A Rosh Hashanah Special: Business Principles from the Book of Genesis
On this podcast, we’ve talked to a lot of policy-makers, pundits, professionals and practitioners about big picture trends they are observing and experiencing as a result of the pandemic.
Today, however, we are going more micro. We'll talk to a venture capitalist about his portfolio of start-ups, and how those companies have been impacted by changes in the way we work and live, and what they tell us.
Michael Eisenberg is a General Partner at the Tel Aviv-based Aleph, which is an early stage venture capital fund with over $500M under management. Since its founding in 2013, Aleph has invested in more than 40 companies including Melio, Lemonade (NYSE: LMND), Bringg, JoyTunes, Healthy.io, Windward, Empathy and Nexar.
Prior to Aleph, Michael was a General Partner at Benchmark Capital for 8 years, the legendary Silicon Valley-based VC firm, and he continues to work with Benchmark on their Israeli portfolio.
Since around 1995, Michael has invested in and served on the boards of some of Israel’s leading companies and startups, such as Wix (Nasdaq: WIX), Gigya (acquired SAP), Shopping.com (Nasdaq: SHOP, acquired: EBAY), and Lemonade (NYSE: LMND).
Michael is also the author of a fun and smart blog, called “Six Kids and a Full Time Job”, which covers topics ranging from politics to technology, Judaism and macroeconomics. The title of his blog is misleading because now Michael actually has 8 kids and 2 grandchildren - and he’s only at the tender age of 50!
He is a frequent contributor to The Marker and Calcalist, Israel's Hebrew-language daily business newspapers. Michael has also published numerous books in Hebrew, including “The Vanishing Jew”, “Everyone can be Moses” and “Roaring Tribe”.
Among other projects during the pandemic, Michael worked on translating his most recent book into English: "The Tree of Life and Prosperity: 21st Century Business Principles from the Book of Genesis”. Given his experience as a successful investor and business builder, and his deep literacy in Judaism, he’s the ideal person to tackle this subject and we’ll talk about his book in this conversation.
Transcript
DISCLAIMER: THIS TRANSCRIPT HAS BEEN CREATED USING AI TECHNOLOGY AND MAY NOT REFLECT 100% ACCURACY.
[00:00:00] We get to a pandemic and we got a live lab of what happens if we give people income without work. And the answer is, first of all, they don't go back to work. Mark Zuckerberg said in a commencement address, I believe it was at Harvard, that if we just gave people universal basic income, they'd be creative in their free time.
Nonsense. They didn't, they stayed at home and they don't go back to work and they're not creative because people need to be challenged and the human being as all society needs to be stressed in order to be productive. Welcome to Post Corona, where we try to understand COVID 19's lasting impact on the economy, culture and geopolitics.
I'm Dan Senor
on this podcast, we've talked to a lot of policymakers, pundits, professionals and practitioners about big picture trends they are observing and experiencing as a result of the pandemic. Today, however, we're going to go more micro. [00:01:00] We'll talk to a venture capitalist about his portfolio of tech startups and how these companies have been impacted by changes in the way we work and live and what they tell us.
So I guess it's a blend of micro and macro. Michael Eisenberg is a general partner at the Tel Aviv based Venture Capital Fund, OLLIF, which is an early stage fund with over 500 million dollars under management. Since its founding in 2013, Olive has invested in more than 40 companies, including lemonade, which is now listed on the New York stock exchange, bring joy tunes.
Healthy. io, the CEO of Healthy. io, Yonatan Adiri, has been a frequent guest on this podcast. And also companies like WinWord, Empathy, and Nexar. Prior to founding Olif, Michael was a general partner at Benchmark Capital for eight years. That's the legendary Silicon Valley based VC firm. And he continues to work with Benchmark on their Israeli [00:02:00] portfolio.
Since around 1995, Michael has invested in and served on the boards of some of Israel's leading companies and start ups, such as Wix, which is listed on NASDAQ, Giggia, which was acquired by SAP, Shopping. com, which was listed on NASDAQ and acquired by eBay, and Lemonade, as I mentioned. Michael's also the author of a fun and smart blog, which I turn to all the time.
It's called, Six Kids and a Full Time Job, which covers topics ranging from politics to technology, Judaism, and macroeconomics. By the way, the title of his blog is a little misleading, since Michael now has He has eight kids and two grandchildren, and he's only at the tender age of 50. My gosh, I'm turning 50 in a couple months.
That's impressive, Michael, but we'll talk about that. He's also a frequent contributor to the Marker and Calculus, which are Israel's leading Hebrew language daily business newspapers, and he's published numerous [00:03:00] books in Hebrew. Including The Vanishing Jew, Everyone Can Be Moses, which is a great book about leadership, and Roaring Tribe.
But among other projects during the pandemic, Michael worked on translating his most recent book into English. That book is called The Tree of Life and Prosperity, 21st Century Business Principles from the Book of Genesis. Given his experience as a successful investor, and a business builder, and his deep literacy in Judaism, he's the ideal person to tackle this topic, and we'll also talk about that in this conversation.
This is Post Corona.
And I am pleased to welcome my Good friend, old friend, very old friend, uh, Mike Eisenberg, who is, uh, speaking to us from Jerusalem. Welcome to the Post Corona Podcast, Mike. Thanks, Dan. Uh, I'm trying not to be old. Just call it a long time friend. [00:04:00] Long time. Long time friendship. Long time dear friend. And you're, and you're my hero, as you know.
I've written that publicly, that you're my hero. You branded a country. That's pretty amazing. Alright, I will, uh, you know what? I, I'm gonna, I'm gonna tell my kids that you said that. That'll, I, I, I'm at, I'm at the stage right now where I'm constantly trying to get my kids to be impressed with me. Uh, cause they're starting to get to that, those ages where they think dad's not that cool.
So I'll tell them I recorded a podcast today with someone who said I was their hero cause I branded a country. Hopefully that will, that will, uh, get me some street cred, uh, in the senor home. Um, the podcast is, as you know, called Post Corona and we always thought it would be a limited series. short period of time, and then we would bounce out of Corona, and we would wind down the podcast.
Here we are, uh, and it does not feel very much like post Corona, and I think where you are in Israel it especially doesn't feel like [00:05:00] post Corona. So just before we get into our broader conversation, can you tell us what's going on from your perspective on the ground? Yeah, let's just say your podcast hasn't jumped the shark yet because it's not done.
There's still a lot to talk about. What's going on on the ground? There is a spike in cases, particularly the ultra Orthodox school system went back to school on the first day of the Hebrew month of Elul, which is now, I guess, 18 days ago, without a plan from the government of how to really handle corona, and it spread Uh, pretty rapidly.
There are 20 percent of the cases are in the ultra orthodox community now, and it's spreading through schools. Um, and in general, I think it is fair to say that the Israeli government, like many governments, by the way, I don't think they're different. This case hasn't figured out what it's optimizing for.
Um, are they optimizing to save lives? Are they optimizing for the economy? Are they optimizing for freedom? And when you don't, you know, any startup that doesn't have a top level goal and metric that you're optimizing for, doesn't get to where it wants to get to. And I think this [00:06:00] notion that we're kind of optimizing for how many full hospital beds we have is, uh, is a bit of a fool's errand, uh, in my view.
And, uh, we have to have that conversation. We have to talk about it very clearly. Unvaccinated people are getting this much worse than vaccinated people. Very clearly. The third booster shot is working and very clearly Israelis are going about their normal life until they're sent into quarantine. Um, but the big downside is the airport's not open.
And my personal view is we Protect people over 60, tell them to stay at home for the most part, um, and then open the airports to vaccinated people. And how widespread now is the third, third shot, the third, the booster? I think I saw something like 65 percent of people over 60 have it. The third booster and it's, it's really whacked the critical infection rate, but I'm, I'm not on top of the details there.
It's working, but you know, COVID is going to be around for a while. This is a dastardly virus that has, I think, taught us a lot of humility, um, both in terms of what we can do about it and how fragile [00:07:00] humanity is. And, you know, I have no idea whether it was manmade or not. Nature made or God made. I certainly don't know.
What I do know is it's a hell of a challenge, um, and, and, and viruses, maybe we'll get into this when we talk about the book, uh, tend to expose the fragility and the fractures in society. And I think more than anything, that's what's going on. And one of those fractures is a lack of trust in government. I don't think governments have acquitted themselves particularly well.
Uh, with their honesty or their, their competence in, in, in trying to deal with this, and maybe it would have overwhelmed anyone. Maybe that's not fair. It could have overwhelmed anyone. Okay. So we will get into that before we do, I want to talk a little bit about your background and what you're working on, because I think the super innovative companies that you've identified and have been backing are interesting in and of themselves, how they've navigated the pandemic.
Is interesting. And they, they tell us a lot about the world we're in and some of the issues you wrestle with both as an investor and as a public [00:08:00] intellectual. So first for our listeners, can you just provide a, just a quick background on olive, your venture fund, the, the sort of the conceit of it, what you were trying to accomplish with it that was distinctive from other players in the, in the, both in the Israeli and the global venture capital scene.
Sure, so I've been in the venture capital business for 25 years now. I had a stint at benchmark Uh, prior, uh, for almost a decade, uh, prior to starting Aleph in 2013 with my partner, Ed and Shohat, and today we're four partners. And what we saw in 2012, uh, beginning of 2013, before these words became well known, was that big data, Uh, machine learning, machine vision and A.
I. Um, we're going to become the tools of the future, and they were going to transform every industry. The second thing we identified was that Israel because of the military background where machine vision plays out in big data. would have a unique competitive advantage [00:09:00] to build scalable companies during that time in the era of scalable Israeli companies was upon us instead of startup nation, which you coined, I used the phrase scale up nation, uh, about eight or nine years ago to describe this.
And I think we we've reached that point that's proven out. And the third thing, uh, we said was. That over time principles, um, we're going to become important in business values would be important business. And we believed in investing in growing the pie of the Israeli ecosystem in order to do that and in backing companies that would be transformational brands and not just technologies, because.
Of what they stood for and because of what they did. And, uh, that's, you know, proven itself out pretty well. So I want to, we're going to talk about a few companies that our listeners may not have heard of, but let's start with one that our listeners have heard of and because it is, it really is a brand and it has been in the news a lot over the last [00:10:00] year or so, which is lemonade.
So first, can you describe what lemon lemonade is for those that actually don't know much about it and how you. Identify the company and thought, you know, put help, put, put together a team to back it. Cause you were not just an investor in it. You were quite instrumental in the formation of the team and the company.
So for those who are unfamiliar, Lemonade is an insurance company founded now, I think some six and a half years ago, maybe, um, with a, with a radical idea. Every insurance company in the world, uh, other than Lemonade, makes money when you are in distress. So if you, God forbid, have a flood or get in a car accident, you file an insurance claim, the insurance company is incentivized to actually to reject your claim or, or reduce it, because they make more money.
When they don't pay you, that's their business model. Um, moreover, so the business model is to get you to pay premiums and not, and then not power claims you [00:11:00] when you're in trouble, right? Right. Exactly. And so, you know, insurance is, is a very untrusted. Uh, kind of corporation primarily because of that, but also because there's so much fraud in insurance.
Insurance is considered a victimless or faceless crime. Um, and so I'll defraud my insurance company either by inflating my claims or by claiming things that are That didn't happen to me and you know, you feel screwed by insurance companies So you feel free to screw them. And by the way, we all pay for this because how insurance companies Price their products is not just around underwriting, but they have to take into account the losses Right, which they're trying to reduce in order to make more money as we said before and fraud That's part of your insurance premium is this group of people out there who defraud insurance companies.
And so insurance goes from being a social good that the world needs in a capitalist sense of social good to being what's effectively in some ways, almost a tragedy, the commons. Um, where we're all paying for a lot of bad actors, [00:12:00] and we're paying for this fundamental tension in the business model where the insurance company gets rewarded, uh, for rejecting your claim in your, in your time of need.
And Lemony came along and said, we can solve that, um, one by fundamentally changing the, the model of insurance company. And instead, what they do is almost like a sass business. They take a percentage of premiums to manage the pool and therefore they have no incentives to reject your claims. And, and what do they do with leftover claims, right?
Because the assumption was if it's not a confrontational relationship, if it's aligned, people will claim less. They said, okay, we'll give it to charity. And so by defrauding lemonade, you're actually defrauding your charity. Not the company and people are less likely it turns out to do that and then on top of that Because it was a mobile only experience initially.
It's totally digital digital collects data. We would underwrite policies More fairly and better, uh, for people and get to, you know, better pricing and better customer experience. It'd be all on an app. You don't have to talk to a person. It's, there's an AI bot called Maya that would do all the [00:13:00] interaction with you and be slick, cool, fast, and, and modern.
And, and in this virtual cycle of customers joining and providing more data. You know, we, we'd underwrite better and then, and we're the fastest growing insurance company in the world. We are the first insurance company to the best of my knowledge that has managed to do this in the United States and Europe, where we're now going really quickly.
And, uh, I think it's because we've built this brand. It's a better product, it's a better customer experience, and it's more aligned, the values of the alignment of the business. Uh, drive, uh, economic value here. And the, the digital, the digitally provided customer service, the feedback, I know, uh, Daniel, Daniel Shriver, the CEO has, has told me that the feedback they get is that the, the, the bot, as you call it, uh, people have a better convey, convey, convey, convey, convey In feedback, a better customer experience with the bot than they do with the person they speak to at some outsourced call center when they deal with other insurance companies, so much so they think the bot must [00:14:00] actually be a real person.
Yeah, totally. So there's AI Maya, who sells your policy and AI Jim, who's our claims agent. Um, and, uh, they're named after real people for what it's worth, and the real people are lovely, uh, themselves, but, uh, the bot does, does a really good job, and, you know, back to your original question, so, Daniel and I know each other almost 30 years, or maybe 30 years at this point, since I've gotten old, and, uh, he came to me with this idea to create something called P2P Insurance, um, which was, you know, more of a, a, a communal or mutual kind of insurance company, and I introduced him to Shai Winiger, who was kind of, Officing at our office after leaving Fiverr, which he founded another very successful public company.
And he was one sentence on Fiverr because it's an important company in and of itself. Sure. So Fiverr is like a big gig marketplace. It started by having people provide things for five bucks, uh, hence the name now with Scott. You know, uh, multiple prices, price points for services, but you can get anything on Fiverr from a sketch of yourself to prepare a video for me.
My book [00:15:00] video, by the way, they were like, they were the original gig economy platform, but one of, yeah, they're definitely want them up work, uh, Elance, a bunch of them. Yeah. Right. And, um, so shy was, and I, uh, we're talking about disrupting financial services, even created a secret Facebook group called secret Facebook group, disrupting financial services.
Um, that were like 20 members of, and, and so I introduced shy and Daniel, and it was like, I don't want to say love at first sight, but you get the point. And, uh, shy is a product genius and a creative genius. And Daniel is a strategically brilliant CEO and the two of them together have, you know, with, with the amazing management team, uh, you know, my, uh, two yells and, and, and.
Tim Bixby, our CFO, just created a, uh, a remarkable company. I even mentioned John Peters, uh, who's our chief underwriting officer. He came over from Liberty Mutual to the company. I knew we had made it when he, he gave up the corner office to come join us. And, um, and it's your, it's Olive's. It's the first company that's gone public [00:16:00] in the Olive portfolio.
Is that right? That's correct. Yeah. We've sold a couple, but this one went public first one. Okay. So let's talk about some of the other companies in the Olive portfolio and specifically. Well, first what the company does, and then secondly, how the company has, has what you've learned from the company in during the pandemic.
And I want to start with one that is counterintuitive when you, when one first learns about it, because when people think of tech startups and tech entrepreneurs, they think of, you know, a sense of the possible sense of optimism, sense of confidence, kind of, you know, rosy eyed, uh, outlook on the world. And then these two guys founded a company called Empathy.
Which is not, uh, necessarily, um, one would not associate with this very upbeat outlook on the world. So can you explain what Empathy is and why they are a part of the market that one cannot imagine a tech company being in? [00:17:00] Yeah, so, uh, Ron Gura was an entrepreneur in residence at Olive and, uh, then he went out and had a management job for a few years.
And he's always been thinking about this issue of, What happens when people die? What does that mean? Um, we all die. That's true, but we don't think about the people who live, the next of kin, and the mess that they go through uh, after their loved one passes away. And, and, and the experience of next of kin is just miserable.
Whether it's getting a government check or getting money out of a bank account and producing 15 death certificates and social security numbers. And by the way, decommissioning a cell phone account. Is is horrific. Um, we haven't gotten a social media yet. And so the world now we have accounts everywhere and everyone needs different proof and process.
It's just miserable. And and Ron, by the way, like, like the lemonade guys said, Why are we abusing [00:18:00] people in their time of need? We could make Amazing experience using technology and some empathy to go do this. And together with his co founder, Yon Bergman. Um, and they've worked together, by the way, for like 15 years.
So it's like the a team and and they said, We're going to create a beautiful, wonderful, empathetic experience for next of kin experiencing loss, and it will treat the human being and not just the process. And so there's audio guides on grief done by Yon Bergman. David Kessler, who's probably the world's expert on, on grief, uh, and others.
And then there's like turbo tax for dealing with the state. And so all these step by step guys, how you get your money from the government, how you get your money out of the bank. You know, how you decommission accounts and so on and so forth. And how, you know, how does an executor manage the will? Um, how do you pay all the people?
And, and, and now what's really amazing is we just announced, I don't know if you saw this, but we announced yesterday a deal with New York life. Now picture this New York life's around for, I don't know, a lot longer than a [00:19:00] century. It's one of the biggest and most important insurance companies in life insurance companies in the United States, if not the most important in New York life partnered with empathy.
And they said the following, uh, we don't only pay out people. Life insurance when they die, we're going to treat the family properly. We're going to enable them to have this empathy experience Past the time and so this creates an ongoing customer relationship. That's good. It treats the family and the whole person And this kind of again super values based business.
We're going to help families in their time of need We're going to treat them right is a great business because there's a lot of money Around this and people are willing to pay for great service But they're getting screwed all the time. So wouldn't we want a great technology service that's beautiful and easy and automated and digitized to get after this.
And that's what empathy. com or empathy is after. And these guys have done a masterful job, masterful. And. In the, in the less, I mean, that it's, it's, it's sounds like it's solving [00:20:00] a real problem in people's lives. It just wouldn't be, in my experience, it just, it's not the kind of problem that would be obvious to tech entrepreneurs.
You know, you're right. It's not obvious because, uh, death in general is something we don't want to talk about. Um, the two hardest topics by the turns of the talk about are money and death. Um, and, uh, I actually have companies that do both of those. And, uh, I think it's really important. One of the things I think technology can propel us forward in is exactly that, is, How we tackle tough problems and tough conversations in a, in a technological way so that it's less uncomfortable to have the conversations and people can get served properly.
And I think this should be an aspiration of entrepreneurs to step into this breach and solve a lot of these things with tech. One area that you have, uh, spent considerable time on through one of your companies, Healthy IO, which also seems to be a sector that's blossoming in Israel and blossoming globally during the pandemic, which is the entire digital health sector.
So, now you identified Healthy IO [00:21:00] before the pandemic. Uh, what, what was the opportunity? With that company that you identified, and how has it performed pre pandemic, during the pandemic, you know, is it, is it kind of catching a wave now because there's all this excitement, some would say hype, around digital health?
So, you know, headline, we need to reform the health system, it costs too much and it's really inconvenient. Uh, so, as you heard from previous discussion of Empathy and Lemonade, I'm really founder driven. And Yonatan Nadiri, who started Healthy IO, is a special human being. He was Shimon Peres chief technology officer when Peres was president of Israel.
Let me just, let me just, one, one, one, uh, public service announcement for listeners. If you go to episode 7 of the Post Corona podcast, or episode 13, by the way, I actually don't intuitively know the numbers of those episodes, but my sister, who's a big fan of the podcast recently told Ilan and me that her, the two best episodes are seven and [00:22:00] 13 in our entire flock.
I think we're almost at 30 and those two episodes happen to have one thing in common, which is Yonatan Adiri. So we've had him on the podcast twice to talk about the, uh, how Israel has performed during the pandemic. So some of our listeners may be. May know Yonatan, but it's still important, Michael, for you to, for you to tell, uh, his story briefly because it's, it's important.
This is now competitive, by the way. I hope your sister is gonna like this episode as much as 7 and 13. So we should trust me. We'll get the feedback. So Uh, Yonatan, uh, intuited after his, his mother had, uh, fallen ill or had an injury in China, that it was crazy that you have these powerful supercomputers in your pockets called iPhones, but you couldn't do medical diagnosis using them.
And he set about on a super ambitious idea to turn the cell phone camera, the smartphone camera, into a diagnostic device that could be used in the comfort of your own home. And [00:23:00] he started out, uh, after urine tests. That was the first product. Uh, they even built like this Kluge robot that would take Millions of pictures of of urine samples and dipsticks, uh, to train the different phones.
You know, Samsung phones and LG phones and iPhones, etc. Under different lighting conditions because it needed to be clinically equivalent. And they wanted to literally build a quote unquote medically equivalent, medical device equivalent, or lab device equivalent, uh, diagnostic on the smartphone. And it turns out.
Uh, that a lot of people who should get a urine test don't get one, uh, they don't get one because it's inconvenient to go to the lab. And then they find out they have kidney failure, uh, too late. They find out they have kidney disease too late. And literally it's solvable if people just took a urine test every year.
And so they, they built this product that is smartphone only. It's an app where you get a cup to your house and a dipstick and you pee in the cup. Put the dipstick in, you take a picture with your phone and you have a result. [00:24:00] Um, and by the way, this works for kidney disease, it works for UTI infections, which is targeting a lot of the female population, uh, mostly.
Um, and it can work for, you know, prenatal testing, uh, as well. Um, and It just works and they first rolled out in Israel and the UK and it's doing swimmingly well there and during the pandemic, obviously, when people didn't want to come to clinics to wait for a urine test and be in a smelly stall with flies and maybe COVID, this obviously took off more and the NHS in the UK has proven that we can prevent kidney disease, which cost the health system tons of money by pushing out the healthy IO tests and, uh, you know, please God, we'll have FDA approval, I hope soon, um, so we can roll this out in the US, but it literally saves lives.
Um, of people who would otherwise have, have kidney disease. Um, and all you need is a smartphone. That's it. And you can pee in the cup in your home. You don't have to travel anywhere. By the way, think of the productivity gains from this. You don't spend two hours going looking for parking, waiting in the lab, wait for the lab result, come back.
The [00:25:00] productivity gains are stunning, uh, from this in addition to the health gains, in addition to the health savings to the system. You know, dialysis costs like a quarter of a million bucks. So if we can keep people off Dialysis by, by diagnosing early, you know, it's a huge win. He's really driven this.
And I thought there's going to be a super global company that solves many health issues. And by the way, the second product, I'll just add this, because his idea was so fundamental. Can we change the smartphone camera diagnostic device? We can use it for other things. So they're doing wound diagnosis now, you know, for like wound ulcers using, using the smartphone camera as well.
And there'll be other applications in the future. It's really stunning. Uh, to your point about the productivity gains, I've seen some recent studies on the impact on just the macroeconomic impact of people not having to leave their job during the day. to go to the hospital or go to the doctor for routine diagnostic tests or whatever it may be.
It's, when you, when you actually aggregate the data, it's jaw [00:26:00] dropping in terms of the amount of time it sucks out of the economy. When, not to mention the hassle in people's lives. When they, they have to go to the hospital, if they take a loved one, a parent, or a child, and it's just, you, you, they can cut out half a day.
of work by just schlepping around. You know, Jonathan has called this healthcare at the speed of life. I think it's really true. In today's hectic times and, you know, chaos, if we can fit your life, we can get to better health outcomes. Um, okay, so from digital urine tests and, uh, end of life planning and insurance, tell us and insurance, take us to Talk to, talk to us about, uh, Uniper and about, uh, Joytunes.
We'll start with Joytunes. Um, so, people want to learn to play music. Now, I'm tone deaf, by the way. Uh, [00:27:00] completely. And I have the worst voice. And my mother spent endless amounts of money, uh, trying to get me to learn to play the piano and the guitar when I grew up in New York. And I was terrible. Um, she could have spent a lot less money by buying Joytunes.
And Joytunes teaches you in a very playful way Uh, and a game to play the piano and people become amazing at it and then share those amazing moments. And what it really is is it's a lean forward education app to teach you to play a musical instrument And it has it's a very fast growing business and has brought joy to lots of people and during the pandemic You know, when people didn't see the piano teachers and not people, I see the piano teachers, they needed something to do and a hobby to build and joy tunes exploded during the pandemic.
And it's, you know, obviously doesn't explode as much now, but it's persisting and people have discovered the joy of learning a musical instrument just on an iPad or an iPhone. Um, and you can play with an organ and it's, it's quite amazing. Just, [00:28:00] you know, I've, I have. Uh, two children who taught themselves to play, uh, the electric piano during the pandemic using, using Joy Tunes.
And uh, their father unfortunately can't enjoy the music because he's totally tone deaf. But you know, it's amazing to watch. It's stunning. It's really stunning. And you have seen, and, and you have seen real uptake during the pandemic. Oh yeah. That's, that's. Yeah. I think, I think this is a harbinger, by the way, of what's to come, which is.
People will discover hobbies and lean forward education, uh, in the comfort of their own home using digital, uh, devices and apps. Uh, I think that will last long beyond the pandemic. It may not be as intense a period and the growth slope may slow a bit, but this has accelerated this, this at home education and hobby education probably by five years.
Okay, before we move on to a couple of these other topics, last, uh, last company I want to just spend a minute on, which is Uniper. Sure, so we invested in Uniper probably right [00:29:00] before the pandemic. Um, the pandemic taught us something really, uh, hard, which is nursing homes are really bad for people. I actually think we knew that.
Um,
you know, how do I say this? I think sending people over to nursing homes might have been convenient on quote the next of kin, but I'm not certain it was good for people and people want to age at home and age with dignity, but still find a community to do that with and nursing homes perhaps provided some of that community, but you were stuck with the people in the community who happened to be in that nursing home.
Um, and people as they get older, their interests are more varied and they want to connect with Not just the people that happen to be co located within a nursing home. And what Uniper's tapped into is it's a, it's a TV based or an app based interface. Uh, where you can age at home with dignity, and you can have a social network tuned for aging adults, uh, to find like minded people, people with like hobbies, people with [00:30:00] like interests, people who grew up in the same town I did, even if we've all moved away from each other, and so on and so forth, and connect, create connections between people, plus a portal for medical professionals into their life, uh, and for exercise professionals into their life in a way that suits the way older people use technology, And not the way young people use technology.
And I, for me, by the way, this is all about helping people age in dignity. Um, but there's a huge business there, and I think there'll be an unbundling of the nursing home driven by, you know, as an industry driven by the pandemic, and it should be unbundled, by the way. It's actually cheaper for the health system for people to age at home as well.
Okay, so now just moving more macro, what are your general observations of what has happened? To the tech economy during the pandemic, just you can hit any, any theme, just what, what, what has struck you about like the big dramatic changes that we're experiencing during the pandemic that you think will [00:31:00] outlive the pandemic?
Well, the acceleration won't outlive the pandemic, but it has accelerated things and diffused digital technologies dramatically, you know, pre pandemic. I know a lot of people went to the bank. Um, I don't know a lot of people go to the bank anymore. They all use digital banking. And so, you know, we've, we've accelerated the, the, the destruction of physical banking, uh, probably another physical financial products.
And, uh, so that acceleration is here to stay. And we've, we've kind of leaped forward a decade in digitization. I think that's one thing. The second thing is, um. We've discovered that our supply chains are very brittle and they need to be rethought Uh from a tech perspective you can think about semiconductors in this context as well, right?
So if we have a supply disruption of semiconductors, like we're having now prices for everything go up And we haven't thought of it strategically in that way Um, and we're also vulnerable because taiwan [00:32:00] semiconductor, which is an amazing company But it's located on the taiwan chinese border is a you know, it's a very susceptible area both for national security And for and for our economy, you know when shipping prices go up We ship things all over the world right now shipping prices go up.
There are delays a lot of people.
Hello. You there? We hear you. Yeah, my head said turn off for a second. So, um, we we lost um people in the pandemic, uh, you know got in the way of the shipping lanes and uh Prices went up and the supply chains were brittle I think the third thing that we need to reflect on is there's a whole class of people in the tech world Uh, they have gotten very wealthy during this time and the people like to talk about wealth gaps.
I think it's a skills gap In addition to a wealth gap between people who participate in the tech economy We're in the 21st century economy, and people are still in the 20th century economy, [00:33:00] and I think that's likely to expand, and we have to figure out as a society, as a civic society, what we're going to do about that.
Okay, so let's, let's talk about that a little. Um, because all the fixation over here in the West is, uh, on these issues, is, if I had to boil it down in a very sort of glib way, it's, it's, you know, the world was told to stop working, and all your products and services will be provided by Tech companies and the people who run those tech companies will amass enormous wealth and the people who invest in those tech companies will amass enormous wealth and everyone else will just kind of muddle along, uh, at best and that this is going to intensify socioeconomic stratification.
Um. Do, I mean, do you, do you agree with that characterization, I guess is my first question, do you think it's a [00:34:00] fair characterization, and is there anything to really do about it, in that it's, it's sort of inevitable, these, the people who built these tech companies are innovative, innovators, they're innovators, they're innovative.
They, they built companies that just so happened to have met their moment during the pandemic. They were meeting the moment before the pandemic, but they especially met their moment during the pandemic in terms of imagining us, try to imagine us going through this last year and a half without zoom or without all the e commerce companies.
Um, it's, it's just. It's, you know, without the streaming services, I mean, it's just hard to, it's hard to imagine. So, you know, is there something sort of wrong or some would say unjust about all of this, or is it just sort of a natural evolution and think, and, you know, we should be grateful that these tech entrepreneurs built the companies that they built.
And by the way, and should they be rewarded, therefore, disproportionately for [00:35:00] having taken the risk when they did that, that helped us solve these problems and, you know, basically reduce the, to some degree, the suffering of this past year and a half. I'll start with your last point and then go to the first point.
So, number one, if we did not have all the technological advance and digitization that appeared before this pandemic, And was put into massive use during the pandemic. This pandemic would have been a lot worse, a lot, a lot worse. And we need to thank the entrepreneurs and the innovators and the technologists and God, in my view, for giving us these tools ahead of the time of this pandemic, where we would have lost a lot more people.
We would have lost a lot more of the economy. We lost a lot more productivity. And so this is a giant blessing. Um, and should people be rewarded for that? If consumers and customers think that these people should be rewarded, then they should be rewarded. And, you know, if Zoom provided this amazing service to let [00:36:00] people stay on when they couldn't get on airplanes, they should be rewarded, um, and so on and so forth.
And, and, uh, if digital banking took off and neo banking took off, they should be rewarded. And anyone who didn't do that should, I don't know if they have to be punished, but they'll, you know, shrink. And so, um, I'm very thankful, very appreciative of the entrepreneurs who drove this innovation, uh, that enabled us to go through the pandemic.
Um, like this and, and we, we'd be remiss if we didn't mention the amazing collaboration efforts of the drug companies to produce a vaccine so quickly, um, which is also part of the collaboration enabled by technology during the pandemic, um, that wasn't around 10 or 12 years ago, and we should say that openly and they should be rewarded.
Now, you mean the mRNA technology with regard to the vaccines? Yeah, also in some of the other vaccines that have made their way. Uh, through the Johnson and Johnson vaccine, Sarah and, um, and you know, the ability to coordinate supply chains to get billions of [00:37:00] vaccines out is the technological miracle, by the way, I mean, think about this.
We take this for granted that we can just say, okay, let's invent a vaccine and we can produce billions of these vaccines. That's That's astounding. It's a technological miracle. It's astounding. And people who built that infrastructure, invested in the infrastructure and developed the technology should be rewarded.
That's a capitalism it's be right. Um, and do you think, and do you think it will be transformative? Uh, do you think it'll be, I heard one infectious, infectious disease, uh, epidemiologist a few weeks ago make the point that there were some major transformations in life sciences during the HIV AIDS, uh, uh, epidemic, and there was a lot we as a society and those in life sciences learned from that epidemic that actually had cascading, positive cascading effects in all these other areas of the advancement of healthcare and, and, Um, and life sciences generally, do you think [00:38:00] the same will be true based on our experience of this year and a half?
We'll look back and say, wow, we made gains not only in how to fight this particular, uh, uh, virus, this particular pandemic, but we've also learned a lot and will therefore make gains in a whole range of other, uh, combating a whole range of other. Illnesses and viruses. I'm not an epidemiologist and I'm not a pharmaceutical expert, but it can't not have an impact.
So, you know, when you accelerate one part of this, you know, you, you get gains elsewhere and I'm, I'm certain it will happen. I think by the way, the, the holdup is regulatory and, uh, it'll be interesting to see how. How the speedy regulatory response of the FDA on a relative basis to what came on with the mRNA vaccine will, will impact the way they approve things in the future.
That, that in my mind is really an interesting issue. Um, but going back to your question before, uh, we shouldn't be, uh, pessimistic or, um, take it glibly that just some part of the [00:39:00] population kind of won't make it. Um, there are economic transformations that go on and they happen from time to time.
Industrial Revolution, the Digital Revolution, uh, the Mechanized Agricultural Revolution, and I talk about this a bunch in my book. And, and the question is a civic question for society, which is, um, what do we do about populations that haven't accelerated to the 21st century? What do we do about workers who are at threat either from automation or just because those businesses have gone away?
Um, you know, banking, bank branches was a job, an insurance broker was a job, it'll be less of a job in the future. I think that's pretty obvious, you know, travel agents was a job, it's no longer. And so, how do we think about those people in the population? At least my view is, number one, that's a civic responsibility.
Not because it shouldn't be a government responsibility, but just because they're not capable of doing anything about it, and we shouldn't expect them to. Um, I, I find it humorous when someone says, Oh, the government should improve public school education to get all these people in technology economies, [00:40:00] like, good luck.
Um, that's a civic responsibility, because we need to move quickly on it, and civilians and, and corporations, and even not for profit organizations can move a lot faster than, Then the government on this, but there's a second point here, which is, um, we can only keep an economy growing as long as large percentages of the beings in the economy do well.
And so this is not altruism in my view, this is absolutely self and mutual interest, which is we need to push other people, rise them up, invest in them, partner with them, people who have been either left behind by the economy or left out of the new economy and bring them in. You know, to use, to use Israel as an example, there's like 350, 000 people in the tech economy in Israel out of a country of nine and a half million.
If we want to be successful as a country and have a growing economy that grows and grows and grows, we need to bring hundreds of thousands of more, if not millions more, into the tech economy. You know, I, I, I have a belief in [00:41:00] humanity and people and their ability to get better. We can do this, and we can bring more people into the digital economy and get them updated for it.
But it has to become a priority. It has to become a civic priority, and that requires leadership. And I think that leadership's been really lacking, um, you know, on this topic. And that's part of the conversation I'm trying to drive. Leadership from who? From government? From business? Yes. From who? Yes. From government, from business, from public intellectuals, et cetera.
We have to, we have to have some hard conversations, right? Like what's my civic responsibility to make sure the pie grows, the economy grows. Um, you know, there was, there's a famous, uh, story I think it was written by, by Neil Ferguson, where he said he was giving a lecture somewhere and somebody said, you know, you can't eat an iPad.
And I think that's true, right? You can't eat an iPad. People need earn a living. And so if Apple wants to sell iPads. People, people need to have 21st century, uh, jobs. And I, and, and we need to train people for these jobs. They're not obvious and [00:42:00] no, no one's taken this seriously in my view, um, as a civic responsibility.
And that's what I'm trying to do. Michael, one would have thought during the pandemic that would have been the perfect time, almost an opportunity, to retrain people for the digital economy. I mean, you had, you had people at home, they're basically told to stay home, they were, in some cases, told not to work at all, or if they were to work, they had much more flexible schedules because they were doing it remotely, and They were being, you know, basically paid to be hunkered down.
Wouldn't have that been the, the ultimate period to, to try to tackle some of these issues you're talking about? And if so, did we miss it? Uh, it should have been the ultimate time to do it. We did miss it. That doesn't mean it's too late. And so let, let, let me, um, with your permission, also take something from the book.
Uh, right now, because [00:43:00] it's super pertinent. So I just want to, I just want to say something about the book. So, so, we, we mentioned the book at the, during the introduction, The Tree of Life and Prosperity, which is one of several books that Michael has published. His, his most recent book is, is actually, was published already in Hebrew, and it's just being released now on, um, on, uh, in English.
And we'll provide information at the end of the podcast for how to uh, to purchase the book. Because we're making these references to the book, maybe before I make one more reference, why don't you just give just a headline description of the book, and then, and then we can jump back into this particular topic.
Sure, so the Tree of Life and Prosperity takes a reading of the book of Genesis, uh, from the Bible, and interprets the verses through an economic and innovation lens, uh, making, giving a different understanding of the biblical text. In ancient context and making it relevant for a modern context. And so just to use a quick example, Noah, who is an inventor, maybe we'll get into it more afterwards.
[00:44:00] Noah was inventor of both the plow and fermentation. Um, uh, is a lesson that we can apply. Uh, and he's very similar to Alfred Nobel in this way who developed dynamite. What happens when we have very significant innovations that unleash abundance and unleash tremendous power, but they're Unaccompanied by, by principles, um, and values.
And so, uh, I do that throughout the entire book. Every biblical character in Genesis from Adam and Eve and Noah, and, and Abraham and Isaac and Jacob and Joseph, and some of the ancillary characters that, the ancillary characters that people don't pay attention to, uh, are homo, they're economic beings. And by the way, we all are, by the way, we spend most of our day working.
Um, we spend less time sleeping with our children than we do working. And it's. Reasonable to assume that the forefathers and the characters in the stories of Genesis did the same thing and the issues that they dealt with dealt with from Family business like what happened with Jacob and his and his children and and Isaac becoming a farmer and changing the family trade From what his father did which was a [00:45:00] shepherd and a metals dealer and and and Jacob transposing his wealth at once from shepherding and then to farming and in other areas and Joseph who was the minister of the economy of Egypt there's a lot to learn from this Um, but it needs to be modernized, which is what I attempted to do in the book.
And why, and what gave you the idea for this, for this book? Like, obviously, you, you identified a gap in the market, because it really is nothing, there really is nothing like this. One could argue you're the perfect person to write it, given that you have, you've been properly educated from a religious standpoint, uh, studied yeshiva, went to yeshiva university, uh, lead a very religiously literate life, uh, and then you're at the cutting edge of technology and technology entrepreneurs and venture capital investing.
So you, so one could argue you're the perfect person to write this book, but how did you, how did you come up with the idea? Uh, so the answer is I didn't. Um, I, it was more [00:46:00] serendipitous in that the book started actually as table conversations in our home with our children. around the weekly, uh, Torah or Bible portion that is read in synagogue that week.
And everybody brings their own baggage to biblical interpretation, and my baggage is the economy and innovation and technology. Uh, you could say their own lens. My wife says that I see everything through the eyes of economics. I'm not sure that's a compliment from her, but, uh, uh, I take it as one. And because I think people are economic beings fundamentally, and the economy is really important and business is important and earning a living is important, and then it became, uh, four or five years ago or six years ago.
It became a weekly missive on whatsapp to about 140 people like six to eight pages on the weekly portion And then someone called me said you know You ought to turn this into a book and so first the book came out in hebrew And that was a bestseller in hebrew the most surprising thing to me was I thought it was going to be a book mostly for religious and biblically literate or tora literate people and what turned out was [00:47:00] ceos of tech companies economists academics Uh secular people religious people people across the religious spectrum, uh read the book Um, and gave feedback.
And in fact, most of my audience, I would say was not, uh, orthodox like I am. Um, the majority wasn't, and it became a bestseller. And so, like, one of these moments, like, oh, wait a minute, there might be something here. And so, uh, we translated the book into English. I've already written, by the way, on Exodus and Leviticus in Hebrew.
Those are out. Um, and the Exodus one also hit the bestseller list. Leviticus one might have been a little too much to swallow, although I thought it was the best one. Um, and, uh, we translated it into English and did this with, uh, Adam Bellow, who edited it and made it a better book, candidly. Um, he was the editor of the Closing of the American Mind and um, uh, we released in English and it's, it's wild.
I got a, uh, I got a picture yesterday from a friend, uh, with a father, uh, a, at, at Georgetown University, you know, in priest garb, [00:48:00] uh, holding up a copy of my book. And uh, I got an email this morning. Uh, from somebody I know in Detroit, he said, uh, he bought the book for his father's father started reading.
He's a devout Catholic. Um, and he's loving the book and I've gotten it from Jews and entrepreneurs and Keith Raboy, uh, tweeted yesterday or two days ago that every founder of a tech company ought to read this book and he runs founders fund. Um, and so it's been really gratifying and we hit number one And a couple of categories on Amazon yesterday and business ethics, uh, Paul Gomper's, uh, professor at, uh, at Harvard business school said this should be, yeah, at HBS said this should be read in every business ethics course.
And you of course recommended the book so kindly, uh, Dan, my hero. And, uh, it's, it's, it's kind of moving the book. I, I, I'm afraid we're going to sell out because we maybe didn't print enough copies, and uh, I really just want to get it out to start a conversation. But do you think it touched a nerve? It's an interesting question.
Do you think the book touched a nerve? Because during this last year and a half, I [00:49:00] find people are being more reflective and introspective about a whole range of issues, especially the issues that you tap into. They may not be thinking about it in a biblical context, but if you bring a biblical context to the self reflective conversations they're having, um, it's just like an added layer of value.
So do you think you just kind of caught a moment where, where people are in the kind of taking stock mode, uh, not taking financial stock, meaning taking stock of life mode and thinking about what kind of role they're having in their lives, in their business lives, in their societal lives? I think it might, it might have to do with a point in time.
I'm not sure it's only that though. I think Um, people feel like we're living through chaotic times, politically, um, economically, technologically, innovation wise, perhaps families as well, and [00:50:00] the pandemic accelerated all that and exposed some ruptures in society as well. And I think whenever we're in kind of a turbulent time, we look for, for anchors.
And I think, you know, the Bible as, as, as an anchor provides a timeless anchor, uh, one that has stood the test of time over thousands of years. Um, and as I like to say, has more unique users than Facebook and Google combined. And it's, it's, I think that the timelessness of the wisdom matters, and I think it's surprising to find out that it has something to say.
About AI or universal basic income or technology or, or what I do. My kids, you know, I, I was an accountant, but maybe accounting is threatened by, by ai. What are my kids gonna do? Or I was a, you know, a I worked in a, in a bank and the bank's going away. What are my kids gonna do? And, you know, that's a topic I touch in the book and it's, we're not the first people to encounter this.
CAC encountered it and, and no encountered it. And these, these are big issues right now, and people are looking for anchors. I think that's part of the nerve. That it touched here [00:51:00] and uh, you know, I'll go back to the previous question you asked which is Um, did we miss the moment? Did we miss the moment of can we train people and help people get into the new economy?
And like I said, I don't think it's too late and and i'm certainly not giving up I think it's a civic responsibility. We can do this, but I think everything is about preparedness and the framework with which you approach a crisis And I think both the israeli government which is my local spaghetti patch and the u.
s government Approached it with the same lens and it was the wrong one in my humble opinion, which is Let's give people universal basic income. That was the idea That was present and pertinent in people's minds. Let's mail out checks Right now. Okay, so let's let's let's I want to I want to delve into that because it's an important topic It's a topic you've talked a lot about you and I've had a couple conversations about it and it relates actually to your book so in the US during the pandemic the federal [00:52:00] government has has distributed about Just north of six trillion dollars, trillion with a T, in relief, and that has come in the form of stimulus checks, enhanced unemployment benefits, uh, you know, all sorts of relief for small businesses, forgiveness, a forgiveness loan program, aid for state and city local governments.
It's amazing now. You have a situation in many of these states and cities where they're awash in cash now, because the federal government has just pumped so much money through these Um, through this pandemic, through, through these, uh, pandemic relief bills, appropriations bills. And so they now, like New York City, the MTA, the subways have more money than they know what to do with, but, but yet no one's riding the subways.
And so you have all this money that's flowed through, flowed through the system, and that doesn't, that's all fiscal. That doesn't account for all the monetary, uh, stimulus. And what all this did effectively [00:53:00] is it, is it paid people not to work. Now some of it obviously made a lot of sense because some people couldn't work and they needed help.
Uh, while they couldn't work. But other critics, I think you among them, have argued we've gone too far because now we, we, we have now gone full throttle into a real experiment of universal basic income. Which we had, which had always been an interesting intellectual idea, an academic idea, but it was still just an idea.
And we effectively I think you've argued we've, we effectively tried it. So explain. I couldn't have asked for a better lab to prove the theory in the book which comes out of the Garden of Eden than what happened in the pandemic. And so maybe I'll tell the story as I tell it in the book and then come back to where I think this went wrong and the lack of preparedness.
So um, we all think of the Garden of Eden as some idyllic place. I don't. Um, and I don't think the Bible intends it to be an idyllic place. The Garden of Eden is an experiment. Adam and Eve are placed there, [00:54:00] um, and they're given what they need to be, to subsist, right? The trees bring forth all the fruits and they have everything they need in, in raw food and materials to get through.
They got a UBI check, um, and, and they subsisted. But a couple of things happened. One is, um, Adam and Eve don't talk to each other in the Garden of Eden. Eve is so bored she talks to the serpent. Um. And not only that, there are no children in the Garden of Eden. None. Zero children in the Garden of Eden. Um, moreover, God throws them out.
Either they sin or they fail the lab experiment, um, and they're thrown out. Now, pay attention to this. They get thrown out of the Garden of Eden where they have full subsistence, where they've created nothing, neither children, nor business, nor property, nor any innovation. Um, and they're bored and they're thrown out by God.
And then God, so to speak, curses them. I don't think he curses them. I think he tells them what's going to be, which is you're out of UBI land. You actually got to work [00:55:00] and you'll have thorns and thistles and, you know, from the sweat of your brow, you create bread. Oh, wait a minute. We'll create bread. There was only wheat in the Garden of Eden and fruits.
There was no bread, didn't manufacture anything, didn't create anything new, any new processes. And, and then man only begins to have children outside of the Garden of Eden. And yes, it's with pain, uh, for the woman and the man is cursed and he has to work, but it's a creative and productive activity. Um, that leads to this.
And I think what the Bible is trying to tell us is that, uh, work is not just about earning a living. There is value to being productive. There is value to work. Um, and there's value to learning new skills, like making bread, um, that cause you to be creative and to procreate and to You know, raise the next generation of innovators and people who will do work together on a joint project.
People do less bad things when they have what to do that is productive. That's part of a good society. I think one of the notions of the founding fathers of [00:56:00] America is that, is that people should be good. I think in their mind, by the way, it was good Christians. But they should be good and virtuous and part of that was hard work, the Protestant work ethic and or Christian work ethic.
Or Judeo Christian work ethic and so, um, that is part of the story. Now what happens is We get to a pandemic and we got a live lab of what happens if we give people income without work And the answer is first of all, they don't go back to work. Mark Zuckerberg said in a commencement address I believe it was at Harvard that if we just gave people universal basic income, they'd be creative in their free time nonsense They didn't, they stayed at home and they don't go back to work.
And they're not creative because people need to be challenged. And the human being as all society needs to be stressed in order to be productive. And so you mean they're not creative meaning, meaning there's no. There's nothing to catalyze that creativity if you don't have a [00:57:00] deadline or Or a problem that you're itching to solve or an expectation sort of stress or an expectation, right?
So, you know the Israeli government and I begged them at the time to go do this, you know Instead of giving out money should have said here's money because people needed money Okay. There was a problem. People were laid off suddenly by the pandemic and their industries were decimated. You know, friends in the tourism industry was decimated.
And so people needed money, but it should come song alongside of an expectation that you should fight some thorns and thistles. You can learn software programming. You can learn data analysis. You could learn to be a robotic engineer, by the way, you can learn agro tech. You know, you want to go out to the outdoors and be out of the, you know, the four walls that can find us during the pandemic, the outdoors was really safe.
And I chair an organization is called the Shomera Hadash, the new guardians, which is the largest volunteer organization in Israel and provides. Farm workers and protection for farmers and ranchers in Israel. We brought tens of thousands of volunteers to the field during the pandemic, because the workers weren't [00:58:00] available, uh, to come in the Thailand, he's went home for the new year.
And so, but we're going to train people who are unemployed, then not just to get a check, but to go learn a new skill, but that's not the frame of reference or, or, or, or mindset that policymakers came with, they wanted to kind of check the box and get a vote. That's not called leadership in my view at all.
Sorry to be so, so speaking such polemical terms about that, but it's, it's not okay. It's, you know, we're giving up on people. We don't believe in their divine spirit and their human spirit and human ingenuity, creativity, that when you stress them and press them, they'll be great. And we can. You know, bring them opportunities.
It's not okay just to tell people to sit at home and take a check. It's disrespectful. And what do you think now that we've gone through this period, it sounds like what you're, what you're suggesting is people have gotten accustomed now to this, to this system, to this experiment in UBI, and [00:59:00] that it may no longer be in many people's minds an experiment.
That this becomes sort of the normal. Yeah, I worry about that, Dan. I really do. So explain, are you seeing that? Well, you're seeing it in spades in the U. S. and Israel too, where you can't get people to come back to work at restaurants. You can't get people to work in hotels. There's a labor shortage, even though a lot of people aren't employed.
And you know, they got a lot of checks and they got used to sitting at home getting a check And maybe they're still getting checks and if you flood cities and states with money So maybe not the federal government's mailing a check But cities and states can now and there's a lot of money sloshing around the system to keep a lot of people at home And so, you know, I I don't know what becomes of this.
I think it actually increases gaps not just income gaps But it increases capability gaps, and that's really scary. And, um, and, and we have a responsibility. Like I said, I, I think it's a civic responsibility at this [01:00:00] point. I think it always was, but now it's clear it needs to be a civic responsibility because the government just can't figure this out.
So you send some more dough. And, uh, I don't think it ends well. You've written about another topic out of the pandemic. Called what you call relocalization. Can you talk a little bit about that theme you've identified and you know, what what? How you think it it'll kind of outlive this period we've just been through.
There's two parts to relocalization in my view One is a supply chain part and the other is a community part and I'll start with the second People were lonely during the pandemic. I think people are still lonely and their nerves afraid Um, even before the pandemic, I thought and invested in the notion of community, and I think there'll be a lot of community driven businesses.
You know, it pains me that community banks went out of style. I think they were super valuable, uh, as community anchors and community organizations. And I think we're going to [01:01:00] get back to that. And some of them is going to be digital, and some of it's going to be geographic. We've discovered that we need communal resilience, familial resilience in order to deal with all this uncertainty.
And so relocalization means I need to start taking care of the people around me. I need to build community infrastructure around me. I need to, uh, invest in, in this, in civic society, uh, around me. And I invest in the success of the people around me, because we'll all be more successful. If more people be successful, just like we'll all be more safe.
If everyone's safe. If everyone gets vaccinated, we're all more safe. Nobody's kind of safe until we're all safe and nobody's going to be successful over the longterm unless all of us are a lot more successful. And I think that requires community infrastructures, you know, America's become a less religious place over time.
And so the, the church and the synagogue, which used to be community anchors. And I think by the way, demanded virtue and goodness of people in a way, the government and politics can't, um, will become more [01:02:00] important over time. I think people are craving that sense of community. You know, it's, it's important to say, I think.
Politics, which has become somewhat of a new religion, um, is very relativist, and it's one day this and one day that, and truth has kind of lost its cause, and so therefore it's unable to demand of people virtue. But virtue is important, and I think communal structures, whether they're religious structures or communal societies, et cetera, will be able to demand that in a peer to peer sense in a way that the government has not been able to.
And then the second part of relocalization has to do with the supply chain. I mentioned this kind of earlier, which is our supply chain got in real trouble, and you see it in spades and semiconductors, and we can't deliver cars because we don't have semiconductors, because for years we just assumed China would be the supply chain for the world.
Oops. Um, and. Uh, I'm not saying that that offshoring or outsourcing was necessarily a bad idea, but Centralization of that made it less resilient. Centralization in one particular country, meaning China, made it less resilient. [01:03:00] And I think we need to relocalize, meaning fragment and make anti fragile, to use an Ossum Taleb term, parts of the supply chain.
And yes, relocalize it in many cases, bring it closer. To the points of production, um, but provide more automation to keep, keep prices down, uh, will be important. And just to add one more point to that, which is, nobody talks about it, but, but part of what sends a lot of, uh, these things overseas is regulation.
The cost of production in an unregulated environment is much higher, lower, sorry, than the cost of production in a regulated environment. And we like regulation in some ways, but it has real costs. And we, we don't pay the costs in real time. We pay them now and we're paying them now. And, but no one remembers that the regulation drove it overseas to begin with, and so we need to think about how we have smarter regulation that enables things to be.
made closer to the point of production. I'm not talking about autarky, by the way. Autarky is a failed idea. Um, it's, we need to have distributed production. It should be distributed, automated, but in places, [01:04:00] you know, where the regulation doesn't drive the cost to the point that it's cost prohibitive.
You've talked several times during this conversation about the future of the semiconductor industry for good reason. Where do you think Israel fits in the Innovation race around chips. I mean, you look at companies like NVIDIA and obviously Intel, which have either made major acquisitions in Israel or have invested.
enormous innovation capital in Israel. One doesn't naturally think of Israel as it relates to chips in the same way one would think of, say, Taiwan. Um, beneath the surface, there's a lot going on. So where, you know, you, you keep coming back. To, to Chips, and I hear you, and I agree, uh, that, that that is like the pressure point for so many of our economic, innovation, geopolitical tensions over the next, call it, decade or so.
Where, where does the country you're sitting [01:05:00] in right now fit in? First, it's important to say that semiconductors are the pumping heart of the digital economy. We need to understand that. And most people don't. Um, you know, I bought a car. They don't realize the car today is made up of more software and semiconductors than it is rubber and, you know, metal in terms of the value of the car.
You know, we had Mohammed El Aryan on a few weeks ago talking about inflation and he said, the chip shortage is making cars more expensive. Yes, absolutely. And, uh, and, and so you're seeing inflation in cars and you can blame it on the shortage of chips. Absolutely. Um, but when you don't see it, you don't think about it, and the chips are hidden somewhere in many of the things, even our computers, you don't see them, it's a nice screen, um, and so, but they are the pumping heart of the digital economy, and as the digital economy becomes, uh, more pervasive in every part of society, semiconductors matter more and more and more, um, and it's a critical piece of infrastructure, it's not just technology, it's infrastructure, it's an airport, a railroad, and everything that looks like infrastructure.
[01:06:00] And so, um, and then we need to divide between a production of semiconductors, and that's where I think Taiwan is super relevant, and the IP behind semiconductors. And the places you find IP for semiconductors, you can kind of count on less than one hand. Um, the U. S., Israel, China, you know, maybe Cambridge, uh, in the U.
K. Um, and in the U. S., you're talking about a place where Intel was, Oregon, and, and, and California, or AMD, and, you know, uh, maybe Boston, a bit. But these are tiny pockets in the world where Where the IP for semiconductor exists in Israel is one of those places. Fundamentally, you know, one of Intel's core design teams is in Israel.
And, you know, for full disclosure, we've backed a group called next Silicon, um, which is hard at work on very next generation semiconductors. Um, the company's in stealth mode, right? The company is in stealth mode. Correct. [01:07:00] No, it's public that we invested. I think it is at least and tell us much more than that.
No, no, but it's an unbelievable team. That's really pushing the envelope. And so, you know, my view about Israel, uh, quite radically is one. We need to make a larger investment in the army because that's where technology comes out from, uh, in Israel in semiconductor talent. That's number one. Number two, there are a lot of semiconductor startups.
We need to do more around that. Yeah, we're still a small country, but I think it's fundamental. By the way, for what it's worth, a lot of Apple's semiconductor operations are in Israel, too. It's not just Intel. Apple has a huge semiconductor group in Israel, and Apple and NVIDIA are targeting semiconductor engineers around the country and offering ungodly amounts of money to join those companies.
Around, around Israel. Around Israel. Yeah, around Israel. And one of the top executives for Apple that worked on the Apple chip is Israeli. Correct. Yeah. And so, um, this is all happening in Israel and I have a somewhat radical point, which I've [01:08:00] attempted to pitch the government on that. I think actually think we need to do some semiconductor.
Manufacturing and fabrication is beyond what Intel does. So Intel has fabs in Israel, but I think we, uh, we need to expand that. I think it literally, I think it's infrastructure. I think it's infrastructure for the economy. I think it's infrastructure for defense and security. And I think it's a critical piece of infrastructure and, um, and Israel needs to, as a, as a nation, invest in that infrastructure.
So, you know, one of the reasons I think it's important to, to have more semiconductor infrastructure, uh, in Israel. And close to the points of IP is because that'll enable faster turnaround times for Israeli semiconductors. But there's a secondary point to it, which maybe should be called a primary point.
Um, like I said before, Taiwan's semiconductor is right near the Chinese border and they are the critical linchpin of the semiconductor economy. And the U. S. is making efforts now to have Taiwan's semiconductor set up in Texas, um, and in other places. But this is, this is a global, [01:09:00] um, conflagration risk. If, if the Chinese decided, um, You know to go up the straits and and invade taiwan and take over taiwan semiconductor This would be cataclysmic on some level for the world economy I got to believe that the u.
s. Defense department is paying attention to this I hope the israeli defense establishment is paying attention to this, but this is this is a fundamental thing And by the way as an investor, it's something I think about a lot Uh, you know, what are single points of failure in a lot of these? You know, value chains, and I think semiconductors is one of them and, uh, needs to be talked about more.
I think the US government's aware of it at this point. The question is how fast they move and what a priority it is. In my view, this is a super high priority. And Mike, I also just want to make sure people know about your blog, Six Kids and a Full Time Job. Yeah. But it's, now the family's bigger than that, right?
Yeah, I have eight kids and three grandkids. The blog name wasn't scalable. No one should hire me to do branding. Right, so just, just so our listeners understand, Michael is how old? You just turned 50? I just turned 50. [01:10:00] Just turned 50 and he has eight children. One wife. And three grandchildren. One wife. One wife.
One wife. Very important. One superhuman wife. One superhuman wife, eight children, and three grandchildren, and you grew up in the U. S., in New York, and you, and, and you guys made Aliyah, you moved to Israel together and started a family in Israel, right? That's correct. In 1993, six weeks out of college, we both moved to Israel.
Together, married and, and your blog. And your blog has been chronicling a lot of these observations, some of which are captured in this conversation, but they go on a bunch of issues that we didn't get into today. So, uh, I highly recommend the blog and I obviously recommend all of Michael's books again, which I will provide information for at the end of the podcast.
Um, but Michael, just wanted to, uh, thank you for, for joining us today for an illuminating conversation. We covered a lot of. Territory and a lot of topics [01:11:00] and I hope to have you back then. Thank you for the opportunity. And this is a great conversation I hope we'll do it again guests like you make it easy.
Thanks again, Mike. Thanks, Dan
That's our show for today to follow Michael you can catch him on Twitter at Mike Eisenberg and as I mentioned, I highly recommend his blog. It's a lot of fun. It's called six kids and a full time job You can find it at sixkidsandafulltimejob. blogspot. com You can also find the blog at Medium. And you can also just go to the Olif website, olif.
vc and link to the blog through the Olif website. As for his book, The Tree of Life and Prosperity, you can purchase that, the English language version, at Barnes Noble or any independent bookstore. And, of course, there's always that e commerce site that might be an option for you. I think they call it Amazon.
But seriously, I [01:12:00] highly recommend the book. It's a terrific read. And here we are in the middle of the Jewish holidays, and it's a great time to sit back over the Chagim and enjoy it. Post Corona is produced by Ilan Benatar. Until next time, I'm your host, Dan Sinor.