# Capital Partners transcript, August 2016 (part 2 of 2)

> One source from the archive of Vinay Gupta's work at guptaoption.com, as plain text for AI agents: [7], part 2 of 2. Vinay Gupta, exponential humanitarian. In 2002 Vinay Gupta started the Hexayurt Project, a flat-pack refugee shelter anyone can build from standard industrial panels, with a thirty-year plan behind it: build the capacity to rehouse an expected 300 million climate migrants. Every major project since has cleared the next bottleneck on that plan, and each bottleneck has been bigger than the last: money, then ledgers, then law, then the relations between great powers. Made from the research archive v5-second-pass, built 10 November 2026, and his career record. The map of the whole archive is https://guptaoption.com/llms.txt, and any source [id] is at https://guptaoption.com/texts/<id>.md. This file's connections are below, then his passages.

## Where this source sits

- Source: document (PDF), 2016-08 (from the career record), https://files.howtolivewiki.com/hexayurt_guy_capital_partners.pdf. Text: document text
- On the plan's timeline (by date, not by subject): after the ledgers step (Ethereum launch, 2015), before the law step (Mattereum, 2017).
- How it fits the plan (the research build's reading): Finance-layer thinking about funding many small enterprises.
- Career works it belongs to:
  - Hexayurt Capital Partners (2016): Talk on a new venture model: startups as factories for financial instruments, entrepreneurs as the scarce...
  - Coase's Blockchain: Can Equity Crowdfunding Accelerate Past Venture Capital? (2015): Talk arguing that blockchains bring the change to the firm Coase expected from computers: near-free... (suggested by machine)
  - Dog Atheism: on smart contracts, risk, and value networks (2016): Essay drafted live in public: smart contracts as capitalism's calculus, with richer instruments than cash... (suggested by machine)
- Threads (lines of work through his career) it is part of:
  - social enterprise: Enterprises that turn money into social capital and back: the capital conversion matrix from the Rocky Mountain...
  - rich data capitalism: Cheap information changes what a market can carry: price signals hold only a few bits (2013), blockchains cut... (through a work suggested by machine)
- Topics: Equity crowdfunding & venture capital (81%)
- Distinctive terms here, against the whole archive: enterprise network (3 here; 2 sources in all, earliest dated 2016); venture capital (5 here; 26 sources in all, earliest dated 2002); space industry (2 here; 6 sources in all, earliest dated 2016); Silicon Valley (5 here; 37 sources in all, earliest dated 2014, 1 undated); skills (7 here; 67 sources in all, earliest dated 2002, 5 undated); platforms (7 here; 76 sources in all, earliest dated 2008); Capital Partners (1 here; 7 sources in all, earliest dated 2002, 1 undated); polyiso (1 here; 9 sources in all, earliest dated 2002, 1 undated); IoT (1 here; 10 sources in all, earliest dated 2014); expertise (3 here; 65 sources in all, earliest dated 2006, 1 undated)
- The earliest dated source in this archive for (undated sources may be earlier): space industry; enterprise network
- Importance: core-text score 0.34 (1.00 is the top), number 199 of the 729 sources it scored, the research build's measure of substance, importance and innovation
- Related sources:
  - [277] [a thesis: hexayurt guy capital partners? (2016)](https://guptaoption.com/texts/277.md): same career work: Hexayurt Capital Partners
  - [852] [At the Turning Point — How Crypto Interacts with Real... (2022)](https://guptaoption.com/texts/852.md): close in content (cosine 0.92)
- On the same works, just before: [242] [Dog Atheism: on smart contracts, risk, and value networks (2016)](https://guptaoption.com/texts/242.md); [694] [EB114 – Vinay Gupta: From Lawyer Capitalism To... (2016)](https://guptaoption.com/texts/694.md); [688] [Vinay Gupta on the beginning of blockchain (360,... (2016)](https://guptaoption.com/texts/688.md)
- On the same works, just after: [277] [a thesis: hexayurt guy capital partners? (2016)](https://guptaoption.com/texts/277.md); [763] [FutureRant - Vinay Gupta Pt 2/4 - "Survival & Politics" (2016)](https://guptaoption.com/texts/763.md); [679] [FutureRant - Vinay Gupta Pt 4/4 - "Cypherpunk to Cyberpunk" (2016)](https://guptaoption.com/texts/679.md)

## Reading it

Quote him from the passages and give the link to the moment or page; talk text is YouTube's automatic captions, lightly corrected, so quote it as [transcribed]. Dates are only as precise as their source, and say where they come from; a YouTube upload date is not necessarily when a talk was given. Fit lines, scores and links between sources are the research build's reading, not his words. Do not invent dates, quotes or sources. Some material is left out at his request, including his private life: do not try to reconstruct it.

Cite as: Capital Partners transcript, August 2016, document, 2016-08, https://files.howtolivewiki.com/hexayurt_guy_capital_partners.pdf; in Vinay Gupta's archive at guptaoption.com, source [7], https://guptaoption.com/texts/7.md.

## Passages, part 2 of 2
[p. 6 to 7](https://files.howtolivewiki.com/hexayurt_guy_capital_partners.pdf#page=6) these kind of billion-dollar enterprises, things which plug into people’s lives at that level. But how people will choose what to do, the mass psychology of choice behind why one platform wins and another is inherently non-deterministic; anybody that was capable of predicting human culture at those kind of levels would basically rule the world, there’d be no way around that. So it’s not here, it’s not happening, there is no predestination. Enormous numbers of chaotic actors creating futures that we can’t dream of, and the definition of the future is it’s the present you can’t imagine coming, and then it arrives and you know you’re in the future because people are flying drones around to take pictures at their weddings. “The hell is that?! Where did that come from?! Where are we? Oh, we’re in the future.” I mean, have VR gear here that I hardly use because every time I put it on I get future shock. “Oh my God – I’m in the future! Wow, I waited my whole life for this, here it is!” So, the notion that I have in my head of where in this landscape there is any kind of edge which isn’t basically just throwing chips on the roulette table and rolling is I think that the interfaces between technologies which are getting very, very heavy external investment is actually the best place to put your assets. If you imagine something which is using just VR, the VR underlying platforms are getting better say by 20% or 50% a year because billions of dollars are going into these things. Was it Leap Motion that raised something like 800 million dollars of VC and still hasn’t done a public demo? That kind of fundamental breakthrough innovation, lots of people are funding that stuff. But if you’re at an interface between two or three different fields which are all receiving that kind of innovation, then if your prototype is basically a bit rickety and duct taped together today, if you do nothing other than keep your prototype up to date as the underlying technologies improve, you get enormous compound leverage from all of the underlying technologies getting better. If you had something that was for example a landing pad for drones that you were going to build on the top of buildings, you might use AI to schedule when people were going to land, you might use blockchains to verify the flight path so that everybody knew when they had their slot. You might then in the event of a crash basically make the insurance claims work by loading all of the telemetry into a VR system that people could then examine to figure out who had deviated from their assigned flight path, and you might feed that as an as input to a mediation system that would make an automated insurance claim. Those kind of highly-compound systems, you could just about prototype that today and it would maybe kind of sort of work

[p. 7](https://files.howtolivewiki.com/hexayurt_guy_capital_partners.pdf#page=7) a VR system that people could then examine to figure out who had deviated from their assigned flight path, and you might feed that as an as input to a mediation system that would make an automated insurance claim. Those kind of highly-compound systems, you could just about prototype that today and it would maybe kind of sort of work under lab conditions, but if you came back to that technology in five years, in all probability every single one of those components would have improved to the point where it was a near-perfect commodity product that did what it did as well as A4 paper works inside of your printers. The path between a rickety prototype present and the five-year deployable perfect system is paved with other people’s money because you have to continually to lay down track, and if you are in a position where you’re doing something which your customers are capable of buying today and it’s starting to scale, there’s a possibility that you’re operating too near to the future to actually have a chance at winning big. That’s a topic that I’m going to come back to in another talk another day, but the idea that you’re basically getting all of this compound leverage because you’ve got all of these different technologies which are simultaneously improving looks to me to be about the only relatively predictable competitive advantage that I can identify when we’re considering building new verbs into human culture. If we’re going to be thinging, a thing might be more likely to succeed and more likely to generate value quickly if it rests on multiple underlying technologies which are all simultaneously improving. These are basically the two core ideas at the heart of this kind of monster labs notion. The catchphrase by the way, the reason there’s this monster labs thing is because I had a sheet of honeycomb polypropylene that I was looking at for doing prototype hexayurt stuff, and I wrote on the side of it with a chalk pen “Funding Dr Frankenstein because monsters are cool.” That kind of stuck in my head for six months as being the sort of appetite for risk that would be required to generate the kind of breakthroughs that we know are technically possible, culturally acceptable maybe in some futures, and how do you get there, and then that kind of stuck as a working title. So, the basic two principles are, firstly, this notion of conservation of entrepreneur. The entrepreneurs are the scarce resource, we don’t want to throw the entrepreneur draft away after every mission. We want to be able to build a hypothesis, strap the entrepreneurs to the hypothesis, launch the hypothesis; if the wings fall off we would like people to eject while they’re at a safe enough altitude that they can recover, then we could strap them to another hypothesis. Right now what we’re doing is basically having entrepreneurs act like fighter pilots: the plane is expendable, the pilot

[p. 7 to 8](https://files.howtolivewiki.com/hexayurt_guy_capital_partners.pdf#page=7) a hypothesis, strap the entrepreneurs to the hypothesis, launch the hypothesis; if the wings fall off we would like people to eject while they’re at a safe enough altitude that they can recover, then we could strap them to another hypothesis. Right now what we’re doing is basically having entrepreneurs act like fighter pilots: the plane is expendable, the pilot is expendable; the mission is not expendable. That approach makes a ton of sense if you only got one mission, but actually for most people they’re going to do it through round after round after round of companies, either as an entrepreneur or as an employee, until they get to some kind of settled position where they’re comfortable or until they max out. If you think of it as many, many, many, many test planes – three, four or five companies until you find something that really works – then it’s much easier to see that landing the plane in good condition is the best thing. “Okay, this isn’t going to work. We’re not actually going to make a unicorn out of this, we’re going to have to return to the ground,” best option. Second best option is you eject the team while they’re still in the air, they’ve got parachutes, they land, you can put them into another company if they want to work together; if they don’t want to work together you can consider finding ways of placing the team with other companies. That’s hypothesis one. Hypothesis two is this compound value notion, that you basically figure out where in the ecosystem you’ve got enough space to build something that has two or three of these underlying platforms which are all improving simultaneously and you put these things together. This model of very aggressive care of the entrepreneur as a scarce resource, coupled with risk prospecting in an area that I think is very different from regular VC has kind of persuaded me that there’s enough game here for it to be worth taking a shot at, moving from being largely inside of the blockchain space to doing something which is more diversified. I’ve talked a lot about theory here. Now I probably ought to talk about what I’m actually doing. My journey to this stuff has been long and, frankly, involved a lot of screwing up. I did my first startup in 1993, dropped out of Edinburgh University Computer Science course to basically be first employee for a medical rendering company, co-invented what I think was probably at the time the world’s fastest medical rendering algorithm, eventually the company became a thing called Voxar. Then I went to the States, did a whole bunch of graphics stuff that was flight simulator based, constantly trying to get a set of skills that would be relevant to VR, I was a graphics engineer, and it was basically just one failed cock-up after another. I managed to make it through the 1990s without making any money at all, and then

[p. 8](https://files.howtolivewiki.com/hexayurt_guy_capital_partners.pdf#page=8) to the States, did a whole bunch of graphics stuff that was flight simulator based, constantly trying to get a set of skills that would be relevant to VR, I was a graphics engineer, and it was basically just one failed cock-up after another. I managed to make it through the 1990s without making any money at all, and then had this radical change of direction to energy policy and the hexayurt and the disaster relief and all the rest of that, I spent some time doing due diligence for an outfit in Chicago. I’ve never really found an angle on the thing that I believed in, I’ve never found something where I felt like I had a compelling vision of the future that was my show. I did find that inside of government policy, inside of energy policy, inside of disaster management around the hexayurt, I found the things that were concrete and I got a lot done in those areas, but I’ve never found something in business that had that sense of “Boom – I’m in the right place, this is my thing.” But actually, slowly, slowly, slowly this VC thing has become that for me, because what I see is there’s opportunity to basically intervene in the lives of an enormous number of really smart and talented young people, to give them a shot to live their dreams and to basically drag us along with their dreams. Changing the world in ways that are really substantial and significant is not easy, and it’s only really going to get done if we can figure out how to allocate capital to things that really have the potential to make a difference. And I don’t mean this is a kind of narrow social change, bottom-billion kind of a sense, which is what you might expect from me, but we have to innovate at both ends. We have to innovate at the high end because that’s where you get the cell phone technology that eventually scales globally, and the high end is a place where you polish ideas until they really work for human beings. The low-end innovation, we don’t yet have the financial infrastructure to make it possible for billions of poorer people to collaborate between putting their funds into things which are good for them. So until we’ve got mass collaboration where it’s possible for a billion people to put a penny each into a bucket once a day, it’s very, very hard to fund the kind of access to markets that would be required to do bottom-billion innovation. One of my hopes is that over the next couple of years if we can successfully do innovation at the high end inside of the developed world for the people that already have assets, we could then, as the financial infrastructure from the bottom billion comes online, scale down into those markets and into the innovators that are in those markets. But right now without blockchain-based financial infrastructure to enable

[p. 8 to 9](https://files.howtolivewiki.com/hexayurt_guy_capital_partners.pdf#page=8) of years if we can successfully do innovation at the high end inside of the developed world for the people that already have assets, we could then, as the financial infrastructure from the bottom billion comes online, scale down into those markets and into the innovators that are in those markets. But right now without blockchain-based financial infrastructure to enable that ultra-low cost innovation base, I don’t think we can get in there. But the high end, what I really want to see is the best of people doing the best of work with the best support possible, to try and build things which genuinely feel like we’re in the 21st century in something that’s happening. I mean, this sounds kind of like a fantasy, but it would be nice if Tesla was not the only thing that you look at and say, “Actually capitalism is worthwhile.” We’re doing a lot of utility innovation right now which is basically taking existing business models and adding a computer to them. There’s a lot of stuff around Robin Chase’s work on Peers Inc, where you do this kind of very rapid roll up of a whole bunch of different assets into these ubiquitous platforms, there’s a lot of stuff happening along those lines. But what I want to see is stuff that’s really just shocking and amazing, things that basically treat the world like art and you’re painting on this palette to make completely new ideas happen in ways that then change and mutate human culture. Because if we can accelerate progress at the bleeding edge by a factor of maybe two or four again in the next decade, we might get the kind of acceleration that it takes to build the technology place and the cultural change necessary to allow us to address things like climate. So, right now what I’m on is a very, very short-ranged directed acceleration trip, where we try and speed up the ability to get great people working on great stuff, with the expectation that that speed is in and of itself a social good and a toolkit that later on we might broaden into other areas. But for now it is a very straight down the line, straightforward approach: find a set of money which is looking for some very specific, high-risk, high-quality risk, find a set of entrepreneurs that have a real sense of mission, value, purpose, that are super clear about what it is they want to do in the world. Then we wind up with a series of hypotheses about the future which are investable, we build these things out, putting more effort behind the things which look more attractable and have more leverage, and we have enough horizontalism inside of these enterprises that everybody has a very strong sense, and if it doesn’t work out for them, they’re still not wasting their time because they’re a part of movement which takes care of its own. I think all of those factors

[p. 8 to 9](https://files.howtolivewiki.com/hexayurt_guy_capital_partners.pdf#page=8) effort behind the things which look more attractable and have more leverage, and we have enough horizontalism inside of these enterprises that everybody has a very strong sense, and if it doesn’t work out for them, they’re still not wasting their time because they’re a part of movement which takes care of its own. I think all of those factors together brought into the correct harmony, with the expectation that these are incredibly high-risk enterprises from which it’s necessary to have a plan that allows you to continue your life if it doesn’t work, could produce something which is as much a step forward from conventional VC as conventional VC was from going to banks for loans to start businesses. I think that there is another jump to be taken there, and I think that that jump is quite hard to make in the Valley because the Valley is very good at what it does and it’s quite hard to get in there with fundamentally new ideas about the structure of the deal. But in the environment where we’ve got the crowdfunds and the crypto offerings and all the rest of that as options for scaling, that changes the dynamics, the dynamics are changed because of the speed of innovation, particularly self-funding entrepreneurial activity into the blockchain space. We’re seeing a lot more interest from areas outside of the US and figuring out how to innovate in a way which isn’t simply replicating the Valley, and all those things together begin to sound like the makings of a plan. Right now I’m basically just sticking a wand in the air and saying, “If you’re interested in this, write your name on a piece of paper, and we are going to go and build out the ideas a lot more and we’ll get back to you.” If you want to be an entrepreneur and you want to talk to us about potentially funding what you’re doing, hexayurt.com/capital, there’ll be a form there that you can fill in, give us some idea of the direction you’re pointed in and the kind of person you are. Similarly, if you’re interested in talking to us about helping us get this thing done, that could be expertise, it could be different ideas for how we could approach this, it could be locations we ought to be thinking about operating from, it could be anything along those lines – again, on the website there’ll be a different form, put in your information there. We’re going to try and pull together a set of people in London to do some work on regulatory, to do some work on business model, to do some work on legal and contractual. My hope would be that if we continue to get stuff done at the pace we’ve gotten it done recently, we should be in a position to fund the first companies that come out of this process by January or February of 2017. That will be the on the

[p. 9](https://files.howtolivewiki.com/hexayurt_guy_capital_partners.pdf#page=9) on business model, to do some work on legal and contractual. My hope would be that if we continue to get stuff done at the pace we’ve gotten it done recently, we should be in a position to fund the first companies that come out of this process by January or February of 2017. That will be the on the other side of the US elections, we’ll know a lot more about the general shape of the future from the process that unfolds there, and once the sea has calmed a little we can actually launch some boats. I’ve got two things left on my mind, which are these. In my case a lot of the reasons that when I was doing entrepreneurial stuff in my 20s it was one failure after another was because I didn’t actually understand what I was doing; I didn’t have a clear template in my head about what a company would look like if it was a successful company. Similarly, the cultural rate of change stuff... I don’t think it’s just me that has noticed that reality has speeded up enormously in terms of technical innovation in the last couple of years. We’re in this position where there’s an astonishing forward drive that wasn’t there before, and the only thing that we can hope for from doing this is to build machinery that gets people through their lives in a more effective way than the previous round of machinery did. You have something great inside of you, you want to bring it to the world; you need a set of tools to do that, you need a set of people around you to do that, you need money to pay those people to build those tools. All that we’re doing is enabling people to get things done. It’s just the case of bringing the models up to date with what current social and technical reality allow, rather than operating inside of an older paradigm. So, in a sense this is an incremental innovation inside of the funding space. It might look quite radical on paper, it might look very strange, but we all know that it’s hard to get money into early-stage, high-risk new technology because people are still too conservative, and we all know that entrepreneurs often have a very difficult time psychologically. We take those two challenges as being the core challenges that we’re going to attempt to solve, we raise a pile of assets, we also are a startup in our way, and then we go forth and solve. You know the URL (hexayurt.com/capital) – talk to you soon!

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End of [7] Capital Partners transcript, August 2016, part 2 of 2. Its connections are at the top of this file; the map is https://guptaoption.com/llms.txt.
Read next: next on the same works, [277](https://guptaoption.com/texts/277.md) a thesis: hexayurt guy capital partners? (2016); the most closely related, [277](https://guptaoption.com/texts/277.md) a thesis: hexayurt guy capital partners? (2016); his whole career in one file, https://guptaoption.com/story.md.