole approach to financial transactions. And the way people think about money will change towards, \u201cI know exactly what the total financial state I\u2019m in. I have agents that are looking out for me. They won\u2019t get me into debt that I shouldn\u2019t be in. They will get me out of debt the second I should be out. I will have a PhD in consumer finance embedded in my phone looking out for every penny I\u2019ve got. There\u2019ll be no slop and by God, no one\u2019s going to fool me again with a fine-print driven business model.\u201d<\/p>\n<p class=\"wp-block-paragraph\">So the world in which you have AI looking out for all of your financial concerns is a beautiful world because we are already there by way of not having any dependency on, \u201cYou\u2019re too dumb to know what\u2019s happening to you, so just pay up.\u201d That\u2019s how a lot of the industry works today. So I\u2019m very excited about the world where you don\u2019t have to change your business model because suddenly no one\u2019s getting fooled because that was never a part of our business model.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>So I\u2019m going to ask you, it might be naive, probably annoying, but it\u2019s going to be a, \u201cHow long until X happens?\u201d type of question, so I apologize in advance for that.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>Sure.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>But I look at, say, China and WeChat, right? It\u2019s like the interface to everything in terms of purchasing, you name it. It\u2019s incredible what they\u2019ve been able to do and there are a lot of reasons for that. And then I look at, say, ChatGPT, I look at Claude and as you mentioned with that tap to pay, a lot has to happen under the surface. So when people say, \u201cOh, well, ChatGPT can just put ads into the LLM responses.\u201d I\u2019m like, \u201cYou may be underestimating the relationship building that Google has done over decades and decades and decades.\u201d<\/p>\n<p class=\"wp-block-paragraph\">There\u2019s a lot that goes into it, but I am curious to know how far away you think the reality is wherein someone can pull up a Claude or ChatGPT and ask questions and make purchases directly from a single interface? I don\u2019t know if that\u2019s the form it\u2019ll take, I suspect it\u2019ll probably be \u2014 at least there\u2019ll be attempts made to create something like that. And then everything will happen in the background including presumably some type of affirm-like option if you select to do that. How far off do you think that is?<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>So it\u2019s very close. Actually, I think it\u2019s very dangerous to consider commerce as this uniform fabric that just kind of, want a thing, buy a thing. One of the dangers, by the way, of building on mass market products in Silicon Valley, if you\u2019re not inventing the future, in which case your greenfield, blank sheet of paper, if you\u2019re trying to improve something that exists and has existed for a while, it\u2019s essential you travel to where normal people live and see what they do because we are not normal in Silicon Valley, in a global Silicon Valley. This is not limited to San Francisco and the Bay Area. We think you just want a thing and buy a thing and if that thing is $10, great. And if it\u2019s $10,000, well, we get paid a lot, so okay, just buy the $10,000 thing, and you care about speed and efficiency and less distraction.<\/p>\n<p class=\"wp-block-paragraph\">And normal people actually hang back and like, \u201cWhoa, it\u2019s $10,000\u201d First of all, that\u2019s an incredible amount of money. And by the way, for someone who is not within these hot beds of growth and opportunity, maybe $1,000 is an incredible amount of money. Maybe $500 is an incredible amount of money. It depends on where you are and the sort of, \u201cOoh, I\u2019ve got to think about this. I want to make sure I\u2019m not exposing myself to a bad financial decision. I also want to make sure I\u2019m getting a good deal. How am I going to pay for this? How long is it going to be on my personal balance sheet before I\u2019m done paying for it?\u201d Those are all questions people are very conscious of. And so, for a lot of people in every part of the US, agentic commerce is here, when you tell Instacart, \u201cBring me a sandwich,\u201d or bring back your groceries and DoorDash, \u201cBring me a sandwich,\u201d or vice versa.<\/p>\n<p class=\"wp-block-paragraph\">And that\u2019s like the threshold of, is this enough money for me to hang back and ask these questions? For most people, for those who it is too much, they\u2019re probably not using these services just yet. For whom it\u2019s like, \u201cYeah, I want a sandwich and I want it now and I want to outsource the rest of this to an agent, be it a human or a robot, don\u2019t care. You have my credit card number, bring me a sandwich,\u201d and I think that\u2019s here today and we will see more of that become a thing and many things like real time delivery or near real time delivery. If you go to other markets, you have, I think in India, somebody launched a six minutes or less delivery service.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>Yeah.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>Boggles my mind, but their storage of mass market goods to buy at edge has got to be just like an exercise in extraordinary logistical prediction. Anyway, so I think that that stuff is here, it\u2019s coming and more will happen. I want to know what I\u2019m getting into, I want to have agency in selecting a thing. My taste matters to me, is a thing that probably will always involve humans. I need a pair of pants, is not actually a thing 95 percent \u2014 if you\u2019re a Silicon Valley engineer and you\u2019re too busy coding and you have a big hole on your butt, you\u2019ve got to need some pants, and like, \u201cAgent, bring me a pair of pants.\u201d Sure. For most people, I want them to make sure they fit and I want them to be my favorite color and I also wanted to match the rest of my ensemble here and so on.<\/p>\n<p class=\"wp-block-paragraph\">And so it goes up from there, like I need a bicycle, but I have brand preferences and my components are important to me, et cetera, et cetera. And so AI will not replace the need for decision making and thoughtfulness in consumption. It will obviate some pieces like who has the best price on the bicycle I want with the componentry that I prefer is a thing that you will gladly outsource. You need to make sure it\u2019s real, you need to make sure that the data your LLMs are fetching for you is current, but that\u2019s what we\u2019re working on today.<\/p>\n<p class=\"wp-block-paragraph\">But at some point very soon you\u2019ll say, \u201cHey, Chatbot of the moment or of my browser or my desktop, I would like to buy a beautiful looking Italian-made bike with Shimano components. I want a good deal. I\u2019m probably going to pay for it over time because it\u2019s expensive and I definitely want to pay no late fees and ideally I don\u2019t want to pay any interest. I\u2019m bringing my business to someone who should be so lucky because multiple people will sell me a beautiful Italian-made bike and go do some comparison shopping for me, bring me some images of beautiful bikes and I want to lust after all of them and then pick the one that gets my business.\u201d That\u2019s a great task for AI.<\/p>\n<p class=\"wp-block-paragraph\">The building blocks for that will include something like a firm where the AI will say, \u201cAll right, so all these people offer some ways of paying. Some of them offer a firm which has no late fees and by the way, has negotiated a special deal with the manufacturer or the seller where they will pay your interest for you.\u201d So they\u2019re actually covering the time value of money. So the plan is interest free, which a lot of our transactions are interest free exactly this way. They\u2019re funded by the retailer or the manufacturer and that\u2019s like where we\u2019re grasping at that future right now. We\u2019re certainly building a lot of the pieces, so I tend to be slightly ahead of schedule as far as the future I want to live in, I\u2019m trying to pull it in here, but this is quarters, not years.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>Yeah. Yeah. Incredible. Man.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>For the foreseeable future, there\u2019s so much to build. The thing that irks me the most in today\u2019s media is the SaaS apocalypse, whatever, but the job apocalypse people are proclaiming is so goofy. There\u2019s so much opportunity to build so many exciting things for everyone, not just a Silicon Valley startup. Everyone from the oldest companies to the youngest ones are like, \u201cOh, my God, there are all these pieces of software that I had to buy from someone who did a bad job or that I could never buy anywhere and I wouldn\u2019t know how to start with.\u201d Well, now you have all these amazing tools that just birth it for you straight from your head. Speaking of things you can put onto your brain, very soon we\u2019re going to have ultrasound mind reading that spits code on the other side of it. That\u2019s what I\u2019m waiting for.\u00a0<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>It seems a lot closer than I would\u2019ve predicted if you asked me just a few years ago. It\u2019s wild.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>The world changed a bunch of times over the last 12 months, but I think the Claude Code moment last December was a big like, whoa, it really is here. The ability to produce something from a glimmer in your mind to a thing that actually works reasonably well and has only improved since was a big breaking point. The one before was obviously ChatGPT and so on.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>So a couple of rapid fire questions for you. Coffee, we\u2019re going to shortchange this one. I apologize, maybe I need to do another podcast solely dedicated to coffee, but for people who want to improve their coffee experience, cheap option, intermediate option, like Bugatti option. Any thoughts on improving coffee experience?<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>I\u2019m not paid by any of these brands, so I just wanted to make it very clear. I have some very strong opinions.\u00a0<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>You? Strong opinions? Come on, Max.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>Yeah, exactly. All right. So first of all, this is primarily relevant to espresso. I love all coffee in all forms, I happen to prefer espresso as a beverage of choice, but I don\u2019t judge, you can have your lattes, your Americanas, whatever. But from the point of view of espresso and espresso-based drinks, the single most important thing is the grinder. And so you can get a fantastic grinder like a Niche or these like $600, $700 grinders that will elevate your game to an incredible level. So if you have a grinder that you didn\u2019t pay a couple hundred dollars for, you\u2019ve got to go do that. If you want to get to a demonstrably better grinder than some of the $600 range, go get something that looks like Acaia Orbit. That\u2019s like a $1,600 to $2,000 grinder. It\u2019s a great grinder, you can swap out burrs.<\/p>\n<p class=\"wp-block-paragraph\">So switching out burrs is really important. But even if you\u2019re never going to replace your burrs, you still want something that\u2019s a fall-through grinder and a good one will cost you on the order of $2,000 plus or minus. And then if you\u2019re like, \u201cYou know what? or no price too large, I\u2019m going to get me the absolute fantastic home grinder.\u201d I mean, obviously there\u2019s like industrial strength stuff that\u2019s even out there. There\u2019s this thing called Weber Workshops that produces unbelievably expensive, but unbelievably good stuff. So if you want to Weber, God bless, that\u2019s a great product.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>Same company that makes the grills?<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>No.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>It\u2019s got to be.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>No, no. Different. I had this exact question yesterday. Anyway, so a better grinder goes a very long way. After that, go invest in skills. There\u2019s an incredible number of online resources that\u2019ll teach you how to do a great job, I\u2019m but a student of those people, there are many, many, many great videos you can watch on YouTube that\u2019ll teach you how to make a great cup of espresso. Before you buy anything else, just go watch all that stuff because it\u2019ll teach you a lot of things you don\u2019t know about. After that, you\u2019re probably going to want to buy a good espresso machine. The great news is that there are many, many very good espresso machines. I don\u2019t want to begin a religious war here, so I\u2019ll state my preferences, but these are preferences. I prefer 58 millimeter portafilter diameter. Many people now swear by 54, 53 millimeter.<\/p>\n<p class=\"wp-block-paragraph\">You can go up or down, but I stick to the classics. I think the finest, most reliable home machine is made by La Marzocco. That is definitely in the multi-thousand dollar range, but that\u2019s what I have on my counter and it\u2019s never failed me and it\u2019s beautiful and both inside and outside. There\u2019s lots of cool \u2014 if you\u2019re a super nerd and you really want to nerd out on the metrics, Decent Espresso is a fantastic product, really fun, but it\u2019s like an Android tablet that happens to be attached to an espresso machine basically. La Marzocco is old school, that is the logo you\u2019ll find in every self-respecting coffee shop. The long red typically spelled out La Marzocco, that\u2019s a granddaddy of them all. It\u2019s amazing. And there are many, many other brands that will sell you a good espresso machine. If you\u2019re trying to go downmarket a little bit, but like Bulletproof will make a good cup every time. Breville people tend to hate on it a little bit because it\u2019s so consumer, but it makes great coffee.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>Yeah. Breville\u2019s surprisingly good.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>Yeah. It\u2019s very, very good.\u00a0<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>I mostly just wanted you to showcase \u2014\u00a0<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>My obsession.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>Yeah, your obsession. I\u2019m going to force your hand though on one here. We\u2019re going to take a side quest away from pure espresso territory. Chemex, French Press or AeroPress, if you had to do coffee with one of those three.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>Chemex.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>Chemex. Why Chemex?<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>If you\u2019re going to go for a light roast, I mean, each type of roast, each type of bean speaks to a method. There\u2019s another heresy, by the way, in a modern day. I like medium dark roast for my espresso. I love the honeyed viscous, feels like it\u2019s too thick, you can almost chew it. I love that in espresso, that\u2019s a great cup of espresso. For non-espresso drinks, I actually love thin, high clarity, low body, just give me the pure essence of not diluted, but the bean in water and Chemex is probably the best one of those. It\u2019s totally the most controllable. Beyond that, French Press is great. I mean, that\u2019s like a campfire type setup and AeroPress, if you\u2019re going to go there, just get an espresso machine.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>Chemex, for those people wondering will cost less than $600. And I will say also that you can get, correct me if I\u2019m wrong, you\u2019re going to know this better than I do, but you can get \u2014 they\u2019re not going to be anywhere near as sophisticated as the devices you describe, but if you are using, for instance, a blade grinder, something that is not a burr grinder and you get a handheld burr grinder, which you can probably buy for $100 or less, the difference between those two will still be noticeable. What would you think?<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>You\u2019re in the territory where I\u2019d probably be like, \u201cYou know what? No coffee today.\u201d I\u2019m kidding. I\u2019ve been known to exhaust the local supply of free ground pods in hotel rooms. There\u2019s coffee and all the beauty of it and then there\u2019s caffeine and then I need both.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>Different things.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>They\u2019re not the same. I mean, the spice grinders as they\u2019re known, you can definitely make a cup of coffee with that too. But that said, by the way, if you must have a thing that is not an electric grinder, get a manual grinder. Those are very cheap. I think Lido, if I remember correctly, is a brand that\u2019ll sell you a very, very high end, but still an order of magnitude cheaper than any of the stuff that I threw out. I mean, it\u2019s a little bit of a good workout, but you\u2019ll make beautiful coffee with that because there\u2019s a really nice correlation to the lower the RPM, the less you\u2019re damaging, if you will, the bean as you\u2019re grinding it. So you can actually get some amazing taste out of manually ground beans. It does take like 10 minutes per cup though, so you\u2019ve got to be ready.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>Yeah, this is what I\u2019m talking about. This is exactly what I\u2019m talking about. So I wasn\u2019t totally misspeaking. Yeah, the Lido OG manual coffee grinder, this one\u2019s 273. There are some other options that I found at slightly lower prices, which I thought did a nice job. It is a workout. It is a workout.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>Switch arms every once in a while.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>If you\u2019re going to go into the ritual of it, I know people who have traveled with something akin to that and AeroPress and some other stuff.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>AeroPress, great campfire attraction for sure.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>All right. I\u2019m going to destroy any shred of respect that you have for me with respect to coffee by also saying if people want something simple, like Cometeer, actually I really enjoy some of their stuff. These frozen \u2014 Oh, the face! If you guys aren\u2019t watching video, the response that I just got.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>By the way, I grew up drinking not just instant coffee, which was hugely popular in Eastern Europe. I occasionally was exposed to chicory coffee, which I don\u2019t know if you\u2019ve ever tried that, but \u2014\u00a0<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>Yeah, popular in New Orleans, they\u2019d add a lot of sugar.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>Except there\u2019s no coffee in it. It\u2019s just chicory root.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>Oh, God. So it\u2019s just like placebo. It\u2019s just \u2014\u00a0<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>Yeah. I mean, it kind of, sort of tastes a little bit like coffee maybe, pour enough hot water into it, if it\u2019s hot enough, you\u2019re like, \u201cAh, it doesn\u2019t smell right, but whatever.\u201d In Soviet Union, it was marketed under \u2014\u00a0<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>Coffee light.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>The coffee beverage stock. Something meant to evoke some plant component that both coffee, bush and chicory would share. So like, well, they both have it, so it\u2019s good enough. It was disgusting, but it\u2019ll wake you up, so \u2014\u00a0<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>Yeah, yeah. So there is that.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>There\u2019s that.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>Yeah, chicory is pretty interesting from a fiber perspective, but I\u2019ll leave that for another conversation. Max, last question. This might be a terrible question to end on, but I am curious, for someone who is technical or just an individual contributor in the sense that you were very technical and then grew into the CEO role and running a public company, let\u2019s put that aside because that\u2019s a whole kettle of fish by itself, but any books or resources that you would recommend to people who are hoping to become a CEO for the first time\/founder?<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>Yes. So here\u2019s a couple, so there\u2019s not a panacea, but I will preface this by saying I have an extremely low degree, by which I mean like zero to negative, of respect for business books. Vast majority of them are far too long, present company excluded. Business books that are verbatim anecdotes of people who\u2019ve done it are actually high value because I think it\u2019s very hard to distill what is inherently a collection of unique experiences. So you can edit it down but you can\u2019t make it \u2014\u00a0<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>Generalizable.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>Yeah. To generalize it, you\u2019re robbing the reader of the true history of what really happened so I\u2019m a huge fan actually of what you do in your books because there\u2019s always so much color directly from the source versus, \u201cI think this person meant X when they talked to me and I\u2019m not going to print anything they said.\u201d Anyway, that said, I\u2019m a big fan of business books that have been distilled to business essays because then I feel like the author did the work of like, \u201cI\u2019m going to generalize, I\u2019m going to really generalize it.\u201d So there\u2019s this book called<em> 7 Powers<\/em> by Hamilton Helmer. If you haven\u2019t read it, it\u2019s a really worthwhile distillation of what it takes to build a competitively lasting business. It talks about why network businesses are longer living than non-network businesses and what brand actually means, like people, \u201cOh, I\u2019m going to build a brand.\u201d<\/p>\n<p class=\"wp-block-paragraph\">Why? Why do you care about having a brand? And so it\u2019s a great book, distills a ton of these things that you kind of think you know, but like they need names and terminologies and it\u2019s idiosyncratic in the sense that like I didn\u2019t think of the word \u201cpower,\u201d didn\u2019t think of the term \u201cpower\u201d until I read his book and I found it to be a great distillation. It\u2019s very short, it\u2019s slightly shorter than <em>The Master and Margarita<\/em>. So anyway, so that\u2019s a good book. Another good book that is off the beaten path, but a great one called <em>A Failure of Nerve<\/em>. It\u2019s a book about leadership and it really postulates this concept of differentiated leader. So as a CEO, as a founder, a lot of times you find yourself at odds with your own team where you\u2019re making an unpopular decision, you\u2019re firing a beloved employee, sort of whenever there\u2019s doubt, there\u2019s no doubt, then you go do it and you\u2019re like, \u201cHoly crap, what have you done?\u201d<\/p>\n<p class=\"wp-block-paragraph\">So you find yourself in these moments where you have to persevere before and then after a decision that you made and many, many flavors of it. It\u2019s a good book that teaches you how to think about it, how to tolerate the stress that comes with it, how to put up with the pressure you\u2019re going to get and not lose your humanity and like not become a tyrant, but also not be someone who is easily bowled over into like, \u201cOkay, okay, I\u2019ll reverse my decision,\u201d because then you lose the confidence of the people you\u2019re supposed to lead. So that\u2019s a great book. I am sure it\u2019s in your list and everyone\u2019s list, but you should read if you haven\u2019t read it, if you\u2019re trying to start a business, you should read <em>Influence<\/em> by Cialdini because that is probably the most important social science book published in the last 50 years.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>It\u2019s so good. It\u2019s a great book. I\u2019m pretty shocked that I had never heard of <em>7 Powers<\/em> and I just looked it up, the foreword\u2019s written by Reed Hastings of Netflix, I have never even heard of it. That\u2019s shocking.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>There you go.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>I\u2019m excited.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>If there\u2019s one thing you find in this podcast.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>Any biographies that have informed how you approach leadership or running companies?<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>I love biographies.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>It could be indirect too, right? It could be a biography and how it informed your view on persistence, right? Through stories or anything.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>Chernow\u2019s biographies \u2014 so Chernow wrote a bunch of these tomes, speaking of enormous books. So there\u2019s like everything from the JPMorgan-<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>The <em>Hamilton<\/em> \u2014\u00a0<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>Yeah.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong><em>Washington: A Life<\/em>, <em>Grant<\/em>, <em>Mark Twain<\/em>.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>Yeah. <em>Mark Twain<\/em> is a great one.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong><em>Titan<\/em> is a huge one.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>So <em>Titan<\/em> is probably the one that\u2019s closest to business advice. It\u2019s a bit of a \u2018how to be ruthless\u2019 basically, but that\u2019s besides the point.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>Yeah. It\u2019s the life of John D. Rockefeller. The cover photo looks just like the vampire in <em>Nosferatu<\/em>. It\u2019s terrifying, but yes.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>Exactly.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>Apropo.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>Those are great books. There\u2019s a great book called <em>A Mind at Play<\/em>, which is Claude Shannon\u2019s biography. By the way, when I was preparing for our conversation, not nearly as well as you are, I was listening to your conversation with Ed Thorp, who I knew a little bit about, but I was like, \u201cOh, my God, that guy\u2019s flipping amazing. I want to be like him when I grew up.\u201d He\u2019s now 1A of the list of people I\u2019d like to meet at some point in my life, I\u2019ve never \u2014\u00a0<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>So incredible.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>He just seems like an unbelievable guy, but so he was friends with Claude Shannon, that alone makes him unbelievably interesting. So Claude Shannon is like a Platonic ideal of what I thought I was going to be before I left academia because this guy\u2019s just brilliant in every way. Everything he touched became this flower of intellectual brilliance.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>American polymath and mathematician, right? Why does Shannon stick out to you so much?<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>Fun fact, Claude Code, named after Shannon.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>I did not know that. That\u2019s incredible.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>Well, actually, I didn\u2019t learn this from Anthropic people, but I would be shocked if that\u2019s not the answer. Claude is not a common name and Shannon is obviously the inventor or the postulator of the information theory. He is the father of information theory.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>Yeah.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>So anyway, so he is a great example of someone who worked on some very serious stuff and was always playful. He\u2019s like Richard Feynman of computer science. So Feynman was famously brilliant and would \u2014 there\u2019s a great quote from Murray Gell-Mann. Somebody asked him like, \u201cWhat\u2019s your algorithm for solving really hard problems?\u201d Like, \u201cEncounter really hard problem, step two, give it to Richard Feynman, step three, receive solution.\u201d And so Shannon was that in computer science or the proto computer science, obviously. He was building this in the \u201940s, \u201950s, \u201960s, and he managed to remain fun. He managed to have fun. He was just this unbelievable fountain of fun ideas and he was like a hardware tinkerer and made card counting devices and all kinds of hilarious stuff.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>It makes sense that he would know Ed Thorp, who beat the roulette table.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>Of course, exactly. So that\u2019s why Shannon, and so it\u2019s a good book about him. These days, it\u2019s so hard to read books because there\u2019s so much content online and podcasts and blog form that you\u2019re like, \u201cI\u2019ll get to this thing.\u201d Content online feels ephemeral, so you\u2019re like, \u201cI must read this now because it might scroll off and I\u2019ll never see it again.\u201d A book is in my hand. I have books in my backpack that I travel with that I\u2019ve been meaning to read for half a year now and I still haven\u2019t opened them and just carry the weight.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>I have a 500-page graphic novel that I\u2019m going to be lugging to New York City because, still, the digital experience just doesn\u2019t do it, but the burden I bear.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>I keep on looking for a great digital graphic novel consumption experience, but it does not come close.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>It\u2019s not there. We\u2019ll be able to replay our dreams before we get that. Max, so much fun to hang. Thanks for taking the time and where would you like to point people? We\u2019ve got levchin.com, we have scifi.vc. We have various social \u2014\u00a0<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>Affirm.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>Of course. Affirm.com. There\u2019s a lot we could point people to. Anything else you\u2019d like to add, whether it\u2019s pointing people somewhere or closing comments, anything at all?<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>No, my work is out there. I try to build in public. If you\u2019re interested in Affirm, obviously affirm.com is where you find that. I tend to go deep so my project list is short at any given moment, but levchin.net, levchin.com, either one is the list of those things.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Tim Ferriss: <\/strong>Amazing. Max, thank you again for taking the time and everybody listening, we will link to all of the things we mentioned, books and resources and people and everything else, Affirm, of course, and on and on and on in the show notes, as per usual, at tim.blog\/podcasts, just search \u201cLevchin.\u201d I can promise you, you will be the only one, might be the only Max in fact on the podcast so far. We\u2019ll find out, I might eat my words. And until next time, of course, thank you for turning in, but be just a bit kinder than as necessary to others but also to yourself. And that\u2019s all for now. Thanks again, Max.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Max Levchin: <\/strong>Great to see you. Safe travels.<\/p>\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n<h3 id=\"Max-Levchin-transcript-legal-conditions\" class=\"wp-block-heading\">DUE TO SOME HEADACHES IN THE PAST, PLEASE NOTE LEGAL CONDITIONS:<\/h3>\n<p class=\"wp-block-paragraph\"><em>Tim Ferriss owns the copyright in and to all content in and transcripts of The Tim Ferriss Show podcast, with all rights reserved, as well as his right of publicity.<\/em><\/p>\n<p class=\"wp-block-paragraph\"><em>WHAT YOU\u2019RE WELCOME TO DO:<\/em>\u00a0<em>You are welcome to share the below transcript (up to 500 words but not more) in media articles (e.g.,\u00a0<\/em>The New York Times<em>,\u00a0<\/em>LA Times<em>,\u00a0<\/em>The Guardian<em>), on your personal website, in a non-commercial article or blog post (e.g., Medium), and\/or on a personal social media account for non-commercial purposes, provided that you include attribution to \u201cThe Tim Ferriss Show\u201d and link back to the tim.blog\/podcast URL. For the sake of clarity, media outlets with advertising models are permitted to use excerpts from the transcript per the above.<\/em><\/p>\n<p class=\"wp-block-paragraph\"><em>WHAT IS NOT ALLOWED:<\/em>\u00a0<em>No one is authorized to copy any portion of the podcast content or use Tim Ferriss\u2019 name, image or likeness for any commercial purpose or use, including without limitation inclusion in any books, e-books, book summaries or synopses, or on a commercial website or social media site (e.g., Facebook, Twitter, Instagram, etc.) that offers or promotes your or another\u2019s products or services. For the sake of clarity, media outlets are permitted to use photos of Tim Ferriss from\u00a0<\/em><a href=\"https:\/\/tim.blog\/media\/\" target=\"_blank\" rel=\"noreferrer noopener\"><em>the media room on tim.blog<\/em><\/a><em>\u00a0or (obviously) license photos of Tim Ferriss from Getty Images, etc.<\/em><\/p>\n<\/div>\n<p><a href=\"https:\/\/hop.clickbank.net\/?affiliate=infohatch&amp;vendor=J1R2C\"><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-10614 aligncenter\" src=\"http:\/\/parmaks.com\/Resources\/wp-content\/uploads\/2025\/05\/profit-gen400px.png\" alt=\"Profit Gen\" width=\"400\" height=\"217\" srcset=\"https:\/\/parmaks.com\/Resources\/wp-content\/uploads\/2025\/05\/profit-gen400px.png 400w, https:\/\/parmaks.com\/Resources\/wp-content\/uploads\/2025\/05\/profit-gen400px-300x163.png 300w\" sizes=\"auto, (max-width: 400px) 100vw, 400px\" \/><\/a><br \/><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Max Levchin (@mlevchin) is a serial entrepreneur, computer scientist, philanthropist, and active investor in more than 100 startups. He is the founder and CEO of [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":13153,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[],"class_list":["post-13159","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-growth"],"_links":{"self":[{"href":"https:\/\/parmaks.com\/Resources\/wp-json\/wp\/v2\/posts\/13159","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/parmaks.com\/Resources\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/parmaks.com\/Resources\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/parmaks.com\/Resources\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/parmaks.com\/Resources\/wp-json\/wp\/v2\/comments?post=13159"}],"version-history":[{"count":0,"href":"https:\/\/parmaks.com\/Resources\/wp-json\/wp\/v2\/posts\/13159\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/parmaks.com\/Resources\/wp-json\/wp\/v2\/media\/13153"}],"wp:attachment":[{"href":"https:\/\/parmaks.com\/Resources\/wp-json\/wp\/v2\/media?parent=13159"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/parmaks.com\/Resources\/wp-json\/wp\/v2\/categories?post=13159"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/parmaks.com\/Resources\/wp-json\/wp\/v2\/tags?post=13159"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}