Please enjoy this transcript of my interview with David Liberman and Daniil Liberman (@DaLiberman), visionary entrepreneurs and investors with a close partnership spanning 16 years. David and Daniil gained valuable experience at Snap, contributing to projects involving avatars, bitmoji, animation, and product operations. They are currently based in Los Angeles, where their primary focus is on building Product Science, a service dedicated to optimizing mobile apps.
Moreover, the Liberman brothers have established The Libermans Company, referred to as a People Company. Through their commitment to the Founders Pledge, they have allocated all future earnings and economic value for the next three decades to LibermansCo, including founder shares of Product Science and potential returns from future investments.
Transcripts may contain a few typos. With many episodes lasting 2+ hours, it can be difficult to catch minor errors. Enjoy!
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Tim Ferriss: Gentlemen. David. Daniil. So where did you grow up? And what did childhood look like?
Daniil Liberman: So the two of us were born in Moscow. Still Soviet Union at that time. To a family of very known neuroscientists. Biophysicists. Who the family were sort of upper middle class for the Soviet measure. But as soon as the Soviet Union collapsed we — with the Soviet Union, the family collapsed. It was a below poverty type of situation. Because our dad was born in 1925. So in 1990 he was pretty old already —
Tim Ferriss: Yeah.
Daniil Liberman: — and didn’t have a chance to adapt to the reality. He always —
David Liberman: And it was six of us.
Daniil Liberman: It was six of us kids.
David Liberman: Elementary school.
Daniil Liberman: Elementary school kids. So a complicated situation. Both parents had to continue the work as they wanted actually to finalize and finish the work of their life, and at the same time somehow survive and feed kids and get some clothes for us and stuff.
David Liberman: It’s like six of us one year apart.
Daniil Liberman: Our mom was —
Tim Ferriss: Was a mom.
Daniil Liberman: She was busy with making her breakthrough works in how neurons work and the signaling system in the neurons. At the same time, having six of us in eight years, less than eight years.
David Liberman: Yes.
Tim Ferriss: How did she — sorry to interrupt. But how does any human do that, let alone a mom? Not to get us into all these confusing gender waters. But let’s just say for the time being mom. Primary caregiver? Would that be fair to say?
David Liberman: Yes.
Daniil Liberman: Yes.
Tim Ferriss: So how did she manage both the scientific exploration with this groundbreaking work and six kids? I can barely manage one dog —
Daniil Liberman: I say always.
Tim Ferriss: — and what qualifies as my job? So how did she do that?
David Liberman: I think that after the fourth one, we kind of a little bit managed ourself.
Tim Ferriss: Right.
David Liberman: But still it’s not the answer to the question.
Daniil Liberman: The kids were taking care of the kids. No, there was a —
Tim Ferriss: Training managers.
Daniil Liberman: — grandma and grandpa from time to time. So from time to time they would drop half of us at the grandpa and grandma’s place, and then took half of us with them to the laboratory. That’s how we —
David Liberman: Spent a lot of time.
Daniil Liberman: — spent a lot. Surrounded by the fish and snails.
David Liberman: We were surrounded by all this equipment.
Daniil Liberman: Lasers. Microscopes.
David Liberman: They got first PCs much earlier than anyone else. That’s why we also were quite excited about that. I think that in general they were super passionate —
Daniil Liberman: About the work.
David Liberman: — about their work. That’s what we definitely picked from our parents.
Daniil Liberman: And about each other. So there were six of us.
David Liberman: That’s for sure.
Tim Ferriss: It’s a full team, yeah. It’s a full soccer team.
So you have lots of excitement. Maybe lots of chaos. You have goldfish, snails, grandparents, lasers. Sounds like a pretty awesome setup for curious kids, honestly.
Daniil Liberman: For curious kids.
Tim Ferriss: And what did you pick up on intellectually as a way of thinking from your parents? And I ask that because I know both of you for instance, and I’m not trying to lead with this question, but pay a lot of attention to data. You’re sort of geeks for parsing the data. Whether it’s to refine how you think about or identify problems and then also how you might solve problems. What did you observe in your parents or pick up from them when it came to how they thought about things?
Daniil Liberman: Now that you said that, I realized that our parents were doing those experiments which required them years of repeating the same stuff. Trying to get data which would make sense on top of their hypothesis of how everything works. So I guess we’ve been surrounded by the papers. Piles of papers with just numbers. Literally, I remember this.
David Liberman: They were like this. How we call this? Cards?
Daniil Liberman: Cards. Punch cards.
Tim Ferriss: Oh, the punch cards.
David Liberman: The punch cards, yes.
Daniil Liberman: Yes, the punch cards. Everywhere the punch cards. Before the PC was, there were this huge type recording machines with all this data as well. But what’s interesting, both of them was always challenging the status quo of the current understanding of science.
David Liberman: So if just someone claims something and you cannot really prove it for yourself with data, probably something is missing and you need to dig deeper.
Daniil Liberman: And that’s how they lived. And they had their own discussions with everyone around.
And we sort of picked it up as we were growing already. I don’t know. 15ish years old. Our dad was even older, so he needed someone to escort him to the conferences and meetings of scientists. Just basically it’s Moscow in winter and the roads are icy, I don’t know, five, six months a year. Something like this. So he needed someone to basically help him get there. And being there all the time, we saw his conversations with the rest of the scientific community in his institute as they were just laughing out of nowhere. I mean just, “Oh, yeah. Of course. Again, Liberman is talking about the quantum nature of the consciousness. Blah, blah, blah, blah.” Something like that. And we were looking at this. It’s like why? He has some ideas and proofs. So it was sort of a —
David Liberman: Resistance.
Daniil Liberman: — resistance to the rest of the world. We felt his resistance and were challenged with this as well. Like, “Oh, we going to prove everyone.”
Tim Ferriss: Libermans against the world.
Daniil Liberman: Libermans against the world. Exactly.
Tim Ferriss: All right, so we’re going to leapfrog from that. So as far as a next logical place, I like hopping around because I see things on paper, I find certain things exciting to talk about, and then we can fill in the gaps. So I’m just going to actually answer my own question and I’m going to take you to around — then we can fill in the gaps as we go. So you’re around 18 to 19 years old and you’re presenting to Russian Parliament. What are you presenting about and how is the reception?
David Liberman: Yeah, so a little bit of background.
Tim Ferriss: Sure.
David Liberman: So after Soviet Union collapsed, the entire population of the country lost their savings in the banks. Twice during the decade.
Tim Ferriss: Yeah.
David Liberman: So it was a quite harsh time for everyone. And for us it was —
Daniil Liberman: Strange.
David Liberman: — really strange. We weren’t able to understand how with all the modern technologies, with computers and et cetera, how it’s all this corruption and how it’s even possible.
Tim Ferriss: That your savings could just disappear.
David Liberman: Yes, definitely some technologies —
Daniil Liberman: Should be there.
David Liberman: — should be there to solve these problems.
Daniil Liberman: We had internet pretty early and we were hackers pretty — it was at that time of the internet era when everything was possible.
David Liberman: Yeah.
Daniil Liberman: Access to everything was possible. So at that moment we read lots of the hackers’ manifestos and some libertarian ideas wandering around the internet. And we saw all these ideas of decentralized type of data storage, which can be —
David Liberman: Protected.
Daniil Liberman: — bulletproof from —
Tim Ferriss: Various attacks or —
Daniil Liberman: — attacks and modifications. Like falsifications.
Tim Ferriss: Right. It’s resilient against falsification.
Daniil Liberman: Yes. Resilient against falsification. Blockchain type of ideas before Satoshi actually released his first paper on the blockchain. Which was never the one word. It was blocklike chain of blocks.
David Liberman: But BitTorrent and other type of —
Daniil Liberman: But BitTorrent and other type of —
David Liberman: — these storages existed even before.
Tim Ferriss: Sure.
Daniil Liberman: It is about this. We’re circulating over the internet. So with this combination of those ideas, we came up to a solution as we saw it for eradicating corruption in Russia. To make all of the governmental expenses completely transparent.
David Liberman: Store it on the people’s machines.
Daniil Liberman: And store it in the people’s machines so that none of the corrupt officials can actually even do anything with the data. So we are presenting this idea, and pretty soon when people realize what we’re talking about they basically ask us to go out.
David Liberman: Shut down the mic.
Daniil Liberman: Shut down the mic. He’s like, “The meeting is over. Thank you so much.”
Tim Ferriss: “Sorry, we’re having some technical difficulties.”
Daniil Liberman: Exactly.
Tim Ferriss: “If you could step off the stage.”
Daniil Liberman: And then the guy who was actually —
David Liberman: Who invited us.
Daniil Liberman: Who invited us. He was some sort of a deputy for the head of the party at the time. At the time there was multiple parties. Not only United Russia, but this guy came.
David Liberman: Approached us.
Daniil Liberman: Approached us in the corridor saying, “Boys, I can see you are very smart and all these ideas are just brilliant. But stop talking about this, otherwise someone will kill you. No, not us. We’re good guys. But there are bad people who are making lots of money and this is against what they want.”
Tim Ferriss: Okay. So now at that point, do you pretty immediately pivot to something else?
Daniil Liberman: Pretty immediately we realize that what we need to pivot into is grassrooting those ideas instead of trying to make them a top-to-bottom approach.
David Liberman: It’s quite —
Tim Ferriss: Instead of being the missionaries of anti-corruption. Distribute the risk a bit.
Daniil Liberman: Yes.
David Liberman: It started to be quite clear that people in the government —
Daniil Liberman: Will never ever.
David Liberman: — are not those people who really can adopt those ideas. And it was another story to that. In a week after that, they actually invited us again to come. And we came and they asked us to work on a project. And we said, “Well, what is the project?” And they said, “Well, you mentioned something about digitalization and how digitalization can be anonymous at the same time. Can you create an anonymous HR agency which will sell seats in government?”
Daniil Liberman: And we’re like, “Wait. What?”
David Liberman: He’s like, “Yes.” So imagine people who actually making lots of money and who’s capable of paying lots of money for a seat in the government. They are people who — business.
Daniil Liberman: They manage better than us.
David Liberman: They manage better. They can manage stuff better than us just from the street.
Daniil Liberman: Yes.
David Liberman: Just happened to be here just by chance because someone was a friend of someone. So if we actually invite people who did something in business and have money to pay for the position in government, they can do a better job for the country.
Daniil Liberman: Our first reaction was like, “Do you really have —
David Liberman: Price list for that?
Daniil Liberman: — prices?”
David Liberman: He’s like, “Yes, for sure.” We’re like, “Can you give us an example?” And the guy was like —
Daniil Liberman: Deputy Minister of Finance was half a million dollars.
Tim Ferriss: Wow.
Daniil Liberman: And Minister of Healthcare.
David Liberman: Ecology.
Daniil Liberman: I mean, Ecology was $3 million.
David Liberman: So the question was immediately, “Ecology? We don’t give a shit about ecology in Russia.” He’s like, “Exactly. That’s how the person who will take the position will have a return on investment pretty much.”
Daniil Liberman: They use all these fancy words.
David Liberman: They’ll get their money back pretty much in a year on bribes.
Tim Ferriss: Oh.
Daniil Liberman: So we quite soon realized that they are —
Tim Ferriss: You’re like, “Well, We appreciate the invitation.”
Daniil Liberman: “We appreciate the invitation. Never call us again. Thank you.” That was our reaction. But yes, that was a moment when we decided to pivot to building our own businesses and —
David Liberman: Making our own money.
Daniil Liberman: — gathering resources.
David Liberman: Gathering resources and then building type of technologies ourselves.
Tim Ferriss: Then you can buy the Ministry of Ecology seat.
Daniil Liberman: One day.
David Liberman: One day. Or we can do other revolution or something like that.
Tim Ferriss: Yeah. Now at that point do you — while you’re observing all of this and it’s imprinting your young minds. Are you thinking, “Eventually we are going to want to build businesses somewhere else,” or did you anticipate that you would be building in Russia for the foreseeable future? How were you thinking about things at that point?
David Liberman: For us, somehow at this particular moment, it was still unreachable. The idea that we can fly somewhere and build businesses there.
Tim Ferriss: Right.
David Liberman: It is only years after that we start to be more confident in our abilities and start to think about that.
Daniil Liberman: It was miserable the first time we flew to United States. Just on our own. Miserable experience. Very low level. Poor level of English. No understanding whatsoever what the country looks like and what’s going on.
David Liberman: We’re trying to raise investment.
Daniil Liberman: We were trying to raise investment.
David Liberman: Was total flop.
Daniil Liberman: Miserable.
Tim Ferriss: That sounds like a hard slog of a first trip.
Daniil Liberman: Yes, Exactly.
Tim Ferriss: Okay. So at the time then you’re just focused on building businesses. And what type of business were you building at that point?
Daniil Liberman: We had ideas. 2001, 2002.
David Liberman: Even before that, our first company was an ISP. Internet service provider. It was kind of — we wanted to have a good internet connection and it was super unaffordable. $5,000 to connect your apartment.
Tim Ferriss: Wow, that sounds very unreachable for most people.
David Liberman: Super unreachable. For us as well.
Daniil Liberman: Especially for the family of eight people who was making a couple hundred dollars a month for the household. It was unreachable. So at some point we realized that if we want to have such level of internet at our own apartment, what we can do. We can go through all of the neighbors. And it was like what, 1600?
David Liberman: We went door to door.
Daniil Liberman: 1600 apartments in the —
David Liberman: Small district.
Daniil Liberman: — small district.
Tim Ferriss: Yeah.
Daniil Liberman: It’s quite dense.
Tim Ferriss: The neighborhood.
Daniil Liberman: The neighborhood. Like dense neighborhoods of [inaudible] in Moscow. And we literally rang all the doorbells. And the question was, “Do you have a computer?” If the answer was yes, “Do you know what internet is?” If the answer was no, “Okay, let us explain you. Let’s have some tea.” And realized you are literally sneaking into people’s apartment and starting to explain to them what they are losing by not having internet already connected to their computer.
David Liberman: So we pre-sold couple hundreds of —
Daniil Liberman: Pre-sold couple hundreds contracts. And with that we were like, “Okay, we can now go to the bank. Get a…” How is it called?
Tim Ferriss: A loan.
Daniil Liberman: Consumer loan. Just basically consumer loan. And we use the money to buy all the equipment to buy the cable.
David Liberman: Optics.
Daniil Liberman: Fiber.
Tim Ferriss: Yeah, fiberoptic cable.
Daniil Liberman: Fiberoptic cable. And basically connect all these households and people paid. And we covered the loan pretty fast.
David Liberman: It still was a quite challenging project.
Tim Ferriss: So I’m wondering just what you’re buying with the loans. You’re buying servers, sticking them in a bathroom? How was it being connected to the existing infrastructure?
Daniil Liberman: So existing. First we needed to — basically someone to bring the cable in. It was the most expensive part of the operation.
Tim Ferriss: Digging trenches.
Daniil Liberman: Digging trenches.
David Liberman: We hired.
Daniil Liberman: We hired the engineering team. We were lucky because the largest —
David Liberman: Hub.
Daniil Liberman: — communication hub for the Moscow internet was basically two kilometers away from us.
Tim Ferriss: That’s great luck.
Daniil Liberman: It’s great luck.
David Liberman: Because our parents from science, we were in the part of Moscow where —
Daniil Liberman: Where most of the scientists was.
David Liberman: — most of the scientists were and the universities were there as well. And that’s why —
Tim Ferriss: Makes sense.
Daniil Liberman: Makes sense.
David Liberman: — internet first emerged at this part.
Daniil Liberman: So we hired these people, the engineering team, to bring the cable. And then by night mostly we were connecting 20-story buildings to each other by shooting the cable using the athletic air bolt.
Tim Ferriss: A crossbow?
Daniil Liberman: Crossbow, yeah.
David Liberman: Yes. It’s just local officials, they were bribed by the bigger player and they didn’t allow us to actually —
Daniil Liberman: They wouldn’t give us the keys.
David Liberman: — get into the roofs and to properly set the cables.
Tim Ferriss: Yeah, competition.
Daniil Liberman: Competition was there. Even though we had the license.
David Liberman: License.
Daniil Liberman: And by law they couldn’t prohibit us to do this, but they were not allowing us. That’s why at night we would sneak onto the roof. Pretty dangerous operation of getting onto the roof even without having an access through the door. And then from the roof to the roof, we basically were putting these cables on our own using the crossbows. Shooting from one roof to another roof.
David Liberman: This company was then acquired by a bigger player. There was a significant consolidation on the market.
Tim Ferriss: So between the ninja crossbow expansion and the acquisition, how long did that take?
Daniil Liberman: Two years.
Tim Ferriss: Two years.
David Liberman: Three years.
Tim Ferriss: All right. Moving fast.
Daniil Liberman: Moving fast. Then later on we realized that what we actually need to do is super computing. We were like, “We are smart in mathematics. We can build out. We can write algorithms. And this is something.” We’d foreseen the future of cloud computing. Using machines in internet to be —
David Liberman: To parallelize.
Daniil Liberman: To parallelize compute over the — this was our idea originally. Then we realized that it’s impossible to do in Russia type of business. And we decided that what we can do, we can start building games.
Tim Ferriss: Now before you go on. Was the computer science and whatever coding experience you had, was that self-taught? Was it school? Was it parents?
David Liberman: Our college degree is computer science. But in reality. In Russia at this moment, no one will really teach you properly computer science because your teachers would know less than —
Tim Ferriss: Than you would.
Daniil Liberman: If you have internet.
Tim Ferriss: If you’re motivated.
Daniil Liberman: If you’re motivated.
David Liberman: So we were lucky. Because our parents were scientists, we got PCs at our home much earlier than most of our peers. We got internet in our home much earlier than most of our peers. And we were super excited about this technology.
Daniil Liberman: We were curious, and I would say naughty. So we would break the computers all the time and we had to fix them all the time for the parents to continue their work. And that’s how we actually learn how to —
David Liberman: We built our first website for our guild in online game.
Daniil Liberman: Online gaming. Ultima Online.
David Liberman: Ultima Online.
Tim Ferriss: Great choice. Curious and naughty. That can be the name of your autobiography. The Life and Times of the Libermen. Okay, so you have the consolidation and then you decide to focus on games after that?
David Liberman: Yes.
Daniil Liberman: Yes.
Tim Ferriss: And what form did that take?
David Liberman: We played Ultima Online. We were super excited about these type of games. We thought that this is revolution because people just hang out there. There is no aim or you don’t need to just kill all the enemy. Just people hang out there.
Daniil Liberman: Sandbox.
David Liberman: Sandbox, yeah.
Daniil Liberman: You can have a marriage there. Build a house.
David Liberman: Like Roblox.
Tim Ferriss: Second Life type of feeling.
David Liberman: Second Life, yes.
Tim Ferriss: Instead of Doom.
Daniil Liberman: Instead Of Doom. Exactly. We’re very excited about this, but had to play only overnight because of a dial-up connection and the phone was for everyone in the apartment. For us at night. That’s why we actually wanted the better internet all the time. And that’s how the ISP started.
David Liberman: So then when we decided to build such game. At that moment, this idea was really not popular. Most of the — you even can find some quotes from CEO of [inaudible] would say, “Online games is just a niche market.”
Daniil Liberman: It will never be.
David Liberman: No one will play online games and all this stuff.
Daniil Liberman: He actually —
David Liberman: Then apologized many years after.
Daniil Liberman: — officially admitted he was wrong.
Tim Ferriss: That’s very, I suppose —
Daniil Liberman: Honest.
Tim Ferriss: — honest. A lot of people don’t own those things.
Daniil Liberman: Yes, he was super cool in that. He was like, “I said that. I was wrong. Now we are in the game.”
David Liberman: So we tried to launch several one time. Failed. Our own savings.
Daniil Liberman: Spent all of our own savings.
David Liberman: Was out soon. But then World of Warcraft was released, and we were the only ones who were —
Daniil Liberman: For years trying to raise money.
David Liberman: — trying to raise for such type of the project. And that’s how at some point.
Daniil Liberman: We got all that attention at this moment. And we raised our first money.
Tim Ferriss: So World of Warcraft comes out. It proves. It’s a proof of concept —
Daniil Liberman: Yes.
David Liberman: Yes.
Tim Ferriss: — for what you are also trying to get to in a way.
David Liberman: Not only proof of concept. It was the first game ever netting $1 billion of profit a year. It was just —
Tim Ferriss: I think people outside of games also today do not realize how big the numbers are.
David Liberman: Yes.
Tim Ferriss: The opening weekend for the new Call of Duty compared to every Hollywood blockbuster for a six month period or something like that. The numbers are astronomical.
David Liberman: This market was really for years larger than —
Daniil Liberman: The movies.
David Liberman: — the movie market. But 15 years ago it’s —
Tim Ferriss: It’s not as obvious.
David Liberman: Yes.
Daniil Liberman: But it was already obvious that it can make lots of money. So we were able to convince some of the investors.
Tim Ferriss: Investors tend to like that, yes.
David Liberman: And we got a lot of attention, grew pretty fast, to 150 to 100 employees in different times. But then 2008 crisis came and just it’s all —
Daniil Liberman: And we were not ready. World of Warcraft, it took Blizzard, the top game development studio in the world, that what we didn’t realize when we started, it took them like five, six years to build a game.
David Liberman: It’s quite complicated.
Tim Ferriss: With an army.
Daniil Liberman: With an army and unlimited resources. And us, we were like, “We can do it with a couple million dollars.” Okay. We were miserable in this case. But honestly in this experience we realized that we can be cool in developing cheap cheat — not cheating, but how to say? Hacking. Hacking our way through the challenges, inventing new stuff, inventing how we can build a —
David Liberman: New type of process.
Daniil Liberman: New type of processes and technologies and et cetera. And even though we bankrupted the company in 2009, by March, 2009 I had to fire everyone, like 150 people in one day.
Tim Ferriss: Sounds fun.
Daniil Liberman: Super fun.
David Liberman: It was the most challenging experience of our life.
Daniil Liberman: The most challenging experience of our life. And then three, four months later, we already started an animation studio, and used all of the ideas which came to our mind during this period. Like, we can actually do this and this and that. We wouldn’t do this in the games, but we can do this in the animation process.
Tim Ferriss: So you were able to take things from the failed gaming studio and transfer them over into the —
David Liberman: In terms of experience.
Tim Ferriss: In terms of experience, like lessons learned.
Daniil Liberman: Most experience, like lesson was learned. We knew how to do stuff better, as we were progressing from knowing nothing when we started, to basically having a pretty sophisticated production process, we immediately reinvented the animation process. So we basically took the guy who was experienced in producing 3D graphics and it was like, “Okay, why don’t we change it all? Why don’t we take what you know and then try to figure out how to make it much more efficient?”
Tim Ferriss: How did you decide on that, versus the hundred other things that you might —
David Liberman: First of all, it was a super challenging time. The company was bankrupt. By that time, we actually already were quite successful in different stuff. We already had a venture firm, raised $30 million to the venture firm. But this venture firm was took over.
Daniil Liberman: By our investors of the gaming studio.
David Liberman: And so it’s like ration style.
Daniil Liberman: It’s ration style, ration style.
David Liberman: The people with the guns and the cars.
Daniil Liberman: Literally, the security people from the persons arrived at the office, took us in the black cars, driving us to the underground of the, what is it, office building in the middle of Moscow.
David Liberman: So first of all —
Daniil Liberman: And then threatening us that they will kill us and our family because they know where everyone lives, unless we will return the money.
David Liberman: So this type of business experience.
Daniil Liberman: This type of business experience.
Tim Ferriss: Hard-lined, strict investors.
David Liberman: In that moment we knew that we needed to, with the new projects, we needed to do something fast, because we still had some obligations in place, which we just fired because we haven’t paid the salary for last month.
Daniil Liberman: We tried to —
Tim Ferriss: So you had outstanding debt —
Daniil Liberman: The outstanding debt was like half a million dollars. And we were still living with our parents.
David Liberman: So we knew that we don’t want to have investors anymore, and they see all this experience which we had. We wanted to do something which can generate cash right away. Not —
Tim Ferriss: Enough for apartment building basements.
David Liberman: Yes, yes, yes.
Tim Ferriss: That was enough.
David Liberman: Yes.
Daniil Liberman: Then there was luck —
David Liberman: And you mentioned was —
Daniil Liberman: — because a friend of ours who is a famous actress in Russia, she told the CEO, the president of Channel One, which is like NBC of Russia, like the largest network —
Tim Ferriss: Or one of the BBC channels in the UK or 20 Minutes —
Daniil Liberman: Exactly, exactly.
David Liberman: That we can do magic with graphics.
Daniil Liberman: She told them that we can do magic with the computer graphics.
Tim Ferriss: How did you become friends with the actress?
Daniil Liberman: Friends of friends introduced us and we basically became super cool friends. We were like writing scripts together for the future movies and stuff.
David Liberman: In reality, I’m not sure that she really knew that we can do that, what they see, what —
Tim Ferriss: But she was very confident in selling it.
David Liberman: What she knew was that we fixed her internet.
Daniil Liberman: Many times.
David Liberman: Many times.
Tim Ferriss: It goes a long way, keeping somebody online.
David Liberman: Yes.
Tim Ferriss: So she sells — it’s head of this primary channel, that you can work magic with graphics.
Daniil Liberman: We work magic with graphics. And we actually were doing magic with graphics, but for games.
David Liberman: And he wanted to create a political satire show, which would be based on the last week events, which is impossible. And you mentioned usual production cycle is nine to 12 months of production.
Daniil Liberman: South Park is actually like three, four months. But then they leave these several minutes for something topical, which they can produce over a couple of weeks, right before the episode is released, like they are doing this trick.
Tim Ferriss: And that’s South Park. They’re the fastest.
Daniil Liberman: They are the fastest. Exactly.
David Liberman: And we invented the production process, which allowed us to produce half-hour animated show, 3D graphics, in one week.
Tim Ferriss: How did you do that?
Daniil Liberman: The interesting part was we just basically disassembled the entire process on smaller pieces and paralleled them. This idea of decentralization and parallelization was like we couldn’t live it.
Tim Ferriss: Right. So rather than an assembly-line type of production, you’re like, how many of these can we have running in parallel?
Daniil Liberman: In parallel.
David Liberman: We found out —
Tim Ferriss: Were you able to borrow resources from the channel to work on those parallels?
Daniil Liberman: No, we actually at the time were able to borrow resources from IBM.
Tim Ferriss: Okay. How does that work?
Daniil Liberman: Friend of ours was the president of IBM of Russia.
David Liberman: And we agreed that they would be able —
Daniil Liberman: He was a DJ in the club during the weekends. That’s how we knew the guy. So during the weekends —
Tim Ferriss: Moral of the story, you never know who’s DJing at the club. Make friends.
Daniil Liberman: They’re DJing at night during the weekends, and then he’s in a suit like a serious president of IBM during the weekdays.
Tim Ferriss: That’s crazy.
Daniil Liberman: That’s crazy. And the guy was like, “I fucking love what you are doing.” I’m sorry, can I say this?
Tim Ferriss: Oh, yeah.
Daniil Liberman: And he was like, “Yes. I will give you the equipment.” And they gave us, I don’t know, what was it?
David Liberman: It was around a million dollars worth of servers, with the idea that they will give us this equipment, not permanently, but for some time for free, in exchange that IBM will use the fact that this show was created with —
Daniil Liberman: The most innovative show was created using IBM equipment.
David Liberman: Then they gives us equipment, but IBM decided that it’s too political.
Daniil Liberman: The head of this IBM.
David Liberman: And they never even used it.
Daniil Liberman: Because the show was political satire in Russia. So the headquarter in the United States was like, “No, no, no, we don’t…”
Tim Ferriss: That does not sound low risk.
Daniil Liberman: Yes. They allowed us to use the equipment but never put the logo in there.
Tim Ferriss: Okay, so they allowed you to use the equipment. And then was the president just like, “Look, we’re going to forget it’s there for a while, you guys can use it?”
Daniil Liberman: Yes. Yes. It was exactly like this.
Tim Ferriss: Very helpful DJ.
Daniil Liberman: We made the first season using that equipment.
David Liberman: But then already from profit —
Daniil Liberman: And then the Channel One paid us like $3 million for the first season.
Tim Ferriss: That seems significant.
Daniil Liberman: And with that money we were able to buy all the equipment we needed —
Tim Ferriss: Because you owed half a million to the employees?
Daniil Liberman: Yes. The first we paid the half a million —
David Liberman: We paid it in —
Daniil Liberman: It was advanced payments. So we came to Channel One, it’s like, “We needed vast payment.” They’re like, “Why?” It was like the processes. And we basically paid the debts.
Tim Ferriss: Wow. Okay. Okay. So what happens then? So you have this parallel processing that’s working with your semi-permanently borrowed IBM machines from the DJ, you make three million, you manage to negotiate prepayments. So you satisfy your outstanding debts to paying the ex-employees. And then what?
David Liberman: This was the first time —
Daniil Liberman: And then this summer was hard work.
David Liberman: Yes. But this was the first time when we actually start to earn enough of our own funds and we return to — first we return to our ideas, that we need to think about —
Daniil Liberman: How to fight the corruption.
David Liberman: How to fight the current — fight corruption, what type of technologies can be created to —
Tim Ferriss: Were you guys not afraid, just for your personal or family safety?
Daniil Liberman: We still are not. Honestly, the part of us not being afraid probably somehow was related to our dad was never afraid of whoever was challenging him. But at the same time, back in 2000, as we finished the school, we knew that if we have all these ideas of changing the world, it’s going to be impossible if we just stay home, play computer games, and stuff. So we decided that we would go to some business trainings, personal development trainings, fear trainings. We started challenging ourself in developing ourself. And by 2005, we spent four years developing our own internal equanimity.
Tim Ferriss: Well, let’s talk about this equanimity for a second because this is super important and it’s the enabler or the handicapper, the lack of it being a handicapper in so many different capacities. And I would say a lot of the people listening to this are going to be from the US, and fortunately for them, they’ve never had the experience of being under a political regime where people disappear. But I’ve spent a lot of time in South America —
Daniil Liberman: Or poisoned.
Tim Ferriss: Or poisoned, or fill in the blank. Yeah, “disappears.”
Daniil Liberman: Yes.
Tim Ferriss: But what you realize is there are political regimes all around the world, very common, where people routinely are killed, poisoned, or otherwise made to disappear. So the risks were very real for you. And these are not conspiracy theories. They were actual threats. So was the lack of fear a lack of fear of death, or was it a belief that you could extricate yourself or avoid any type of really significant consequence, or something else?
Daniil Liberman: There are three answers to that. A, yes. We don’t afraid to die, somehow don’t. I mean this is like you die, that’s it, whatever. B, somehow — and it actually really helped with the bandits in 2009, when they came to ask for all of their money invested in the game back. We knew that it’s their way of threatening you, and they want you to be afraid. They want you to fear. And that’s how you are on the hook. As soon as you show the fear —
Tim Ferriss: That’s how you are controlled.
Daniil Liberman: — that’s when they hook you and you owe them forever. And we showed them that like, “Okay, kill us, whatever, you will never get your money back. In the other case, we can probably work it out, somehow.”
David Liberman: And Lawrence has this experience, that actually if you don’t show the fear, it’s much safer than if you show. It’s a little bit like with lions.
Tim Ferriss: Like blood in the water.
David Liberman: Yes.
Daniil Liberman: Blood in the water. Yeah. And then the third one is when it comes to the political systems, let’s say particularly Russian political system, for the KGB people who were actually running the country at that time, Putin was ex-head of KGB. That’s the only thing which we all should understand. That’s a country run by KGB people. Yes, they call themselves FSB, but who’s to give a shit? It’s KGB. It’s the same guys who [inaudible] who were just basically killing people 60, 50 years before that in Russia, after the war, before the war. So when it comes to them, they see two type of people who are playing against them. It’s either enemies or idiots, fools.
Tim Ferriss: Enemies or idiots.
Daniil Liberman: Enemies or fools.
David Liberman: Enemies, like spies.
Daniil Liberman: Spies.
David Liberman: Your either work for CIA —
Daniil Liberman: You either work for CIA —
David Liberman: — or you’re an idiot.
Daniil Liberman: — or you’re an idiot who was convinced by CIA to fight against them and you just fool who —
Tim Ferriss: Yeah, you’re a pawn.
Daniil Liberman: A pawn. So we played the pawn card. We’re like, “Let’s show ourself as if we’re stupid.” And we were completely transparent about all of our ideas from the very beginning, saying like, “They will just see us as fools.”
Tim Ferriss: Like town lunatics.
Daniil Liberman: Town lunatics.
David Liberman: And this strategy —
Daniil Liberman: Worked.
David Liberman: It worked. This point, it doesn’t work anymore.
Daniil Liberman: Officially, look at what’s happening —
David Liberman: We know people like that who already were in jail. But at that particular time, at the time —
Tim Ferriss: It was just so rare that they’re like, “Oh, these guys are just crazy.”
David Liberman: Because we made it transparently. If you are a CIA agent, you will try to hide. But if you transfer money to the biggest opposition here transparently, write an article —
Daniil Liberman: Writing an article in the largest newspaper, Financial Times —
David Liberman: — about that, you probably need —
Tim Ferriss: Hiding in plain sight.
Daniil Liberman: Hiding in plain sight. And they’re like, “Oh, idiots. They spend their money. Okay, whatever. We’ll just steal this money from the opposition here anyway, so fools.” That was hesitation. So for us, the shield for us all those years was like they believe we’re just idiots.
Tim Ferriss: Incredible. All right. We may come back to this, but I want to make sure I don’t lose the thread. So the graphics for this political satire, it seems to be working pretty well. You returned to your ideas from prior, which is how we got here. So thinking about anti-corruption and things like that. And then where do you —
David Liberman: And also, we started our move to United States in 2010.
Tim Ferriss: You started thinking about —
David Liberman: Immediately established our presence in Los Angeles, because of animation in 2010, and started to move our whole attention to United States.
Daniil Liberman: So we were like, “Nothing good going to happen in the country. It’s run by the KGB and they’re not going to release their grasp over the country, unless it’s going to be like a revolution type of situation,” which we saw that even the opposition, they were trying to play the political game, and it was a lost game from the very beginning. So we knew that the show political satire on largest TV network in Russia is not going to last more than the term of puppet president Medvedev. That’s exactly what happened. As soon as Putin got back to his position, the show was shut down immediately. So we knew it’s going to end, and we knew that we needed to spend all of the money which we will make from this in order to transit to United States.
Tim Ferriss: So two questions, and it might seem obvious to you guys, but I think for a lot of people listening, they might wonder, well, why not Europe? Why not somewhere else?
Daniil Liberman: We tried.
Tim Ferriss: Why the US? And then how hard was it or how easy to start to move your lives to the US?
David Liberman: In Europe, especially animation industry is —
Daniil Liberman: It’s mostly subsidized.
David Liberman: — mostly subsidized by government. So you actually need to deal with bureaucrats and you need to get any fighting. The private sector almost doesn’t exist.
Tim Ferriss: I would say that makes it very hard for immigrants.
Daniil Liberman: Yes, exactly.
David Liberman: Yes, yes, yes.
Daniil Liberman: And it was always like if you want to get —
David Liberman: If you’re local, you need to work with local studios, and they should get this funding, and all that stuff.
Daniil Liberman: We started developing the relationship, but even faster we realized that in Hollywood we have all the chances. And pretty quickly we were introduced to people who then introduced us to the agencies, and the William Morris Endeavor signed up with us January, 2010.
Tim Ferriss: Early, on the trajectory.
Daniil Liberman: Half a year after we started the company.
David Liberman: It’s still a challenging process. Any immigration is a challenging process. It took us six years for people to really take us seriously and to get to the same type of level of professional acceptance than we had back in Moscow.
Daniil Liberman: But we found our ways.
David Liberman: But at least it is possible here, like in airport, in UK you would never become —
Daniil Liberman: You would never able to spend only five, six years and get into the major Hollywood studios to —
David Liberman: To be the same, like equal in terms of market —
Tim Ferriss: And California has a lot of downsides. But one of the upsides is — this is true in a lot of the US, no one is discriminating against green, and people like opportunity. And also California, a lot of people don’t realize part of the reason Silicon Valley worked is that California also makes it very hard to enforce non-compete contracts. So there are opportunities everywhere of all different types.
Daniil Liberman: Yeah. Yeah. We agree with you completely. This is the cornerstone —
David Liberman: This was our observations. It’s all about non-competes, that they are not enforceable, that this allow you to actually work at Google, write your own search engine at night, and then launch your own search engine. And Google cannot do really anything that you can —
Tim Ferriss: There’s a lot of free flow of talent.
David Liberman: Free flow. Yes.
Tim Ferriss: Which makes it hard sometimes to retain talent in Silicon Valley, but that’s a whole separate story. So you land in L.A., you have introductions to people at, say, William Morris Endeavor and other places. What happens as that momentum starts building?
David Liberman: Yeah. We actually had a pretty good success working with different studios and different big names like Jimmy Fallon, we worked on the show with him in —
Daniil Liberman: At some point we met with the guy who used to be Jon Stewart’s head writer, and he just moved back from New York to Los Angeles, and was available-ish. He wasn’t for a year, but then a year later he was available. We took our chance to become friends over the year. And then when he become available, like, “Josh, why don’t you work with us?” And we managed to convince him because we showed him how fast we actually can produce animation.
David Liberman: Yeah. We realized that he —
Daniil Liberman: What we realized, that people even like William Morris Endeavor or Josh, even being the friend for us for a year, they never actually believed that we can produce animation in one week. And we had to prove it literally by saying like, “Josh, are you serious? Okay, let’s write a script right now, a one-pager. You will write a one-pager joke. In a week you will have it in animation.” And that’s what we did. And he was like, “Whoa, you guys were saying true.”
Tim Ferriss: You guys can actually do it.
Daniil Liberman: You guys can actually do it.
David Liberman: Before that he worked at Simpsons, before Jon Stewart, and at Simpsons like 12 months —
Daniil Liberman: Like a year. He’s like, “You’re making a joke?” And it’s all really old, a year-old joke. And with us there was an opportunity for him to make jokes, which are super hard.
David Liberman: So it was cool. But on the other hand, really wanted to focus more on the technologies which can transform society. And plus, Hollywood wasn’t really our thing.
Tim Ferriss: There are some trade-offs.
David Liberman: Yes.
Daniil Liberman: There are lots of trade-offs.
David Liberman: No one cares about technologists, especially that time. It’s before Netflix and before all this stuff. No one cared about technologists. No one cares that you are faster and cheaper. No one cared about like who is your producers and all —
Daniil Liberman: Divorce lawyers.
David Liberman: — divorce lawyers and all this stuff.
Tim Ferriss: Wait, wait, wait. How does the divorce lawyer fit in?
Daniil Liberman: We don’t know, but people in Hollywood say so.
Tim Ferriss: Oh, wait, you need to know divorce lawyers?
Daniil Liberman: Yes, because they know people.
David Liberman: They know people, they know the power dynamics.
Tim Ferriss: Oh, this is good for me to know.
Daniil Liberman: There’s a power dynamic of the divorce lawyers who control —
Tim Ferriss: I picked up a new stratagem today. Thank you.
Daniil Liberman: Exactly.
Tim Ferriss: Okay, divorce lawyers.
Daniil Liberman: So, in addition, we knew all the lawyers and we started to know the people, and we started to meet the people, and eventually we deconstructed what the show needed to be in order to come to a meeting in Fox, at Fox.
Tim Ferriss: Okay. So you were at that point then you’re pitching your own show?
Daniil Liberman: Yes. So we get to the point understanding that we cannot sell our technology, we have to sell the entire show.
David Liberman: Package, yeah.
Daniil Liberman: We package it. We should package voice actors —
Tim Ferriss: The Trojan horse with the technology inside.
Daniil Liberman: Exactly. We took it all. That’s why we needed Josh, because we needed a head writer. That, we took the voice actors, we took the best concept artists to combine this all and produce a pilot, like a literal final quality pilot, and brought it to Fox. And who was it? Suzanna Makkos at the time, she was like, “Wow, I love it,” because we actually knew what she likes, who she likes —
David Liberman: What type of artist.
Daniil Liberman: What type of artist. We engineered data, data, data. And then we —
Tim Ferriss: Went to a custom tailor to put together a pilot for her?
Daniil Liberman: Yes, exactly.
David Liberman: But it was also some misfortuned time, because still we didn’t get back to power. So our show was canceled back in Russia in 2013. The banking crisis in Cyprus, all our money were nationalized. So [inaudible] —
Tim Ferriss: Wait, hold on a second. So Cyprus, you had — does that mean that you had moved your finances from Russia to Cyprus?
David Liberman: Yes.
Tim Ferriss: And then it was out of the pan and into the fire.
David Liberman: Yes.
Tim Ferriss: And then Cyprus got nationalized. It was like uh-oh, it’s the same story all over again.
David Liberman: Yes.
Daniil Liberman: Same story all over again.
David Liberman: It was like $6 million earned.
Daniil Liberman: And all of a sudden we couldn’t pay anyone in the United States. No voice actors, no screenwriters, we couldn’t pay anyone. Immediately it all fell apart. And we’re sitting there and like, all right, are we going to do it again here? We know everything but —
Tim Ferriss: So did you get the green light for the pilot?
Daniil Liberman: Yes.
Tim Ferriss: And then Cyprus, and then bye-bye fuel —
Daniil Liberman: Bye-bye fuel. Exactly. And we tried to think what we can do in Hollywood more for half a year, a year. But then we realize that it will take us another four or five years to recover, because there’s no money, there’s nothing in there. We’re like, “Screw it, we’re not going to stay in Hollywood. Let’s move to Silicon Valley.”
David Liberman: And we moved to Menlo Park at that point.
Tim Ferriss: Right in the middle.
Daniil Liberman: Right in the middle.
David Liberman: And also, we really already wanted to return to our real ideas. We started with transparency again. We decided that we can do a trick, that we can actually not target governments, become transparent, but target nonprofits. Like, why we don’t see how nonprofits actually spend our money? It’s kind of obvious. It’s not your personal money. It’s like we all together gather these funds to make the world a better place. So we created a transparent banking platform for nonprofits.
Daniil Liberman: For many reasons. We were wrong about the —
David Liberman: Ability and readiness on —
Tim Ferriss: The appetite.
Daniil Liberman: The appetite, exactly. The appetite for the nonprofits.
David Liberman: But this was also the times when we realized that some of the challenges, fundamental challenges which we saw in —
Daniil Liberman: United States.
David Liberman: — the economy, actually they were true in the United States as well. Not only in Europe, not only in Russia, not only in Israel, but in the United States as well. And we realized that even with the nonprofit transparency, if you will look at research of what actually donors want, you will see it’s the previous generations of donors, they don’t really want to see where is the money spent.
Tim Ferriss: Don’t ask, don’t tell.
David Liberman: Yes. It’s almost the last item in the list of their preferences, their requirements. But our generation is younger, it’s actually on the first place. We want to see what happens with the —
Daniil Liberman: The dynamic of thinking behind this as for the older generation, they donate money because it’s a giveback for them. They’re like society —
David Liberman: Society gives them a lot.
Tim Ferriss: It’s feeling good versus doing good.
David Liberman: Yes.
Daniil Liberman: And for the youngest it’s like giving forward.
David Liberman: They don’t —
Daniil Liberman: We want to change what’s bad right now, and we want to see it’s changing, now.
David Liberman: And also, actually, previous generations got a lot from society, in terms of form of free education, almost free college education, like 30 years ago, and things like that. New generation being —
Daniil Liberman: Hammered.
David Liberman: — hammered with student debts, et cetera, they don’t really feel that society gives them much. But they really still donate the same portion.
Daniil Liberman: Share.
David Liberman: The same share as the older generation. But it’s just different reasons to do that.
Tim Ferriss: Yeah, I feel like some of the younger generations here, younger certainly than me, get a bad reputation for misunderstood reasons, or I should say they’re misunderstood in the sense that — and I know you guys have spoken about this before, but if you look at, say, previous generations’ ability to get a higher education, put a down payment on a house and pay for a mortgage, compared to some of the more recent generations, it’s night and day.
David Liberman: Yes.
Tim Ferriss: It’s night and day. So it’s important to factor that into how you evaluate them. So question for you guys, looking at the nonprofit and this and the platform, you’re very good at, it seems like, letting go of ideas, having a light grasp on ideas if things are not working, so you can move to something else that you think might work better.
David Liberman: Yes.
Tim Ferriss: That’s not true for everyone. Some people get very attached to one thing and they want to ride it until they die, and they get attached to things that may never work. And I’m wondering how you think about changing direction, maybe “failure.” What allows you to do that so readily?
David Liberman: Data.
Daniil Liberman: Data. Yes.
David Liberman: They will learn the hard way.
Daniil Liberman: So the first, the game studio, we grasp, and we tried —
David Liberman: So you know that if you don’t stop at the right moment, you can actually get to deep shit.
Tim Ferriss: Yeah, you can get into a hole.
David Liberman: Yes. But also what we saw in the data is that — and what we realized also through the experience of game development, failure, and then animation success, that we realized that —
Daniil Liberman: It is not always about your abilities.
David Liberman: — your abilities. So you can fail because of different reasons, like financial crises —
Tim Ferriss: Like poker, right?
David Liberman: — and the times are not right.
Tim Ferriss: You have to study the decision-making, not just the outcomes.
David Liberman: Yes, and the statistics of venture startups, is that like two thirds will fail, completely fail.
Daniil Liberman: Completely fail, losing all the money, at zero.
David Liberman: And if you will look at all these failures, there are rare exceptions, but in most cases what you should see is that if your startup is growing, you should continue, you should double down with your all attention there, et cetera.
Daniil Liberman: If it’s not, think twice.
David Liberman: But if it’s not, it could stop growing.
Daniil Liberman: And probably just quit.
David Liberman: And quit and start another one. It’s almost like in most of the startups you will observe —
Daniil Liberman: If we look at this purely from the perspective of statistics, if it’s not doubled the growth, if whatever numbers behind your understanding of your business isn’t doubled, it didn’t double, isn’t doubled —
Tim Ferriss: Yeah, didn’t double —
Daniil Liberman: Didn’t double —
Tim Ferriss: Over what period of time?
David Liberman: 14 months.
Daniil Liberman: Over 14 months.
Tim Ferriss: 14 months?
David Liberman: Yes.
Tim Ferriss: Why 14 months? I have to ask.
Daniil Liberman: It’s pure statistics.
David Liberman: If you look at the statistics of just —
Daniil Liberman: If you look at all the failures and successes, it’s like a pattern. They should basically take —
Tim Ferriss: Oh, I see, I see. That’s the pattern, is over that period — doubling over 14 months.
Daniil Liberman: If you take all of them and divide, then just 14 months —
David Liberman: Because if you’re also not growing within this space, venture capital will not be accessible to you, and you won’t be able to actually raise money, use these funds to grow further, and things like that. So this market is actually pretty special in terms of these probabilities, like just one out of hundreds.
Daniil Liberman: It is going to be a unicorn.
David Liberman: — success. And if you don’t see trajectory to get there, probably —
Daniil Liberman: Probably you’re not getting there.
David Liberman: — the right thing is just to stop and start something new.
Daniil Liberman: And knowing that your chance is a one in a hundred, you should try as many attempts as possible, take more shots overall.
David Liberman: Moreover, we usually show to the young —
Daniil Liberman: One of the entrepreneurs.
David Liberman: — people who want to be an entrepreneurs, we show this picture of Mark Zuckerberg or Evan Spiegel who made into success from the first attempt.
Daniil Liberman: Dropping out from the college and look, they’re billionaires.
David Liberman: Most of the billion dollar companies —
Daniil Liberman: It’s not like that.
David Liberman: — created not like that. It’s created by people who failed multiple times —
Daniil Liberman: Multiple times, and then got to success. In terms of statistics, this is what we should observe with these things. Definitely something depends on your abilities to execute, et cetera. But there are things which is independent from you.
Tim Ferriss: Totally. I mean I remember angel investing starting in 2008 and seeing business models, companies that couldn’t execute in a period of time because the technology just wasn’t there and the adoption wasn’t there. And then five, six years later, basically the exact same company, but a few things have changed. Mobile phones have become more powerful. A handful of protocols have been developed and then boom, it works.
David Liberman: Uber is mobile phone with GPS. Yes, with wide enough adoption. And it was tried, these ideas were tried —
Daniil Liberman: Ordering taxi online, yes, for sure has been there.
David Liberman: And because of that, especially because we really balance ourself between sometimes when we work on some forward-looking ideas, like not —
Daniil Liberman: Flying cars, rockets to Mars.
David Liberman: — something which is not happening yet. And also we work on some projects which down to Earth, which already something which is happening. We know that with these projects which are not there yet, yes there is a chance to win big, but this chance is small and there is a lot of timing issues —
Tim Ferriss: Very binary.
David Liberman: And you can lose just because timing is not right. And we, as Daniil mentioned, we learned it hard way with game development studio. It was really hard for us to stop, even though it was obvious that probably —
Daniil Liberman: We were lucky with the animation studio. And then another unfortunate event with losing all of the money just in banking crisis in Cyprus. And we stopped pretty fast. I mean we’re like, “Okay, are we going to spend time recovering, or are we just starting something new?”
David Liberman: Yeah. When Silicon Valley Bank crisis happened, we were among really small group of our friends, founders who all this time we were obsessed —
Daniil Liberman: With diversifying.
David Liberman: — diversifying the money on different banks. And everyone would tell us that in the United States, you shouldn’t think about that stuff. Don’t worry about the science.
Daniil Liberman: Can’t happen. Cannot. Cannot. Just because cannot. And we’re like, “Right.”
Tim Ferriss: Surprise. We are not immune from all the problems we’ve seen other places. All right. So I’m going to zoom out for a second because I like to think about sort of meta decisions that span across a lot of other decisions and projects and so on. So the two of you living one life, we have to talk about this. I have never seen an example quite like this. I mean there are couples who are say power couples, but it’s a different dynamic. I mean you guys have been seemingly sort of hive mind from a very early age. So when did this start, right? So you have one email address, one Instagram account, one LinkedIn. I think the phone is maybe the same.
David Liberman: It’s connected so that —
Tim Ferriss: Right. So I’m looking at some notes here. So since you were born, this year was the first time that you guys spent 10 days apart or, put another way, not being together in one place when you went to a Vipassana retreat.
David Liberman: Yes.
Tim Ferriss: All right. So could you explain for people who understandably will find this interesting and kind of alien, how did this come about and how is it helpful versus confusing? How do you guys do it?
Daniil Liberman: It is confusing, but we should understand that the six of us grew up in one room of a size smaller than this studio.
Tim Ferriss: And for those who can’t see the full studio, it’s not huge. This isn’t an airplane hangar, it’s not a basketball court. It’s like a bedroom.
Daniil Liberman: Three bunk beds. That’s how the six kids could fit in the room like this. And then even later, so we grew up this up until school already started and I think until 13, 14 years old it was a situation more or less. And then at this moment, and then parents also send us to school by pairs. It was like a logistical innovation.
Tim Ferriss: It’s like buddy diving when you’re scuba diving.
Daniil Liberman: Exactly. Buddy diving.
David Liberman: It was dangerous to walk —
Daniil Liberman: On the streets in the ’90s, alone, in Moscow.
David Liberman: So put together, they don’t need to walk us to school so we can do it by ourselves and all the stuff.
Tim Ferriss: High degree of confidence.
David Liberman: Exactly.
Daniil Liberman: So they were sending us by pairs to school, not only the two of us but the other kids as well. So we were a pair, Dave was five years old, I was six years old when we went to the school and the rest of the kids were seven. So we were beaten..
David Liberman: But because it’s two of us, we learn how to —
Daniil Liberman: How to avoid —
David Liberman: To protect ourselves being two rather than one.
Daniil Liberman: And then so had to survive. It’s like bonding experience.
Tim Ferriss: It’s very helpful for the bonding. Yeah.
Daniil Liberman: It’s very helpful for the bonding, helping each other through the education, doing homework together, all the stuff together —
David Liberman: And through this process —
Daniil Liberman: By 13, 14 years old, that’s when we started forming our own ideas of what could be cool for us to do in our life. And that was already a sort of social justice type of thinking. How can we make the world a better place for everyone? And starting from there we saw how no one literally was supporting this idea except two of us basically continued the conversation in between the two of us and it never faded away.
Tim Ferriss: Which idea is this? This is the combining —
David Liberman: Transparency in government. It was just one branch of this idea that technologies —
Tim Ferriss: So the two of you are very aligned.
David Liberman: Yes. The technologies can actually lead us to a better governance and that’s what we thought. And through this experience of being kids, first we realized that when you go to school, all kids, they are alone. But we weren’t, it gave us a lot of advantage.
Daniil Liberman: We’re always two of us.
David Liberman: We don’t need to struggle to company gather around us because it’s already two people. It’s much easier to gather together a company like group of friends around. Also, we realized that if I know mathematics better, we can do it the way so that no one would know that Daniil don’t know mathematics as I do.
Daniil Liberman: As good as he does.
David Liberman: So you can actually copy —
Tim Ferriss: Like Voltron.
David Liberman: Yes. Voltron-type presentation. And we learned that that’s what we can do that. And if we weren’t allowed outside world to actually distinguish who has which qualities —
Tim Ferriss: You can cover the bases.
David Liberman: Yes, we will be able to seem to be a superhuman because we have both of the qualities.
Tim Ferriss: Okay. So I know you guys as an example are fans of the Collison Brothers, right?
David Liberman: Yes.
Tim Ferriss: Amazing. And Patrick’s been on the podcast. My understanding is they’re very powerful together, but they have maintained, they’re like, I don’t want to say Batman and Robin, that’s not quite the same. They’re like two of the Avengers, right? I mean they’re superheroes, but they have clearly delineated separate points of contact and so on. What have been some of the other advantages or drawbacks of doing it the way that you guys have approached it?
David Liberman: Even though they kind of a little bit definitely more separate than we do, but they did a lot of really great stuff. For example, they were CEO and president, they switched who is CEO and who is president and they switched roles. So they actually showed to the world that they are interchangeable —
Daniil Liberman: A team.
Tim Ferriss: Tag team.
David Liberman: The team and they’re great in this regard, but in our case we went to just in an extreme version of that, having one line of communication. So if you text me, you actually text both of us and you don’t know who answered this text.
Daniil Liberman: But we can answer faster.
David Liberman: We can answer faster, we can seems to be this superhuman. And that worked pretty well during negotiations of the contract.
Daniil Liberman: David honestly hated speaking to people as he was young. He was super not into talking to people and I was super easy to talk to people. So it was my role in the couple to talk all the time.
David Liberman: And I still never pick up the phone —
Daniil Liberman: He was never picking up the phone —
David Liberman: — if someone called.
Tim Ferriss: I don’t pick up the phone either. For me, it’s just too much. I don’t know what I’m signing up for unless it’s my brother or a family. Okay, fine. There are a few exceptions.
David Liberman: It mentions that you can outsource that. That’s nice. So that worked in business principle. Even though our first business partners, they were like, why you are in the same meeting, you can be in two places at the same time and think like that. But we even at some moment gave up on trying to explain them that it’s allow us to — in business especially, it’s like win or lose. You won this contract or lost the contract. And all these meetings are important and if —
Daniil Liberman: If you’re playing two contracts and losing both of them, it doesn’t matter that it was two of them. If you’re playing one, but you’re playing hardcore game of us being a team in this conversation, which can win the contract. It works much better.
Tim Ferriss: Bird in the hand versus two in the bush. What are your respective roles generally then in terms of responsibilities or strengths? How do you think about them?
Daniil Liberman: I would put this way, we have two different intuitions and they’re completely different. David’s intuition is he absorbs data, he remembers everything and then at some point he can just like, “The answer is this, like, 42,” just out of nowhere, and you’re like, “Why?” He’s like, “I don’t know, but I’m pretty sure that it’s 42.”
Tim Ferriss: 42. Yeah, it’s like The Hitchhiker’s Guide to the Galaxy.
Daniil Liberman: And then the next morning he can wake up. He’s like, yeah. And now I know why. So I figured. I cleared my path to this place in my mind, which actually made the calculation and tell me it’s 42, so here’s why. My intuition is completely different. My intuition is like, “We need to fly to London tomorrow.” He’s like, “Why?” “I have a good feeling about this.” And then we fly to London and we got the investors. It’s like this and [I’m] like, “We need to offer these people this.” And then he’s like, “No, no, no, no, no.” I’m like, “Yes, yes, yes. We need to offer them this.” I offer them this, and they’re like, “Yes, agree,” handshaking. And they’re like, “How did you know?” I’m just like, “I felt it.”
David Liberman: So Daniil, much better in the reading people, Daniil much better in reading situations in general. I’m much better in processing data, processing knowledge. I have these strange qualities that I remember —
Daniil Liberman: Everything.
David Liberman: — everything. All the events, all the emails —
Daniil Liberman: Give him some time and he will.
Tim Ferriss: Is that hard for you? I’m just wondering because I have family members like this and sometimes it’s a huge advantage, but are there things that you wish you could forget or is it —
David Liberman: I learned to live with that. I think that because we have both of it and I see what is the advantage of a different type of thinking, et cetera, and I learned how to live with that and now I embrace it. I understand the limitations, but I cannot read dissertation properly. I understand the limitation of this tool, but because it’s two of us and we have both, I actually doubled down into these qualities and developed these qualities further and further and further.
Tim Ferriss: Do you guys get physical or psychological anxiety when you are separate?
David Liberman: This was the first time when we were separate.
Daniil Liberman: April was the first time when we’re separate, not even being able to text each other because the phone is off during Vipassana. For 10 days long in our life.
Tim Ferriss: What was that like? Well, see you had something to do. I mean you’re in your own mind, but you had a task. So what was it like for you David?
David Liberman: It was unexpected, but for me it was okay because I knew that Daniil is working on something which is important. I knew that if he will extract some new experiences out of it, I also will do that. So it’s kind of I outsourced this —
Tim Ferriss: He was the Guinea pig.
Daniil Liberman: I was the Guinea pig. And I actually felt like I had this intuition, I got to do this and I just went and it was so quick. So David had to wait for three months.
David Liberman: So everyone expected —
Daniil Liberman: I was accepted four days before the course started.
David Liberman: So everyone expected around that I will be devastated by this experience. But somehow I was super calm because I probably knew that Daniil is working on something important for us and that didn’t feel like —
Tim Ferriss: There was a purpose behind it.
David Liberman: Yes.
Daniil Liberman: And then the second time was the same situation but reversed. He was working on his mind and I was back home. For me it was a little bit more challenging, meaning that I had this sort of a mind trick, which was: “It’s your fault that he’s there struggling there.” I’m like, “What am I talking about? For you it was a great experience. Yeah, but for David, maybe it’s not as great. Maybe it’s challenging for him. Come on, seriously, stop it.”
Tim Ferriss: All right. So you had the internal voice keeping you company.
Daniil Liberman: Yes.
Tim Ferriss: Part of the reason I ask, and I don’t know if this is true, this is from the New Yorker piece, is “Selling shares in yourself is the way of the future,” which I would love to hear what they got, if there’s anything you wish were different in that piece for those people who might check it out. But I was curious because at one point it says at home the brothers share a single king-sized bed. Is that still the case?
David Liberman: We recently changed it.
Daniil Liberman: In April, we moved to a new house and we basically decided to have more bedrooms and we have separate bedrooms now.
David Liberman: Because this behavior creates some limitations, especially around relationships.
Tim Ferriss: Yeah, I would imagine so.
David Liberman: And so we decided that especially now when it’s published, would become an additional problem.
Tim Ferriss: It was already right in The New Yorker, right? I imagine I’m not the first person to ask you about this.
David Liberman: So in general our bond is quite challenging in terms of relationship. That’s why we decided that we need to make it easier —
Daniil Liberman: Like romantic relationship, he means.
David Liberman: Yes. We decided that we need to explicitly make it easier for potential romantic partners. And splitting bedrooms is one of the first that is —
Tim Ferriss: Maybe a key.
Daniil Liberman: Different floors. Like Daniil has his own floor and David has his own floor in the house, so.
Tim Ferriss: Oh, I can imagine those in my mind as I’m painting a picture, I just imagine the floors looking very different if the respective brother floors must be very different.
David Liberman: But also when we were in the same room, it was for purpose. We usually would stop talking only before a minute we’ll go to sleep and —
Daniil Liberman: Start talking as we wake up. “So what are we doing today? This is a wake-up call.”
David Liberman: So now we’re traveling to New York, we’re in one —
Daniil Liberman: In one part of the room.
David Liberman: We constantly talk.
Daniil Liberman: And we constantly talking nonstop.
Tim Ferriss: I mean what an incredible blessing and gift it is that you guys have each other.
Daniil Liberman: Yeah, I mean we’re absolutely enjoying this way of life. Yes, as David said, challenges in the romantic relationship. We will work it out.
Tim Ferriss: So do you think when you have romantic partner, let’s just say you have romantic partners, maybe you have families, who knows. Do you think you guys will still live together?
David Liberman: Yes.
Daniil Liberman: Yes.
David Liberman: We maybe we’ll do some is in our vision. We maybe can create special house when you have sections of private and not private in something like that. Because we definitely need to hear also what our partners —
Tim Ferriss: Partners have to say about things.
David Liberman: Have to say yes. But we really want to still have a place for the two of us when we can spend a lot of time together.
Tim Ferriss: So I have heard, people need to fact check this because I think a friend of mine told me just as a model, that Tim Burton and his wife, I think it’s Helena Bonham Carter, if they’re still together, I don’t know, but that in their house they actually lived in separate wings and then they would come together for shared meals and things like that. So they had a very unorthodox arrangement.
David Liberman: We have friends who build houses when they have joint bedroom and —
Tim Ferriss: Separate bedrooms.
David Liberman: — separate bedrooms.
Daniil Liberman: And a wing for kids.
David Liberman: A wing for kids —
Daniil Liberman: A wing for him, wing for her, wing for kids and wing for them together.
Tim Ferriss: It’s like a spaceship. I like it. I like it. I’m very interested in all. That’s why maybe the divorce lawyers can give you some advice from Hollywood. What has worked? What has not worked? So you mentioned Evan earlier, not everyone’s going to recognize that name. How did you guys end up at Snap?
Daniil Liberman: How did we end up? So our point of view, we always tell this story from the perspective of us meeting Dalai Lama in 2010.
Tim Ferriss: When in doubt, go with the Dalai Lama story.
Daniil Liberman: So it was back in 2009, right in between us starting the animation studio and bankrupting the game studio, there was a three months of us —
Tim Ferriss: Took a Dalai Lama sabbatical.
Daniil Liberman: Yeah, there was three months of us clearly not knowing what to do and then the bandits are threatening our lives. We don’t don’t know how to return the money. And then we just decided to go for a five, six days meditation retreat of Rinpoche Tibetan lama who just arrived to Moscow and a friend invited us. So we came there with no expectations whatsoever. But the gentleman was very interesting. He was young, he was super smart, speaking like 11 languages. And from time to time he would switch from this Tibetan stories about the enlightened kingdoms to something more practical, even claiming that a single person can actually change the world if they want. And for us it was like, wait, what? Are you talking to us? And we then asked if we can have an audience with the Rinpoche. And we were told that everything is booked already. But five minutes later he called us.
Tim Ferriss: Now, just so I’m clear. So he is which teacher?
Daniil Liberman: Rinpoche is like a Tibetan —
Tim Ferriss: Spiritual.
Daniil Liberman: — spiritual, yes.
David Liberman: It’s like a title which you can get only from your childhood if you recognize —
Daniil Liberman: He’s recognized as the —
Tim Ferriss: Reincarnation of someone else.
Daniil Liberman: Yes. So this gentleman is in Moscow and Rinpoche is asking us to come see him. And we’re like, wait, okay, cool. So we —
David Liberman: Shared our ideas about transparency, about how in the future we can leave within governments without physical borders and for Tibetan peoples it’s really important subjects knowing that they don’t have their land.
Daniil Liberman: So it resonated with him. And when we finished our story by saying, “And now it’s just two of us,” he immediately abrupted us and is like the three of us and it was touching and unexpected and he finished his phrase with, “Fly, come visit me in India in…” what was it? “…January next year, I am hosting an integration of a monastery. Dalai Lama going to be there and I will introduce you and we’ll introduce your ideas together and we’ll see what we can do together.” That meeting actually happened and not happened at the same time. So we flew to India, we spent this week in the monastery in India, Tibetan monastery, Dalai Lama actually arrived. We had a non-private meeting with him in a group of 10 European donors of the monastery. But then we had to have a one-on-one meeting with him next morning, which never happened because the storm came. I know this is like a movie story. The storm came and Dalai Lama immediately took off —
David Liberman: Was packed in to helicopter —
Daniil Liberman: To the helicopter, the military helicopter and just disappeared. And then we’re standing there and in half hour the storm just rushed and flooded the entire valley —
David Liberman: For the next two days —
Daniil Liberman: For the next two days we weren’t able to leave the place because it was flooded. But then a month later we received an email from a gentleman whose name is Jerry Murdock, he’s the founder of Insight —
David Liberman: Partners, one of the biggest VC firms in New York.
Daniil Liberman: And the email was like —
David Liberman: “I’m at the dinner…”
Daniil Liberman: “I’m at the dinner with Dalai Lama and this other monk and they told me I have to email you and they give me your email. So that’s what I do.”
Tim Ferriss: “That’s why I’m emailing.”
Daniil Liberman: “That’s why I’m emailing you. We met this team few months and we become close friends.”
David Liberman: And eventually through the many different stories, he invited us to a dinner. The dinner wasn’t really for us. He thought that other people will come, but it didn’t work. So he invited us instead and —
Tim Ferriss: Whatever gets the job done.
David Liberman: Yes. But since this introduction, we always were quite cautious about everything which —
Daniil Liberman: Was related to him. I mean Dalai Lama introduced you to someone —
David Liberman: Could be the reason.
Daniil Liberman: So there should be a reason. And we always try to help him and be around and just see where it’ll come, where it’ll go.
Tim Ferriss: You’re talking about Jerry?
Daniil Liberman: Jerry. Yes. And at some point eventually he introduced us to Evan at his house and then Evan gave me his phone number just right away at the meeting.
David Liberman: And it was the right moment —
Daniil Liberman: Which wasn’t expected for everyone around because that’s not what he’s doing.
David Liberman: And we were developing technologies around 3D avatars —
Daniil Liberman: Computer vision —
David Liberman: — at that moment. And that’s what was exactly what he wanted —
Tim Ferriss: On his mind.
Daniil Liberman: On his mind was he wanted to combine a bitmoji, which were the 2D avatars he acquired from the Canadian company and 3D engine of AR technology of Luxury, the Ukrainian company he acquired. He wanted to merge the two technologies, and our experience in Hollywood was merging technologies. We literally were transferring the 2D styles of existing animated shows into 3D and back and force and back and forth.
David Liberman: In that moment, we’re also focused on 3D avatars and how technology can actually not a show, not something which require —
Daniil Liberman: Game type of thinking. Because we decided right after the financial transparency for nonprofits didn’t work, we decided that we looked around and realized that the technology advanced like a computer vision and style transfers and all this stuff advanced a lot since we left the CGA graphics and we realized that we know everything and more than probably everyone in the field. So we can try to just start something and probably going to be going to build a successful company. Half a year later, Evan offered us, not offered, but already acquired us.
Tim Ferriss: And so just for people who might not have the acronym, so AR, augmented reality. So people may recognize some of the current or recent iterations on Snap where you can, say, put any number of different sort of overlays of characters. I mean they do partnerships with all sorts of companies and so on so that you can add something to your face that sort of tracks your eye movement and augments the kind of visual experience. So is that what you guys were working on in some capacity?
David Liberman: This technology, the face-tracking technology, it was Ukrainian company Luxury, which they recently acquired before —
Tim Ferriss: Snapchat acquired.
David Liberman: — us. And we worked how to combine the avatars into this technology.So right now, 3D version of bitmojis is the most used avatars daily in Snapchat. It’s already everyone in your profile and games in lenses in all places.
Tim Ferriss: And so you guys get acquired and, if I’m missing a chapter, let me know, but can you describe what you did, what your analysis looked like when Snapchat suddenly started losing users? I think it was in 2017.
David Liberman: 2018.
Tim Ferriss: 18.
David Liberman: So it was early 2018.
Tim Ferriss: Are you right? Yes.
David Liberman: 2017, Instagram released their stories and in the beginning of 2018, new version, new update version of Snapchat was the list. Kim Kardashian tweeted or Kylie Jenner tweets that no one would use Snapchat anymore. All the stuff and audience started to decline. And at that moment most of the people believed —
Daniil Liberman: Internal idea in the company was that it’s due to the —
David Liberman: Competition.
Tim Ferriss: Public sentiment, competition.
Daniil Liberman: Public sentiment of the bad new version or competition of —
David Liberman: Instagram.
Daniil Liberman: — Instagram and TikTok or altogether. While our analysis of data showed us that it’s not true. And then the major reason for the decline of the audience was related to the fact that Android version of Snapchat after the update became so slow that people over time developed, not developed, but gave up.
Tim Ferriss: Yeah, they just abandoned.
Daniil Liberman: They just abandoned. Started abandoning.
David Liberman: Yes —
Daniil Liberman: 10 percent of the slowest devices of Android users could have experienced up to 40 seconds before the feed with stories would load.
David Liberman: Next time when you will open some feed like count to 40.
Tim Ferriss: 40 seconds. No way. I’ll barely wait for four seconds.
Daniil Liberman: Exactly. So it was so obvious that this was the reason, but it took some time to —
David Liberman: We realized that we didn’t have any specific position related to that in the company and we realized that what we can do is actually to just bring all the insights which we were able to extract to Evan —
Daniil Liberman: The engineering team to Evan —
David Liberman: — and to just give him all the evidences so that more focus can be added to the problem and to making the app faster.
Tim Ferriss: Now why do you think you guys spotted this, right? Because it doesn’t sound like it’s immediately your department or responsibilities? Was the narrative that it was the Jenners and the Kim Kardashians and then the competition, was that so accepted at face value that people weren’t looking at the data or what happened?
David Liberman: So there were several reasons that first of all, it’s Android.
Daniil Liberman: Android.
David Liberman: We’re Android users and among executives it was a really rare things to —
Daniil Liberman: To actually use Android date.
David Liberman: To use Android day to day. Even he pushed himself to use Android to experience this all what his users usually experience when they use Android. But we use Androids as a day-to-day devices. We hackers, we don’t like limitations of Apple App stores.
Daniil Liberman: Closed systems.
David Liberman: And closed up ecosystems. That’s why we always were there. So when we developed our 3D avatars, it was the first —
Daniil Liberman: It worked, it worked further faster on Android than on iOS.
David Liberman: Android than iOS, and it was quite unique to compared to other products. And through this experience we learned a lot about some limitations and we already at that moment looked at some data just for our products to be launched properly.
Daniil Liberman: We wanted to fix Snapchat’s Android app earlier just for our product to work better.
David Liberman: And so we had already some predispositions and beliefs related to that.
Daniil Liberman: Then, when the product was launched, we decided to research everything about the user behavior in order to understand how we can better position our product inside of the Snapchat ecosystem.
David Liberman: And with such problems. The challenge, there are different methodologies. For example, there is a methodology to A/B tests. When you launch, half of the users will see one version and half of users will see —
Tim Ferriss: Different one.
David Liberman: A different version, and then you will compare the results. But with performance degradation, the result is delayed. It’s not immediate. You cannot really, it’s really hard to —
Tim Ferriss: It’s not apples to apples.
David Liberman: Yes. So you need to wait for some time. You need data for longer period of time —
Daniil Liberman: And more or less you need to break it, give your users a bad version, wait for them to use it for a long enough period for you to see the difference in behavior.
Tim Ferriss: Sounds like a tough assignment.
David Liberman: Yes. Evan’s decision, moral decision, was never do that. So you shouldn’t really make the experience of users worse intentionally.
Daniil Liberman: And as hackers, for us it was like, okay, can we find a way how to get this data anyway? So we started to look at all the previous bugs.
David Liberman: Accidental, accidental.
Tim Ferriss: Mistakes.
David Liberman: Degradations.
Daniil Liberman: Which led to and then was discovered, but lasted for long enough so that we can actually extract the change in behavior data.
David Liberman: Still it’s really important to note in the article in The New Yorker, the words not from us. That’s why they are not as clear. There were people inside of Snap who also believe in this idea, not only us.
Daniil Liberman: It was basically their initiative, we just —
David Liberman: There were not enough momentum.
Daniil Liberman: And arguments.
David Liberman: Certainly not enough people who would work on this problem. They were really brilliant engineers who already before that started to rewrite that Android application.
Daniil Liberman: And we had our daily meeting with Evan, so we actually could have —
Tim Ferriss: You could be good ambassadors.
Daniil Liberman: Yes.
David Liberman: So we used our previously earned —
Tim Ferriss: Like social capital.
David Liberman: Social capital.
Daniil Liberman: Social capital of building this avatar product.
David Liberman: We need to just spend all the social capital on this problem, otherwise its shares dropped to five dollars per share from 20 in the entire computation of ours.
Tim Ferriss: In the equity, of course.
David Liberman: In equity of course. And also we saw the opportunity. For us, we got through two major crises in our life, not counting the childhood crisis, financial crisis. That’s why somehow for us, when it is a crisis for us, it’s a great times. So it’s like —
Daniil Liberman: Now we can show how we can —
Tim Ferriss: Never let a good crisis go to waste.
Daniil Liberman: Yes, exactly. And at some point we just had to show that we are good engineers as well. So David, just in order to challenge the status quo, David had to sit down and fix camera. I mean camera, Snapchat is camera and David made it load, what was it?
David Liberman: Twice as fast.
Daniil Liberman: Twice as fast.
David Liberman: Like not load. When you press the button, how fast the picture would be ready. I showed that it can be —
Daniil Liberman: The speed can be doubled, and it was like, “Oh, wow. So yes, your guys also are great engineers as well. So how did you do that?” And we showed some of the principles of how you can find inefficiencies in the code.
David Liberman: But still it’s really important in the sense that it was a really team effort of great engineers actually was part of this process. What we see is our contribution, this kind of promotion, this idea.
Daniil Liberman: Their voice was heard.
David Liberman: And bringing this voice to the decision makers so that they also will be empowered with data to then thread it to the entire organization. And that was definitely really great times and it worked. And even though Snapchat has some challenges right now with —
Daniil Liberman: Revenue.
David Liberman: Financial side of things, but with audience since then it’s growing.
Daniil Liberman: The audience is growing.
David Liberman: They recently reached like 800 million.
Daniil Liberman: The audience is growing in the countries where the Androids are even slower. So the app actually is pretty significant still.
David Liberman: It’s still right now in terms of Android apps, it’s still one of the fastest apps to load compared to the major apps outside.
Daniil Liberman: What was interesting as well, so launching a new updated version only happened when in March-ish of 2019. But it was also important and we put lots of efforts into this program more than the other one to fix the existing version. Before the new was released, the old had to be fixed in order to stop bleeding. And by December the bleeding stopped.
David Liberman: You can see it’s from data.
Daniil Liberman: And in January the audience started to grow.
David Liberman: Even before the new version —
Daniil Liberman: And in March, the new version was released. It never actually slowed down since then.
Tim Ferriss: So I have a question about this type of data-driven analysis. Do you attempt to do this type of analysis with goals or challenges that you have in your personal lives? Do you try to apply it everywhere? Are there examples that you could give outside of the business context?
David Liberman: First of all, we should know that we, as Daniil mentioned about intuition, we believe in both. We believe in intuition, we believe in data approach. But yes, so for example, one was a major principle is that we know what is compound growth. And for example, when we have some crazy goals, crazy for some people, we will set some goals and these goals seems to be impossible. What we show again and again that actually if you have KPI, for example, number of followers.
Daniil Liberman: If you have —
David Liberman: Goals, for example, number of followers or a number of dollars in your pocket.
Daniil Liberman: Quantify.
David Liberman: Quantifiable things.
Tim Ferriss: Quantifiable key performance.
David Liberman: What you can do is that you can evaluate what you have right now and then if you can multiply this number two.
Daniil Liberman: If you can double.
David Liberman: Two times a year actually.
Daniil Liberman: Every year, if you can double your results.
David Liberman: It is a greatness. You have the entire money on Earth, the entire —
Daniil Liberman: Population on Earth.
David Liberman: Population of following, et cetera. So it’s really important then when you have this big goals, you can have any big goal with this approach. You just —
Daniil Liberman: You need to run faster than —
David Liberman: Doubling.
Daniil Liberman: Two times every year.
David Liberman: Actually what we realized that there is this corridor.
Daniil Liberman: There’s probably a physical limitation at the top, which is around 2.4. You cannot run faster than increasing your results 2.4 times a year in a —
David Liberman: Long.
Daniil Liberman: Long run.
David Liberman: But what we realized that actually it’s really tiny corridor. If you increase this number 1.6 times, you’re successful. If you increase this number 2.4 times, you are —
Daniil Liberman: You’re superhuman.
David Liberman: Superhuman.
Daniil Liberman: You’re like, godlike.
David Liberman: So this is only as a small corridor, you don’t need to think about something faster. If it’s —
Daniil Liberman: Anything slower, it just like a normal life.
David Liberman: Slower, it will not be success.
Tim Ferriss: Now this is multiplying your KPI by 1.7 times every year.
Daniil Liberman: Every year.
David Liberman: Every year.
Tim Ferriss: Every year. Once per year.
David Liberman: Once per year.
Daniil Liberman: Once per year.
David Liberman: And we applied it a lot in our life, in our business life, in the life of our companies, in our personal life. So we use this methodology.
Tim Ferriss: How do you apply it? What would be an example from the personal life? Maybe it doesn’t have to follow that doubling heuristic. It could, but what might be an example?
David Liberman: But for example, amount of hours you spent with as a romantic partner, you inspired by.
Tim Ferriss: And so you would track the hours and then look to multiply that over time?
David Liberman: Yes. So you shouldn’t expect that immediately. You would start a relationship which would be perfect and you will spend all the time and all this time would be perfect and great, et cetera. But if you have one hour of this experience a year, the next year it can be two hours as the next year it can be four hours.
Daniil Liberman: For some it might sound like —
David Liberman: In 10 years you have the entire life like that.
Tim Ferriss: Slow build.
David Liberman: Slow build. And we just realized that when you try to run faster, you can actually break yourself.
Tim Ferriss: I see what you’re saying. So you can make a mistake by saying, “Okay, I’m going to spend half of my time this year with this person,” because you’re sort of biting off more than you can chew and maybe shooting yourself in the foot for the long term.
Daniil Liberman: Yes.
Tim Ferriss: Okay. So basically having an eye towards growth but not being excessively ambitious in the beginning because you’ll break things.
Daniil Liberman: Yes. I know on personal experience, yes. This is like when you run too much right away, you break stuff.
Tim Ferriss: Yeah, I can see that as someone who’s suffered a lot of physical breakage also.
David Liberman: But even with the acceleration, when you’re in the rockets flying into space, there is this limitation of three —
Daniil Liberman: 3G.
David Liberman: G, three times G, which then actually start breaking stuff in yourself. So it seems that it’s kind of natural number. This is what we can sustain like 2.4 like to 1.6. This is something which we can sustain physically and mentally and you can achieve everything.
Daniil Liberman: And you can honestly you can find it anywhere. If you want to play music, just start from something achievable right now today, double your result every year.
David Liberman: And you will become like Beyoncé.
Daniil Liberman: You will soon become superstar.
Tim Ferriss: Superstars.
Daniil Liberman: Superstar.
Tim Ferriss: Certainly true with physical activity too. If you think about say weightlifting or whatever, you don’t need to 10X a number every year. And if you try —
Daniil Liberman: You want 10X. You can try.
Tim Ferriss: If you try it like I’ve tried, then you start damaging your connective tissue or needing surgeries.
David Liberman: I remember that was one of the Olympic teams, was it in UK or something like that? I don’t remember exactly, but they got a new tech trainer and the new trainer was —
Daniil Liberman: A coach.
David Liberman: Coach was with this approach, but the approach was like we need to improve our KPIs one percent a week. It’s almost the same. And they become champion from nowhere.
Daniil Liberman: Years later they become champion from nowhere. The last position on the list they become champions.
David Liberman: So but physical activity is the same and business activity, money, finance.
Daniil Liberman: Writing books, music.
David Liberman: But really important is that you can achieve anything. You can have any type of mission or big goals, but then you draw this course for yourself —
Tim Ferriss: As long as you’re consistent.
David Liberman: And be consistent.
Tim Ferriss: So what are some of the maybe logistics challenges and how have you addressed them in running your businesses, how you run them or organizing your lives, the way that you guys organize them?
Daniil Liberman: We have a very messed up calendar. It’s like multidimensional.
Tim Ferriss: Does that mean that you’re just traveling all over the place? Do you have —
David Liberman: We travel a lot for sure.
Daniil Liberman: We travel a lot. We probably this year we’re in the States for three months all over the year. But at home in L.A., even less maybe than that, maybe one week a month, not more than that.
David Liberman: But what helped a lot, it started with two of us, but quite fast, two of our sisters joined and they usually —
Daniil Liberman: And they don’t travel that much.
David Liberman: And they usually run operations and scaling of their projects.
Tim Ferriss: Do any of your other siblings have the pair bonding that you guys have?
David Liberman: No. It didn’t work. But five of us, we are quite close and we work together.
Daniil Liberman: We work together, we live together in L.A. Our houses is literally like two minutes away from each other.
David Liberman: Yes, and they start to run operations scenes, game development. And then they come —
Daniil Liberman: Became our equal partners.
David Liberman: The equal partners in animation studio. And in since then it’s much easier for us to dream more and to act.
Daniil Liberman: No, now we discuss everything together. Philosophy, the vision for the future, the morality. It’s a constant discussion among all of us.
Tim Ferriss: So I can imagine, I’m just putting myself in the place of people listening to this that I’m sure there are people out there who work with family and then there are other people who don’t work with family. But I imagine working with my family and I love my family, but I’m like, “Wow, if I hired two people from my family to run my operations,” what do you do if it’s not working? Would you ever fire them or do you just have complete confidence that you can resolve anything that might come up? How do you think about —
David Liberman: You definitely can fire, but for sure.
Daniil Liberman: I mean what we learned —
David Liberman: What we learned. So we went through really harsh experience with game development to the bankruptcy and they were the only ones who stayed with us.
Daniil Liberman: Stayed with us.
David Liberman: Through it was a challenging period. And when you actually went through such experience, it’s much easier to trust. Not trust just because it’s family, but because you know what you can expect.
Tim Ferriss: You saw how they behaved.
David Liberman: Especially in venture business when as we mentioned most of the attempts.
Daniil Liberman: Would fail.
David Liberman: Would fail. It is really important quality to have someone who you can trust that they are with you long term, not just for this project. And I would say this worked pretty well. Maybe this was the results of this experience, which we all had, but maybe just because our parents worked together. For us, we didn’t have this concept [inaudible] that it’s not right.
Tim Ferriss: You saw that modeled.
Daniil Liberman: Never work with your family? No!
David Liberman: And we went through challenges. Definitely we argue with each other, et cetera. So we went through a lot of challenges but it worth it.
Tim Ferriss: Well, I was thinking also, as you saw your sisters, I suppose, doing the challenges of the game development company has reminded me of a quote, I don’t know the attribution, but that’s in English is a common expression. “Adversity builds character.” But the alternative, which I think might be just as true or maybe truer, is “Adversity doesn’t build character. It reveals character.”
Daniil Liberman: Reveals character.
Tim Ferriss: And so you got to see how they responded to a lot of challenge, which gave you the confidence then.
David Liberman: And there were a lot of challenges.
Daniil Liberman: We are lucky in many ways.
Tim Ferriss: So I want to ask you about, so this is the same question applied to two different groups. So the first is going to be your parents and I wanted just ask about what ideas of theirs you find most interesting. Maybe that’s a place to talk about [inaudible], maybe not. But then the second is what ideas you guys are most excited about right now. But I wanted to start with —
Daniil Liberman: Do we have a couple more hours for each?
David Liberman: Yeah, exactly. So our parents, so our dad, he was from physics, but he was by government, pushed out from physics because he was Jew and —
Daniil Liberman: And switched to biology.
David Liberman: Biology because biophysics was an open field.
Tim Ferriss: Physics was more protected and Jews were more discriminated against in physics?
Daniil Liberman: Yes.
David Liberman: So he found this niche, it was a new niche, it was an emerging new science. He came there with knowledge of physics and that gave him a different perspective than most —
Daniil Liberman: An advantage.
David Liberman: Biologists.
Tim Ferriss: A huge advantage.
David Liberman: Who would see everything through prism of chemistry or through a prism of biology.
Daniil Liberman: He looked at it through the prism of physics.
David Liberman: And he started discovering things —
Daniil Liberman: Faster.
David Liberman: Faster in this field —
Daniil Liberman: Starting with the first thing which he discovered was that the color which received by an eye is encoded not in the frequency, which is then translated as a signal inside of the eye nerve, but as a pattern of signal —
David Liberman: Pauses in between spikes.
Daniil Liberman: Pauses in between spikes.
David Liberman: So this pattern is encoded.
Daniil Liberman: It’s almost like Morse, de-de-de-de.
Tim Ferriss: Morse code.
Daniil Liberman: And this is sort of like —
David Liberman: That’s how he realized that it should be a computer is there, that should be a computation because the encoding happened.
Daniil Liberman: He came to this idea, there was a really interesting weird obsession of his on the idea that if evolution was working properly for millions of years, if not billions of years, then it should be optimal. That the most optimal mechanisms should have survived the evolution process and therefore what’s the most optimal from the physics perspective in terms of measuring —
David Liberman: Amount of energy spent on the operation.
Daniil Liberman: On operation and data is like time in between the quantum events. This is probably the most optimal one. And from this perspective, from the perspective —
David Liberman: He was able to find —
Daniil Liberman: Optimality, he was trying to find how the eye works and he was the one to discover exactly how it works. And he’s like, “Wow. So I was right about optimality,” and then used optimality all the way down, exploring into the nerve, into the neuron and into the core of the cell, into the DNA and then across the entire cell.
David Liberman: So Chematic was the abbreviation of chemistry, chemistry.
Daniil Liberman: Chemistry.
David Liberman: Optics and mathematics. So he always believes that the real discoveries are in combination of different fields, that actually the fact that we learn this subject separately —
Daniil Liberman: Limiting us.
David Liberman: Limiting us in terms of us being able to discover some things, which requires you to look at some —
Tim Ferriss: Have some interdisciplinary synthesis.
Daniil Liberman: He was pushing this idea of interdisciplinary synthesis.
David Liberman: And their success, both of our dad and mom, their success was because of that. They would combine things which others wouldn’t combine. For example, he brought the quantum physics —
Daniil Liberman: Into cells.
David Liberman: Describing cells processes. So even he, maybe 2008, 2010, it was really emerging idea in science. Scientists, they were trying to avoid —
Daniil Liberman: Avoid as much as —
David Liberman: As much as possible some complicated processes in biology because —
Daniil Liberman: Not just in chemistry.
David Liberman: It will challenge the idea that it happened randomly and that they was trying to avoid that. I can only recently more and more discoveries around photosynthesis, which probably requires quantum tunneling. And then there’s the smell and the fact that the birds can see the direction of —
Daniil Liberman: Polarization of light.
David Liberman: Polarization of light and where is North Pole. This all can be described only through the quantum properties of some processes.
Daniil Liberman: Processes.
David Liberman: Which happened inside —
Daniil Liberman: In life.
David Liberman: So biggest discovery, which we personally, it’s the last discovery. It’s always like that.
Daniil Liberman: It’s not just discovery. It’s like the entire concept that our consciousness work through the quantum compute inside every single neuron. So every single neuron is sort of a qubit. It’s like a quantum state machine itself, which then combined in the network produce all the results. But every neuron is quantum state machine.
David Liberman: This can actually explain a lot about our psychology, about how we think, how our consciousness work, but also it can give humanity a lot of clues, how to build proper quantum computers. So currently the quantum computers, which we build like Google builds or Microsoft builds, they are all requires some really complicated environments. So you need to froze the computers to minus 270 degrees.
Daniil Liberman: Fully isolated from any chaotic fields.
David Liberman: Electromagnetic fields and stuff. So it’s really complicated. While if our parents write in every cell —
Daniil Liberman: Every cell in our body has a quantum —
David Liberman: This what’s happening in a room temperature. So we can actually look at how biology made it and then build a new class of quantum computers which can actually [inaudible]. And then this can accelerate the personal AI development, not the corporation’s big AI, but the one which would be with you always and things like that.
Daniil Liberman: Plus there is a chance also as well that if this processes are happening inside of the cell, the answer to a room temperature —
David Liberman: Superconductors, also.
Daniil Liberman: Superconductors can also be there somewhere. I know that recently there was this entire hype with supposedly discovery of the —
David Liberman: Room temperature superconductors.
Daniil Liberman: The room temperature superconductors.
David Liberman: It seems that it didn’t work this time fully, but why everyone was so excited because it can change everything. It can change how we build roads, it can change how we build —
Daniil Liberman: Understanding —
David Liberman: Electrical grids and things like that.
Daniil Liberman: Understanding the quantum limitation. All roads can be done from superconductors. If all roads can build, then we have flying cars. If the same roads can then become the electric network which distributes electricity around the globe from sustainable sources of energy, like solar panels. We have days somewhere each hour all the time. And if the superconductors can surround the planet, then we have electricity everywhere without the losing of power. Lots of stuff can come from the superconductors. The answer can be inside of ourselves.
David Liberman: Yeah. So and the biggest discovery was that the answer can be inside of the cells. If we can actually look at the properties of these nanotubes and they are really special. This really right now there are a lot of discoveries showing that these nanotubes have properties which no one would expect that they would have. Even though we all know about physics and chemistry, but we cannot predict these properties.
Daniil Liberman: We’re not quite sure about, because this is recent, probably not even published or maybe some discussions in the conferences is happening that the nanotubes of that sort, the cytoskeleton nanotubes, how is it called? Microtubules, they can capture photons, they can capture light and direct it within its structure as the light actually hits the microtubules, the photon goes inside the tube and then as if it’s a core, which captures a light. And then —
David Liberman: So a lot of freely unexpected and great properties which can be used in industries and which can be used by humanity to just accelerate our development. So this we believe that —
Daniil Liberman: This is one the most exciting part about our parents.
David Liberman: What is important is that they just realize that to achieve that we need to be interdisciplinary and we need to combine through the last years, he was a promoters that he believes that in schools we should teach kids like that. Not to teach physics and chemistry and biology, but —
Daniil Liberman: Not separately.
David Liberman: But teach it —
Daniil Liberman: Altogether.
David Liberman: Altogether and show how all this interconnected and that we need to kind of grow a new generation of scientists who wouldn’t be so —
Tim Ferriss: Siloed.
David Liberman: Siloed in the disciplines.
Tim Ferriss: All right. So I want to segue to the ideas that you guys are currently most excited about. Thank you for explaining all that. Every time, anyway, I could spend hours just digging into what you just said. Maybe another time. But since you mentioned teaching, which relates to learning, how would you teach kids to code or people to code?
Daniil Liberman: Oh, that’s interesting.
Tim Ferriss: Versus how it’s maybe currently taught.
David Liberman: So first of all, we saw that computer science historically emerged from mathematics —
Daniil Liberman: And geeky minds like ours.
David Liberman: So it’s really great for us. But for most people it’s really alienating because see, if you’re not good in math, you —
Daniil Liberman: Mathematics.
David Liberman: Mathematics, you will just avoid even —
Daniil Liberman: Trying.
David Liberman: Because you will think that you are not really great in that. In reality —
Daniil Liberman: It’s a language.
David Liberman: Coding is much closer to learning French or learning Japanese. It’s actually much —
Daniil Liberman: Easier.
Tim Ferriss: A friend of mine published a small book, which was basically Code Is Poetry.
David Liberman: Yes.
Daniil Liberman: Oh, that’s interesting. Can you share it? Because we actually also wrote a tiny book, like Code Is a Language?
Tim Ferriss: Sure, I’ll find it for you. I’ll find it for you. And I’m not sure if he published it, but he gave it away as a gift. Matt Mullenweg, who’s the founder and CEO of Automattic and was one of the lead developers, arguably the lead developer of WordPress.
Daniil Liberman: Probably need to combine our thoughts in one book and then publish it.
Tim Ferriss: I’ll find it for you.
David Liberman: I created during pandemic, had some additional time. So I created interactive —
Daniil Liberman: Online course.
David Liberman: Book where you learned that you can actually first type something in a normal language, descriptions of world.
Daniil Liberman: Description of the [inaudible].
David Liberman: And then it can be easily translated by you into —
Daniil Liberman: Coding.
David Liberman: Coding language and like Python or C++ or Swift.
Daniil Liberman: It’s actually like a translation. First you wrote it in your own language and then you translate it into the code.
David Liberman: So the only thing which you need to learn is a little bit different —
Daniil Liberman: Grammar rules.
David Liberman: Little different way to describe the world. And that’s what mostly you should learn. You shouldn’t learn the words.
Daniil Liberman: Punctuation.
David Liberman: Punctuation and [inaudible] of this language. And if you use these methods to learn, then you can actually code —
Daniil Liberman: In any language.
David Liberman: In any language because it appears that Swift or C++, they all the same. They all interchangeable. Every time when I interview an engineer and this engineer would say that, “I know only this language,” this will be a red flag for me because it means that you don’t really understand and all this languages, they’re almost the same. Yes. So there are nuances, but you almost don’t have tasks which actually require you to use this nuances. But if you understand the kind of meta language and this meta language is really close to —
Tim Ferriss: Natural language.
David Liberman: Natural language, then you can actually code into any language. That’s what we really promote and we happen to actually teach some people coding who would never think that they can code and who would think that mathematics is not theirs.
Daniil Liberman: Moms of two.
David Liberman: Moms, yes.
Daniil Liberman: Housewives. They are great. Because they’re great in language, and if you’re great in language, you can actually learn this language as well. Especially right now, even though, yes, ChatGPT’s of the world, they can code for yourself, but if you know how to code, you will be well off in the next 20 years, 10-20 years.
Tim Ferriss: So for people who are listening, if they are resonating with what you’re saying — for instance, I’m a casualty of mathematics. I was actually very good at math. My brother, also very good at math, and we had very different experiences with teachers. He had a few great teachers, and I had one very, very angry, abusive teacher, and so I said, “No more math for me” even though I was innately quite good at it. He kept going and got PhD in statistics, and he’s very math capable. But I developed an adolescent onset allergy. But I recognize the beauty and elegance and value of code. I don’t think I would ever use it as a profession, but I like the idea of testing myself but I’ve always struggled with trying to identify how to start. I’ve looked at AI as maybe a way to use an intermediary, so I can use natural language to do some type of coding, but how would you suggest to someone who is interested, maybe a little nervous, but would like to explore coding?
David Liberman: There is a free book on our Instagram. There is link which you can try. It’s definitely only the first step. Then, you will need to learn more, but at least through the step, our expectation is that you will stop being nervous and afraid of coding, and it would be more natural for you.
Tim Ferriss: Right. That’s step one.
Daniil Liberman: That’s step one.
David Liberman: That’s why we wrote this book, just to make it easy because I don’t like any other courses, because they all start with syntaxes, et cetera. It is not the way you start.
Daniil Liberman: It’s not the way you start. They are great courses, it’s just not the way you start, because you alienate people who are like, “Oh, function. What is function?” They’re unable —
Tim Ferriss: I don’t know anything about coding, but it’s the same with foreign languages, right? You see the way that they’re taught, and it’s like, “Okay, here’s a huge table of conjugations, memorize this,” and people are like, “No thanks, I’m out.”
Daniil Liberman: Yeah, no thanks.
David Liberman: I’m out. Exactly.
Tim Ferriss: No, here’s a comic book. Let’s look at some things that you can use immediately, make it fun, and then later we can do the harder stuff.
David Liberman: Also what we found, that’s how we learn how to code, is that —
Daniil Liberman: Other examples.
David Liberman: Usually when you learn language, you first read, not write, you read. You need to read some easy but good written —
Tim Ferriss: Book.
David Liberman: — book, to learn the language.
Daniil Liberman: With software engineers, it’s the same. We actually —
David Liberman: We mocked an Instagram application, and we wrote a simple Instagram application.
Daniil Liberman: We re-wrote a clean code of a simple Instagram application.
David Liberman: Because everyone knows what it is, and everyone understand how it works, so if you read this code, you understand what it will do —
Daniil Liberman: In the middle of the course you’re just, “Okay, now change.” Now change some stuff in the code and you will see the changes in the app. And as you change the parts of the code, you see the changes in the app and you’re like, “Oh, that’s how it works.”
Tim Ferriss: Also positive feedback.
David Liberman: Absolutely. Also, even if you decide not to be an engineer, even for example, if you are a product person, product manager or marketing person.
Daniil Liberman: QA.
David Liberman: It’s really important for you to understand, otherwise, you won’t be able to give properly the tasks to engineers. You won’t be able to manage engineers and losing a lot of opportunities. You will always be triggered by engineers because you will ask them to do something, but they will do something really different if you don’t really understand their language. But as soon as you do, it actually helps you out.
Daniil Liberman: I wish we had more time and more eager to actually finish the full course, but it’s absolutely not the primary goal in our hectic life as well.
Tim Ferriss: But I’ll link to that in the show notes so that people who are interested can at least find it and give it a shot. I might do the same thing. Ideas, exciting ideas.
Daniil Liberman: Exciting ideas.
Tim Ferriss: Things that are, it could be projects, could be missions, could be ideas. Just things that have you both feeling excited and motivated.
Daniil Liberman: Where do we go? Identity international gap.
David Liberman: So I sense ideas —
Daniil Liberman: AI.
David Liberman: — through two things. First, observations which we have about the world. And this observation, they give us a different perspective and this perspective is almost obviously led us to some ideas.
Daniil Liberman: And projects.
David Liberman: And then usually when we have ideas, these ideas exist in us for some years and then we try to crystallize them into projects.
Daniil Liberman: Into product.
David Liberman: One of the major observations which actually started from bankruptcy of game development studio, we really wanted to understand “What was that?”
Daniil Liberman: What the hell happened?
David Liberman: Financial crisis.
Daniil Liberman: Financial crisis.
David Liberman: How we missed it.
Daniil Liberman: Not that we missed it. We saw that there was a problem in the real estate market, but everything collapsed around real estate market.
David Liberman: We thought that just real estate market will collapse, but everything collapsed.
Daniil Liberman: Little did we know about how the financial market works.
David Liberman: Yes. So then we dig deeper and first we got to the same —
Daniil Liberman: Conclusion.
David Liberman: — conclusions than everyone, like economists.
Daniil Liberman: Derivatives, credit default swaps.
David Liberman: Deregulation to 2001.
Daniil Liberman: This all lasts to this bubble.
David Liberman: But for us, usually people —
Daniil Liberman: Sometimes like all this stuff.
David Liberman: Yes, people usually when it’s about derivative in credit default swaps, blame the bankers.
Daniil Liberman: Everyone blames bankers.
David Liberman: Oh, bankers, they made this deregulation, they had the problem. And that’s how it all happens. But every time when we have a statement, we check it with data and we decide to [inaudible] who was the actual beneficiary. Beneficiary of credit default swaps.
Daniil Liberman: Not of their fault, but of them being created and popularized that way.
David Liberman: And then we realized that most of the credit default swaps through some vehicles, they were owned by pension funds. We’re like, what? Because we are from a region where pension funds, really small pensioners are really poor people and you would never think that they all sell multi-trillion dollar —
Tim Ferriss: Huge. Huge.
Daniil Liberman: The United States are like, what is it?
David Liberman: 40 trillion dollars in assets. It’s more than the entire publicly traded market combined. You will combine all Apple, Google, Exxon, Walmart, you will combine all these companies. It’s smaller than the assets of pension funds.
Daniil Liberman: Altogether less than the assets of pension funds.
David Liberman: So through this reason, we started to learn more and more like how the hell it happened —
Daniil Liberman: And it was green invention. I mean the fact that United States is the greatest economy in the world is because of this.
David Liberman: So we realize it’s not because of the army, not military.
Daniil Liberman: It’s because of people actually were saving some big chunk of their money, and the money was not just saved but was invested into the market and that’s how market got all the capital to grow, et cetera, et cetera, et cetera.
David Liberman: But then realized that unfortunately as soon as this population not only grew to the amounts that are the majority of voters, but also they have this enormous financial power, the financial power, which bigger than the banks, the bigger than any other organization. So this financial power in this voting power —
Daniil Liberman: Together combined led to lots of popular political decisions.
David Liberman: And regulations.
Daniil Liberman: And regulations which was completely false.
David Liberman: Which led to —
Daniil Liberman: What types of things? We can give you some taste of it. Yeah.
David Liberman: For example, when we first came to United States, we learned about student debt.
Daniil Liberman: Student loan.
David Liberman: And for you it’s obvious it’s United States, everything is commercial. That’s why college is not free. That’s how we got to the student debt. But the student debt, if you will look at the size, before 2000, it was really a small problem. It’s now like $2 trillion. But before that it was a much, much, much, much smaller problems. And what we realized that previously in the ’80s, your tuition when you go to state college would be mostly subsidized by government. 90 percent of your tuition would be subsidized by government. That’s how your parents were able to actually pay for their tuition during the summer job, there’s a summer job. And that’s how the debts never accumulated as much. But in the late ’80s, beginning of ’90s, because of almost bankruptcy, state of —
Daniil Liberman: Public pension funds.
David Liberman: Public pension funds.
Daniil Liberman: In many states.
David Liberman: The governments in different states and in federal level as well.
Daniil Liberman: Bailed out.
David Liberman: Made a decision to not only bail out, but also for the future, protect these pension funds. For example, in California, the growth of public pension funds, including teachers funds guaranteed on the level of 7.8 percent a year. Imagine that your deficit would be guaranteed as this level.
Daniil Liberman: A state budget.
David Liberman: And it’s not even average.
Tim Ferriss: State budget. So the subsidies to education went down as a result.
David Liberman: Yes, exactly. So it’s —
Daniil Liberman: You can see because during [inaudible] —
David Liberman: The money is still there.
Daniil Liberman: Tons of information become publicly available online.
David Liberman: You can trace it.
Daniil Liberman: You can trace it. It’s all there.
David Liberman: So this is from —
Daniil Liberman: Tons of data, but if you like to dig this data, you can find it. It’s just there. You can see it. You can like, “Oh, right, the money goes into the education.” Then —
Tim Ferriss: There’s a pension fund.
David Liberman: There’s a pension fund like CalPERS in California.
Tim Ferriss: In California.
David Liberman: Yes. It’s public pension funds pension fund, the public workers pension fund of teachers of California. No one really realized the size of these funds.
Daniil Liberman: And no one really realized the gap in between —
David Liberman: Assets and liabilities of this fund.
Daniil Liberman: Assets and liabilities of this fund. So when everyone discusses that pension funds are underfunded —
David Liberman: It’s only public pension funds.
Daniil Liberman: It’s only public pensions funds which are underfunded.
David Liberman: It’s $5 trillion of a gap, $5 trillion. And this is accounting the money which is constantly transferred.
Daniil Liberman: Someone might think that —
David Liberman: From subsidies to the pension funds instead of subsidies.
Daniil Liberman: Someone might think that this is just public workers. They’re probably what? 15 percent of workforce in United States. And yet the size of their pension funds is half of all pension funds.
David Liberman: Even though it’s only 15 percent of workforce.
Daniil Liberman: Why? Because of a guaranteed 7.8 percent analog growth. Because when the rest of the market goes down, up, down, up.
David Liberman: And this problem is not only indication. If you look at the police, there was this big movement of underfunding police. And we looked at the budget and per person in L.A. for example, per officer in L.A., it’s almost like 250,000 a year.
Daniil Liberman: And people were very angry about that. “What the hell, we pay you a lot and you’re not doing your job.” But then what —
David Liberman: The real work is right now, and the real officers right now —
Daniil Liberman: Are not paid as much.
David Liberman: — are not paid as much. And they get only a tiny portion of it and most of it goes as a transfer for pension funds for officers who worked 30 years ago.
Daniil Liberman: Now again —
Tim Ferriss: So where does this lead? You guys are looking at the data and I suppose a good set of data ideally allows you to have some predictive ability or at least speculation ability. So what do you do with this after identifying.
David Liberman: So we realized that every next generation because of that —
Daniil Liberman: Zooming out to a larger picture, what it led to is that through the generations starting saying from Boomers, I know this is like a false signs about dividing people into these generations, but we can batch —
David Liberman: People who was born around the ’50s, yes, let’s say.
Daniil Liberman: The Boomers, as they were getting into 30 years old, on average as a generation, own something around 21 —
David Liberman: 23 percent.
Daniil Liberman: 23 percent of national wealth in the United States. The following generation Gen Xes at the same age, average age owned around seven. Us, the Millennials, by the same age, owned only less than three percent, like 2.8-ish. And then the trajectory shows us that together with the crisis which happened during the COVID, we can expect that the next generation after are the Gen Z are going to be in debt.
David Liberman: By the same average —
Daniil Liberman: By the average age. So they still —
David Liberman: So its trajectory —
Daniil Liberman: — on average as a generation, they’re still going to be in debt.
David Liberman: So trajectory really bad.
Tim Ferriss: Sounds bad.
David Liberman: And also what this created that if these young people, not if, when they realize that the social agreement is not working, social structures will start to fall apart.
Tim Ferriss: What do you think are some likely ways that that will show up?
Daniil Liberman: We’ll see the new wave of unions, protests, people not working, economies slowing down. This stuff, new businesses not created. We can see from the statistics that over the last 10 years, the share of the new businesses created in the United States. And in the United States, lots of new businesses created every year. Lots of them never survive the year. But that’s the case. You create many, many, many businesses and lots of them die and some of them survive. And that’s the economy. So the share of the new businesses created annually in the United States, by the people under 30 years old used to be 40 percent or 45, let’s say 40. And now 10 years later, now it’s a 30, so it’s down 10 percent.
Tim Ferriss: Is the same number of companies being built just by younger and older? Or is the total number —
Daniil Liberman: It’s just more people, more companies. The total number is sort of the same. It’s just not young people creating them, it’s people 55 plus creating them.
Tim Ferriss: That’s surprising.
Daniil Liberman: That’s surprising. And not what I would expect. I never checked the data, but my intuition tells me all those businesses are just real estate. People buying houses and renting them out. So nothing new is created. Just the spike in the price in real estate is just because they’re buying and renting out and those are the new businesses.
David Liberman: So there are a lot of problems. But still when you talk about the problems, it’s really important also, at least to propose some solutions. What we saw, because we realized that this shift is based on regulations, it’s not natural that this shift is happening. So regulations which were —
Tim Ferriss: Based on regulations?
David Liberman: Regulations, that’s the rules which was set by the previous generations, which making this constant transfer. We realized that if you would decipher the regulations, what they did, that they made a preference to equity, to shares of the companies, et cetera, compared to the income.
Daniil Liberman: Individual income.
David Liberman: So capital gain is taxed less. There are a lot of things which actually made the huge difference between equity, how equity treated by the regulation and by the market and how personally.
Tim Ferriss: Got it, right. The taxation —
David Liberman: Everything.
Tim Ferriss: — incentives. “The expansion funds can invest in that, but cannot invest in that,” and things like that. So there are limitations set, not naturally.
Daniil Liberman: The majority of the capital is pension capital. Then where it can be invested matters a lot.
Tim Ferriss: Sure.
David Liberman: So in this term we realize that the solution which we can test and propose —
Daniil Liberman: At least try.
David Liberman: — is to try to convert income —
Daniil Liberman: Individual Income.
David Liberman: — into securities. Securities.
Tim Ferriss: Okay. So this is where the Libermans Company comes.
Daniil Liberman: Yes, the Libermans Company comes.
David Liberman: Yes. First time we did this to ourselves. As a scientist, you need to make the experiments and the experiments first have to —
Tim Ferriss: I wish more scientists did this. Yeah, you’ve got to be the first monkey shot into space.
David Liberman: Yes.
Tim Ferriss: At less than three Gs? Just to be clear.
David Liberman: So we realize, yeah, okay —
Daniil Liberman: If you want to survive this.
David Liberman: So even though our income is not stable, but if you will build a model around all the founders, all tech founders, and the probabilities of successes during the period of time, we can build an income model like you would do with a company, kind of cashflow projections.
Daniil Liberman: Risk, weighted risk adjusted cashflow, projection of an entrepreneur.
David Liberman: And then based on these —
Tim Ferriss: Like a value stock.
David Liberman: — projections. Like yes, but based on these projections you can actually set a price for a company which would have the same type of income. In this case, if you can form the company, then you can attract investment the same way companies do. And in this case he will eliminate this bias and vice versa will be supercharged by this —
Daniil Liberman: The capital floating into personal income.
David Liberman: — improving your future. Like personal income —
Tim Ferriss: So supercharged, just to try to ensure I’m hearing you correctly. So supercharged, meaning if you’re showing a decent rate of growth, even though you’re capital constrained, if you can bring in equity investors who invest in you as if you were a company, you can accelerate your growth and potential.
Daniil Liberman: Yes. And then we can average as an index across some cohorts of specific professions or specific cohorts like students for example. You have higher education or you don’t have higher education. How does it change your average income?
David Liberman: Should we invest in you having good education?
Daniil Liberman: Should we invest in every kid to have the good high education, higher education for them to increase their individual income? And that’s where investors get their money back. Or should we just leave it to the way it is right now, with the loan, which then suppresses the wheel to go and risk? And that’s how young people don’t create new businesses and just go find a shitty job.
Tim Ferriss: So how do you think you incentivize this type of wider adoption and data sharing, right? Because I can imagine if let’s just say we flash forward and this has been widely adopted. Now I can choose right, do I want to invest in people who are going getting accounting degrees where maybe I have a more reliable return on my investment year-on-year, or do I want to invest in the growth stocks that have much higher volatility. Like the entrepreneurs of a certain class or maybe age bracket where it’s going to be a much riskier, by volatility measurements, investment, but who knows the gains could be higher.
How do you go from a single proof of concept? I have also questions about taxation. Just if you’re being taxed at an ordinary income level, how you translate that effectively to equity holders who might be your investors, let’s just say. But well, we could tackle any one of those. So it could be like how do you contend with maybe the handicap of having ordinary income taxed, even though that’s presumably what people are investing in on some level, like the discounted cashflow or whatever. And then how do you take this and encourage other people to experiment with it?
David Liberman: Some regulations need to be changed to make it widely adopted.
Daniil Liberman: But now we start with ourself as tech entrepreneurs, because most of our income comes from building companies and selling companies or the making companies [inaudible].
David Liberman: Even today there is no difference whether you registered this company under your name or you registered this company under a holding company name. So there is no difference.
Tim Ferriss: That’s a great point. That’s a great point. You guys are actually operating in an easier case, straightforward case, because most of your gains would be from companies therefore likely long-term capital gains. Maybe you have USBS exclusions, et cetera. Versus if you guys were highly paid lawyers or something, it could get a lot trickier.
David Liberman: Yes, we went through that, prove it to regulators, pave the way through, show that it works pretty good.
Daniil Liberman: Thousands of entrepreneurs can actually show in their example that it works for the investors and then if it works for the investors, then we can introduce new regulations which will make it work for the professionals. Let’s say software engineers, doctors, lawyers. And from there go to even wider groups like students. There need to be even more regulations because kids need to be protected and stuff like this, but it all possible to be done.
David Liberman: So we’re pretty sure that at least some politicians who will see is that their voters can benefit out of it and that they can actually live better life. And the problems like student debts can be solved in just really short term by the tools like that. We hope that some rules will change.
Daniil Liberman: And what’s interesting right now, most of the pension funds are invested in really bubbled overpriced assets just because it’s too much money and not that much of instruments, like financial instruments, to actually generate the growth.
David Liberman: That’s why they needed this accredit for swaps and et cetera because they need this derivatives because it was just too much money to invest. So if it would be invested in people —
Daniil Liberman: If we are talking about investing in people.
David Liberman: — everyone will win. Pension funds will win, people will win. It’s just the gross economy would be much faster than it is today.
Daniil Liberman: It’s likely going to be 10 times larger market to invest in when we start investing in individual income as equity.
Tim Ferriss: So what do you say to people who think about this and they’re like, “Okay, I’m sure there are cases where this would be very attractive, at least initially.” So you might have somebody like a very promising YouTuber, they want to build out a studio and hire. I guess they could go out and raise an equity round if they’re really —
Daniil Liberman: That’s what we did, but with individual income like in the YouTubers.
Tim Ferriss: Okay. Now do you think if somebody is really successful that they would try to renegotiate or that they would not try to renegotiate?
David Liberman: There is an example. It’s not us, it was before us. There is a fund which invested in college athletes and they proposed to every college athlete. They took the statistics because it’s quite statistical thing.
Daniil Liberman: It’s like a Moneyball type of a game. They calculated their way to understanding how to predict —
David Liberman: And they offered.
Daniil Liberman: — how many students they should invest in order to basically hit the —
Tim Ferriss: Have a couple of LeBron Jameses.
David Liberman: Exactly, yes. And they offered every student era the same price, 5-10 percent investment.
Daniil Liberman: We’re buying 5-10 percent of your future income and we pay you the same price. It’s $10 million.
David Liberman: So half a million, million for 5-10 percent. 70 students agreed.
Daniil Liberman: Athletes.
David Liberman: One of them already netted 15 years contract for $350 million. So they did great with the fund.
Tim Ferriss: Yeah, they did pretty well.
David Liberman: There is one athlete —
Daniil Liberman: To sue them.
David Liberman: — who tried to challenge this agreement in court.
Tim Ferriss: This one athlete challenged them?
David Liberman: One athlete.
Tim Ferriss: Was it the same athlete?
David Liberman: No. This one, there is a great interview of him where he explains that this man actually helped him a lot.
Daniil Liberman: Best decision in his life.
David Liberman: He would never do another decision.
Tim Ferriss: I’m just imagining he might be cool with it, but I’m thinking about the managers and the agents who are like, “What the fuck is this?” But it worked out.
David Liberman: Yes, it worked out for everyone. But there is another athlete who netted like three, $4-million-a-year type of contract. He tried to challenge this in the court and everything in this case is more complicated than with our case. He was 16 when he signed, English wasn’t his main language, anything like that. So he signed in, steel court was on the side of investors, upheld the ingredient.
Tim Ferriss: How can people find more about this particular example if they wanted to Google something?
David Liberman: I will send you a link.
Tim Ferriss: You can send it to me, we’ll put it in the show notes.
David Liberman: Yes. I think it was in Wall Street Journal, the description of all this case. But also I can send you the links to the court case because we Googled it. All the court cases they opened. So you can see all the arguments and arguments of the court. They were about the fact that he did well. So it’s not about investors taking the glass screen view, I think like that. So he did well and also investors described all the scenarios. There is a scenario in the agreement that there is scenario that they will do well and in this case we’ll get this amount of money. So they described all the scenarios.
Daniil Liberman: Precisely described.
David Liberman: Moreover —
Daniil Liberman: So definitely.
David Liberman: — I don’t remember what was in their contract, but in our contract, when we —
Tim Ferriss: With your investors?
Daniil Liberman: With our investors, and when we invest in others —
David Liberman: We also invest, we’re not the founders.
Daniil Liberman: We also invested already in around a dozen people. We have this —
David Liberman: Minimal sum, which we don’t touch a year.
Daniil Liberman: — minimal sum which we don’t — minimal income of yours before which we’re not getting anything.
Tim Ferriss: Okay. There’s a hurdle, right?
Daniil Liberman: There’s a hurdle.
David Liberman: It’s not about the last opinion.
Daniil Liberman: It’s not about your last opinions, we actually aim to have the outliers.
Tim Ferriss: Yeah, it’s a power law distribution.
Daniil Liberman: It’s a power law.
David Liberman: In most of industries there is this power law. It’s not only in tech, it’s just in art, in podcasts, in athletes.
Daniil Liberman: How I feel about this, we will all win. The market will win, society will win. Humanity will win from the fact that we will use this power law for wider groups of people to invest in them, provide them capital, and provide them a chance to get a higher education to try to start a business.
Tim Ferriss: So question about your investments, and we can look at it at least two different ways. So one could be your investors and why they chose to invest in you guys? But since you guys made the decisions about your investments, I’m curious about those people. To what extent did you choose them based on their earning potential and so on, versus their potential to be a good ambassador or story for this model? Because they both seem to matter, right?
Daniil Liberman: Yes. Now we care about both.
Tim Ferriss: So a good investment may have the financial ROI, but there’s also showcasing.
Daniil Liberman: Obviously, because we have not that much money to invest in every people we want. We needed to pick those who will be a good story.
David Liberman: So definitely we look at both.
Tim Ferriss: Makes sense.
David Liberman: So in terms of investors in us, the first investor who supported us, was —
Daniil Liberman: Basically, he did not allow us to —
David Liberman: — quit from it.
Daniil Liberman: — back off. How do you say, back up, and we were almost ready to say, “Oh…” to give up, and say like, “Okay, we’re not doing this.” And he’s like, “No, no, no, guys. You have to do this. Please.”
David Liberman: Same lesson. He actually had the similar idea when he was out of high school in 2001. He’s one who’s a general partner of Slow Ventures —
Daniil Liberman: Too early.
David Liberman: — he invested in us, but then other prominent names like Marc Andreessen, or Chris Dixon, or Josh Kushner, they all —
Daniil Liberman: Also now own —
David Liberman: — invested —
Daniil Liberman: — tiny share of Libermans.
David Liberman: — in Libermans. But we earned it. So it did work right away, but we made the first round, then we proved some results, and we made the second round. So, with the startups. So, when we invest for us, definitely it means a lot that we want to find really great examples because all these examples will affect the future of the idea, and this will help others to get access to the same type of resources —
Daniil Liberman: But what’s more important for us, the major thing is whether we believe in this [inaudible]. If the person will continue building after failing.
Tim Ferriss: Yeah, that’s a big one. That’s a big one because you’re not just investing in one company, or one —
Daniil Liberman: Yes. We don’t invest in one company. Moreover, we would come, and already did this through the last year and a half as we investing in people, we came to people and said like, “Quit it. Drop it, and that’s not worth your time. It’s not working. Switch to something new.”
David Liberman: You’ll never hear about —
Daniil Liberman: You will never ever hear something like that from the investor who invested in this particular company. If I invested in you personally, I am mostly interested in your success. And if you are locked yourself —
Tim Ferriss: That’s refreshing.
Daniil Liberman: — if you’re locked yourself into something which you’re like, “No, no, no, I’ve got to do this because this is failure.” It’s not failure. It’s an attempt. 60 percent, 70 percent of those attempts are going to end up with zero, so just move on. Start the next one. You’ll be successful later.
David Liberman: So with Sam, it’s probably our best relationship with the investors ever. So because it can be really open in —
Daniil Liberman: Conversation about everything.
David Liberman: — not just showing the good results, but also showing the things which are not working, struggles because now we in a different type of relationship, and we really like it. And we actually had challenging experiences with investors —
Daniil Liberman: Before.
Tim Ferriss: I don’t think Sam’s going to take you to any basements.
David Liberman: Yes.
Tim Ferriss: It seems unlikely.
Daniil Liberman: Exactly. But not even that. He’s fully supporting us.
David Liberman: In the same when we invest. So we understand some of the founders, who invest, they already failed with their current projects, and they started the new one, and we were the ones who supported them through this process.
Daniil Liberman: Some of them are going through hard times, and we would say, “Go for a sabbatical.”
David Liberman: “Go to Vipassana”
Daniil Liberman: “Go to Vipassana. Take care of yourself. You need to be super efficient, and you need to be happy with your own life.” —
David Liberman: Long term, you need to be efficient.
Daniil Liberman: Long term. This will score us much more than if you’re like, well destroy yourself right now.
Tim Ferriss: Running out in the next year.
Daniil Liberman: Yeah. Yeah.
David Liberman: Yes. And we already have really beautiful examples when founders this freedom were able to act the way they wouldn’t act —
Daniil Liberman: In the past.
David Liberman: — it already gave some results, and —
Daniil Liberman: We completely enjoin with the passes of all the people who we invested in, and they’re all very different, different stories, different individuals, different spheres. It’s everywhere from YouTuber to reinventing quantum physics.
David Liberman: Yes. With YouTuber, Marina, she’s actually really also awesome example. She’s a founder. She had the startup, but to create a marketing vehicle for the startup, she created a YouTube channel, and then this YouTube channel —
Daniil Liberman: Media empire.
David Liberman: Become a much larger things than —
Tim Ferriss: Bigger than the startup.
David Liberman: — the startup.
Daniil Liberman: Making like a million plus —
David Liberman: A year from her network.
Daniil Liberman: But a mortgage, family, kids, it’s all risk, which you wouldn’t bet all of your income to the growth. Yes, she was growing fast, but as soon as she got the understanding that she can use the capital from her future, literally this is what we are doing. This is capital from your future. If you are doing as you are doing right now, then clearly you’re going to have that amount of money in the future —
David Liberman: So —
Daniil Liberman: You can take part of this money, which already almost exists into the present time and use it in order to make your future even more successful.
Tim Ferriss: So this brings up something that I wasn’t sure we would get to, but I figure I can bring it up.
Daniil Liberman: Time machine, is it possible?
Tim Ferriss: Well there’s the time machine, but there’s also maybe the — and I go back and forth on how I feel about this, but I guess you could look to the data, if you have such data, and there is some it would seem, but maybe the overfetishizing of suffering, and how that contributes to success, or the belief that the more one struggles, the more likely you are to have outside success because those make for good stories.
Daniil Liberman: Yes.
Tim Ferriss: Somebody suffers for their whole life, and then they show how much they can persevere, and then they succeed. But if you look at some of the examples that you mentioned earlier of the dropout and then the big company, these are not stories of abject suffering from the earliest stages of childhood, generally. So, would you say, and this is tying it to what you just said, that by relieving some of those pressures with the mortgage and the kids, you’re improving the likelihood of a bigger success later, or somebody could certainly look at it and say, “Well, she’s not going to be as hungry if…”
Daniil Liberman: So we have lots to say about this subject.
Tim Ferriss: That’s why I’m asking.
Daniil Liberman: A, if we’ll look at the most successful experiment of all times for the humanity, providing free school education, free school education for everyone, doesn’t matter whether they’re a smartest kid on the street or not, every kid, gave us more than any other investment, which we as a humanity, like infrastructures and stuff know. Writing free education. Is this, a capital early on —
David Liberman: It was a controversial idea like a hundred years ago.
Daniil Liberman: It’s an expensive investment to provide education for every kid. Expensive investment —
David Liberman: It gives —
Daniil Liberman: And we scored a beautiful world, gave a lot to us. So providing a little bit more of the same can give us unexpected results. The different perspective is if we’ll look at majority of the unicorns created in United States and look at who were the founders of those companies —
Tim Ferriss: And these are companies worth a billion or more?
Daniil Liberman: Those are companies worth a billion or more. What —
David Liberman: A big share of them —
Daniil Liberman: A huge share.
David Liberman: — most of them are from upper-middle-class families. They never struggled as us. They never went through real poverty type of situation, hunger —
Daniil Liberman: Losing all of their money in the bank accounts and stuff like this.
David Liberman: — all the stories about dropouts from high school, from college, they never had student debt. Parents paid for their college, and that’s how they afforded to do —
Tim Ferriss: Yeah. The other thing that gets left out of those stories is when you drop out of a fancy school, they always let you come back, generally. It’s not like you burn the ships behind you.
Daniil Liberman: Exactly. Exactly. And then the last one — well, probably not the last one, but also the last one for me. Then there it’ll go something. The struggle will come. It doesn’t matter if you have millions of dollars, you will always be struggling because you strive to achieve more, and it’s challenging, and it’s not necessary that the struggle is needed, but it will be there.
Tim Ferriss: Yeah.
Daniil Liberman: It doesn’t matter if you’re rich or not. What was this? “Rich people also cry.”
Tim Ferriss: I’m not going to wear that t-shirt around, but yeah, that’s true.
Daniil Liberman: And the challenge comes especially when you started the startup. You wanted to succeed, but —
Tim Ferriss: Also human nature is human nature. Life is suffering. It’s going to find you. Don’t worry.
Daniil Liberman: Sounds scary.
Tim Ferriss: Yeah.
Daniil Liberman: Still here.
Tim Ferriss: Exactly.
David Liberman: But, in general, this argument, we hear a lot. That founders should struggle —
Daniil Liberman: We were spoiled.
David Liberman: — and we, personally, struggled a lot through our founder’s path. We were even no resources in the country where investments are always considered as a debt. You need to put as a collateral your house and things like that compared to San Francisco where there is no collateral, you can have a salary. In our case, we were prohibited to have a salary as the founders. How you should survive.
You should have the skin in the game, basically.
Tim Ferriss: No salary. That’s hardcore.
David Liberman: So hardcore. And if you compare this experience with Silicon Valley experience, this is a struggle, this is not a struggle at all.
Daniil Liberman: And then we see all the unicorns were from a [inaudible].
David Liberman: Yes. So most of the successful companies would never exist without venture capital, without venture capital —
Daniil Liberman: Without this reason —
David Liberman: Venture capital gives the money in advance. It’s actually not struggling. Struggling is having the cashflow and building your bootstrap business. Most of the companies are not like that because some levels of achievements —
Daniil Liberman: Requires.
David Liberman: — at least in some areas, they require this freedom for you to actually risk and to try things, and that’s why we believe that some struggle is needed. But we believe that not on the level we have right now.
Tim Ferriss: You don’t have to manufacture it.
Daniil Liberman: Yes.
David Liberman: Yes. The student loan which stops —
Daniil Liberman: Competition is always struggle, and there will always be competition.
David Liberman: — but student loan, which just stops most of young people in United States from actually taking the risks early and to achieve more —
Tim Ferriss: And later. And later, too. I know people in their thirties who still haven’t paid off their — and I’m not talking early thirties. Mid, later thirties, especially if they go to an extended graduate school or professional school, they’re still paying off student debt.
Daniil Liberman: None of the individuals —
David Liberman: This is unneeded struggle. This is really unoptimal not needed. This is artificial struggle because we know that the subsidized money is paid through taxes, by people, but it’s just spent on a different stuff.
Tim Ferriss: It goes somewhere else.
David Liberman: So we don’t believe in this idea that the struggle is needed and vice versa. We believe that different local maximum, which would be much higher in terms of the size of the economy —
Daniil Liberman: Like 10 times higher.
David Liberman: — is in the place where we remove some of the struggles, especially those which are artificial and —
Daniil Liberman: Just try to imagine what it is, 10 times higher. More electricity, more power, more roads, more cars, more education, more whatever, more everything, 10 times more everything. This is when the abundance is probably likely to be close to reality. And that’s what we can do in this new local maximum. If we just change the perspective on whether what’s more worse to invest in —
David Liberman: Shares or —
Daniil Liberman: — the individual income, or the undying companies. The companies are dying.
David Liberman: On average they live actually less than human beings.
Daniil Liberman: Less human being.
David Liberman: All the statistics is for people in their potential, but all the regulations are —
Tim Ferriss: Supporting for companies with a shorter life span.
David Liberman: Yes.
Daniil Liberman: It’s obvious why it’s this way, because in the past we needed this invention of limited liability companies in order to remove the personal ownership of personal [inaudible].
David Liberman: Obligations.
Daniil Liberman: Obligations, individual obligations over the business. When your ship is sunk in the sea, now you owe not only all of your money, your house, but your family can be taken and enslaved. We are far away from this world, hundreds of years away from this world.
David Liberman: So now we can —
Daniil Liberman: Through the innovation of limited liability, and then the public market, and this is all innovation in the way how we see the market, and the way we look at the market, but we are ready for the new innovation, and this new innovation can uplift the economy.
Tim Ferriss: So question for you guys. I’ll answer it first too. So what request would you like to make of my audience? So very, very diverse audience across many countries, many places. Most of them are interested, on some level, in technology, not all of them. Well, let’s be honest, all humans are interested in technology. They just might not recognize it as technology.
Daniil Liberman: As I said, limited liabilities company is a technology.
Tim Ferriss: Is a technology. We all use tools. That’s the reason that Homo sapiens have done what they’ve done, good and bad. But my request for my audience would be to send me links to some of the biological and biophysics topics that you both discussed earlier. Very interested in all of that, including quantum effects and potentially bird vision or olfaction. All of this is of great interest to me, so people can shoot those to me on Twitter @tferriss or elsewhere. But what requests would you like to make of my audience, or places you’d like to point them, anything at all?
David Liberman: Two things. First, there is a conference about quantum biology near San Diego in 20th, like 18th of August.
Daniil Liberman: 18th or 20th.
Tim Ferriss: All right. Here we go. Look at that.
David Liberman: Best scientists, right now, are gathering. And it’s still a quite a small group of people, that’s why they’re really supportive to each other.
Daniil Liberman: It’s open talk.
David Liberman: They should compete with each other, but they actually are quite supportive to each other. We will be in the conference as well, but what we would ask is actually, first, to think who would be those individuals you would invest in?
Daniil Liberman: Likely, all of us have someone who will, like this guy, is going to be very successful.
David Liberman: Second, he sent this information out to us. So if you know the brave person, let us know.
Daniil Liberman: You would invest. You would invest your money and probably —
David Liberman: We all should invest.
Daniil Liberman: — let us know. And the third one is think that maybe you should invest in this person as well. Maybe it’s your kid, and you’re a parent, and maybe you should make an agreement, and actually invest in the first —
David Liberman: Our [inaudible] publicly available online. You can all read it and check what’s the closest in there. You can use this.
Tim Ferriss: And that’s libermans.co?
David Liberman: Yes —
Daniil Liberman: Libermans.co.
David Liberman: There is an agreement there. But, I would say that this is request, so first think about this people you would invest in. Send out the information about them to us.
Tim Ferriss: So what is — just being cognizant of the fact this is a large audience, so sometimes not good to give out your private email. I’ve had people do that. I warn them about it. How should people notify you of these —
Daniil Liberman: We have a form.
Tim Ferriss: You have a form. Perfect.
Daniil Liberman: Yes, we have a form.
It’s humanism.is —
Tim Ferriss: IS.
Daniil Liberman: .is. Humanism.is.
Tim Ferriss: Humanism.is?
Daniil Liberman: .is.
David Liberman: And also we communicate quite extensively through Instagram. We use Instagram not —
Daniil Liberman: Million people will come —
David Liberman: Usually, we use Instagram not for pictures, but for larger texts in some of the ideas.
Tim Ferriss: That’s instagram.com/libermans, also. Same spelling libermans.co.
David Liberman: Yes.
Tim Ferriss: Just telling people.
David Liberman: Thank you.
Tim Ferriss: All right. So Instagram, the email@example.com, and people can find the agreement on —
Daniil Liberman: Libermans.co.
Tim Ferriss: Libermans.co.
Daniil Liberman: Yes.
Tim Ferriss: And you have —
Daniil Liberman: What the other ask can be, if we truly want to see this world happening, we need to educate the older population and the investors and the grandmas and grandpas who actually are shareholders, stakeholders in the pension funds. We need to educate those people who actually own most of the money in the country to gradually start investing in this type of agreements to at least check to see what’s going to happen in five, 10 years from now. If they’re going to make more money by investing in individual income rather than private companies, public companies, and in this case, we’ll be able to have an experiment, and if it’s a successful experiment, will educate country and market to shift towards this.
David Liberman: Yes, you can ask your grandma to look where are the pension money of her are invested, and to see that probably some companies will blame for some —
Daniil Liberman: Problems.
David Liberman: — problems in the world. They can be the investors, but actually, companies which affect our ecosystem in a bad way, they’re not owned by —
Daniil Liberman: Bankers —
David Liberman: — rich bankers —
Daniil Liberman: — or whatever.
David Liberman: — or rich people. They actually, most of them, 90 percent owned by pension funds. So, if we can educate our previous generations that they can be a problem.
Daniil Liberman: They’re shareholders in the problem.
David Liberman: They’re not the source problem.
Tim Ferriss: Or the shareholders in the future, and they have to choose —
Daniil Liberman: Yes.
Tim Ferriss: — how their money is influencing that —
Daniil Liberman: And they can be the shareholders of the future.
David Liberman: And all of us —
Daniil Liberman: This is the heritage —
David Liberman: — all of us —
Daniil Liberman: — this is the heritage. They can leave, destroying the planet or actually switching.
Tim Ferriss: And I would imagine 99.9 percent of them have no idea —
David Liberman: That they can control it.
Tim Ferriss: — that they have a choice. Yes.
Daniil Liberman: And they have. That’s the funniest part.
David Liberman: They can log in, and they can —
Daniil Liberman: They can log in and change.
David Liberman: — change. Let’s sit down with your grandma, maybe look at their 401K —
Daniil Liberman: Write an email saying, “I do want some share of my pension funds, my savings, to be invested in the individual’s corporations.”
David Liberman: — or in sustainable companies, at least. This education should happen, otherwise there is this belief that the [inaudible] generation did everything right, and just the new generation is fail. But it’s really important to educate that some decisions, which were made 30 years ago, affect us a lot today, and some of this effect can be changed if we change where the money —
Daniil Liberman: And where is the knowledge of that.
David Liberman: — invested.
Tim Ferriss: Yeah. Yeah. I think a lot of it is a communications problem, and an education problem, and that net-net, humans of different generations have more in common than they have different amongst them. But, as you pointed out, sometimes the problems aren’t obvious, and sometimes problems aren’t discussed, and the options aren’t discussed. The fact that I didn’t know this until, shockingly, recently for me, like 10 years ago, that with retirement accounts you can invest in privately held companies, and all sorts of other things. It is an option. It’s just not readily —
Daniil Liberman: Done.
Tim Ferriss: — exploited by most people because they don’t realize that it’s on the menu. So I’m excited to see what people come up to. I’m excited to see what people come up with.
Daniil Liberman: Maybe someone needs to make a startup which actually offers a solution for the pensioners to do it easier.
Tim Ferriss: Yeah.
David Liberman: To just do the sustainable companies. That’s it.
Tim Ferriss: Some type of interface that makes it less manual, less one-on-one.
Daniil Liberman: Yeah. Yeah.
David Liberman: Because right now it is hard. You need to spend some time to actually set up your account properly. But —
Daniil Liberman: It’s actually the greatest opportunity. We just need all to talk about this. If you have some challenges believing in this, A, you can make your own research on trying to understand whether we are right with our data and our points of view. B, you can ask a question in the forum. You can find a way to reach us out and ask a question. So we will explain how we see this until you believe this is actually the really, really, really good way of investing your money.
Tim Ferriss: Well, also, this conversation has raised so many good questions. One of which is how do you take capital, which is a currency, it’s something that you can exchange for other things that is currently locked in a somewhat static form that may not be generating much positive value in the world. And how do you liberate that for other faster growing, more dynamic sources of value, not just for the individual, but for the community, for society? And I think about that a lot. It’s asset allocation, but on sort of a karmically considered level, at least at the collective.
David Liberman: And you don’t need to spend the money which you need right now. It is money which —
Daniil Liberman: You will only get access like in 30 years from now.
David Liberman: — so we made an experiment when we joined Snap. It was first time in our life when we got 401K.
Daniil Liberman: First time in our life employed.
David Liberman: Yes. Yes. We never —
Daniil Liberman: So Snap acquired us. We are employed. We now have 401K, and the experiment was we are getting exactly the same salary, exactly the same savings in the 401K account of both of us. David changed everything in his account where the money is allocated towards more sustainable companies. Companies caring about —
David Liberman: Between the Procter & Gambles and Coca-Colas of the world.
Daniil Liberman: Yeah, exactly, and the Monsantos of the world, removing them from there and just shifting the investment towards the companies which are more sustainable. Me, I just left everything as it was by default, provided by Fidelity.
David Liberman: So far, I earned 20,000 more than Daniil.
Daniil Liberman: 30 percent. The gross is 30 percent higher than mine.
David Liberman: So, in essence, it’s just [inaudible]
Daniil Liberman: That’s the funniest part.
David Liberman: — so if you believe that other people believe in the same, and that actually the world is moving in a more sustainable, clean society, you will win financially, as well, because if the shift is happening, if you believe in the shifts, then —
Daniil Liberman: And it should happen, otherwise we’re all going to die. And because it’s happening naturally, logically it’s happening, then it should be no-brainer that we should invest in the companies which actually does this because others will lose in the market game.
Tim Ferriss: Yeah. Doing right morally doesn’t need to mean doing something that is self-destructive. You can align the incentives.
Daniil Liberman: Absolutely. And investing in your kids and your grandkids is the best thing ever.
Tim Ferriss: Right. So, I think everybody listening has a good amount to think about, and they have options for communicating with you. They can go to libermans.co to see examples of the agreements, the types of contracts that have this participation in future earnings potential, and outcomes of individuals. They can go to humanism.is to fill out a form after they think about which of their friends, which of their peer group, which of their circle they would most invest their own savings into, and they can also consider doing that themselves with the templates that you provided. We’ve got the Instagram book and course for those interested in exploring coding. Excuse me. And the Instagram is instagram.com/libermans. David, Daniil. Daniil.
Daniil Liberman: Yes.
Tim Ferriss: Thank you so much for taking the time today.
Daniil Liberman: It was awesome. Absolute pleasure. It’s a pleasure.
Tim Ferriss: So much fun to traverse so much ground with you, and for everybody listening, as per usual, we’ll have extensive show notes linked to all the resources, everything that was mentioned, and we’ll track down a few things here and there, including links to, might’ve been in Wall Street Journal, but the sports example. And you can peruse those at your leisure at tim.blog/podcast. And, until next time, be a little bit kinder than is necessary to others, but also to yourself, and as always, thanks for tuning in.
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