20VC: Former Meta CTO, Schrep on Why Climate is a $10TRN Problem, Operating Lessons Scaling Products to Billions at Meta and Why the Best Leaders are Like Music Conductors

Shrep
Building a company, it feels like it's big moments, but it's more a game of inches. I describe a good leader as sort of like a conductor of an orchestra. It's like I can have the best players in the world, but if they're all playing from a different song sheet, it's gonna sound terrible. My joke is like, inertia is the most underappreciated sort of force in the universe. As I learn more about climate, I'm like, this is a $10 trillion problem.

Availability of cheap, clean energy is probably the biggest rate limiter to human progress right now. This is 20 vc with me, Harry Stebbings, and today we have one of the greatest technologists of the last two decades on the show. His name? Schrepp. He was the CTO at Meta, where he scaled products to billions of users, shipped millions of units of consumer hardware, constructed tens of millions of square feet of data centers.

Harry Stebbings
He built teams of up to 35,000 people and made breakthroughs in AI. Today, Shrep is the founder and partner at Gigascale, a new kind of climate focused investor investment firm. But before we dive in, lets face it, your employees probably hate your procurement process. Its hard to follow, its cobbled together across systems and its a waste of valuable time and resources. And as a result you probably are facing difficulties getting full visibility, managing compliance, and controlling spend its time for a better way.

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Check them out now@Navan.com. 20 VC, you have now arrived at your destination. Shrep. I am so excited for this. As I just said, I spoke to JC, Julian Cordoneur, I just spoke to Dan Rose.

They said wonderful things. So thank you so much for joining me. I've been so excited. I've gotten a lot of feedback from people who can't wait for me to be on this. So I'm very excited to.

They said, oh, my God, poor you. You've got to spend an hour and a half with Harry. Christ. Listen, I want to start with a question. I think so much goes back to childhood.

Honestly, if you were to think about how your parents or your teachers would have described a ten year old trap, what would they have said and how would they have described you? I mean, I don't know if nerd was in the lexicon, but probably I was like, I was thinking about this and I was remembering my dad took me on this one weekend trip to Disney World and, like, they had one of those, like, cartoonish sketch artists or whatever. And I wish I still had it because, like, what they did was, like, me at the computer with a little bubble that says, oh, no, bugs in my software. I was probably ten or twelve or something like that. Because they're like, what are your hobbies and stuff?

Shrep
And I was like, I like computers. That was a kind of nerdy, smart, nice, nice kid. So that's probably what they'd say. Poor you. I mean, what, what a, what a rude cartoonist.

Harry Stebbings
I think along the journey you get many yeses and nos and they really shape a lot of how you are and how you think. If I ask what was your most memorable yes. And what was your most memorable no. And how did each shape, how you think, what's the first that comes to. Mind for, yes, it's probably gonna be my wife going out with me and then eventually marrying me.

Shrep
Because I think that that is like having a partner in life who's smarter than you and supportive and you can work with and build a life together, I think is a phenomenal gift. That's an easy one. That's the yes. I think the nos, you know, it's not one no. It's a rapid sequence of no's in succession, which is when I was trying to raise money for my startup.

I don't know if anyone's raised money before, but, like going to pitch after pitch after pitch, and like people saying, now we're not going to give you money, or we don't like your market or this or that. And the hilarious thing was, this is 2000, this is Q four of 2000 dot crash happened in April. So it was like a tough time to raise money. I get it. But I was remembering back the first like six slides of our presentation was trying to convince people that there was going to be a lot more servers in the world.

It's like, I think we nailed that one. But like people do is like, nah, they're really going to be a lot because like we're selling software to help people manage large data centers and people like, are there really going to be that many more servers? I don't know. And so it's like, I think we got the market right. How did that shape you then getting repeatedly told no?

It reinforced the intrinsic motivation, sort of the core of like, well, why are we doing this? If everyone else is saying, nah, this is dumb? Like, why do I think it's not dumb? And to me, that's like boiling it down to first principles. And I had first hand experience and I was like, this problem needs to get solved and I'm as experienced as anyone to go solve it because I've been doing this for a while.

So whenever anyone said no, I was like, what do they know that I don't know? And I was like, well, I have this first in experience, so it's like first principles. Like, what do I believe? Has this new data invalidated that belief at its concrete, at its core or not? Or do they just have a different opinion?

And if not, then I'm going to keep going. That's why I kept going. I mean, we kept going and going. Got a lot of note. We had someone fall asleep in one of our pitches.

You know, I had it all happen. And then Sequoia Capital said yes. Take me to that meeting. I love the story, shrep. Dan and JC will tell you, but, like, you go to Sequoia after a loaded no's, someone fell asleep.

Harry Stebbings
I thought we agreed that you'd keep that private. I didn't mean to fall asleep. By the way, shrap, you talked about servers. What can I say? It's taken 24 years, but it's payback time.

Shrep
Harry, do you know what? I was three then, you know, sorry, shrap, I'm innocent on this one. But you go to Sequoia, who do you meet? How did it go? Like, just.

Harry Stebbings
I'm intrigued. The first thing to just set the stage for anyone who's been in a vc. This is on Sand Hill Road. You know, it's a room full of glassed in conference rooms and in Q four of 2000, because the doc, everyone basically lost their shirt. In companies.

Shrep
The best I could describe is, like a zombie apocalypse movie where you're like, walking through the mall and nobody's there. Like, that's what it was like. I was like, where is everyone? Why are we the only ones here? We're like, all the conference rooms are empty but us.

And then Mike Moritz was the partner who did the investment, legendary investor at Sequoia. You know, originally a journalist. I just remember sitting across from him and he wanted to, like, do a one on one with me and just probing, you know, it was like deep, investigative journalistic questions about my childhood, this and that. Why do I think this is going to work? And, you know, he wasn't a technologist, but he was just trying to get the root at, like, who we were and what problem we were trying to solve.

There was a series of meetings after that. You know, we had prototypes we'd built, we had customers that we had to give to them to explain the problem to them. So I think what we have was really solid, but I think they, you know, believed that we could go off and build this. I love that. With Mike.

Harry Stebbings
He asked me the same. I came out of, like, an hour's meeting and it felt like an incredible therapy session, and I'm not sure if I passed or failed. Yeah, no, no, no. You didn't know. I know.

Shrep
I was like, oh, that went terrible. I was like, sorry, team. Like, I really screwed that one up. Like, let's keep going. And then he was an incredible board member and he was incredibly tough on us in the, in the.

In the board meetings. I mean, I'll just tell one other story that I often tell to our founders. Which is just sort of like I was the engineering guy. So I started the company that found our founder, CEO and founder had a product, you know, and then one of the board is enterprise software. So we sign a big contract with a customer and say, you know, hey, at this point we're going to deliver this version of the software with these features.

So we spend a bunch of time designing and testing and all the rest of it. So I came to the board and like, all right, here's our schedule for delivery. We're going to deliver, and of course, we don't make money until we ship this thing. So I do this long presentation about all the things we need to do to get done, and the board kind of sits back and they said, have you thought about shipping the product a quarter earlier? And I was like, nah, I never, never thought about.

It's like we basically take Sunday afternoons off. Like, that is our current schedule. It's like, I got a half a day off a week and we booked a schedule that was six and a half days a week. And it's like, if we could ship it a quarter earlier, we definitely would have. But, you know, now as an investor and as a board member, I get it that they're like, it's the right question to ask, which is like, you want to push, can we do this faster?

Can we do this cheaper? Can we get more customers? Because building a company, it feels like it's big moments, but it's more a game of inches. Every single day. It's every single customer, it's every single, you know, diff.

And so I think that that is a good board in the right way, appropriately. They won't ask you to do things that affect the laws of physics, but, but they will push it. What else do you think makes a great board member? Shrep the joy of this show? For me, I'm forever learning.

Harry Stebbings
I'm early in my career. I'm trying to be the best board member that I can be, but I use it as a learning tool, quite frankly. When you think about being a good board member today, from having Mike on your board to seeing many different boards, what do you think makes the best? And how would you? I mean, I have had the, you know, I've been on board several boards myself, including a public board.

Shrep
You know, I've sat in on meta board meetings for a decade and a half. And so I've seen an amazing set of people there. I think the best boards that I've seen, the most high functioning boards are the ones in which the team is actually treating the board as a resource, as a set of external people who are invested in the success of the company, but bring a different set of broad perspectives to the problem. And so you come to the board not with a report out and everything that's happening. You don't treat the board meeting as a pass fail test that you, like, come in and, like, hope it's over.

You come in and say, like, I've got these two big strategic challenges. You know, do we go vertical? Do we go horizontal? Do we go to Europe? Do we do the US?

Do we launch early? Do we wait? And then you try to tee up the question in a way that you get a broad range of feedback from a variety of people who have good horizontal experience. And I think the key of a board member is to give critical advice, but to remember it's not your company, it's the entrepreneur's company. You're not there five days a week.

I try to say fewer things, but more impactful, generally speaking, because it's easy to fill the time with lots of advice. And if I give 30 pieces of advice to a founder, they're going to remember five of them. And so I sort of like, what are the, I'm always running an algorithm in my head is like, what are the most important, highest value things this person needs to get right? Maybe it's hiring, maybe it's the first customer, maybe it's this particular role. My job is to help elevate that executive and get them focused on that, on the most critical bits at any one, one point in time.

And then you need to go to work as a board member when the, you know, entrepreneurs like, I'm looking for this hire. I need this customer introduction. I need this, like, get to work, pull out the Rolodex, call those people, call recruiter, refer people in. Like, at least that's the way I treat it as, like, part of why I ended up becoming an investor is like, that's what I'm here to do, is to, like, go to work for these entrepreneurs and help them build. Someone once told me very wisely that when you make the move from operator to investor and board member, you need to move to a role which is best described as nose in, hands out.

Harry Stebbings
Do you find that difficult? Shrep, you're a builder. You've been a builder for years. Suddenly now you can't put your hands in and get, get involved. What's funny is, for me, at least, I think if I'd made this transition 15 years ago, it would have been a huge challenge for me, because when I was running a small organization, by the time I sort of switched over, I was running a 35,000 person organization.

Shrep
We had gone through several acquisitions, including the Oculus VR acquisition, Instagram. So I would describe Doctor Julian about running workplace. I was often running four or five lines of business simultaneously at Meta. I was describing my job as a one day a week board member to five companies at Meta, rather than sort of operating one verticalized thing, because I'd be working with the data centers team over here. I'd be working with the VR team over here.

Now our ads team, now Instagram. Like, that's not a role where I could get in and become a critical path on anything, because these are each large things, and I would have to figure out how to get the right leadership, point them in the right direction, get the right contact. So it was a much smaller shift from that to investor than if I was running one of those things to investor. Then I could get how it's harder to sort of elevate and sort of step out. These are all, like, multi billion dollar business units, and you run, like, five of them at the same time.

Harry Stebbings
And you set it very casually, but literally, how does one do that? You have to have some humility about what it is you can do and realize that actually the most important thing, just like, the most important thing the board can do is have a great CEO running the company. You know, when I had a great leader running these areas, 90% of my job was done, and then my job was to sort of, again, have humility about, like, not trying to sit in and do their job, but answer the question. You know, I'm often asking the question of, like, what are they going to do naturally, that they need to change. So, like, maybe there is some inertia in some direction that made sense, but the market conditions have changed, or we need to adjust or pivot.

Shrep
And then how do I nudge and apply pressure sort of in that direction, or probably context or feedback? And there are times when people are fully aligned, like, you got a great leader. Their strategy makes sense, and there's just not a lot for you to do. And you have to recognize that, too, and back away a little bit and be like, all right, that's going really well. So usually what it means is you're kind of scanning for, like, where are the places where sort of we need the most help?

Maybe I need a new leader. Maybe we need to switch our strategy. Maybe that leader is great, but they're hiring a team. So then I'll go spend all my time out recruiting, trying to find vps to come join that leader. It's just sort of a constant process of like, what's the, what's the highest value thing across this organization and how do I do it?

Harry Stebbings
What did you find was the most common element that teams did naturally that was most destructive of value? I would say the two hardest things that are sort of common across everything from that, what I see in my climatech portfolio companies and others. My joke is like, inertia is the most underappreciated sort of force in the universe, which is you get a people set of people together, they're running in one direction, especially if they've gotten any success. I got a first customer. This happens to startups too.

Shrep
It's like, great, we got this customer. They're really excited. They really want us to do all the following things. They really want us to build a full stack electrolyzer rather than build a platform to sell. So we're going to go in that direction.

You have to ask yourself like, wait, wait, wait, is that where the big market is? Is the big market actually selling this technology to a bunch of other people rather than trying to build a big vertically integrated thing? You're going to start running in that direction because it's what's in front of you. So that's inertia pulling you in that direction where it may not be the right thing for the market. So I think the biggest thing by far that orgs do is like high functioning orgs is they're like doing the right thing.

They're just like operating in a LoCAl maximum, using inertia to go in a DirectiOn. And you got to either provide them with context or sort of nudge them to say like, hey, hey, hey, this market size is 10 billion. This market size is 100 billion. So every minute you spend over here, you're like missing this bigger opportunity. Are you sure?

I think the other is the challenge in any from my startup recruiting, hiring Xero to Mozilla. When I joined, it was about a dozen people to meta to the startups. We operate as people. When the n is greater than one, you've got a people problem, right? Because you got to get people together, they got to work together.

Everyone wants to play their part. People challenges are by far the hardest and the MosT common across these, the BesT orGanizations. I describe a good leader as sort of like a conductor of an orchestra. It's like I can have the best players in the world but if they're all playing from a different song sheet, it's going to sound terrible. So you got to kind of egg at the best players and everyone focuses on that.

That's great. But I think people way, way undervalue the sort of coordination and optimization. I've seen the difference between a well organized team and a not well organized team. I think it often trumps the, like, quality of individuals. So you got to spend a lot of time, like, does everyone know what they're doing?

Are you asking the bass player to play the drums? You know, and the percussionist to play the trumpet? Like, that's going to go real bad. If they really like to play the drums, give them the freaking drums and figure out how you need drums. That is your job as a leader is like, how do I get everyone sort of in the zone where they're coming to work every day going like, God, I am doing the best fucking work in my life, excuse my language.

And that when you get that happening, there's just like, to me, it's like, it's kind of why I do what I do. I get this, like, tingle in the back of my neck. It's that, like, the goosebumps feeling. It's like, holy, this is awesome. That feeling of this, like, team of people just doing the best work of their lives is really important.

So I think that. That people undervalue that. They're like, great. I hired a bunch of people, I did one all hands, and I'm like, our goal is to get this customer. Then I left the office and I'm good.

I did my job. Nope, that is not how you do that. When I think about what you said, I just want to start with the inertia element. We always hear that speed is the most important determinant in getting from zero to one or not product market fit to product market fit. I'm just intrigued how you think about speed and sheer activity being the most important thing versus strategic thought, picking the right direction and being much more thoughtful.

Harry Stebbings
Which side of the camp do you lean on? Two things, I think, generally speaking, when in doubt, I think speed. Speed often beats sort of good strategy. I think if you kind of zigzag more quickly, you'll probably get there quicker than there. So I think when in doubt, go for speed, is what I'd say.

Shrep
But it depends a lot on the problem domain. And this is, I think when you talk about what I'm doing with this climate tech, when we built data centers, you didn't, like, iterate your way through a data center. You designed the whole thing. You figure it's like, I can't go like, I need 100 acres land. Like, oops, I need 120 acres.

That doesn't work. You don't get to pivot 18 months into that project. I distinctly remember all these conversations about how much capacity do you need in 18 months? And I'd be like, I don't know. And they'd be like, well, we're ordering steel, and you can't buy that a day, but you can't go to Home Depot the day before.

So we kind of need to know. And so we're like, oh, crap, we got to get better at capacity planning. There are problems in the world where if you don't get good at planning, it's really going to hurt you. And I think the biggest mistake people make, it's the one hammer problem, which is just like, speed. Speed.

Speed or planning. Planning. And like, the best operators are. It's a much more nuanced. It's like, ah, I've got the lay of the land.

This is a, this is a problem where planning it correctly is really important, and this is a problem where speed is really important. And so we adjust our, our sort of operating cadence appropriately. It's a sort of, it's a tough answer because it's like, it's kind of a little both, but, like, the bigger answer is really understand the nature of your problem and optimize your process for that problem, and then flex depending on the problem. Like, those are what the tier one operators do. It makes me think of the Jeff Bezos kind of decision making framework of one way versus two way doors, and thinking very carefully about that.

Harry Stebbings
When you review your best and your worst decision, what would you say they were and what did you learn from them? I guess you should say that some of the things that I am most proud of fall into three categories. One is like, betting on people is like having an intuition about this person. Like, huh. I think they're going to be incredible.

Shrep
So, like, let's invest in them. I think it's emergent things from a culture that I didn't actually, like, decide on that thing and I'll tell it. I can tell a couple stories in that regard. And then the third is sort of like roughly calling technology trends. Like, not perfectly, but I had a pretty good history.

You know, we built an AI lab at meta in 2013, and it was kind of like, huh, this AI thing is going to be pretty big. Let's start building the skillset. And that's why you see meta doing llama now and a bunch of other things, because we had all the people, we had all the skills we were doing that and the companies who hadn't had to pivot quickly and do sort of crazy things to sort of catch up to the current state of the art. So. But I think it fits in those three categories.

Harry Stebbings
If I'm pushing you, shrep. Sorry. Sometimes I have to be more journalistic. Go for it. What's the best?

So, like, the best decision I ever made specifically was buying the domain name for 20 vc for an amount that I could not afford because it meant that there was no humanly possible way I could not do it. And I just had to commit everything I had. I would say there's, there's people we hired at meta that were really transformational. And I think that, that, you know, in the meta context, is probably one of the best things we did is get those people in the organization and the things they built. The culture of open source at meta has done a lot for the world and done a lot for meta.

Shrep
So, you know, everything from react to Pytorch to now llama is out in the world. I'm very, very proud of that work. Can I actually ask, I actually spoke to Yann Lecun before this. Yeah. Love Yan.

Harry Stebbings
Amazing, dude. Why did you do it in 2013? Now it seems very obvious. And why that moment, did it seem like the right strategic decision? This is 2012, 2013.

Shrep
So a couple of things that happened. One is, from a company perspective, we'd spent the last first five years I was there fighting for dear life. It was sort of, how do we build a business on top of social network? Which when I joined was, this is the other thing is everyone thinks these big successes are obvious at the time. My experience is exactly the opposite.

When I joined in 2008, a lot of people convinced me to not join because they're like, social networks are big. Nobody makes any money. Look at email, look at AOL instant messenger, everyone uses them, nobody makes any. MySpace was bleeding cash and was actually bigger than meta at the time, or Facebook. It's all looks obvious now.

At the time, it was absolutely not obvious, but. So we spent a lot of time building a business, and then the whole shift to mobile happened where it's like, we built this whole business on the web, we had to move it to mobile, and then not like everything was perfect, but there wasn't such an eminent crisis all the time. And Mark and I had a lot of time to talk about, like, what are the things we want to proactively build in the future. And that's when you saw first move into VR shortly thereafter and the move into AI, and it was kind of a, where do we think computing platforms are going? Do we think that like, the little, you know, rectangle in my pocket is the, like, summation of computing in the future?

And, and our analysis was, no, it's going to both be more integrated into my real world class, you know, smart glasses and immersive in VR. And it's going to be smarter, it's going to be. So we ar VR and AI became the big bets the company made at the time. And so we did work on VR and then we decided to build. And I remember because we're like, should we build a general purpose research lab?

And Mark was like, no, we should focus on AI. And so then when we decided to focus on AI, met all the leads of AI and met Jan, and that's how we built it. What technology shifts did you mispredict or get wrong? And are there any lessons from that misprediction? Well, I think that timing is often challenging on these things, like how soon something is going to become big is often a challenge.

Harry Stebbings
Can I push back on you that in companies is a challenge, like startups is a challenge because you don't have budget, and if you are too early, it's the equivalent of being wrong. But when you're meta, actually, you have enough cash to sustain, obviously, indefinitely. And so being early on VR just means you get more lessons, you get more reps. No, maybe. I still think it's important to be right because like you are, you are effectively distracting resources from other things, right?

Shrep
You could be putting those resources towards other things and you could miss, if you pick this trend over that one and this one's the right one and you're investing over here, you can be in sort of deep duty. I think you're right that, like, startups don't get as much luxury of time. And I think timing is this is, as a climate investor, a lot of the questions I ask is I can see what the future is going to look like in ten or 20 years, but in the time horizon of this company, which is five or ten years to sort of, to full self sufficiency, will that market be there? And I think that's a really, really key question we try to answer for a lot of these things is I love this technology, I love this team. This is definitely going to happen.

Not sure about. I'm not. Maybe too early, maybe too late. And I think timing really, really, really does matter. You know, when I was at Mozilla in 2006 to 2008, I get pitched of startups wanting to start browser companies, right?

And I was like, Firefox 1.0 when it came out. It's like big innovations where like tab browsing, pop up blocking and plugins. And then Chrome came out. Just like if Chrome, you have Firefox. That is like, as a startup, how do I differentiate there?

And you see this in electric cars, right? Tesla was the first out in electric cars, BUIlt a lot of Thing. Rivian shows up. They're like, all right, we're going to make high end pickup trucks. What does the next electric car startup go do?

What's the market entry that they can do? It's a crowded market. It's hard. It's a BAD time to start a new electric car company. So I think you need to like, figure out when the markets.

And I think this is what's exciting. I see a lot of disruption happening in the power markets. And so I'm REallY excited about this because disruption means there's a shakeup and there's opportunities for like, market changes and entrants. And like, that's what you need to have a viable company. If the market's REaLLY static, it's very hard to start a company.

Harry Stebbings
So with respect, you know, you speak with the timing there and, you know, if companies need LOnger, they need more cash. Respectfully, you fund some non conventional companies. In other words, companies that are not b, two b procurement payments, businesses that venture investors on Sandhill love. Do you worry and think a lot about financing pathways and who's going to fund it next round and how that pathway is going to look? Yes, and I think the key thing that I apply here and learn is how much capital do you need to spend to prove the core technical risk?

Shrep
And I think there's a huge variance in some of these. You know, some projects is like, I need to go spend $2 billion before I know whether this thing even works. And others, it's like, oh, this is actually a cell we're going to build. You know, it's about the size of a refrigerator. That is the core technology.

We can build that with $10 million, and then a large scale commercial facility that costs $100 million is 20 of those. And so when you go to finance that, you're like, oh, like, we've already built this thing. We know how to build it. You can see it. It works.

We're just gonna build a lot of them. You're not trying to scale it up or do something different. So I think efficient use of capital is really important. Time to revenue is really important. And I think the hardest thing that you didn't ask, Harry, is I think in climate, like, I spend a lot of time doing philanthropy and I spend time investing.

When I invest, I'm like, I'm a capitalist. I'm like, your pitch to your customers is we are cheaper or we are better. And they're like, oh, by the way, we're good for the environment. It's like the little asterisks at the end. Because my thesis is like, most people are busy, most enterprises are busy.

You can't lead with the, like, we're better for the environment, but we're more expensive, whether this or that. So you look at all of our companies, their core pitch is like, you want our product because it's a cheaper form of ethylene, because we produce 24/7 green energy and capture carbon, because you don't have to take out your trash as much as a consumer and it doesn't stink. And that's awesome. This is the pitch. And then, oh, by the way, it's massive climate impact on the back end.

So. And that's what gets me excited is these technological and market disruptions mean that you, like, you have the opportunity to enter with a better product that then has all these co benefits. Tesla, the reason they got successful in the early days is like, the car's freaking fast. You're like, check out my car. It's faster than yours.

Oh, by the way, it's electric. That sort of entry point works and that's what we look for. Can you just talk to me about how you think about time to revenue and investing today? Because I worry always with blindly investing in this space that a lot of things remain science projects. Talk to me about how you think about time to revenue and how that impacts your investing decision making.

To me, it's a question of how quickly. I mean, and at each funding gate, you need to basically be retiring risks, right? We've got a core technical risk, we've got a core market risk, we've got a team building risk. Whatever it is, you set those with teams ahead of time. Do you identify them post rat?

Harry Stebbings
How does that work? I mean, that's part of the funding process. It's like, all right, you're raising this money. What are you going to get to before you need the next funding round? And then what are you going to do with that?

Shrep
Because you kind of need to pencil it out and say, like, will that next round of investors invest based on if you succeed? There's a whole joke that, like, the worst way to fail is to achieve your plan and fail. So, like, you need to set the right milestones and get a ton. I think there are some businesses where you can get to revenue quickly. Mill is sold out.

The first run of 10,000 units, they sold them for a $1,000 ish each, you know, and they're now on rev two. That's cheaper to make and better in a whole lot of ways. You know, Dioxycle, who's got an ethylene plant. They're negotiating offtake agreements right now. They have producers who are like, we want to buy this so that we can use it to make our products.

By the time they build their plant, as soon as they flip it on, they're making money. So, like, these are the sorts of businesses years, this is not decades, to sort of, like, do a bunch of crazy stuff. And then I hope it happens. What's the hardest thing that climate tech companies face in those early years? I mean, you're in this, too.

That's never one hard thing. It's like, you got to build a business. You got to de risk the tech. You got to get customers. There's this valley of death, which is like, I haven't built this thing, and so I don't totally know whether it works.

Like, maybe I built a small one on a bench or this or that, but I haven't built exactly what I'm going to sell. And, like, who's going to pay for that risk, right? Because a venture investor says, like, ooh, that's $30 million to build that thing. And if it doesn't work, we lose it. A bank looks at that and says, like, I'd be happy to finance it once you have a customer and three examples of one running.

And so you run into this, like, chicken or egg problem. And so this is why I think that a lot of what I look for is, like, you can complain about that, or you can basically say, how do we find technologies that are fundamentally smaller, lower capital, easier to get to proof points where you sort of skip all that and say, like, I've got one. It's not lab scale. This is commercial scale. Again, I just need to replicate it.

You know, I go back, I looked at, like, what happened to data centers? It's like, used to be giant, huge mainframes. And then we went to pizza boxes. Why did we go to pizza boxes? We put 48 pizza boxes in a rack.

We could just build one giant rack, you know, all on our own. It's because chopping it up in those pizzas made it really easy to do it in increments. I only need three pizza boxes, you need 15. This person needs a million. But like, even we get a million of them, we're buying them one at a time.

And you just get this awesome sort of de risking decoupling of the risks. If you had to build a data center, you built one and you spent a million like that, instead of a million pizza boxes, I'm building one machine. Just think of how much risk you're coupling together in all of that. Like, oh crap, we like, we missed a line this, we didn't have enough power. And so you just decouple the risks that way.

So this sort of like horizontal scale I think works really well for, for hard tech because it sort of decouples all of these risks. And then you can imagine what happens from there. You shipped consumer hardware to millions of people in your time at meta. How did that experience impact how you invest and identify investments in consumer hardware that you like? Today I was most humbled in two transitions.

So like, did software at massive scale writing, huge distributed systems, billions, hundreds of millions of users. We start building data centers. Building stuff in the real world is different than building software, to my point earlier. You have to plan stuff out. If you make a mistake, it's very expensive to fix.

You just need to approach that problem differently. So we kind of got good at that. And I kind of had an ego. I was like, I can build hardware, consumer hardware, enterprise hardware. Eh, it's the same, oof.

When you ship something to a consumer, a, they have to decide to buy it, b, if they don't like it, they just send it back. And as soon as they send it back, your business is toast. You lose a ton of money on every single return. And if your return rate's above a certain amount, it doesn't matter how good your product is, your whole business is toast. Basically, retailers are upset.

Consumers are upset like, you're in trouble. And that could, because they didn't like it, maybe they liked it, but it didn't work. And so anyone who's built consumer hardware, you know, you don't have, you know, what a drop test is. But basically I'm building a piece of hardware. So we spend all this time building this exquisite VR headset, and we hand assemble it, we try it all out.

Awesome. Now what you got to do is drop it 2 meters and then pick it back up again and see whether it works because that's what's going to happen with the consumer. They're going to take it out of the box and put it on, go oopsie. And like it's going to drop. And you got to make sure it works nine times out of ten.

And then you got to go to a factory and basically be like, okay, I need like a million of these. And like, oh, we're going to have to build custom molds and injection and a whole production line, maybe multiple production line. We're going to build specific tools designed just to build your one thing. And so you're like, oh, again, you got to get good at capacity planning. Like, do I need a million?

Do I need 5 million? Do I do two lines or three lines? Do I make this thing thicker so it doesn't break when I drop it? Or do I make it thinner because it's lighter? It's just a world of micro trade offs and all of these things.

And so this is a place where experience really, really, really matters. The difference between people who've shipped consumer hardware and haven't. You get to learn all these lessons for the first time? You know, this is why I, when I decided to invest in mill, it was like sort of later stage than I normally do and a little bit, a bunch of other things. But this is a team that knows what they're doing and you can see it in the products they build and the way they build it and how they get it done.

This is the last thing I say about it. Good thing about hardware is like, I think it's a little bit harder. Like the mistakes are less forgiving. You have to plan a little bit better yet kind of to know what you're doing. The good news is once you get there, you start getting like a moat that's really deep.

So if I'm building a product and shipping and I'm at a 5 million unit scale and you're at a 500,000 unit scale, I'm fundamentally cheaper than you are and that's just going to compound as I sell more. And so this is part of why I'm excited about this area. Yeah, it's a little harder. You have to be smart about how you're picking. But like, once you get there, good.

Harry Stebbings
Luck catching how much cash, seeing it takes to get to a sustainable mode. I mean, it depends on the company, what they're doing, but it's tens to hundreds of millions of dollars. It's not millions of dollars. No, I totally get. You can ask.

You mentioned kind of the risks that one's willing to take. Are there risks that you're very much not willing to take when investing the risks? In order that I worry the most about, market risk is probably the biggest. If there's just people who aren't willing to buy it or aren't willing to buy it at your price, like, it's an extrinsic factor that you have very little control over. I think the very next risk that's very similar is regulatory risk.

Shrep
If your business is premised on some future law being passed, that's a binary outcome that completely outside of your control. And unless I have some information that makes me bullish that that's going to happen, we're probably not going to do it. Then you get to like technical risk. I feel pretty good about our ability to assess technical risk, so it means that there are some technical risks where I'll decide that you can't do it. You're, like, violating the laws of physics, but, like, there's others that it's like, okay, well, maybe you can, maybe you can.

But, like, we're willing to take that risk. Probably in the top of that mix, too, is team risk is like, you know, there's old, old joke in investing that there's the three t's, there's team, tech and tam. Total addressable market. My joke is like, we have three tees too. It's team, team, and team.

At the end of the day, the team is the one that's going to figure their way out through some of these hard problems. So, like, we have to really believe that the team has the sort of run through walls, get those 30 nos and people falling asleep in the pitch meetings, and then still keep going because they're just like, damn it, I have to build this. Those teams do surprising things again. I use the show as a great testing mechanism for myself. I'm looking at this pre seed now.

Harry Stebbings
It's the CPO who scale the company $1.5 billion, which in Meta's world is tiny but normal worlds. It's a $1.5 billion company scaled to millions and millions of users, as I said, hundreds of millions in revenue, and they're starting a new company in the sales productivity space. And you're like, ugh, sales productivity. It's the worst market. It's a sucky, like, horrible.

You're just in a sea of shit. But they're an amazing CPO, and they are great, great product leader. I don't see many of them do you just write the $1.5 million check? 1.5 at 15, you get 10%. Do you just write the check?

Even though you hate the market and hate the product, you're always doing deal. Review on these podcasts. We get, like, our meeting on Monday. Shrep, I've got. I've got you on the line.

Why would I not leverage this opportunity? You're gonna hate my answer, man. Which is. It really depends. I think, like, maybe is the answer.

Shrep
I think the first question is, like, I think of, like, my deal memo is like, what do I have to believe for this company to be wildly successful? And so it's like, and it's usually like a one, two, three. It's like, I have to believe this. I have to leave that. I believe this happens.

This is a multi billion dollar company. That is the key. My question to you would be like, great. Okay, team, four out of four, three out of four, whatever your ranking system, like, fantastic, past flying colors market, you're kind of like, ugh. What is their take on why they think they have a unique angle in what do you have to believe that?

Maybe you're like, I don't see it, but I'll trust them because they think they have a unique product angle, they have a unique market angle. There's something where it's like, and I have to be like, if you're right and I'm wrong, this is a huge business. You have to fundamentally believe that customers are fundamentally frustrated with the unbundled infrastructure that we have today, and they want to go back to a bundled environment. There's too many tools, and they want one platform to sell with. Yeah, maybe due outcome scenario, plan.

Harry Stebbings
Think about what the exit could be project. Hey, this could be a strategic acquisition for X. This could be an IPO. This could be a buy for Nvidia, you name it again. I like to think everything we do can be a multi billion dollar business.

Shrep
Otherwise, the math just doesn't work. And I like to think they can be independent businesses. So my first plan is, you're going to make a lot of money, and if you're making cash flow and money, there's a lot of options for you in the market. So I don't do anything where I think the most likely exit is an acquisition, because I just like, I think that's just like, not where I play. Now, we do have to say, like, again, can you make money?

Where is this market? Where is it going? Is it, you know, I've passed on things that, like, I think your technology is really cool. You're fundamentally attacking a relatively small market. So if you take 50% of that market, you're still a pretty small business.

So, like, from a market sizing standpoint, that I will do that. You said about kind of being a capitalist very much in terms of how you think about investing today and it being different from philanthropy. Did you take a certain amount of assets and put them in a fund structure? How did you structure that kind of capital allocation question? Well, yeah, two things.

Yes, I have put, we were putting a bunch of money to work philanthropically, and I am putting a bunch of money to work in the fund. But I think more philosophically for climate specifically, I'm very much like outcome derives the tool and approach rather than the other way around. So it's sort of like this path through where I started this during COVID in 2020, which is like climate crisis. I got to do more, I got to do something here that, like, it's too big, it's too hard, isn't the right answer to, like, why am I not doing anything? Which was kind of my answer to that date.

And so I was like, I'm going to start directing a bunch of our philanthropic efforts towards the climate crisis because I can do that on nights and weekends while I do my, my day job at meta. That's where I started. And we started deploying a bunch of philanthropic capital, and we're still doing that. And we're funding a lot of early stage science and policy work. And I think it's a really good tool for, like, high risk, early stage stuff that's just like, not commercially viable.

But along the way, I sort of, as I learned more about climate, I'm like, this is a $10 trillion problem. This is not a hundred billion dollar problem, a $10 trillion problem philanthropy and governments can't solve. You need markets. Markets can solve this. Why can't they?

The us federal government budget is $2 trillion a year ish. If you took the entire us budget and you put it on the climate crisis for five years, you could do it. But, like, you're just not going to do that. But what does work is we spend trillions of dollars a year on lots of things. Like, if you have capitalist markets going and people making money and clean energy being cheaper than dirty energy, then you just sort of start aligning the forces of the market in that direction.

You're starting to see this with solar, where in many places around the world, like, solar is the cheapest form of power generation by a large margin. And so, like, people are deploying record amounts of solar, not because anyone's telling them to. It's because it's like, the economically rational thing to do. What we need to do is move more things into that category, which is like, oh, this thing's like, cheaper, so we're going to do that, and then it's just going to pile on investment. So that's why I sort of moved into the, like, huh?

We just like, combined with, as I met entrepreneurs, it was like, it's just on a selfish level, a lot of fun for me. It's like I've started, started a company, I've worked at three or four startups. I've grown companies from, like, zero to 35,000. And so, like, the entrepreneurs want to talk to me about how do I hire an executive, how do I run a board meeting? How do I cite our first plan?

That's fun for me. My Sundays are taking calls from our entrepreneurs, you know, and I'm, like, excited to talk to them at 08:00 a.m. on a Sunday. That part's fun. I think when you look at kind of the excitement around AI, and then you take a step back and you look at the requirements that that needs in terms of data centers and what they need in terms of energy, and you look at that kind of as a chain of regression back to the kind of source, so to speak.

Harry Stebbings
Suddenly the focus becomes energy. And then you look at that and go, huh. Is Sam Altman right that, like, energy is kind of, I think it was the, is the currency of the future, I think he said, or aligned to that? Or is Mustafa Suleiman right that we'll see abundant energy free for everyone? And I'm looking at it going, I don't know, I think part of why.

Shrep
I switched in, like I said, I think I'm decently good at calling AI ten years ago, two or three years ago, like, hmm, energy transition seems like a big deal. Like, think I'm pretty good at calling the trends. I do think availability of cheap, clean energy is probably the biggest rate limiter to human progress right now. Why is it such a rate limit at just out? Because it enables absolutely everything.

There's a whole stack of technologies. When you look at them and you're like, huh, 80% of the cost of operating, that is electricity. If I lower the cost of electricity, all of a sudden that technology becomes really viable. We know how to make jet fuel from CO2 and electrons. We can suck CO2 out of the atmosphere and make jet fuel technology exists.

It's just like four to five times more expensive than drilling for oil because primarily, the amount of energy you have to put into it, that's electricity. There's a whole bunch of industrial processes which burn hybrid to make steel, to make concrete. We have the technologies to do all those things. They require clean energy or energy at a very low cost. You know, if you've ever, you know, consumer here is like trying to replace a gas heater or gas water heater in their home.

Gas is so cheap in the United States, and so if your electricity is expensive and gas is cheap, you're like, maybe I'll just get the gas one because it's cheaper. You kind of want the electric one to be half the price. There's just so many things out there that are enabled by cheap and available clean energy. And again, this is where people forget things. We've had about two decades of relatively flat to declining energy demand in the United States.

So we've got an entire industry that spent, like, two decades basically going like, what's next year look like? Eh, kind of like last year. Cool. And now all of a sudden, everyone's freaking out over, like, oh, my God, a 5% increase in, like, energy demand. I lived in industries where we were, like, getting 100% increase in usage year over year, and it's like, you just got to go out and build a lot of stuff.

Harry Stebbings
I'm so sorry for asking dumb questions. Why did we see continuous energy demand decreasing? Mostly because of energy efficiency. So we saw a lot of energy efficiency gains in the, you know, over the last 20 years. Honestly, the other thing in the United States is we had kind of not been doing a lot of manufacturing here, so we had sort of offshoring a lot of manufacturing.

Shrep
And what you see is, I think there's 200 plus new factories underway. We've got battery factories, we've got chip factories, we've got car factories, and then you've got AI data centers. So you've got that, you've got electric vehicles. So you've got this, like, all of a sudden a bunch of new sources of electricity demand. Okay?

Harry Stebbings
So we have kind of this confluence of new technologies combined with onshore, meaning that energy demand spikes again. Are we able to produce it at that level? And going back, is Sam right that it's like, energy is the currency of the future? Or is Mustafa right that actually, very quickly it'll be completely free and abundant? I think the next couple of years are going to be messy, because what you have is a massive spike in demand in a relatively static industry.

Shrep
And the ability to ramp clean energy right now is growing, but still limited. I don't think in the next few years we will have, like, unlimited clean energy. I think in the next decade, we have a really good shot at it. If you look at the growth of solar, if you look at all these charts, you kind of see this exponential curve at the very bottom with solar, it's like all sources of power generation, like, solar is, like, down here, but it is on this definite exponential curve. China last year installed more solar in 2023 than exists in the United States.

We are just deploying. It is just in front of everyone. If you actually look Texas, on an average, there's ERCOT, which is the Texas power grid, shows their power mix. Go there on a 12:00 today, and you'll see it's about 50% wind and solar. Now, what's missing for renewables, wind and solar super cheap, is storage, because, you know, it's cloudy, it's nighttime.

You don't get that storage prices. Battery prices are on this just, like, precipitous decline. And what happens with technologies is there's, like, there's always this, like, I call it, like, breaking through the surface of the ice moment, where it's like, it's too expensive, too expensive, too expensive, too expensive. Oh, shit. It's, like, cheaper than everything else out there.

We're kind of seeing that very quickly happen with solar. Plus, battery storage is all of a sudden going to be cheaper than installing a gas turbine power plant and sort of generating 24/7 power that's totally clean. So we're in this really messy transition where it's hard to tell exactly how it's going to go. But if we can continue to deploy solar, continue to get cheaper storage, and then we've got this, like, x factor of, like, I like to have lots of shots on goal, and, like, the extra couple shots on goal is fusion. I think we got a couple credible shots on goal on fusion.

And if, like, that shows up in the 2030s, then all of a sudden you're in a world where it's like, hey, do you have 40 acres? Because if so, I can basically make you unlimited clean power. What are the shots on goal, on fusion? Why are you optimistic about fusion as an alternative? Because we've got 45 plus startups out there going through what is now really well understood, credible science.

There's probably a dozen different designs for a fusion machine. Several of them are based on fairly well understood decades of plasma research. I'll highlight two. You've got Commonwealth fusion systems is based in, outside of Boston, Massachusetts. I went and visited their facility where they're building right now, their first generation fusion machine, and they set the world record for most powerful electromagnets using superconductors.

So they have built the world's most powerful magnets, which is called a tokamak, which kind of makes a donut shaped like magnetic field, which then you basically burn a plasma at hotter than the center of the sun, and that generates energy that you can recoup. And their whole thing is like the more powerful the magnet, you kind of squish it with a magnetic field, and if you increase the power of that magnetic field, it increases the efficiency of the fusion reaction. We have built these sort of things. There's a thing called iter and others that have been scientific consortiums that have built this sort of fusion reactor that, you know, works. We've got really good modeling on it.

So that's a very serious company, 700 people, lots of plasma physicists. Then you've got, for example, the national ignition facility, NIF, in the United States, as a national lab, and they do a different thing, which is they drop a little target and they hit it with a whole bunch of power all at once, and it creates so much energy that it fuses the atoms and creates a fusion reaction. We've done that. We know it works. It releases more energy out than we threw at it.

So, like, that works. We've done this many times, actually, in the United States in a variety of different ways. And so it's not a question of like, hmm, can we make it? It's a question of, can you make it commercially viable? Which means you need to be able to do all of that cheaply enough and get enough power out to absolve the power in.

So there's a variety of companies looking at that. What do you think is the timeline for commercial viability? I know that's a really hard question. Twenty, thirty s. Twenty, thirty s.

Harry Stebbings
Yeah. By the way, this takes me back to kind of 11th grade math class in algebra, when I kind of just thought, fuck, I'm out of my depth, but I'll progress anyway. I got a solid b minus, which was a. I know you've managed 35,000 very smart people, but that was a win at the time. I think you turned out okay, Harry.

You know, it's been fine. Actually, my question to you is, I had John Doar on the show, and I actually spoke to him ahead of the show. And my question that he kind of posed is he said, the sad truth is, although it's important to do, we're too late. The environment, global warming is happening too fast and we cannot stop it fast enough. How do you respond when you hit that?

Shrep
I would say he's both right. And that's not very helpful in the sense of like, yeah, we should have been doing, dealing on this 30 years ago and we have a bunch of positive feedback loops in the environment that are baked in, unfortunately. And so, for example, glaciers in the Arctic and Antarctic, they're moving and like, they're going to cause sea level rise. And even if we stopped all our emissions today, that's probably still going to happen. And scientists are debating about how and when and how big, but, you know, there's somewhere between a foot to 6ft of sea level rise projected between now and 2100, which is lifetime of our children.

So 6ft of sea level rise is pretty catastrophic. So. And even like a couple feet is real bad. Yeah, that's, that's bad. There's a bunch we don't understand because we just like, we haven't run this experiment as earth.

So I think there's a question of like, yep, there's like, we should have been doing this three decades ago, but then there's a kind of like, great, what do we do with that? And that's where I agree with John, like, his speed and scale thing, just like, we just need to do a lot more really quickly. And it's a little bit of everything. It's wind, it's solar, it's efficiency work, it's electrification of everything. It's carbon removal, it's sort of adaptation and we need to do it all.

And humans can move very quickly when we need to. And that's the thing that gives me optimism. You know, people kind of like, ah, we don't really know how to build things anymore. It's like built 10 million data center in like less than ten years. They're going on trajectories above that.

If you like, go back to like one of my favorite charts is like ship building production in the United States, 1939 to 1945. It's like 10,000 ships a year to like 100,000 ships a year in like a year or two. That was a war, of course. But like that's an example of like, when we go like, man, this is a problem we need to go solve. It turns out you can solve things.

So I think getting people oriented towards concern because it's definitely some bad stuff happening. But like, great, what do I do with that concern? I vector my energy into trying to make it better, get more clean power, more electrification, more efficiency, more carbon removal. The more we get deployed, the better we have a shot at, like where we're at, which is reducing the harmful effects, not eliminating them. I mean, that's the reality of where we are.

Harry Stebbings
I love the way you say about the speed of humans moving. I don't know if you know anyone from Europe, but alas, we do not move so fast. Srep, we will have a nespresso before we address this climate crisis. My question to you, and sorry for the hard questions. A friend of mine, Constantine Kissen, says, actually it's almost arrogant of us in the west to expect Brazil, India, China, the largest nations who will control the future of this climate in terms of global warming, to expect them to align to us.

They have fought for years to have any form of life out of poverty. And to say, well, you know, actually you should forget economic growth and you should prioritize climate is almost naive. Do you agree that the future of climate change will be decided by Brazil, India, China? And how do you think about Xi Jinping prioritizing climate over economic growth? I think the climate crisis is fundamentally a humanitarian crisis.

Shrep
I think this is the thing that people get wrong, is like, it's not about the planet. Planet will be fine, it's going to outlive us. It's about how many people are suffering and are going to suffer because of the climate crisis. And I think the answer is like, prosperity, energy availability for everyone in the planet. I don't like this either or scenario.

And the thing that I like about technology is it is the one thing I know that shows up and changes the rules of the game. Do I want to have this or that? And then I show up a decade later and go like. Actually, turns out these batteries are now a 10th the price they used to be. And these solar cells that were more expensive, they're now cheaper than this other thing.

We shouldn't be asking people who are affected by this to make sacrifices. We should be investing our time, energy and money into making them not have to make sacrifices, because we're going to deploy technologies at a scale that makes it easy for them to cheaply get access to clean energy, clean water, and like a place to live. And that is a future we can have if we continue to deploy solar batteries, fusion, electrification of everything. It's like, that's the future I believe we should make. And it is, I think, compatible with, with the entire world.

Harry Stebbings
When you think about venture investors, say, like me, I worry that we're going to see, I think we might see a load of venture investors lose a lot of money investing in hard tech or spaces that they're not used to. How do you think about advise this wave of venture investors who's now moving into this for the first time, who are not used to investing in this category? How do you think about that and advise them? We need a lot more money in this space. So I'm not a like, negative, you know, person on these things.

Shrep
I'm much more of the optimist. And so we need thousand x venture investment, we need 1000 x the startups, we need more people switching from other careers into clean tech. We need that to be a job that's good for them from an economic standpoint. So I'm excited about more people. So I'm more on the fence of like, how can I help educate people to make sure that we do this well?

And I think it just basically boils down to, you know, everyone has something to bring to bear on these problems. Harriet, some of the best tech investors weren't techies. We talked about Mike Moritz. He was a journalist, he wasn't computer scientist. The legendary investor.

So I think it boils down to always having a humility. And I actually think this is a place where techies like me can really get ourselves in trouble, which is like thinking we're too smart about a problem by the market, about an entrepreneur. And so, like, I constantly have to remind myself to like, eat humble pie every single day and be like, yep, yep, I don't know this. Ask questions, don't talk to people. And so I do think it's a question of just like intellectual curiosity and learning a market and understanding it, and some humility about what you know and you don't know and just like learning from others.

The beauty of this is like the number of times I've asked people questions be like, I don't know what that means, or like, what's that acronym? Or like, I guess I should know that. But I don't. I've got laughed at exactly zero times saying that. I just try to run that.

It's like, hey, plasma physicist, like, you just said three things I don't understand. Can you walk me through it? And they're just like pumped to tell me, like, it's the best part of my job. It's like I'm getting a private education on like, how this fusion thing works. I just think you need to approach it with like, humility.

Intellectual honesty and, like, figure out what it is you bring to bear. So, like, okay, maybe you don't have the physics background, but you really understand people, or you really understand markets, or you really understand the sales motion. All of these companies are companies. They need to sell stuff. They need to hire people.

Like, the hard, nerdy physics is usually a part of it, but it's not the whole thing. What do you know now about investing that you wish you'd known when you started gigascale? How much time do we have left? I have learned a lot of humbling lessons. It's called the 400 hours vc.

Yeah. I think it comes back to what I just said. I think the biggest mistakes that I have made is getting too excited about a technology and saying, like, ooh, this technology is definitely the one that's better and not thinking enough about the market and the entrepreneurs. It's like, well, who's going to buy it and who's going to pay for it? Because the world is full of this thing is cheaper, better, faster.

But there's a whole bunch of reasons why people don't want to buy it. And, like, that, that has been the real humbling, is just like, not trying to outsmart the market and how great this new technology is and paying a lot of attention to that. I think that the biggest, like, misses I've made is sort of trying to outsmart the entrepreneur, and that's basically, ooh, I love that entrepreneur. They're so good, but, like, I don't really like the market they're in. And then they pivot into a different market that I really like.

And I was like, oh, should have invested. Like, and now they're in the hot market and everyone's trying to throw money into them. So the definitely mistake I've made that I try not to repeat is like, oh, my God, you're working on climate problems and you're amazing, and you're thinking through these problems. Like, I'm going to go ahead and get behind you. Like, I've definitely missed out on some where I just, I should have gone in and again, try to not outsmart.

Both of these, basically are me eating a lot of humble pieces, like trying to either outsmart the market or outsmart the entrepreneur. Shrep, given it's your money, you don't have the kind of rules or barriers or constraints that a traditional farm manager would do, which is like, well, I said to my lp's that I'd invest and get 10% ownership. I said that I'd only do seed, and now I'm doing b. How do you think about the constraints that you have around you? Do you have any?

Harry Stebbings
How do you think about that? And when you break them and when. You don't, I think the best part about it. I spent a lot of time talking to a lot of friends to figure out, like, should I just raise out of the gate or should I do with this? And I went here because my life is basically my, like, my North Star is high frequency learning.

Shrep
It's like high frequency experiments. How quickly can we learn things? And I think the problem with all of those things is you, like, decide everything up front. We're going to be this stage, this amount. Like, and I have all these boxes, and it's like, and then a deal comes in.

You're like, I can't do that because it doesn't fit this. But I'm like, but that's an amazing deal. It's like, well, but it, you know, blah, blah, blah. I was like, that drives me crazy. Fundamentally, we're going to put money to work against great companies that are going to affect the climate crisis, and then we're going to make a bunch of money from that and cause a bunch of fomo from everyone else who's going to be like, why the hell didn't you let me into fund two?

That is the game we're playing. And so it allows me to try lots of things. So, like, we've done super early stage, we've done some really late stage. So we've done unannounced, but we've done some series ef, you know, companies pretty close to exit. And so it allows us to, like, look across the whole spectrum of companies and understand it and then really understand and dial in.

Where is it that we are uniquely advantaged? Where do we provide the most value? Where do we think the opportunities are on the market? I get to run all those experiments rather than just pick a strategy and execute it. What did you learn from those experiments?

Harry Stebbings
Now, you've done that full gambit from very early to series ef. What have been the takeaways? Oh, come on. You're gonna let me give away all the secrets to everyone else? That's why the show is so successful, dude.

This is why. Because we monetize your wisdom. Come on. Okay. Well, I believe in open source, so, again, all humility.

Shrep
It's not like I've been doing this for 20 years. So I think a couple of things. I guess the first is this is fundamentally a game of outliers and, like, you have a bunch of rules of thumb to try to get you there, but you're like, you're trying to find the company that's going to be this huge, huge success. And like I said from early meta days, you know, my experience is even the best companies go through some significant period of time where everyone thinks they're crap and common wisdom is like, it's a pile of junk. And so like, I think there's this notion that like, oh, we'll spot it and we'll know.

It's like, no. And so I think that, like setting up your opportunity to be lucky to some degree is like, how do I have enough investments, enough meetings, enough things? Even if I'm wrong, we still like have a shot at being lucky at these things. Like I said earlier, I think the entrepreneur is everything. Who are the best entrepreneurs?

Who are running through walls? Like when in doubt back the entrepreneur sort of over the, over the market and other things. And the one thing I agree with is it is difficult to look across many stages at once because you're just comparing unequal objects. And so if you're looking at two PhDs at a lab who literally haven't talked to a customer yet and a series f company with 50 million revenue, it's just hard to compare those two in a meeting on a Monday and decide which one to invest in. So I do think that figuring out ways to sub segment these things is really important.

The other thing I'd say is the best part of the experiment that I've been excited about is assembling this little band of operators around us that I really trust, that really know what they're doing. And everything from marketing to HR to recruiting and like applying those to our companies has been, you know, it's kind of a question of like, does it matter? Is it just like free services? It's been sort of transformational because it means that like we start referring our teams out to the companies, they're like, well, we tried three or four other people and they kind of sucked, but yours is great. And like, it means our launch was really good and we got all this feedback or we hired this great candidate or like, now we did this.

And so that's the fun part for me, is like, oh, I know how to build companies. I can pick people, technologies and build companies like that. That is like my, what's going to be written on my gravestone, you know, hopefully below, like, was, was a great father and family member and friend. That part has been really fun because that I wasn't sure, it could have just been something everyone does, but I think we're doing that particularly well. The final thing before we do a quick fire, you mentioned that kind of great father.

Harry Stebbings
I do just want to ask. I think parenting shaped so much of how we think. If you could call yourself up before you had your first child and say, you should know this, what would you tell yourself? Don't miss a moment. You don't get it back.

Shrep
So, like, I think it's not the once a year family vacation. It's the, you know, driving the kids to sports, driving them to school, walking them to school. I mean, this was a respect shrimp. You managed 35,000 people and, you know, the engineering and infrastructure for one of the largest companies in the world. Did you miss a moment?

I mean, there are always trade offs. I had to take business trips. You know, I was the coach of the softball team. I, like, volunteered on Fridays at school for lunch duty. Like, I have been very fortunate to sort of carve out some time where I'm like, I'm there and just present.

And it's something I've decided to, like, really invest into my time. And, like, that's why I'm like, hey, 08:00 on Sunday. I've got older kids now. They're sleeping in, so 08:00 on Sunday. I can do my calls.

An entrepreneur. I ain't missing a thing there. My kids are busy when they, you know, want to walk to school or want to go get coffee or go to a sporting event. Like, I'm there and I'm there because I love it. Not because I feel like I'm gonna get, like an award for it, but, like, it's your chance to have this tight group of people that you care about and build a relationship with that hopefully spans your lifetime.

Why wouldn't I want to invest in that above everything else? Someone said to me recently, you know, you've been successful as a parent. When your children grow up and they choose to spend time with you, I think it's a very nice one. I love that. I'm gonna do a quick fire with you.

Harry Stebbings
We've had a very, very. I love this. You see why it's like the best job in the world for me. Yeah, I'm jealous. Anyway, so the quick fire first one, what do you believe that most around.

Shrep
You disbelieve that solar and storage are going to just be a massive part of the energy grid and fusion's going to work. What would be the biggest barrier to that happening? Incumbents basically making, like messing up the economics on it. How did you deal with the insane stress of leading Eng for Facebook? I was chatting to a mutual friend of ours before and I was like, shrap must have like, not slept for years.

Harry Stebbings
I mean, if it goes down in a country, it's like big problem. Shrap. You're the dude who was responsible. When it goes down and it's trending on twitter, like, you're the one who gets the cool. That's like, fucking shrap.

Shrep
There's a couple apologies for me out there on the services being down. I have to write more than one apology. I mean, look, I just acknowledge it as hard and I don't think it's perfect. And there are times when I dealt with it better than others. I used to write notes to the whole company about how to manage stress.

And, like, I think it basically boils down to exercise and sleep and then having something you do that is fun, that is your decompression and can be different for everyone. It could be painting, could be hanging out with the kids, could be playing a sport, like, whatever it is, and then trying to find that time to block it off. The biggest mistake I would often make is when things would get really stressful. I would throw off the boat everything that felt selfish and discretionary, which is often sleep and exercise. And so, like, the times when I was the worst, it's like, I don't have time for this.

But it's actually a negative feedback loop. It makes you less productive, less smart, less. Less risk, resilient. So, like, there are times when you have to do that. Sites down.

I'm not going to go to yoga class. Right? Like, I'm online. We're here to deal with it. But over a multi week, multi month period, you got to be careful to not stop yourself from doing those things that you're sort of burning yourself up.

Harry Stebbings
I would just love that. Facebook.com down. It's like, where's shrapnel? He's in aerial yoga right now. I got high over at eleven.

Shrep
Guys, I'm gonna have to wrap this up. No, don't. Don't get to do that. What's your relationship like to money? Does money make one happy?

I mean, I think the research on this is pretty clear that if you are struggling with money, if paying the rent, if you are one car breakdown away from trouble, then that's like a massive source of stress. And so I think for most people in the world, money is a massive source of stress and getting above a sort of subsistence level is like a great way to sort of absolve stress above that. You know, I don't know that it's the biggest determinant of things. Like, allows you to do some fun things, but like, I know plenty of very successful, happy people and plenty of successful, miserable people and plenty of, like, not successful, very happy people. I think some of the early teachings are sort of some of the most wise.

That the, like, happiness and fulfillment is fundamentally incised and that when you try to externalize it is like a great, great path to unhappiness. Is it difficult bringing children up in a very affluent financial environment? I think we are incredibly privileged and lucky. I think it brings a unique set of challenges that, you know, I think people worry about the expectations that it sets for people, but I think that that is an incredibly, like, I think almost anyone in the world would make that trade. Let's just be honest about it.

It's like, how many people are like, yeah, let's like, solve this by, like, not having it. Like, nobody does that. So I think it's a set of challenges. Everyone deals with a set of challenges. Like, I think the other wisdom in life is like, you never know what's going on with someone, right?

Could be a health thing, could be loss of a parent, like, could be kid sick. The idea that anyone is happy or better is like, just wrong. They're like, suffering is one of the fundamental common things in humanities. Like, everyone suffers in their life in some form or the other. And so just having that humility and understanding that, like, everyone's gone through something or went through something or will go through something, you just got to know that and just like, internalize it and like, just be humble about it.

Harry Stebbings
God, you're annoyingly humble.

It's like you're just this like killer Og and just like. So you're not really a traditional venture investor. Clearly I'm not. Probably gonna be. Yeah, my single, my quarter zip in the other room.

So, like, I put on that terribly humble. Next you're going to give attribution to someone else for work that they did. I mean, God, terrible. As a public markets Facebook investor, I practically founded it. I was that instrumental.

Shrep
Thank you. But tell me, what do you know now that you wish you'd known when you joined Mesa? Honestly, I think it gets back to some of this balance stuff. I think there were definitely periods where I burned the candle on both ends and just gave up stress management, physical health, that sort of thing. So I wish I had sort of found a way to get more balance, then I don't know if that was possible.

So there were times when it was just so crazy. I just, like, couldn't. Couldn't deal with it. But I think it was that. What was it?

Harry Stebbings
What was the craziest time? I mean, the other thing I'd say is, like, I always felt very fortunate because meta was not my first job. It was not my second job. It was my third or fourth job. I'd started a company and been through lots of things.

Shrep
I'd seen the.com boom and buster. I kind of knew when it was crazy and special. I was like, ooh, this is real unique. Like, this is not normal. And for people, it's the first time through, you're like, this is just the way things are.

It's like, no, this is not the way things are. It gave me a bit of, like, remove from it to basically, like, kind of sit back and appreciate, like, holy. Holy crap, this is special and unique. What was the craziest moment that you. Think back to so many?

I mean, you talk about, like, every time the site was down, that was a. That was a crazy moment. The IPO happened, and when trading got halted, the day of the IPO, like, the switch to mobile, was a really stressful time because we just built this business and started building a new one. It felt like every three months there was something going on. It's great.

Harry Stebbings
Will you raise outside money with Gigascale? I don't know. We'll see. If you were to co found a company, who would you choose, JC or Danrose? Oh, that's a mean question.

Yeah. No one said I was nice. It's not fair. I've worked with Dan for 15 years, so I know Dan really, really well, but through a lot with him. So I'd have to go on depth of relationship and go with Dan.

Shrep
Thanks for getting me off several, like, holiday card lists. Final one for you. Ten years out. It's 2034. You said at the beginning, and I wrote it down, but you said, like, you are fundamentally optimistic about the world being a better place.

Harry Stebbings
Why? And talk to me about what you want to see in 2034. I mean, there's just, like, so many things that are getting better. I mean, let's just talk about diesel school buses. We, like, drive children to school in a vehicle that we know affects their health negatively.

Shrep
And, like, we're now getting to the point. We're starting to replace them with electric buses, which are just, like, not only they, better for the environment. Like, it means our children are not, like, inhaling diesel fumes every single day. I think in a decade, you're gonna wander around and be like, that gas car. Like, look at that.

It's like a model t. It's like, wow, that's weird. I can't believe we used to do that. That's kind of what you're gonna do. Maybe not in ten, maybe it's 15, but, like, definitely, like, gas vehicles, you're gonna be like, weird, self driving cars.

Have you been in a waymo? I think self driving cars went through a huge boom, and then, like, now everyone thinks they suck. They kind of miss that they actually work now. And so, like, I think in 1015 years, it's going to be like, whoa, you drive your car. That's weird.

I think self driving cars are going to be huge. Not really about climate and energy, but I think it's something that's there. And I think that we will be talking about sort of deployment, hopefully, as we've been discussing, of fusion power plants. And, like, it's like a new thing that allows us to sort of build power out there. But fundamentally, I think this idea of burning something for energy or heat is going to feel increasingly weird.

It's going to be like, the gas stove is going to feel weird. The gas car is going to feel weird. But, like, anytime I have a smokestack, I'm going to be like, why do we have that? It's just going to, like, we're going to get to this point where, like, that's kind of weird and that's going to be awesome because, like, forget the environment for a second. All those things are bad for human health.

They all pollute. That's, like, bad to inhale the fumes. So again, I think you can have this, like, wow. This induction stove, it actually boils water faster than the gas stove, and it doesn't pollute my indoor air, my car is faster, the heat pump is, like, way more efficient, and again, doesn't pollute. I do think we have this opportunity to sort of, like, rebuild our industrial economy in a way that's like, I can't believe we did it the other way.

Harry Stebbings
As someone who doesn't have a driver's license, I'm thrilled to hear that we might actually have self driving. Do well and replace me. That's a wonderful thing. Shrap. Listen, dude, as I said, I heard so many good things.

I've loved doing this. Thank you so much for being so open, and this has been fantastic. Fantastic. Thank you, Harry. This is awesome.

Shrep
I had a lot of fun. I mean, I literally think I just have the best job in the world. Having the chance to sit down with a minelite shrep and have that discussion is such a unique position, which I am so grateful to have. If you want to see the full episode in video, you can check it out on YouTube by searching for 20 VC. That's 20 VC.

Harry Stebbings
But before we leave you today, let's face it, your employees probably hate your procurement process. It's hard to follow, it's cobbled together across systems and it's a waste of valuable time and resources. And as a result, you probably are facing difficulties getting full visibility, managing compliance and controlling spend. It's time for a better way. Meet Zip, the first modern intake to pay solution that can handle procurement and all of its complexities, from intake and sourcing to contracting purchase orders and payments.

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20 vc as always, I so appreciate your support. Really. It just means the world to me and the team here. And stay tuned for an incredible episode this coming Friday.

Shrep
And stay tuned for an incredible episode this coming Friday.

Harry Stebbings
And stay tuned for an incredible episode this coming Friday.

20VC: Former Meta CTO, Schrep on Why Climate is a $10TRN Problem, Operating Lessons Scaling Products to Billions at Meta and Why the Best Leaders are Like Music Conductors

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1: Introduction to Schrep's Background

2: Leadership and Innovation

3: The $10 Trillion Climate Problem

4: Transition to Climate Investment

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