Jim O’Shaughnessy: Learning to Learn, AI Disruption, and the Future of Publishing
Happy to announce that we have the one and only Jim O’Shaughnessy on the show! Jim is the legendary investor behind O’Shaughnessy Asset Management and now OSV. Jim is also the author of several bestsellers including What Works on Wall Street.
Jim and I have a fun, light conversation about the power of learning, curiosity, innovation, and technology-driven societal transformation. We also cover topics such as the publishing industry’s future, mental models, the role of AI, and the concept of Universal Basic Income.
Links to Platforms:
Here’s what we explored in the episode:
"The most important thing I learned was how to learn and unlearn... most people are never taught it. It is something that, almost by definition, you have to do yourself."
It’s important for leaders to admit when they are uncertain, and lead a culture of open-mindedness.
It’s important to adapt to new environments, not cling to outdated practices.
There’s an upcoming shift toward AI-driven, author-friendly publishing models that reduce inefficiencies and empower writers.
Jim predicts AI will allow a “tsunami of slop” content and open huge opportunities in curation.
In a world of abundant content, good taste and effective curation will be very profitable.
Jim shares his evolving views on Universal Basic Income (UBI), arguing for experimentation to address societal shifts caused by technological advancements.
Understanding opposing viewpoints to refine one's perspectives helps make better decisions. Jim uses AI to force him to debate and understand his own opinions better.
Jim credits his success to a lifelong commitment to curiosity, whether through broad reading or questioning established norms.
"Curiosity is a shit starter. It ignited my curiosity to the point where I just voraciously read everything."
Quotes from Jim:
"The smartest thing I ever did was stop being smart. Intellectual humility is super, super important."
"How to learn is not regurgitation. It is the opposite of regurgitation. It is challenging the things that are presented to you."
"Circumstances have changed. The environment changes around you. And it may be that you were correct up until 20 years ago, but a lot has changed."
"The future of publishing is going to be incredibly better for authors... AI gets rid of all the boring, laborious, repetitive stuff."
"Good taste is about to be a very profitable thing to have."
"When companies reach a certain number of employees or departments, bullshit starts taking over... 40% of senior executives’ time was spent in check-ins and meetings about meetings."
"There will exist a group of people who, through no fault of their own, will simply not be able to grok this new world."
"I fully understand most of the attempts at UBI are going to fail. That’s okay."
"There is just so much that can be done... AI will create a tsunami of slop, and people will increasingly pay for curation platforms that get them."
"I started taking arguments that I disagree with and asking the model to steelman it for me. It changed my mind on a couple of things."
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Learn more about Jim O’Shaughnessy
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Episode Transcript:
Eric Jorgenson: So, I want to start with this question I've been enjoying asking people in my life, and I have a sense that you will have a fantastic answer to it, no pressure. What is the most important thing you think you've ever learned and how did you learn it?
Jim O’Shaughnessy: The most important thing I learned was how to learn. That sounds like it's a cop out, but it is not. Our schools do not teach students how to learn. They are antiquated systems that in fact teach students how not to learn. And what is the purpose of an education? Obviously to know more, to be wiser, to make better choices. The truth ought to be predictive. I think Naval said that once, and I love that line. To tell us something about which mental models work well, which ones don't. How to unlearn is an also really important part of how to learn. So let me amend my statement – how to learn and unlearn is the most important thing I've learned because most people are never taught it. It is something that almost by definition, you have to go and do yourself. And it is in many instances, the exact opposite of my university experience, my high school experience, my grade school experience. I was punished for being smart when I was in grade school. We had a reading thing, the SRA. And it was- so, this is 1960s, 1970s. And so they had this little reading program. And so it went all the way through the eighth grade. And I finished it in the third grade. And rather, it was a catholic grade school. So rather than send me to the library when the class was doing the SRA hour, where you read the thing and write about it, they made me sit at my desk making a Christmas tree with my hands. And my anti-authoritarianism was born. But I tell that story because it was actively saying a few things to me. You didn't follow the rules. You're going to be punished for not following the rules. You are- the message we have for you, you're a bad child for doing all of this on your own because you found it interesting.
Eric Jorgenson: You're the problem because you're above average.
Jim O’Shaughnessy: Exactly. And I'm below average in a lot of other stuff, so don't get me wrong, but I'm pretty good at reading. But that in a nutshell, being punished for... Robert Anton Wilson has a great quote, which is, he also went to Catholic grade school, and he said, the nuns, their one goal was to install the correct answer machine in your head. And by that he meant no speculation, no thinking about is this right, is this wrong? No. What they wanted was you give us the answer we tell you is right, and then you'll get a gold star and you'll get an A, and if you give us the wrong answer, you're going to get whacked with a ruler or whatever. And there's a lesser amount of that going on in other school systems, but it's basically the same. If you're in a university and you're not regurgitating exactly what the professor said, your grade suffers. That isn't teaching you how to learn. Like I was talking about, I have it here somewhere.
Eric Jorgenson: So how did you learn how to learn and when? Writing to learn.
Jim O’Shaughnessy: So, I learned how to learn as a consequence of my punishment. Maybe so there was a- it was actually a serendipitous event for me because I went home and I complained bitterly to my father. I'm like, dad, they're punishing me because I finished the whole thing. They won't send me to the library. They made me sit with a Christmas tree. And he was like, all right, come with me. And he walks me into our formal living room where he had the Encyclopedia Britannica, and he took out the first volume, and he handed it to me. And he said, read this. And so, I did. And when I was reading it, I still have the encyclopedia. It was one of the only things I wanted from my dad when he died. I was like, I want that encyclopedia because it means a lot to me in my life, because what it did to me was it absolutely blew my mind. I was like- I didn't know, I didn't know about this, I didn't know about... So it showed me how horribly informed I was, but it also got me incredibly curious. Like, wow, there's this whole world here, and I got to know about it. I got to like-
Eric Jorgenson: This being actively hidden from you by your nuns.
Jim O’Shaughnessy: Yeah, by the nuns and by professors as well. It's like how to learn is not regurgitation. It is the opposite of regurgitation. It is challenging the things that are presented to you. It is accepting like, oh, I believed X for a long time, and now I've seen a lot of really compelling evidence that a lot of it's empirical, that X is wrong. I’ve got to learn how to unlearn that, and I got to learn what to replace it with. But I think that's what was born, and so literally it ignited, as Breen Brown says, curiosity is a shit starter, it ignited my curiosity to the point where I just voraciously read every- I was lucky to grow up in a house that was filled with books. And I literally, I don't think I would have done that from a younger age if I hadn't done the thing with the SRA program. And then another thing that really helped me was the first book I ever wrote, I was 10 when I wrote it. I have it. It's horrible.
Eric Jorgenson: Be nice. You were only ten. A ten-year-old can't handle that kind of criticism.
Jim O’Shaughnessy: But to move it up to something that is actionable for your listeners, I told my mom I was bored in the summer of 1970. And she's like, why don't you write a book? And I'm like, that's a good idea, mom. And so, my parents never gave me solutions that were pat, like here, take this course, or we'll get you a tutor or whatever. What they did was always say to me, figure it out, figure it out yourself. I did it with my own kids. Like Patrick and Kate and Lail, my kids used to come to me and try to use me as their human Google, or should I say, these days, their human Perplexity, AI. And we had a huge bookcase in the house they grew up in, and I would point to it and say, look it up in there. And all three of my kids, same kind of voracious curiosity, desire to learn, so that's pretty much it.
Eric Jorgenson: You're still doing that throughout your career. Does it manifest differently sort of as an adult in the professional realm?
Jim O’Shaughnessy: I don't think it manifests differently. It has different consequences. I'll give you an example. So in the first version of What Works on Wall Street, I, being a rookie, called Price to Sales the king of value ratios. Now, that was really stupid of me to do, and if I'd given it any amount of thought, I would have thought, well, I'm going to do a new edition of this book. It's going to include new data. There's probably a really high likelihood that something has replaced price to sales in that interim. And so, rookie mistake, but it had ramifications because I had an asset management company and I had salespeople. And what did all the salespeople lead with? Price to sales is the king of all value ratios, convinced a lot of people of it. We did the new research, and we're like, yeah, about that price to sales ratio. It led ultimately to us doing composites of different ratios. But the challenge was they were really unhappy with me, my team, because they're like, Jim, you told us that it was the king of all value ratios. We've been making hay with that, and now you're telling us it's not and that we're going to do something else. Well, thank you so, so much. So, one of the things that has changed from when I was a kid to now is I am aware that as I'm having people join my team, I kind of give them the talk, which is this is what I believe right now. Now, I change my mind a lot, and I don't change my mind based on like a whim, and I wake up and say, today it's going to be opposite day. I change my mind when I do a lot of reading on a particular thing and there's new research, there's new information, there's all of these things, and my mind gets changed. And so the new team at OSV is better. They don't make declarative definitive statements to people. But it influences the way they think too. Like I had a teammate the other day say, well, it's funny, because he was talking about that, and he's like, and it changed the way I think about things, because it's like, this is good for now. As you know, I'm a huge fan of David Deutsch. And one of the things that he really unlocked in me was that obvious in hindsight but not so obvious in when you're in the situation, sometimes many of us, especially bright people, think they know everything there is to know. And we don't know like half a percent of nothing. And so that was the other aspect as I got older. When I was a kid, like I was a show off, and I was like a proselytizer and like it was my way or the highway.
Eric Jorgenson: Yeah, well all you know is that you're smarter than the kids sitting next to you. And then you get out into the world, you see the number of people and then to your point and David Deutch, the percent of total conceivable knowledge that we actually have that is vanishingly tiny. And yeah, that's humility-inducing. Which is very productive.
Jim O’Shaughnessy: Yes, it's incredibly productive. Jed McKenna, who I love his stuff, he has a great quote, which is, the smartest thing I ever did was stop being smart. And for me, the other thing is, I started thinking of myself at best as co, co-whatever, co-creator, co-contributor, co-ideator, because the intellectual humility is super, super important. And because if you're not humble, you're going to get hoisted by your own petard, and you know, I'm right. I'm right. I'm right No, you're no longer right. And it gets particularly pernicious with people who have been right with the right playbook. Well, we're seeing it in the book publishing industry. Like they were right. They had a great playbook. It just doesn't work well anymore.
Eric Jorgenson: The circumstances have changed. The environment changes around you. And it may be that you were correct up until 20 years ago, but a lot has changed.
Jim O’Shaughnessy: Exactly, and so when you're humble about your- it's like I often begin statements with I'm probably wrong. And some people call me out on that. They're like, why do you say that? And I'm like, just because it reminds me that I probably am, I probably am. If you really increase the time span, it's almost certain that I'm wrong.
Eric Jorgenson: And I think that habit of projecting humility or assuming that you are probably wrong and stating it actually I think is incredibly important when you are in a leadership position because you can very accidentally and I'm sure in your role as founder and chairman and emperor and chief at OSV, like find yourself accidentally giving orders that you didn't mean to give because you didn't preclude with I'm probably wrong, I don't know, this is an opinion, this is a wild conjecture, maybe this is an experiment worth running, stuff like that.
Jim O’Shaughnessy: That is incredibly insightful. In fact, it affected my behavior pre-O’Shaughnessy Ventures while I was still at OSAM, which I also founded. I realized that I was making a huge mistake ever saying anything when we were confronting a problem and would have a team-wide meeting about it. I kept my trap shut because one of the things I noticed, that if I said something, all of a sudden, even people who disagreed with that like fell in line, and they're like, yeah, yeah, that's probably right. And so it had an immediate and incredibly positive impact. I didn't say anything at the start of the meeting. I just said, okay, what are the ideas? And then everyone would offer their ideas. And then, and only then, after everyone had offered an idea, did I contribute anything.
Eric Jorgenson: Interesting. So I think of you, and I think we've already seen that demonstrated in this conversation, but as somebody with an extremely broad circle of competence. I think that probably has to do with your skill of learning and unlearning and your willingness to sort of explore new areas and new problems and new challenges. How do you think about your circle of competence? How do you decide when it should be moved, when it's fallible, when it should be obeyed as the boundaries exist?
Jim O’Shaughnessy: That's something I'm probably a little, you could maybe call me arrogant about. I think that, for example, I started a book publisher, I started a movie company, and I started a new media company.
Eric Jorgenson: All at the same time.
Jim O’Shaughnessy: Yeah, and I have no experience in running a publisher, running a movie company, or running a new media company. And in that way, the reason that I did that kind of joyfully and giddy about it was I didn't have all of the baggage of 20 years of history in that industry with me. And so, when I looked at doing a deep dive on these industries, and by the way, it's not a coincidence that the things that I'm starting are the ones that I’m starting. These are things that I love and have always loved. I'm a huge reader. I love movies, big podcast fan, all of that. But they were also areas where I saw the most asymmetric payoff pattern and people clinging to antiquated models that didn't work anymore as my competition.
Eric Jorgenson: Yeah, power law outcomes with bureaucratic organizations.
Jim O’Shaughnessy: Yeah, and oh, that's a fun game to play. But so, look, I always joke, I only have a really limited number of skills, but they're good skills to have. But one of the things that I do passionately believe in, anytime I have an opportunity to hire somebody who's smarter than me at whatever it is that they're going to be doing, I take it. And we're going to be announcing some hires soon that will underline this point. But I think I'm pretty good at seeing end states. And that is very handy when you're trying to build something de novo, ground up, and ignore the way that it's always been done.
Eric Jorgenson: You have the longest view in the room, sort of first principles approach.
Jim O’Shaughnessy: Yeah, that I'm pretty good at. And so, it's what led me to launch Netfolio, which was going to be the customized portfolio. The tech wasn't up to it back then. We built the tech at OSAM. I kind of forgot about Netfolio, and then Patrick, my son, came in and was like, hey, he didn't even refer to Netfolio. He was like, hey, we should do what AWS did. We built this incredible technology. We should turn it around and let our clients use it. And I went, yeah, like I was going to do at Netfolio. But the point is I'm pretty good at seeing the end state of things and then working from there.
Eric Jorgenson: So what's that- I think we probably have both spent some cycles on that in the book publishing, like thinking about the future of the book publishing market as it relates to today and where some of the dead ends are that the industry has gone down. What is the future state that you see in books in particular?
Jim O’Shaughnessy: So, in books in particular, I see the state as being far more friendly and helpful to the authors. I think authors are, and by the way, I've written four books, so I have experienced this firsthand, two of those books were best sellers, and I was not treated terribly well by any of my publishers. Even for the only mass market book I wrote, which I got a really big advance for, and they made me the front of the catalog, the whole deal. They had the attention span in terms of marketing, continuous marketing of a net, like two weeks and they were done. And so I think the future of publishing is going to be incredibly much better for authors. The standard split at Infinite Books is 70% of royalties to the author, 30% to Infinite Books. Why can you do that, Jim? Well, because every one of our companies are AI-first companies, and when you can have AI get rid of all the boring, laborious, repetitive stuff, you don't have to hire all of that group of people. So guess what, your margins, you're playing a different game here. And plus, you're also- now to again serving the author. You probably know this really well. Like with a traditional publisher, you can send them your manuscript, and what you expect to get back from them is two things. You expect to get back the manuscript with all of the typos gone, any continuity or incongruity in the text highlighted and pointed out. But you're also expecting to get it back in a galley format so that you as the author can see what it looks like as a book. As you know, they're very different. This looks very different than what my Mac screen looked like when I was looking at this. So right now, you can, if you're with a legacy publisher, that can take six months. With Infinite Books, you'll get it back probably the next day, or if there are problems that we need to address, within a week. So your ability, while it's still fresh in your mind as an author, to work on the project is going to be sped up dramatically. Editorial support. We have incredible editors working for us. And like, again, I wish we had one of our authors, the author of White Mirror. He started out totally anti. He didn't want anyone to touch to his stuff. And we're like, well, so Dylan O'Sullivan is one of our senior editors.
Eric Jorgenson: Humility.
Jim O’Shaughnessy: Yeah, exactly. Well, I understand like, especially fiction writers can be precious about... But so, we said to him, just talk to Dylan, just walk through, give him an hour of your time. Well, that led to essentially him working with Dylan to basically rewrite the book. And so we will give the author those resources. In terms of what can our AI first mentality help our authors with, well, let's say you publish a book, Eric, and you will have a dashboard from Infinite Books. So, you'll be able to see in real time where your book is selling and how much. So, you see a spike in Omaha, Nebraska. If you've told us that it's cool for us to turn the AI agents all the way up, an AI agent would have already investigated all of the podcasts and sub stacks who are in or around Omaha, Nebraska, that fit with the topic of your book, sent a query letter, introduced you as the author and the expert in this situation, said, boy, he'd be a great guest on your podcast or you might want to write a sub stack about him. All of that gets missed in legacy publishing, and you'll have it here as an author. And then for readers, legacy publishing also takes its gatekeeping to an extreme that I think is detrimental to the reading public. And we are not going to be like that. Will we gatekeep because we want a certain level of quality for anything that goes under our imperator of Infinite books? Sure. But we're not gatekeeping based on our political beliefs, based on any of those kinds of things. We're really gatekeeping only on, is this like an interesting topic? Is this a great writer? Can we improve, can we help that writer get better? Even if I or my editor in chief completely disagree with the thesis, if it's well stated and it's a point of view that is supportable, we'll publish the book.
Eric Jorgenson: Yeah. I think people underestimate how there's actually like ten people in New York deciding what books get published for the most part, and you and I are both on a mission to, yeah, arm the rebels.
Jim O’Shaughnessy: Like literally we are the rebel alliance.
Eric Jorgenson: Yeah. The pirates of publishing.
Jim O’Shaughnessy: Yeah, the pirates of publishing. All of the legacy companies, they're sitting in their Death Star. They think we're not going to be able to get to them. They have no idea what's going to happen.
Eric Jorgenson: It's interesting to see even some of the leaders of the old legacy traditional publishers are leaving and starting models that are tacitly admitting the weaknesses of the old one. Even like the humans, the individuals, like forward thinking humans within those institutions are kind of leaving. And that's just how it works. Like the husk of the thing slowly withers and collapses while new publishers with new paradigms are built upon new primitives.
Jim O’Shaughnessy: I was just having this conversation today. And it is not that the people sitting atop the legacy publishers are stupid. They're not. But the structure of their organization makes it almost impossible for them to introduce any of these innovations broadly. And so, they do what you just said, they leave. Because they can't accomplish it there. Now, what happens when an Infinite Books is incredibly successful, or a Scribe, or some other company that isn't even formed yet and is using AI first mentality, is really generous with the author, has the editorial support the author needs, doesn't gatekeep like the legacy does, has all of the dashboards and all the cool stuff that authors might like, they'll buy it. And they'll be forced to, because again, they're not stupid, but they understand, they can't even put a skunk works in because like if you want to really keep a secret between two people, one of them better be dead.
Eric Jorgenson: Yeah. They have this weird like big four, big five mentality of like this standoff of collusion is perhaps a strong word, but a stasis, of collaborative stasis in the industry.
Jim O’Shaughnessy: Totally agree. Totally agree. And it is attackable, and it should be attacked. And Schumpeter was right, creative destruction, but it's pernicious in that like GE invented the transistor and didn't make bupkis from it. Why? Because they had a vacuum tube division that was huge revenues. And why did Hollywood fight viciously against VHS and then DVDs, which is now their biggest source of revenue, because they couldn't get their minds to understand the new place things were going. And we're seeing it slightly...
Eric Jorgenson: And they're doing the same thing with AI.
Jim O’Shaughnessy: Yeah. It is the most predictable part of human OS that I get to arbitrage. I just love it.
Eric Jorgenson: And when you see, I feel like we have a lot of these conversations about just this piece of feeling close to the frontier and knowing that you will be on the right side of history because you're perpetually trying to be the disruptor and not the disruptee.
Jim O’Shaughnessy: Yeah. And obviously, it's more fun. You and I talk a lot about stuff. And what a lot of people don't understand is that's where all the fun is. Like, who doesn't want to be on that frontier? Well, all those guys in their very comfy, cozy offices in Manhattan. And I love Manhattan, as you know. I think it's a great city, and I'm there often, but the idea that you get closeted, and we've done an internal analysis on this. When companies reach a certain number of employees or a certain number of departments, what happens is like bullshit starts taking over. And we did an analysis of one company that shall remain nameless while we were still doing asset management. And it turned out, we did a real deep dive, it turned out that like 40% of the time of senior executives was spent talking to colleagues at the company, doing check-ins and meetings about meetings. I know that's a joke and a cartoon, but it's real.
Eric Jorgenson: It's very real. Dilbert is a documentary.
Jim O’Shaughnessy: It really is. And like, I think I should be spending all of my time on thinking about this stuff, directing it outward. I said to my chief of staff, if you ever tell me that you want to have weekly check-ins with people who are teammates with us, you're fired. And he's like, what do you mean? You want me to know-? And I went, yeah. And you can know that by picking up your phone, having a two second to ten minute conversation. And the minute it becomes a planned meeting that oh, we've gotta go to this one, and oh, blah, blah, blah, blah. No.
Eric Jorgenson: It's amazing how one scheduled meeting can ruin your entire day. It seems like a joke, but I find it over and over again.
Jim O’Shaughnessy: It happens to everybody, and it's like that's why that meme got so retweeted or re-whatever, the one where book that could've been a blog, blog that could've been an email, email that could've been a Slack note. And I mean, honestly, there's a lot of truth into it. And when you are only talking to your colleagues, what value are you uncovering? You get group- not only do you get group think, you get competitive with your own colleagues. Like I was reading this account of, I think it was a music company or whatever, but people got pen sets when they were a certain level, like if they were an executive vice president, they got a pen set, except it was only one pen. So one guy went out and bought a pen set that looked just like the one you got, but it had two pens. It's hysterical, but this is what they were wasting all of their time and cycles on. That's crazy.
Eric Jorgenson: Yeah, incredible. Well, another- I mean, speaking of like books, investments, positive visions for the future of publishing, our mutual friend and mutual investee Paul Warren had quite a launch with the Margins app. Speaking of kind of bringing AI into and disrupting some of these, like Goodreads has just been around for a very long time with very little... They've got a network effect, but no innovation, no product improvements. There's so many things that AI can change about book recommendations and curation and lists. And I think seeing, I think he sent out an update this morning, 75,000 people sign up in the first 10 days is an immense signal of success and correct vision on that one.
Jim O’Shaughnessy: I love the market because the market gives you the no bullshit answer to am I right or am I wrong. And him getting- he's like a kid at a candy store, I get texts from him every day, which I love. I just love it.
Eric Jorgenson: He's like, I haven't slept in three days. We got 10,000 more users.
Jim O’Shaughnessy: And so, we were a big part of his raise, O'Shaughnessy Ventures was, just because, again, loved the founder, loved the category. Because like, I love Goodreads. I love all that stuff, but do I use Goodreads? Not really. Why? Because it's just static. It doesn't do the things I want it to do. And so when he pitched me on this, I'm like, oh hell yeah. And yet the market is now saying, hey, Eric, Jim, you guys were right. You were right to invest in this because 75,000 users in, what, 14 or 15 days, something like that. It's amazing.
Eric Jorgenson: Incredible. And to see the- one of my tweets was one of the like early sort of announcements that went viral. So I was tagged in every single like comment along the- so to see the feedback roll in too and the pace that he's like responding and shipping new features that people are requesting like in tweets same day, it is a really exemplary kind of like building in public, and he personally went from 50 followers to, I don't know, a few thousand in that span also just by like talking about what he was doing.
Jim O’Shaughnessy: Yeah. And it's also yet a very different model. And it works, I think, extremely well because he's getting feedback a lot faster. He is responding. That's how you keep that flywheel going. If a bunch of people give you feedback and you don't respond to that feedback, it does eventually die off. But when you respond to that feedback, they're like, oh, wow, he's working on an Android version of this already? And that excites people who are excited about it. So guess what they do? They tell their friends who tell their friends, and honest to God, I don't know how you reproduce that in any kind of marketing campaign, in any kind of like spokesperson or influencer or anything like that. The reason he is doing so well is because he's our kind of founder. He's like he immediately responds. He takes the feedback. He's not all precious about it. It's like, oh yeah, that does look like that. I need to work on that. And so, yeah.
Eric Jorgenson: And he is the user. I mean, from the first topic, he reads 250 books a year. Like, he is building an app for himself. He is a reading maniac. He knows all the reading maniacs. And there's no more earnest, excited group of people to talk about books than like the ultra readers who are just flying through books, always looking for new recommendations. His vision around the search by vibes of like I feel like every reader is always talking about, I love this about this book. Tell me what my next read should be. How do I get this level of story, but this kind of setting, and this book made me feel this way, and what's the next book that made you feel this way? I think those are such, there's so much depth to be plumbed there.
Jim O’Shaughnessy: Totally agree, and we talked about end states earlier. One of the end states that I do see for everything that is coming, both good and bad, because of AI, because of innovation, etc., is going to be a tsunami of slop. And people like you and me are going to be increasingly be willing to pay almost anything for a curation platform that gets us. And so we'll be launching one at OSV. But you’ve got to be really careful because it's got to stand and fall on the installed customer base saying to their friends, Eric, have you seen this? You're going to love it. And it's going to save you so much time. You don't have to weed your way through the slop on the main internet. I also foresee probably five to ten years from now, there might be private social media platforms that are as big as some of our current ones. And why do I say that? Because AI and AI characters and everything else are going to be just left on their own on the platform, and that's not going to work out well in my opinion. And by that, I mean it's not going to work out well because you couldn't find a bigger fan of AI than me, I don't think. But you've got to use it for the right things. Having it be your best friend on Instagram probably isn't one of them. And at least for people like me, it's not or people like you. And so the segment of the market that we are looking at is really tiny, honestly. It's like the 5% of the world's population that we call tuned in, and then maybe the 10 to 15% right beneath them that are aspirational to get, excuse me, to that level. And so, we think we have a pretty good handle on what they're going to really love, what they're really going to hate. And so, another thing that we are building is this ability for all of our verticals to interact with each other. So, Two Thoughts, well, what else can we do with Two Thoughts? For the audio book, we have Rory Sutherland, we have Morgan Housel, we have Anna Gat, and it's like an hour private podcast. We're never going to release those as podcasts, but it's us talking to them about why they like quotes, what quotes are important to them, why are they important to them? It's content you're not going to be able to get anywhere else. And we'll add to that content. So if you happen to buy the big bundle where you get the audio book and you get the digital book and you get this book, it'll be constantly updated. And we'll add those additional commentaries or conversations with people. There is just so much that can be done on a basis that, and the other thing that we're really thinking about, and this sounds like corporate bullshit, and it's not, we really won't do deals that aren't win-win. So, we won't price this book at a price where we think that the person who buys it is going to get less value from it than the price they paid for it.
Eric Jorgenson: Well, I've yet to meet the book that wouldn't pass that test. I feel like books are the highest, the most consumer surplus purchase imaginable.
Jim O’Shaughnessy: Totally agree, totally agree. But I think though that if you constantly filter things through that lens, it does get rid of a lot of marginal projects that you're just like, yeah, that's very cool. Yeah, I myself would probably pick this up, but I'm not seeing a price point where we can deliver the full experience where we're not actually extracting more value than the person who's buying it from us. And so if that's the case, we won't do it.
Eric Jorgenson: Yeah, I like that. That is no surprise. Also, my ethos in almost everything, everything.
Jim O’Shaughnessy: Yeah, you and I are incredibly simpatico.
Eric Jorgenson: Yeah. And I'm excited to see that. I think the more- The tsunami of slop is a great phrase for maybe the downside of the AI impact on publishing in books in particular. I think the other side of the curve is the hope is that it will make the excellent more prolific. And that the returns to judgment and taste and the production level and capacity of the people with that level of judgment and taste is really going to... I think the bar will go up, but I think the production quality will go up. And at the end of the day, everyone is really... The bottleneck of the skills will be around something like executive editor. Can you position the thing? Can you craft it? Can you really deliver value for the reader, as we're talking about? Because all of the tools to do the creation and really distribution will like asymptote to zero, but that taste will be all defining and it will get closer to binary outcomes.
Jim O’Shaughnessy: And that is again, not surprisingly, because we are simpatico on this stuff, that's been one of the watch words at OSV. Good taste is about to be a very profitable thing to have. And so, a lot of people hate talking about it because you can't- how do you measure it? How do you put a metric on it? You can't. It's like the Supreme Court Justice.
Eric Jorgenson: Where there's mystery, there's margin.
Jim O’Shaughnessy: Exactly. And so we think we're pretty good at collecting a group of people as teammates who have really, really good taste. And it'll be really interesting to see because also trust. If we deliver on the taste part, we're going to earn a lot of trust. Then you’ve got to consistently never, ever violate that trust. And if you do violate that trust, first off, acknowledge it, acknowledge, ooh, we fucked up. Here's how we fucked up. Here's what we're going to do to address this. We're very sorry because your trust is everything.
Eric Jorgenson: Yeah. There's a very- it's interesting how few publishers actually have good brands when you really think about it. Like, Stripe Press is basically the only one I can think of that has a really clear stance on what they do and don't publish, that is the kind of publisher that when someone says a book is from Stripe Press, I'm like, oh, I probably want to read that, almost certainly. There may be others in niches that I'm unaware of, but the big five are basically so bloated and so convoluted with all of the imprints and the stacks, it just doesn't signal anything really to have come out of one of those publishers. I do think what you guys are doing in Infinite Books is certainly like on that path of creating a new trust, a new publisher, a new signal in that book market.
Jim O’Shaughnessy: Yeah, and we think that that signal is going to be extraordinarily valuable.
Eric Jorgenson: Yeah, I agree. I think it's worth a lot. Well, I think, speaking of taste and signal, I think your inaugural book, your maiden book, your inaugural book from Infinite Books.
Jim O’Shaughnessy: It is our inaugural book from Infinite Books, Two Thoughts. I've collected quotes since I was a youngster. I love them. And what I love about this though is also the way it came about. This was some like policy, what kind of book should we launch as our inaugural book and everything else. This was all like just happened to emerge. So I was sitting around looking through my old quotes, and I found a couple that I really love from Buckminster Fuller, a guy who I think is an amazing thinker, way ahead of his time on a lot of things. But so, I just thought, you know what, I'm going to put this up on Twitter. And then you get questions like why two, why not three, why not four? And it was like, because the honest answer is when I was looking at my notebook, I'd highlighted two of the quotes. That's why Two Thoughts. And so, got a lot of, a lot of people said, oh, I like these quotes, blah, blah, blah. And I went, oh, since I've been kind of going through them, I'll just keep putting them up and see what happens. And then we started getting people that would say, hey, would you do a newsletter of these? It's back to listening to the market. So we're like, well, maybe, I guess we could include them in our weekly Infinite Loops newsletter. And then one of my colleagues, Vatzel, came along and said, hey, we got to do this as our first book. And I'm like, that's a good idea, because I love these kinds of books because you just- The way I do it, by the way, using my own book, I'll just open it every morning. I have one right to the left of me here. I'm left-handed. I'll pick it up and I'll read the quotes and I'll think about them for a little bit, close it again. It gives me jumping off points. It gives me an interesting start to the day that I didn't have otherwise that I was doing with my notebooks.
Eric Jorgenson: I feel like it brings back the art of the bathroom book. Remember before everybody had phones, you went to everybody's house and they had a stack of books or Readers Digests or whatever next to the... I love that. The nostalgia I have for bathroom reading just can't be contained.
Jim O’Shaughnessy: Totally agree. And the other thing about it was we wanted- I love beautiful physical books. By the way, I do most of my reading on the Kindle app for iPad. Because it's easier for me to export my highlights, it's just easier. But I love physical books, and books like this one, I want the physical book because of what you just said. In the physical books, it's great to have in the bathroom, it's great to have on the coffee table, etc. In my case, I have it right next to me. It's a great way to just start a day with knowing is not enough, we must apply. Willing is not enough, we must do. Good old Goethe. But then you start thinking about that and you start thinking, how am I fucking that one up in my daily life? And so, it was very important for us to have a beautiful artifact, too.
Eric Jorgenson: Yeah. And it is a very beautiful book.
Jim O’Shaughnessy: Thank you. You'll see that with all of our hard copy books. We really want them, we think that they are beautiful objects and that they should be beautiful objects. But that's just the bonus you get because we just love the physical book so much.
Eric Jorgenson: It's a very cool, no surprise knowing the eclectic and broad thinking person that you are, but the breadth of people in here, from Einstein and Steve Jobs on the very obvious side to people I've definitely never heard of. Francisco, I'm just flipping it open. Francisco de Quevedo, next to Euripides. Edward Gibbon, Sigmund Freud. The gamut is just so wide and it's such a fun flip through.
Jim O’Shaughnessy: Well, the thing there is I spent a lot of time reading, and I try to read as broadly as I can and Decline and Fall of the Roman Empire, that's an important book to read. And you just mentioned the author of that book. And so yeah, it would be the Gibson guy, if you're struggling.
Eric Jorgenson: I already lost the page. I didn't know who the author of that book was.
Jim O’Shaughnessy: But that's why he's included. And like a lot of this stuff is just literally, I read stuff just because I thought, well, no one else is reading this. I kind of rebelled against this idea of like if everyone is reading it...
Eric Jorgenson: Where's the alpha?
Jim O’Shaughnessy: Yeah. Where's the alpha? I want to generate alpha from reading brilliant writers that many people are not reading. But that's another fun aspect of this book is the fact that I've gotten that comment, by the way, from a ton of people who I know are huge readers. And it was kind of like, I'd never heard of Chris Jeremy. And that's another fun aspect of this.
Eric Jorgenson: Yeah, the discovery piece is very fun. And I pulled out a couple that I liked. And this one I'd heard, but I didn't know the attribution. So now I'm like, oh, I got to figure out what what else Jim Hightower has said because this quote is incredible. The opposite of courage is not cowardice, it is conformity. Even a dead fish can go with the flow.
Jim O’Shaughnessy: I love that quote. And I read that in one of his books, obviously. And I think I did at least, I found it in one of my notebooks. And I did a very bad job. I tend to be chaotic in terms of my own, like I didn't write out, I read this in this book. I would just write the quote and then attribute it to him. But I adore that quote. And the discovery piece that you're mentioning is really another thing, like margins. It's kind of like you're doing it on your own vibes. You start vibing with a quote with somebody that you've never seen, and like Don Tapscott, most people know who Don Tapscott is, but your network is your filter. I remember when I first was going through my notebooks to find some of these quotes, I saw that. And what I thought about it then is very different than what I think about it now. I wrote that like, I don't know, way before the ascendancy of AI and stuff. And now, boy, your network really is your filter.
Eric Jorgenson: Yeah, well, you think about getting most of your news from algorithmic feeds that are driven by what you engage with and who you choose to follow and very literally become your filter.
Jim O’Shaughnessy: Exactly. And so you've got to- it made me change a couple of things. Like I started following some feeds of things that I personally disagree with. Just because another thing that I do as a result of that quote, this is kind of fun, I hadn't planned this, but here we go. That quote, your network is your filter, made me think, wow, that is even truer today because of the algorithm. So I better fade the algo and start following a few people who I know that I disagree with vehemently. But it also led me to start thinking, you know what I'm going to start doing? I'm going to start taking any argument that I kind of disagree with, and I'm going to put it into our AI. We're also building our own in-house AI because we don't want it to be lobotomized. And a lot of the commercially available programs I happen to know are, there are some hard coded answers into them that are lies. And that's because the emperor doesn't want people to say, oh, he's naked, anyway.
Eric Jorgenson: I mean, maybe not the forum for it, but what are the most common type of lies that are being hardcoded into the LLMs?
Jim O’Shaughnessy: The most common type of lies, think about it for a minute. If I was going to challenge you and tell you, Eric, we're going to test you and see how incredible your mind is here, what do you think people who control the people who are training those large language models, what do you think they might want to make sure the common point of view was upheld rather than torn down.
Eric Jorgenson: I mean, if you look at somebody, if you answer that about China, it's very easy. It's the party exerting censorship over things like anti-democratic or anti-capitalist sentiments, no anti-party sentiments. And if you just assume that the same thing reverse is happening on our side, then it would be...
Jim O’Shaughnessy: With a lighter touch. So it is people who currently are at the top of the hierarchy, whatever hierarchy you're interested in. This happens to be the power hierarchy. They want to preserve their place. And so inconvenient truths about them. And by the way, I'm not a conspiracy theorist in the least. This is all explainable by follow the money.
Eric Jorgenson: But these are specific and explicit like names or people or families or companies that are being manipulated, not as much like concepts like no anti-party.
Jim O’Shaughnessy: Yeah, they tend to be more, much more specific. Be that as it may, we're trying to have our AI be non-lobotomized, 100% truth-telling. And I think Musk is doing that with Grok, at least it looks that way to me. We'll see if he mucks it up.
Eric Jorgenson: That is the claim. But as you point out, it's very difficult to test without inside knowledge.
Jim O’Shaughnessy: Very difficult to test. We do have some cool questions that test that. So thus far, it has passed. But now we haven't done it on the newest model of Grok yet.
Eric Jorgenson: I can't wait to ask you, to stop recording and ask about those.
Jim O’Shaughnessy: But so what I got in the habit of doing is taking arguments that I disagree with and asking the model to steel man it for me. It changed my mind on a couple of things. It changed my mind on...
Eric Jorgenson: Back to the beginning, learning how to unlearn. What did you change your mind on?
Jim O’Shaughnessy: We got here organically without any plan. I love that. What did I change my mind on? I changed my mind on universal basic income.
Eric Jorgenson: From against to for?
Jim O’Shaughnessy: Yeah. And I think that all of the earlier tests would empirically say, not a great thing. But I think that there is a change coming to all of society, not just one specific business, not just one specific thing, but the big enchilada. Everything, everything is going to be transformed, primarily by AI, but by other innovations as well. And there will exist a group of people who, and for people just listening, I'm underlining here, through no fault of their own, will simply not be able to grok this new world. And I just think it's bad social policy to say, yep, too bad, learn to code or one of the other things that they use as an insult to people. This is serious stuff. There's going to be an adjustment period. Now do I think that the world we're going into is going to be a lot more fun and a lot better and that people's jobs are going to actually be much more interesting for them? Yeah, I do. But I think that there's going to be a longer adjustment period than many people anticipate and that there will be a group of people who will fail to make the adjustment. And again, underlining through no fault of their own. And so, we got to try everything. Universal basic income is one of those things. And I have a lot of friends who are like, have you read about- Yes, I have. But I've also gotten enough steel batting from the pro UBI side to be willing to publicly state, hey, I think despite this prior evidence, there are new forms of this, new ways of distributing it, etc., and I think we should try all of them. And I'll give you an example. We do this on a tiny, tiny, tiny, almost infinitesimal basis through our fellowships. There's a fellowship that we're going to announce soon that I'm not going to tell you what it is because I don't want to take the thunder from the person we're giving the fellowship to, but it's a mini experiment that could improve quality of life for young people enormously. And we gave them $100,000. That's why I mean infinitesimal. But this little tiny experiment, if it proves to be as efficacious as I think it will, could impact a far broader, it could impact policy, it could impact a bunch, it could be the domino effect. And so, I'm all in favor and would put money into the game, I would put skin into the game to try varying types of UBI.
Eric Jorgenson: Yeah, it was so early in the experiments. And only one method has to work for some subset of people to still have a very meaningful impact. But it's a very multifactor- the number of things that have to line up to do it effectively for a big group over time is... but the stakes are huge.
Jim O’Shaughnessy: They are massive. But the one fun thing that I learned when I did the steel manning of their arguments that I hadn't really thought about before, I had a little but not to this level, is who do you think might be the biggest opponent to UBI in terms of just giving them a credit card and and putting money into that credit card every month?
Eric Jorgenson: The credit card companies?
Jim O’Shaughnessy: No. The people who run all of the intermediated welfare systems. They don't like these people getting direct access to money because then they can't tell them what they can and cannot do. I'd never grokked it that way before. I'm like, well, of course, that makes perfect sense. It takes their power away.
Eric Jorgenson: Yeah, they get to scrape as a pass-through channel. But of course, it's not a perhaps necessary pass-through channel. It's sort of the same as the nonprofits in San Francisco that are like paid by the number of homeless people that their budgets are associated with, the number of homeless people that they can keep homeless, essentially. And so the incentives get a little awry. And you're like, from the outside, that's just hilariously- it seems like a punchline. It could be a Shakespearean play, and I think it's a comedy.
Jim O’Shaughnessy: But also back to UBI, like I also am going into this fully understanding that most of the attempts at it are going to fail. And okay, that's fine. I think that what we are facing is an enormous societal issue. And that we've got to try every conceivable way to make that landing smoother for the people who, again, through no fault of their own are not going to fit into that system.
Eric Jorgenson: Yeah. Very interesting. Well, I'm looking forward to a long fireside chat with you about this and many other things. I couldn't encourage people more to pick up your book and to look into OSV and Infinite Books and everything that you're doing over there because I think it's so fascinating. We're charging at the same tower with different weapons, and it's a very fun thing to have you as an ally in this mission and share this future, the vision of the industry and support you guys and everything you're doing.
Jim O’Shaughnessy: Right back at you, Eric. I’m delighted to have you riding alongside us.