Blake Masters

2 Billion Under 20

My friends Stacey and Jared published a book today called 2 Billion Under 20. It was my pleasure to write this foreword to the book:

“They all laughed at Fulton and his steamboat - Hershey and his chocolate bar, 

Ford and his Lizzie kept the laughers busy – that’s how people are”

                -George & Ira Gershwin, They All Laughed

History shows that innovators can’t expect to be popular—at least not at first, and often not ever. That’s the price of doing new things in a world in which so much of what people do is to repeat what has been done before. A certain class of innovator—young people—must be especially prepared to steel themselves against the scoffing and skepticism they’re sure to suffer as they try to do anything new. The world has given up expecting new things from kids—why else would we lock them up in schools and prescribe to each one the same homogenous (and homogenizing) curriculum for years on end?

But sometimes the tracked path doesn’t take. Now more than ever, young people are realizing that the future is theirs to create, not something that will simply happen to them. In 2 Billion Under 20 you’ll meet 75 remarkable individuals who have learned that it’s never too early to do something bold. These trailblazers have plenty in common—each is self-taught in one way or another, and not one has yet celebrated a 21st birthday. But even more remarkable is just how diverse they are: from programmers, designers, and writers to race car drivers, Olympians, and EMTs, their achievements dazzle—like flying machines in a world used to bicycles and buggies.

If you type “Millennials are ” into Google’s search bar, the autocomplete feature suggests “doomed”. But the crowd’s got this one wrong. This book shows what ambitious young people can get done, if only we believe in them. Actually, scratch that: they don’t need our faith. Perhaps all that’s required is that we get out of their way. 

Get a copy here.

Why Zero to One?

Anyone familiar with this blog is familiar with my notes from Peter Thiel’s startup course at Stanford. With over 350,000 readers, more than a million page views, and coverage in the New York Times and Forbes (to name a few), the notes have had a good run. But I’m happy to report that they are only the beginning: Peter and I have decided to write a book called Zero to One.

Why a book? For starters, we can make the notes considerably better. Substantively, we are revising, updating, and expanding on the best parts of the class. Everything else will be improved as well. The prose will be stronger and clearer, without losing the atmosphere of openness and experimental thinking that inheres in the notes format. The design and packaging, too, will provide an entirely different readership experience. In short, we can make a book worth owning.

More broadly, though, books remain important, whether digital or in print. Our view is that some degree of sustained attention, not just brief scanning, is essential for real thinking. Stepping back from the parade of distractions and seriously engaging with a text affords opportunity to think, plan, and create. As Peter has said, meaningful progress requires that we think about the future for more than 140 characters or 15 minutes at a time.

Zero to One will be published by Crown Business, a division of Random House, in March of next year. Stay tuned for lots more details—I’ll try and share as much as I can along the way. Meantime, you can sign up for updates or follow along on twitter/fb here. Or pre-order here!

Judicata raises $5.8 million led by Khosla Ventures — Guest post from Keith Rabois

Keith Rabois is a partner at Khosla Ventures and former executive at PayPal, LinkedIn, and Square. Follow him on twitter @rabois.

A long time ago in a galaxy far, far away… I was an attorney.

Indeed, I devoted most of the 1990s to the practice of law, clerking for the United States Court of Appeals for the Fifth Circuit and then litigating for the preeminent Wall Street law firm, Sullivan & Cromwell.

As a young lawyer, most of my billable hours were devoted to legal research and writing. I recall slaving away at my computer, endlessly querying LexisNexis and Westlaw and becoming frustrated with the limitations of crude keyword search and arcane Boolean operators. Indeed, my hack was to spend many days and nights in the library reading cases in printed books to track down the key facts and subtle distinctions that the “computer” could not grasp.

Of course, most of the world of technology has advanced since those dark days. But not legal research. Until now.

Fixing legal research is a major task. To start, it requires a scalable method of extracting meaning from millions of cases, not just adding a more advanced search engine on top of the text.

Judicata is developing an intuitive search technology that groks all of the facets of legal precedent. In a matter of moments, their software helps a lawyer retrieve everything she needs, comprehensively, accurately, and painlessly. By early next year, the team will ship the new tool of choice for California’s 180,000 lawyers.

According to Crunchbase, legal technology attracts fewer investment dollars than any other sector, and perhaps for good reason; the problem is difficult, and most companies are taking incremental approaches. Yet there is a lucrative market awaiting the right team with the right approach: the two industry giants generate over $2 billion annually from their legal research products, and the largest 100 law firms alone generated $70 billion of revenue last year.

Real innovation is possible in legal technology, and it is on the horizon. We at Khosla Ventures are excited to be working with the Judicata team to prove it.

—Keith

Leap forward

In 1811, when Cornelius Vanderbilt was 17, he borrowed $100 from his mom to buy a small sailboat. He figured he could make some money by ferrying goods and people around New York Harbor. He was right.

When the War of 1812 broke out, Vanderbilt’s competition nearly vanished (presumably, few American transporters were keen on operating in British-infested waters). The demand for effective transport, though—particularly military transport—increased dramatically. Vanderbilt, who quickly acquired the nickname “Commodore” for his prowess on the water, was all too happy to service the need and profit handsomely therefrom.

Vanderbilt, of course, was the sort of guy who thought seriously about the future, and the future, he thought, was steam power. So in 1818 he sold his fleet, leased a steamship called Bellona from a guy named Thomas Gibbons, and began to operate his ferry business 2.0.

But there was trouble on the water. The New York legislature had seen fit to grant a monopoly on steamboat service to a couple of guys named Fulton and Livingston. Some operators, like Gibbons, respected the edict and stayed out of the water. Others, like Aaron Ogden, cowed and paid the Fulton-Livingston partnership for an operating license. But Vanderbilt was made of different stuff. He just wanted to build a great business. What good are rules when they stand in the way of building great businesses?

Unsurprisingly, suits were filed. (Ogden was the plaintiff in the one you’ve probably heard of.) Interestingly, though, this didn’t seem to matter very much. Initially, Vanderbilt paid the litigation no mind; he continued to provide excellent service and ruthlessly undercut his competition on price. Equal parts sword and shield—he employed a “crew of shoulder-hitters, ready for battle” to ensure orderly moorings at competitor’s docks,¹ while also deflecting criticism and developing a Robin Hood-ish mythology—Vanderbilt insisted on forging his own future. You might be aware that Jay-Z just executive produced Baz Luhrmann’s Gatsby; so long as we’re anachronistically weaving Hova lyrics into montages of the long-dead nouveau riche, take a moment to imagine Vanderbilt, as his marine hoplites take control of a pier, blasting:

And government, fuck government, niggas politic themselves.²

The end of the legal battle came in 1824, when the Supreme Court heard the case and ruled for Vanderbilt’s side. (Vanderbilt, as merciless in court as he was in business, had helped his cause by hiring Daniel Webster—think Ted Olson and David Boies rolled into one—to represent Gibbons.) Doctrinally, the case was quite important, but that is the stuff of AP US History and 1L year of law school. What matters here is that Vanderbilt was venerated:

“We owe to him,” said a prominent citizen, “the freedom of the seas as applied to us locally.”³

I think this story is pretty cool in its own right. It’s even cooler, though, to the extent it can help us understand the present. Does the Vanderbilt steamship ordeal remind you of anything more… familiar? Say, much of Silicon Valley right now? I’ll let someone else write the manifesto about how technology is and will likely continue to outpace physical-world regulators and solve problems the government can’t. But cf. Uber/Airbnb/Taskrabbit/Exec/Crowdflower/Turk/3D Printing. It’s hard not to notice that CS can be a powerful mechanism to route around inefficiency and unlock a lot of value.

Of course, disruption is risky. People don’t like to be disrupted. Aaron Ogden certainly didn’t. Neither, apparently, do the bureaucrats in DC who are coming after Defense Distributed, ostensibly because they feel weak and techno-libertarianism scored too many points over the weekend, or something. The best path is usually one that avoids head-on confrontation. But still—very often, it’s messy and complicated where the rubber hits the road. So what should we do then this happens? Play by all the rules? Ask for permission? Or just build something great? To ask the question, hopefully, is to answer it. WWVanderbiltD?

Over the last year or so, I’ve had the pleasure of watching my good friends Kyle and Dan build Leap, which, as they bill it, is “a better bus service for San Francisco.” The idea is simple: the city’s MUNI bus system ($2/ride) is slow, overcrowded, and leaves much to be desired.⁴ But biking (free) isn’t for everyone, and cabs ($20) are expensive. What if we could relieve the MUNI’s load by bringing the private shuttle service that Google and Twitter employees enjoy to… everyone? What if anyone with a smartphone could instantly buy a pass and streamline their commute on a bus with wi-fi, air conditioning, and a comfortable seat? Well, please meet Leap ($6), which launched this week with a line from the Marina to Downtown SF.

It’s always fun to watch your friends start new ventures. It’s also fun to see really good products get built. Throw in the delightful parallels to the Bellona line and it’s not hard to imagine Kyle and Dan and company as a couple of proto-Vanderbilts, just trying to get people from point A to point B in a better way.

May the streets of San Francisco be their New York Harbor.

Weapons of Mass Dilution

Others have written—some quite critically—about the government’s decision to charge Dzhokhar Tsarnaev with “unlawfully using and conspiring to use a weapon of mass destruction.” Colloquially, most people have come to associate WMDs with nuclear, biological, or chemical weapons.¹ But 18 USC § 2332a©(2)(A) says that “any destructive device as defined in 18 USC § 921” is a “weapon of mass destruction.” Section 921(a)(4)(A) in turn, says that bombs, grenades, and rockets, among other things, are “destructive devices.”²

Since the IEDs used in the Boston attacks are clearly “bombs,” the § 2332(a) charge is pretty straightforward. People can argue about whether that statute is too broad, and whether other laws against, say, murder, would suffice. But what caught my eye in § 921(a) was the grenade and rocket stuff.

It turns out that another way to say “grenade launcher” or “rocket launcher” is “flare gun.” The government knows this and doesn’t really care about your flares, so there is an exception in 18 USC § 921(a)(4) (and in 26 USC 845(f)(3), an identical provision in the NFA) that says that a “signaling, pyrotechnic, line throwing, safety, or similar device” is not a destructive device. (Presumably, the ATF would say that a signaling device that is used to launch grenades is no longer a signaling device.)

Whether certain kinds of launchers are WMDs thus depends on what sort of ammunition you use or plan to use.³ Firing unregistered grenades or rockets obviously triggers § 921(a)(4)(A) and an avalanche of criminal liability. That makes sense.

So what’s between a grenade and a flare? Well, according to the ATF, “cartridges containing wood pellets, rubber pellets or balls, or bean bags” are “‘anti-personnel’ ammunition,” so 37/38mm launchers containing such loads are d̶e̶s̶t̶r̶u̶c̶t̶i̶v̶e̶ ̶d̶e̶v̶i̶c̶e̶s̶ WMDs. That’s right: launcher + bean bag round = WMD.

DYODD and check your state laws, but it appears that in some jurisdictions one can order a pretty serious launcher and have it shipped right to his doorstep; absent “anti-personnel” ammo, the federal government doesn’t even consider it a gun. Just stick to fireworks and take care not to possess (let alone fire) any bean bag rounds if you don’t want to spend “a term of years, up to life” in Leavenworth.

Drop out or not is the wrong question

I did a keynote interview last night at kbs+ ventures for their new book’s launch event. Since I talked a bit about CS183 and the Thiel Fellowship program, a few people came up to me afterwards and asked different versions of the same question: if I wanted to be an entrepreneur, why did I get several degrees from Stanford instead of dropping out?

My quick answer was that it’s important to avoid blanket statements about education and entrepreneurship. Certainly many successful entrepreneurs have name brand college degrees. But many don’t.

Last I looked, Wikipedia’s list of college dropout billionaires is 31 people and counting (and only one of them is a drug lord). I thought that was a shockingly high number, as most of us only know the most famous three or four. If we wanted to talk about dropout millionaires, there are so many that we’d probably need scientific notation.

One of the reasons for this is that the market doesn’t necessarily wait 4 years for you to get your BS or 6 or 7 years for your PhD. In 2003 and 2004, Mark Zuckerberg had a huge advantage in that he was working furiously toward something he sensed was important while his peers were still locked into school. Starting Facebook in 2007 would not have worked.

One key distinction is between businesses that require a lot of specialized domain knowledge and businesses that don’t. Often, this tracks the distinction between enterprise/B2B and consumer models. Bright, well-adjusted 18- or 19-year-olds can develop the kind of social insight that’s at the core of many great products, maybe even better than older folks can. If their engineering skills are adequate, they can build the vision and more or less take over the world. This isn’t to say this is easy, of course—only that it’s very possible.

Facebook was one example. Another may be Gumroad, a novel e-commerce company run by 20-year-old Sahil Lavingia. If you aren’t already familiar with it, Gumroad enables anyone to sell something online in a matter of seconds. If you want to sell an e-book, for example, you create a product listing and get a unique link that you can share throughout the web. If, as Sahil says, Gumroad “becomes a thing,” he will have succeeded in turning all of Facebook and Twitter into a global online marketplace, i.e. in building a billion dollar company.

Other businesses require a great deal of domain-specific knowledge, which often entails specialized education. For example, my company, Judicata, builds radically better legal search and analytics software for lawyers. This requires great engineers, but it also requires great lawyers who deeply understand how the law works. For better or worse—and I actually suspect for worse—one almost invariably needs to go to college and then law school to become a lawyer. At the very least, being in law school affords one a structured opportunity to learn how to think about the law.

For some ventures, getting a technical or professional education is unquestionably the right move. For others, college is absolutely the wrong move. More interesting than the drop out vs. not question, I think, is the set of questions that aims at unpacking what a college education really is. To really understand the nexus between education and entrepreneurship, we’d be better off starting there.