The Bioinformatics CRO Podcast
Episode 12 with Delian Asparouhov
Transcript of Episode 12: Delian Asparouhov
Disclaimer: Transcripts may contain errors.
Grant Belgard: [00:00:00] Welcome to The Bioinformatics CRO Podcast. I’m Grant Belgard and joining me today is Delian. I don’t want to butcher your surname and honestly, I think you’ve reached the point where anyone who would know who you are will recognize you by your first name. So can you introduce yourself please.
Delian Asparouhov : [00:00:14] Thankfully, Delian is not too common of a first name, so I can claim the namespace, but yeah. Full name is Delian Asparouhov. I’m currently a principal at Founders Fund, but also co-founder incubator of this company, Varda Space Industries that we just got off the ground over the past six months or so. My brief background is you studied computer science at MIT, dropped out to get into the world of startups through the Thiel Fellowship, ended up running an enterprise healthcare company for about three and a half, four years, went okay, not amazing. But we went through Y Combinator, StartX, raised a seed round, got a decent revenue scale, but not enough to raise our series A. I was in the VP of Growth at Teespring for about a year and then for the past four years have been a venture capitalist, first half at Khosla Ventures, second half at Founders Fund, roughly two and two years at each. And at both firms was pretty focused on what I’d call engineering based investing. And a significant focus area was the commercial space industry. And the goal was eventually to actually start a commercial space company. And so as much as maybe COVID was not ideal for the world as a whole, it did provide me with a little bit more free time to think about how I would go about doing an incubation and is eventually how Varda came about.
Grant Belgard: [00:01:21] Tell us about Varda.
Delian Asparouhov : [00:01:24] So Varda is an idea that I’ve been thinking about gosh, since like 2010. So it’s definitely been almost a decade. Basically I’ve always had this fundamental belief that one of the best ways to accelerate humanity’s path out into the stars is by focusing on industry. The analogy that I like to give is California did not become California because the government of their military funded or reimbursed Lewis and Clark’s expedition missions. The way that California became California was the gold rush and the industrialization of California, and that the best way to get to Mars is the doing the equivalent for space, which is not just sending big spaceships out towards Mars, but instead focusing on industrialization. And ideally, first off near-term industrialization, near space industrialization. So I’d always been thinking about, okay, what is this first step to doing so before you even start to do asteroid mining or lunar ice mining or trying to set up a trade belt between US and Mars or something like that. The very first step is industrializing low Earth orbit and ideally creating things that you don’t just try to sell in space, because right now there’s not that many people buying stuff in space. Like even if you were to manufacture things up there, most of the market is down here. And so Varda is primarily focused on in-space manufacturing, but it’s manufacturing things in space for use down here on Earth. And the reason that that’s valuable is because there’s a wide variety of basically materials and products that can only be manufactured in a microgravity zero-G environment that have a ton of value for people down here on Earth. But like most of our customers for Varda have no clue that we’re a space company. We’re just a factory that produces materials like they’ve never seen before on Earth because they’re literally not made on earth. And so that’s what we’re primarily focused on.
Grant Belgard: [00:03:02] Why is now the right time?
Delian Asparouhov : [00:03:04] Yeah. Like I said, I’ve been thinking about this problem for almost a decade. And it was sitting on the back burner for quite some time. But the reason that it’s most relevant to be done now is there’s this fundamental equation that comes with orbital manufacturing, which is basically dollars of value generated by being manufactured in space per unit mass of the material that you’re making versus the dollars that it costs to send something up into space. And so as launch costs were extremely prohibitive, there was just no way to make the numbers or the economics work for orbital manufacturing. Basically as launch costs continue to drop, it both makes the high end use cases economical. But as they continue to drop, it eventually opens up the world of materials that have benefit to being manufactured in space. And so right now, the current launch cost and what Varda is focused on are more niche, super high end materials that wouldn’t be, let’s say, purchased by a consumer per se. But more by really large groups like Telcos or the military or things like that. But over time, one could actually eventually make the argument that, hell, even Apple’s like M1 silicon chips can be done both cheaper and at much higher efficiencies and yields in space than they can be done on earth as launch costs continue to drop.
[00:04:16] And as I was seeing the performance of in particular, obviously SpaceX with the Falcon 9 and especially over the course of 2020, I will say I have a lot of friends that have worked at SpaceX or are still there. And I was for sure a say, a rocket optimist. I thought things were going to go very well. I did not think that in 2020 they would have a rocket that launched for the first time in May and that by the end of the year, that same rocket had launched and landed an additional five times. That progress in reusability went a lot faster than I expected. And so I was seeing the early signals of that and seeing the early signals of starship that made it feel like, okay, now’s the time to start the orbital manufacturing company and bet ahead that this trend will continue, such that when we’re going to market, the launch costs are ready to bear the burden f our company. And so, yeah, that’s why I think now’s the time. And hell maybe the right time would have been maybe like 18 months earlier, but I wasn’t thinking that I was quite ready to incubate a company then.
Grant Belgard: [00:05:11] What do you think space manufacturing will bring?
Delian Asparouhov : [00:05:14] I think the most important thing is it will bring a lot more volume to the launch market. Like right now, the only reason that people launch things up is basically just satellites. And there’s a variety of use cases for satellites, but they basically come down to two things. You’re either taking photos of the earth or you’re communicating back down with the earth. And taking photos of the earth, sure you can open up more and more spectrum. We started off with just pure visual with Planet Labs, and now we’re expanding into synthetic aperture radar, infrared, tons of different parts of the spectrum. But at the end of the day, a camera is a camera is a camera. It’s just you’re looking at different parts of the electromagnetic spectrum. So that’s one area. And I think that some level of market communications for sure, I think is even larger than that. But at the end of the day, fiber optics and the underlying telecommunications infrastructure that we’ve built up is quite well built and is very cheap for moving data around. The total market size for that is good. And it’s probably enough to maybe help fund SpaceX, but it’s still somewhat limited. And so the thing that I get most excited about for in-space manufacturing is when we start to look at the target markets that Varda is pursuing, we start to think about sending a payload every week or every couple of days that could fill up potentially the size of the entire Falcon 9 or eventually the size of, let’s say, a third or even half of a starship literally every single week.
[00:06:33] And so that’s what I get most excited about for in-space manufacturing is I’m obviously very glad to have built out these products that end up providing a lot of value for our customers down here on Earth, and that’s what we’re motivated by. But at the end of the day, what I get super excited about is how it helps accelerate humanity’s path into the stars by making it so there’s just a lot more flowing. And as there’s just more things flowing up and down between Earth and low-Earth orbit, then all of a sudden you have enough of the supply chain there that you can start to afford having more humans up there or flights up and down much more often. Eventually that’s what allows asteroid mining and lunar ice mining to become much more commercially viable because now there’s enough supply chain and flow through low-Earth orbit that people are willing to actually make a bet on those future supply chains. And so I really think about when we’re thinking about how to expand humanity’s path to the stars, it’s like thinking about how do you create these supply chains. And so this is the first step in the supply chain and the one that is most commercially near-term viable and largest in the near term.
Grant Belgard: [00:07:33] That’s so far out. This is awesome. So can you talk a bit about the science of zero-G manufacturing and what prior work there is in the area?
Delian Asparouhov : [00:07:42] Yeah. So it’s an area that’s been studied for God 25 years now at minimum. But gosh, even in the 60s and 70s, people were talking about this. What it mostly comes down to is there’s a single physics equation called Gibbs Free Energy, which basically just describes how different molecules crystallize depending on the amount of entropy in a system. When you’re in a microgravity environment, you can much more fine tuned control that entropy such that you can either choose to have very particular crystallizations or no crystallizations at all. So this is a little bit of a complex, let’s say, physics that I’ll dive back into. But the simplest maybe example to provide to your audience to start is human organ 3D printing. So when you do 3D printing on Earth, one of the most difficult things to do is very thin walls and intricate shapes because you typically need basically support structures underneath. And so what we do with metal is when we’re 3D printing metal, we put the support structures out, then we cut them out. There’s some groups trying to work on preventing needing those, but at the end of the day, it’s quite difficult to do even in metal. Let alone if you try to move to something that’s cellular based and you’re doing 3D printing of cells, the moment that you start to basically print this human heart inside of a gravity field, it basically like flops over. And that makes it very difficult to print versus, as you can imagine, in zero gravity, you can actually continue to print this very intricate shape. And it basically maintains a structure and it’s a lot easier to basically complete the printing of a human organ. That’s one example.
[00:09:14] The other example that I’m providing is the easiest maybe to understand around like cancer drugs. Basically, as you manufacture a cancer drug, at the end of the day, it’s mostly like a chemical reaction that’s basically coming up with one particular molecule. However, most of the time there are different shapes that that molecule can take. And typically that’s entirely just dependent on the amount of heat that’s being applied, how things are moving around. But in particular, the biggest effect is basically due to sedimentation and convection, basically heavier versions of the molecule flow down. They get heated up and it rises back up. And that happens on Earth because we live inside of a gravity well. And that’s why you have the terminology of like hot air rises. In space, there’s no up or down. And so hot air doesn’t rise. Hot air stays in place and so the way that you can think about it is like these types of cancer protein molecules stay in place and you can much more precisely, basically heat them and force them into a very, very particular shape. And so that can increase the potency of the drug. It can make it so that there’s much higher yields, much cheaper. And so, for example, there are certain cancer drugs that the Pfizer’s of the world have worked on where they discover a manufacturing process, but unfortunately comes out with 50% of the molecules being very useful for the cancer and then 50% of them being toxic and they don’t have a way to filter that out.
[00:10:29] And so it ends up actually killing the cancer drug manufacturing process. Versus in space, you can actually perfectly say, I actually just want 100% of this very particular version. But again, the reason that you’re able to do that is because you can much more fine tune control, how heat is applied and how these crystals and molecules lock into place. So that’s the very high level explanation behind it. People have been doing this type of research now, as I mentioned, for 25 years. It started off in real earnest, like sort of the mid 90s on the vomit comet that NASA was running. Or basically people do these microgravity experiments where you’d have a parabolic plane flight and you’d get 30 to 40s. And then I’d say in the 2010s over the past decade, a lot more has been done on the ISS across a variety of these types of experiments, everything from 3D printing in space, fiber optics in space, human organs in space, semiconductors in space. There’s been a ton of research that’s been done on the ISS. But at the end of the day, you can’t rely on the ISS of NASA as a component of a commercial supply chain like they are fundamentally research groups and research institutions. We’re very grateful for those. And a lot of the work that Varda is doing is predicated on research that these public institutions have done. We’re basically helping create the independent and purely commercial supply chains that we are not research, we are a commercial supply chain that is independent of, let’s say, NASA and the ISS.
Grant Belgard: [00:11:54] And how do you envision rolling this out? Will this be largely a series of partnerships, or are you planning on building out a pretty robust capabilities in-house to develop a completely novel product? Or will it be more a matter of taking products that are limited in their manufacture on Earth and partnering with those organizations to do it in space?
Delian Asparouhov : [00:12:17] Yeah, the way that I describe it is like Varda is ideally in the long term, like the contract manufacturer of space where we primarily focus on the physics of microgravity, manufacturing, the logistics of getting things up and down the materials. But ideally, we don’t necessarily want to be the ones that are going all the way through to the end product and end customer and developing that relationship. And so I sometimes jokingly describe the company as the Foxconn for space. We want it to be much more like Foxconn than we do Apple, where ideally the Apple’s of the world come to us with their designs and say, Hey, you’re the only ones that know how to manufacture it. Ideally, though, obviously with much higher gross margin than Foxconn has, I think partially because the defensibility of a space manufacturer is going to be a little bit more than just iPhones and cheap labor in China and also American made and American ground. So there’s a lot of people in the defense industry like an equivalent of the Foxconn for space, but that’s American made. So yeah a lot of it, early on we’re going to have to be developing a lot of this ourselves, both the actual products that we’re going to be manufacturing and the end customers ourselves in-house. But over time, the goal would be to actually just form partnerships with companies that both have expertise in particular areas.
[00:13:25] And then we just introduce the one particular step, because a lot of these products, it’s not like the entire manufacturing line needs to be in space. It’s actually typically just like 1 or 2 very particular steps. And so ideally we’re working with somebody that already has a manufacturing line in these types of products. So for example, like I don’t want to get into cancer drug manufacturing, I don’t want to get into like FDA approvals, but I would love to do a like joint venture with Pfizer where we take a drug that’s going to market, help them set up their supply chain in a way where they have a particular step that runs through Varda and runs through our microgravity factories. And so that’s the ideal long term. But at the short term, we can’t be reliant, obviously on others for our own success. We can’t become a platform on day one. So we have to start off by developing our own products and then eventually that builds up the logistics and operations and infrastructure to then become a platform. So we’re more in our like book selling Amazon phase than we are on like Amazon marketplace phase. We would love to become the marketplace one day, but for now, we just got to figure out how to like market and sell these books and become large enough that eventually people want to come to us to be a platform.
Grant Belgard: [00:14:25] So you talked earlier about this being the first step towards robust multi point space supply chains. What is your vision for space long term? Where do you think we’re headed? I know we’re kind of getting into sci fi territory here, but what do you think we might see in your lifetime?
Delian Asparouhov : [00:14:45] Yeah. I mean, part of why I’m so excited about space exploration is I do think that the fundamentals of the institutions that I believe in the most, both democracy and capitalism are somewhat dependent on uncapped upside uncapped growth, non-zero-sum equations and non-zero-sum games. And I think at the end of the day, yes, you can continue to become more and more productive on Earth. But space is the eventual final frontier and what makes both life on earth, but life in the galaxy non-zero-sum. And so I actually think that unless we get to space ASAP, we will start to see cracks in the foundations of these institutions that we care so deeply about. I think it is going to be difficult to continue maintaining a democratic and capitalistic United States without space. So that’s why I got excited about it. What I think we’re going to see is within a decade, I think you’re going to see extremely large scale low-Earth orbit infrastructure. So we’re talking about things that are Ten X the size of the ISS, staffed by humans and largely run by private corporations. I think within the next 5 to 10 years after that, you’re seeing large scale infrastructure on both near bodies like the moon, but as well as further, let’s say, mid-range bodies like the Lagrangian points between us and the sun on the other side, further out into the solar system. And then within I’d say 20 years of today, you start to see things on probably maybe not quite on the surface of Mars and significant infrastructure, but probably on Phobos and like some of the moons of Mars that are a little bit easier to get in and out of is, I think the things that I get most excited about.
[00:16:30] And as you can tell, the way that I describe it is I think about it again in these like step by step supply chains. The best way to get to Mars is not by landing straight on Mars, it’s by probably creating a trading post on Lagrangian Point where people can bring in asteroids, process them, and then go from the Lagrangian point back down to earth into low-Earth orbit, down to the factories that are down there. And so that’s where I get really excited is you got to step by step, start to expand the sphere of economic influence, be like recently went through mission and values exercise at Varda and came up with a draft version. But of our mission statement being expanding the economic bounds of humankind. So that’s how I think about anything in space is you don’t want to just expand the exploration bounds. You want to expand the economic bounds of humankind. We’ve gone to Venus, we’ve gone to Pluto, we’ve gone to Europa. We’ve gone there on research missions. I don’t want to just send more research missions with humans. When we’re sending humans out, let’s do it in a way that is like economic and profitable and more helpful and valuable to people here on Earth.
Grant Belgard: [00:17:32] It’s incredible. So besides space, what areas of tech are you most excited about and what do you think is most oversold?
Delian Asparouhov : [00:17:39] Yeah. I think it is amazing to see a lot of the innovation curves that we’ve been writing for the past. Let’s say ten years or so, start to have their next waves. And so the examples that I like to use here are let’s take battery energy density and let’s say compute density. Over the past decade, it’s been very difficult as a venture investor to invest in anything that basically just isn’t lithium ion or just Intel continuing to shrink chips further and further. Because those curves were just so predictable and it’s so much scale behind them, like the amount of money going into just continuing to improve lithium ion was so great that it was basically impossible as an up and coming startup to ever compete against that. But we’re now actually starting to hit these fundamental physics limitations where we’re basically done with lithium ion. You can’t increase the energy density basically any further. And so for the first time, you now have the ability for there to be this wide open field of potential new technologies for batteries. And I think that’s actually good because like, I’m not convinced that lithium ion was improving on the fastest curve that was available to humanity. Like I think there were technologies that could have already leapt forward, but those could never attract enough economic scale to ever be able to compete against lithium ions improvements versus now there’s so much capital flowing into new types of battery technology that I think that will, over the next decade, innovate far faster than we did over the past decade in terms of battery energy density.
[00:19:10] And I think that has wide ranging implications from everything from electric flying cars, the range of electric batteries, the likelihood that the penetration of electric cars in the United States improves significantly. It has implications for how the world of space, just like the amount of power that you can get into a satellite. And so I get really excited seeing a lot of these let’s say, fundamental inputs into a lot of the technology that humanity relies on, like battery, like compute starting to step into new paradigms. So in the world of computing, it’s unlikely that Intel and NVIDIA today are at the forefront of compute for CPUs and GPUs. Ten years ago that was the same case. I don’t think ten years from now it’s going to be the same case. I think there will be a new CPU and GPU leaders and the only reason is because both of those companies are now really reaching the fundamental physics limitations. And I think that’s great for humanity in some ways. Like we’ve tapped out all the resources that we can from this new technology. Ten years ago there was like for sure some chips companies getting funded. There are now I can name like five different optical chip related, whether it’s interconnects compute companies that are getting funded by top tier investors that are north of, let’s say, 50 to $100 million total in funding.
[00:20:22] I think that’s an incredibly exciting world to live in, and it’s part of why I love working on the venture side of things is not only get to see the future of space, but I get to see the future of batteries. I get to see the future of compute. And then also get to think through what are the types of flying car companies one could invest in now that maybe aren’t viable today with lithium ion, but will be viable in 3 to 4 years with some of these solid state batteries that, like QuantumScapes of the world are working on. And so yeah, I don’t know, that’s obviously a broad range of things. But I think 2010s were the decade of the bits and there were some changes in atoms. But at the end of the day, this office and the life that I lived was basically the same as somebody that did in 2010. Uber and Airbnb and things like that are nice, but they’re new economic models. They’re not new physical models. Whereas I really do believe that the 2020s are going to be the decade of the atoms where my life on a fundamental day to day basis is actually going to look quite different a decade from now than it does today.
[00:21:15] The way that I transport via flying cars much more economically available, small scale electric planes allowing individual consumers to be able to afford private flights. All of this, I think, is going to really, really change how people live their lives on a day to day basis. Hell even just the houses that we live in, I think are going to change quite a bit. One of the companies that I’m most excited about in my portfolio cover is basically building houses on an equivalent of an automotive line, and they build these extremely high quality houses that are at the price of affordable housing almost, and they’re only continuing to drop the floor of that. Like at the end of the day, the way that construction is done today, there’s like a fundamental flaw that nobody can beat that is basically high skilled labor. There’s a reason why everybody can afford an iPhone now, and it’s not because people got better at the labor behind how you manufacture these iPhones. It’s because people got better at the actual manufacturing lines and the actual CapEx and the R&D to automate more and more of this and make it cheaper. And we haven’t seen that same innovation curve hit homes yet. We should be able to allow every American to afford as high of a quality of a home as they do quality in the pocket computers.
Grant Belgard: [00:22:19] When are they going to move out of LA? I look them up the other day, but they can’t help us out here in Florida yet.
Delian Asparouhov : [00:22:26] Yeah, I mean as you know, it’s like with a startup focuses everything and so they’re primarily focused right now on like backyard homes a very specific square footage and really just optimizing that product. And they’re like high end ADUs are like the roadster equivalent. And so yeah they’re not mass market yet in a variety of different ways. They’re meant for more affluent folks that have a large backyard that are trying to add a second property. It’s like more accessible in LA, but accessible in LA is not the same as mid-market in Florida there. Next is going to be like the Model S, which is still going to be on the high end, but much more accessible versus now they’re more on like the ultra high end. But when I get excited about is just starting to see that progress. Any other construction company that I’ve ever looked at, they make a little bit of progress via some software that does workforce coordination or something like that. But there’s a pretty high floor on the cost that they can get to versus covers floor on where they can get to you with their super high quality homes is extremely cheap and it’s really cool to start to see that cost curve progressing.
Grant Belgard: [00:23:25] Where are the bubbles?
Delian Asparouhov : [00:23:28] We probably can’t go on forever just printing infinite amounts of cash and distributing that to people. And this path leads to only firm inequality and wealth inequality. I think this constant printing and constant asset inflation is like a huge bubble. I think what’s going to end up happening is the government starting to pull back on this. We’re going to go through a huge, I think demand shock while supply is not going to be able to catch up as COVID comes to an end across a variety of different things, whether it’s travel, consumer goods consumption. There’s just so much pent up demand and supply chains just don’t react that quickly. Take airplane flights. The airlines have made a lot of cuts, both in terms of CapEx, people. I think flight prices from, let’s say, SFO are going to skyrocket. There used to be flights every hour on the hour between SFO and LA from 6 a.m. to 10 p.m. for commuter flights every day on like, let’s say, Delta and United. Right now, those are limited to like 9 a.m. to 6 p.m. and there’s far fewer of them. Even as demand starts to skyrocket in a couple of months, these airlines aren’t going to be able to immediately react.
[00:24:33] It takes time to start to staff things back up, buy up more planes. And so what’s going to end up happening is you’re just going to have this huge demand shock, limited supply prices are going to go through the roof. And so there’s going to be a lot of these things that just become inaccessible to the average consumer for an extended period of time until supply can actually catch up. And so that’s where I get worried. And I think the way that plays out in terms of the public markets is I’m very happy that the IPOs that have happened over the past quarter have happened. I think it’s amazing to see the amount of dollars that the community have returned back to their LPs and that those dollars will get reinvested into new funds and new companies. And that’s great. But I do think Tesla probably needs to drop by 2X like Snowflake is going to probably drop by 30 to 40%. And one of my public equities friends described it as over the past decade, the person who won was just whoever bet on Amazon.
[00:25:22] And so the reason that all these companies are getting so highly priced is these public equities investors just don’t want to miss out on the next Amazon. And so now every company, IPO ING is getting priced as if they’re the next game is on. Not all of them are including some probably in our portfolio right they probably are not the next Amazon and I’m not sure that they quite have $1 trillion upside in terms of market cap. And I don’t think the public markets quite yet reflect that. I’m loving these techno optimism probably needs to be dialed back. It was Ten X off three years ago. Now Ten X off in terms of the public markets were not optimistic enough about tech. People underappreciated Tesla. They underappreciated companies like Airbnb versus now I think it’s maybe like 40 to 50% too optimistic. And so we’ll probably get dialed back down. But still on that net, it’s going to be amazing for technology because still we were off by Ten X and now it’s going to be more like off by 7x or something like that.
Grant Belgard: [00:26:16] So let’s talk about you. You’ve had a really unique path. How did you get to where you are today? Maybe we can go way back to childhood.
Delian Asparouhov : [00:26:26] Yeah. You grow up in an Eastern European household with two PhDs as parents and math, multiplication table flashcards before you can even really speak English. You kind of become pretty academically oriented and pretty oriented around math, physics and robotics. Pretty early on in life. I thought I was going to be an academic professor type. I went off to MIT expecting that I was going to join JPL one day and that was how I was going to get into the world of space was through the world of “academic space”, but got sidetracked, freshman year at MIT into the world of startups, ended up interning at Square. The summer between my freshman and sophomore year, just totally fell in love with Silicon Valley. I thought that it was the most amazing place on the planet and I needed to get out here ASAP or end up being roommates with a guy that was friends with a Thiel fellow and she’ll learn about that program was like, Oh my God, this is the way that I can get back out to Silicon Valley ASAP. So I ended up applying for that program, dropping out, and have now been in San Francisco since summer of 2013. It’s been a circuitous journey during my time here. But in some ways, just stick around in Silicon Valley for long enough and keep doing hard work, you’ll eventually get better at identifying the opportunities that land in your lap and knowing which ones to pull the trigger on and which ones not to you and start to build up inflow of more opportunities.
[00:27:38] And so, yeah super grateful with how the past seven years have gone, even if at times it didn’t feel very obvious where things were going to go and felt pretty brutal. I ended up running this company that, like I said earlier, we did okay, but not amazing. We got to ramen profitability, but man, I slam my head against a wall trying to make that company successful as a 19 year old that might drop out. But yeah, it did not turn into Dropbox or Facebook, but it taught me a lot, taught me a lot about fundraising, marketing, sales, how to hire, how to fire. So I’m grateful for that experience. I ended up joining Teespring for a year as kind of a break, honestly. But again, it was a useful experience where I just learned how to operate as an executive within a larger organization. It just gives you like, I have some friends that have basically just only been founders since they were, whatever, 19 or 20. They never like worked inside of “real company”. And so I think that one year experience was really helpful to understand, like, oh, here’s how like a 350 person, 300 million a year “large company functions”. And here’s how I fit into it. As somebody that just runs like 15, 20 person team and then goes considering basically founding something again after that “spring break”, had a couple different ideas that I was chewing on, had a couple different founding teams, but it wasn’t quite coming together in time.
[00:28:48] And Keith basically made me this offer to come join him at Khosla Ventures as his chief of staff. And yeah, it was just an incredible experience learning from via osmosis from one of the best VCs on the planet for like 12 hours a day. Turns out if you do that, even just like a year and a half, you end up learning a ton and then steadily over time started to strike out on my own, let’s say, and started to learn how to bring in companies, invest in them, start to understand like they were for sure things that I liked about the areas that Keith invested in. But there were also areas that Keith wasn’t interested in that I was like SpaceX as an example, and started to really explore those investment areas. It was about maybe three, three and a half years ago where I realized that SpaceX could be more than just say personal hobby, but that it could be like a professional interest. And so started going to space conferences, meeting with VC backed space CEOs. People would always ask me like, Oh, if you were ever to leave VC, what would it be for? And I always said Oh, it’d be like to like found a space company. But then seeing Keith do open door seeing now Trey Stevens here at Founders Fund do and I was like, oh, maybe there’s a way to do the incubating thing.
[00:29:46] And so, started thinking about, okay, what would I incubate? Started talking with some SpaceX friends this past summer about like starship and some ideas that I had. And had been thinking about orbital manufacturing and then stumbled Lacrosse Will Bruey, who’s now the CEO of Varda and I was like, Oh my God. He’s like, going to be the perfect CEO for this. He’s just the lead hardware engineer on the Crew Dragon, head of mission Control for eight of the cargo ISS missions, like super well respected at SpaceX, Super entrepreneurial had that you want to scratch quote that I always like to use is you don’t become Elon by working for Elon and will definitely felt that he wanted to strike out and become his own Elon. Yeah I definitely remember talking to my girlfriend in July being there’s just no way I can pull off this incubation thing, the type of founding team that I have to put together. Being able to put together this fundraise like super, super unlikely. But then long hold by like mid November, I was like, Oh shit this thing is actually coming together and I’m gonna have to do it. So yeah, that was obviously a very wide ranging answer about how I got to today, but happy to dive in more on any of it.
Grant Belgard: [00:30:48] Yeah, that’s fantastic. Why do you think the Thiel Fellowship has been a success?
Delian Asparouhov: [00:30:54] Yeah, it was not obvious. When I was in it, let’s say seven years ago, a lot of people still made fun of the fellowship, didn’t think that there was going to be any successful companies from it. People really ragged on it and it’s crazy to see now you’ve got Vitalik with Ethereum, you’ve got Dylan with Figma, you’ve got, I think it’s Paul with Upstart. They’ve just been now clearly a higher number of hits than basically any other program. Even I think in terms of a percentage basis, I’d say obviously still in total is ahead in terms of market cap. But they’ve also funded a lot more companies. I think it’s just like select for anomalous people and you’ll end up doing all right basically in the long term. Even in 2016, people were still pretty bearish on Dylan and Figma. It wasn’t super obvious even then. Even after him having worked on the company for years. But I think Dylan had the resilience to just keep grinding away at it. And now Figma feels like a “overnight success”. But he’s been at it for an extended period of time, but most people probably would have given up. But I think Thiel Fellowship selected for people willing to take a non-standard path, were willing to bang their head against the wall and not necessarily give up.
Delian Asparouhov: [00:32:06] Oone thing that I think is really positive about COVID in some ways is taking everybody off of their “traditional life paths”. Everybody was just going to continue to go to school and continue to climb the rung in their company. All of a sudden, everybody’s life got thrown in a completely different direction. And I think it’s actually been great in a lot of ways because I think that’s what just Thiel fellowship does. It takes people that are willing to have their life thrown a different direction, but then actually does it. And learning how to deal with that on the fly and being comfortable with structure and ambiguity and things like that is actually an extremely valuable skill set. If you look at the people that I think are most successful in Silicon Valley over the course of decades, it’s the people that are willing to just constantly take all the risk and take these massive swings. And I think that Thiel fellowship teaches you early on in your career how to take a huge swing, dropping out of school and doing a risky, non-traditional path. If you continue to do that, you end up being quite successful. And so I think that’s partially why the Thiel Fellowship has seen the success that it has.
Grant Belgard: [00:33:02] And what, in your opinion, should be deciding factors on someone doing something like the Thiel Fellowship versus staying in college?
Delian Asparouhov: [00:33:09] Yeah, it’s for sure not for everybody. College has a lot of beneficial attributes. The structure, the social environment, there’s a lot that’s beneficial there. I’d say, for the people that feel like they already know what they want to do in the real world and feel comfortable in the “real world”. They don’t need somebody to do their laundry for them. When you’re ready, go out and do things. The Thiel
Fellowship is probably a good fit for you. If you want to do frat parties and get into the world of academia, then you should probably keep doing that. And I think honestly, that’s better for most people. Most people are not ready if you put them out into the real world and give them a 100K, they’re just going to end up completely wasting their time and end up in a much worse situation than they would have been in if they had just stuck with school. And so I think if you’re comfortable with ambiguity, comfortable with a lack of structure, ready to go out into the real world, absolutely it’s a great place to go. If you’re not sure about things. You’re not sure what you want to do with your life et cetera, et cetera. Maybe spend more time in this structured environment that allows you to figure out what you want to do with your life in an easier way than giving you 100K and making you build a company.
Grant Belgard: [00:34:18] And among the Thiel Fellows, did you notice any identifying attributes that ended up being predictive of who knocked it out of the park versus who’s not on our radar anymore?
Delian Asparouhov: [00:34:32] Yeah, it comes to the exact same thing of there was just a set of fellows that weren’t yet ready for being out in the real world. There are ones that I could pretty confidently say were worse off after doing the program than they were before. They should have just stayed at Dartmouth and been a valedictorian at Dartmouth and then gotten a really good I-banking job and then maybe 3 or 4 years later got into the world of startups. But the moment that they basically got shifted off of that career track, just really started spinning their wheels and losing track of what the hell they wanted to do with their life. And so a lot of it really comes down to you need to be willing to be self-motivated and self define your own goals and not rely on both external validation or external planning of your life. And I think most people are not like that. Most people need other people to tell them what to do, how to do, how to be successful versus you just can’t if you do the Thiel Fellowship. You need to define your own success. Nobody in the Thiel Fellowship program is going to define that for you.
Grant Belgard: [00:35:32] So since we’re on the topic of the Thiel Fellowship, what important truth do very few people agree with you on?
Delian Asparouhov: [00:35:38] Oh, man, it’s been a minute since I’ve been asked this question. I’ve never actually verbalize this on Twitter or anything like that. We don’t really need most of humanity to be productive. In the future, let’s say, not in the immediate, immediate term. But in the not too distant future, you could probably have 95% of people just playing artificial games and entertainment and video games and just being artists and things like that. And just purely creative, self fulfilling pursuits and that you only need 5% of humanity to just basically help with allocating resources, innovation, doing fundamental research and actually pushing forward. The way that I sometimes joke is in the future everyone’s going to be an actor. Like 95% of people are going to be actors and musicians and it’s great. I’m glad. We will be much more cultural society in some ways, in a much more rich and probably happier society because we don’t need people to be baristas or etcetera, etcetera, because a lot of that maybe gets automated by robotics or if you choose to still be a barista, it’s because you’re doing it at the high, high end because you want to do it as a craft, not in like we’re paying you strictly for robotic menial hours. And I don’t think we need to as a society, try to help make everybody productive.
Delian Asparouhov: [00:36:55] I don’t think everybody needs to be an engineer or contributing to technology or contributing to pushing humanity forward. I think we need to get comfortable with the idea that most people just don’t want to, but nor do we really need that many people to. And so I think it’s a somewhat dystopian world where you end up having 90% of the world and like universal basic income type thing where you have enough to provide for yourself and enough to choose to do anything from playing video games all day to producing music to being an actor. Everybody within that ecosystem consumes that same content that everybody else is producing. And I think you’re starting to see that. If you look at just the popularity of celebrities like the Tiktokers and the YouTubers of the world are not as popular as a whole in comparison to Marilyn Monroe or like Tom Cruise was like a few decades ago. There’s just a long tail now of celebrities where everybody’s a celebrity, everybody’s an actor, and everybody spends all day consuming content from one another. And I think that’s it’s an okay world actually to live in. And then there’s going to just be a lot fewer people that actually push the world forward.
Grant Belgard: [00:38:03] What do you think is the time scale on that?
Delian Asparouhov: [00:38:06] The way that I sometimes project this stuff is just look at the world poverty graphs and how rapidly poverty has been dropping in the world. But then also in the United States, it is for sure a very widespread problem. But also news and most people by default want to fearmonger and not show you how amazing it is, how much we’ve dropped both, let’s say infant mortality and then how much poverty as a whole is dropped. And so I think if you just continue to extrapolate the median income curves of the median family in the United States, and then also the deflationary effects of tech were 10, 20 years ago, this thing would have cost $2 billion. Nobody could have made this basically right versus now this thing costs like $600. I think you’re actually looking at this 10 to 15 years out. I don’t think we’re actually that far away. If you continue to just extrapolate these curves, put in some exponential assumptions as opposed to linear assumptions, man from 2016 to 2020, median household income rose a lot faster than GDP did, which is a great signal for US general income inequality. People today are significantly richer than they were in 2016. And I don’t think most people have wrapped their heads around that. Like, yeah COVID sucked. There’s been a lot of things that are not great, unemployment is not great. But if you look at average household savings, average household income, they’re in an amazing place.
Grant Belgard: [00:39:30] What do you think will be the geopolitical implications?
Delian Asparouhov: [00:39:35] You need to figure out how to give people internal motivation and mission and validation by the work that they’re doing right. And I do think that some of these technology platforms like TikTok actually help with this. Dancing for your group of 20,000 followers, strangers, provides you the validation that you need to feel motivated and get up in the morning some of the online video games and tournaments and things like that. You just need to like start to create these artificial structures since I think as people start to spin their wheels too much, lack structure in their lives or motivation or purpose, I think there’s a reason why household income has gone up the amount that it has. And then also QAnon conspiracy theories have gone up the amount that they have. It’s because all of a sudden these people have a lot more wealth and free time, and you end up spinning your wheels into these like crazy dark corners of the Internet. I think that will only continue. And so helping provide some centering for these people is probably going to be the most difficult thing. Like how do you prevent the world from just continuing to fracture and continuing to radicalize? I think everybody thinks like, oh, Trump is gone and now everything’s going to be calm. And I think we’re just getting started. There are going to be a lot more Trump like characters in the future, and we got to know how to deal with this.
Grant Belgard: [00:40:44] So on an unrelated note although we’re an all remote company, we’re headquartered in Florida. I understand you and the mayor of Miami kicked off quite the conversation about an exodus from Silicon Valley to Miami. Can you tell us a bit about that? I don’t know if all of our listeners are aware of this.
Delian Asparouhov: [00:41:00] Yeah. So Keith had maybe announced his move to Miami. I would say 2 or 3 weeks maybe before that tweet and it was getting a lot of attention and I was chewing on it. We even debated in December, maybe we should put Varda down in LA. And the problem was just everybody that we were recruiting, a lot of them were ex SpaceX. And so it’s difficult to justify how many people are gonna have to move across the country. And then California I believe, basically announced their outdoor dining lockdowns. And I was just so insanely frustrated. I was like, this just makes no effing sense. Like, why in what God’s name would you justify this? Just was so frustrating and so was just literally sitting on the toilet and it was frustrated with it. I got a new idea and the joke was supposed to be somewhat pithy because obviously Keith had been talking about it for weeks on end. But I was like, Guys, hear me out. What if we move Silicon Valley to Miami? And then man, that tweet just took off. And it was funny because a very pithy tweet, like I’m not planning on moving to Miami anytime soon. But Varda is not in Miami, so never say never.
Delian Asparouhov: [00:41:58] But at least in the short term though, no immediate plans. And yeah, just took off. I did not expect it to go off so much. And then the mayor quite brilliantly, maybe 11 or 12 hours into the tweet when he was going pretty damn viral quote, tweeted it, which is like, how can I help? And then it just really exploded. That’s just the classic. I don’t think he even meant it. That’s just been his classic mantra as a politician. But little did he know that, How can I help has such a signal here in the VC community. And so that just made it totally explode. And then it’s just been off to the races since then. He’s hosting these cafecito as people are moving there, buying houses there. And so, yeah, I’ve had Miami real estate agents reach out to me and thank me for upping the value of their portfolio through a single tweet. And I’m like, I tweeted and I didn’t even get to participate in any of the upside. I’m not even planning on moving there anytime soon, but I’ll be there mid March for Keith’s birthday, so I’ll get to experience it for at least a week myself.
Grant Belgard: [00:42:55] Yeah. Thank you so much for joining us Delian. It was a lot of fun.
Delian Asparouhov: [00:42:57] Sweet. Yeah. Thank you so much for having me on Grant, really appreciate it.