“I actually keep a list of big mistakes I've made, so I don't forget them.” – Joey Krug
Joey Krug (@joeykrug) is Co-CIO at Pantera Capital, a crypto-focused asset management firm. He is Cofounder of Augur, a global betting platform, and Cofounder of Eco, a personal finance app utilizing USDC. Joey is also an advisor at 0x and Numerai.
To hear Joey''s full interview on building a $6B hedge fund in crypto, click here.
Chapters
- CRISPR, Layer Two, and design in crypto
- Synthesizing information and learning soft skills
- Superhuman and Apple Notes
- On failure, success, and gratitude
Links
Transcript
Daniel Scrivner:
This should be a little bit shorter format than long form interview we did. We try to keep these episodes under 20 minutes, so let's go ahead and dive in. And the first question we always ask, and I'm super excited to hear your answer, is what you're fascinated or excited about. And this can be obviously in crypto, this can just be more broadly in the world. What things are on your mind? What things can't you stop thinking about?
Joey Krug:
Yeah, I mean, I think outside of crypto, I would say biotech stuff. I'm super fascinated by of what's happening in that industry. Crypto and biotech are kind of the two most interesting things to me. I think what's happening with CRISPR and genetic editing is going to be huge. It kind of reminds me of what I've read about what software was like in the late 70s, early '80s. And I think you just fast forward two decades, it's going to be mind boggling what's happened in that field.
Joey Krug:
I think outside of that, I'd say, obviously crypto and within crypto, I'm mostly excited about what's happening with Layer Two is finally getting adopted there in real numbers, which is sort of starting to solve the scalability problem that we've had for years. And the other thing in crypto is not a specific thing, it's more just like the concept that teams are caring more about design, I mean, like UI UX and stuff. Companies that we invest in are actually hiring to designers and that kind of stuff, which three years ago, most of them weren't. So I think that's another thing that I'm excited about.
Daniel Scrivner:
Amen to that second one. I always am slightly bummed when people are just focused on engineers, I'm like, it actually takes a lot of people to solve and build a great product. It doesn't just take code. On the biotech side, I have to ask a follow up question there because that's an area that I'm always fascinated by. I also feel like it for people to grasp. So is there papers, you would point people to, a personality whose videos you watch, a company? Are there tangible things that people can look up to learn more about CRISPR gene editing in that space?
Joey Krug:
I don't have great pointers on resources. I'm mostly just once in a while, I'll read latest research papers and stuff. That'd be a field there would be great books for it, but I'm not sure what's out there. I'm mostly just street kind of latest stuff that's in clinical trials once in a while, or what's happening on the research side just because I find it interesting.
Daniel Scrivner:
Yeah. Something I finally subscribed to after not for a long time, is Nature. And I feel like, whether you just follow them on Twitter, whether you follow them on the internet. I mean they have great stuff, and a lot of it is kind of biotech related.
Daniel Scrivner:
We talked in the other episode all about crypto investing, Pantera capital about your investing superpowers. What are your superpowers much more broadly? You're clearly somebody who I think is very smart, very technical, when you think back in time, look back in time, what do you feel like was there early on that is still the superpower that's helping you today?
Joey Krug:
I probably just, synthesizing information and then making a decision quickly and fairly aggressively, I think. Which works fairly well for investing, especially early stage investing where you have not that much data to go off of. Another kind of way to explain that is making decisions without much data is something I'm fairly comfortable doing. Some people are very uncomfortable with it; they want to wait to every ounce of data possible to make it a decision. I forget who said it, but there was some scientist, or entrepreneur, or somebody who said" You want to gather as much data as possible to make a decision at the last possible, reasonable time you have to make it." I actually might have been a general or something. I think most people, they get the last possible reasonable time part wrong, they often make the decision far too late than they should. And so, I think one skillset I have is determining when the right time is for those sort of decisions.
Daniel Scrivner:
That's fascinating. I love that parallel universe where you're a general in some sort of an army. Maybe this is back in time. One thing I think is interesting is, there's kind of this theme of just being really comfortable with risk, and that's something that I think is relatively unique. Where do you that comes from?
Joey Krug:
It might be something psychological from my childhood. My brother was hospitalized and very ill when I was really, fairly young, and I remember having to do a bunch of research to try to figure out what drug to be used to basically make him get better. And at the time my options were like, be extremely sad and give up, or just keep researching until late in the night, every day. And I opted for the latter. And so, I kind of view it as, that always feels much riskier compared to everything else. My brother almost dying, always feels riskier than almost anything else. And so, every other risk it's all downhill from there. Every other risk is much more easy to get comfortable with, compared to that one. It might go back to that. I haven't thought about it too deeply.
Daniel Scrivner:
Yeah. That's beautifully said. Feels like the ultimate risk setting exercise, where you have this thing, this kind of moment very early on that I think calibrates your risk in a certain way. On the flip side of the coin, what do you feel like you struggle with, and how have you improved or worked around that over time? And this is just generally, whether that's personally professionally.
Joey Krug:
Yeah. I'd say probably softer, emotional stuff. For instance, giving someone on feedback, tell to them very factually, but I might accidentally do it in a way that's giving them too much feedback. They've already gotten the point, but I really hammer the point to make sure they understand it. That's probably actually the main thing is the softer and emotional stuff. And then, another thing I struggle with is just dealing with everything going on. I have a million meetings, million emails, a million people pinging me about stuff all the time, I mean it's a lot and it's kind of stressful. I handle that pretty well. Sometimes you'll have a day where there's three crises or fires that you need to solve at midnight or 1:00 AM when you went to bed, you have a really long to-do list of stuff that you're going to hammer out, and then three fires pop up, so you can't do any of your to-do list that day because you're addressing the fires. Stuff like that, I think I handle it well, but it's stressful for sure. And sometimes frustrating.
Daniel Scrivner:
Especially thinking about that in line with also I know every single day you try to get through all your messages, all your emails, so you're kind of doing inbox zero in all these different places. You also have all these meetings. Obviously, I think part of that, at least my experience has been is that kind of pressure ratchets up, you slowly adapt to that, and you get more comfortable with that. But I think we also all develop our own coping mechanisms. Do you have anything that you do to try to, I don't know, either just remind yourself it's okay, take a deep breath, shut off or switch off. What do you do to, I guess, keep yourself sane?
Joey Krug:
I love listening to music, especially if I'm just going through emails. I don't ever remember a scenario where I was going through an email and it was some extremely, extremely, mentally challenging thing, so I think going through emails, you can kind of listen to music, and it's kind of a way to just do something that's kind of a bit rote in a way that's more exciting. I'll also go for walks and stuff. I live in Puerto Rico, so often I'll go for a walk along the ocean. You can kind of hear the sound of the waves, and I'll usually be doing emails or something while I'm doing it. But it's still very relaxing. Far more relaxing than doing 100 emails in a chair.
Daniel Scrivner:
Yeah. That doesn't sound terrible. It doesn't sound like a terrible way to answer emails. On the kind of software and tool side, do you use any tools daily to manage your work, your email task time? And that can either be software, or that can be physical things if you keep a physical to-do list. What does that look like for you on the tool side?
Joey Krug:
Email wise, I use Superhuman. I wouldn't get through most of my email if I didn't have it, I don't think. And then, Calendar, I just used the Apple Calendar. And then task management stuff, I've tried everything over the years. There's this one that I liked for a while called [inaudible 00:54:58] or something like that. Asana is okay. And then you have a million other ones that, some are more engineering specific, some are more just general task managers. I think the problem with Task Manager that I found is there's so many that I'm invited to. If I opened all of them, I probably have 10 tabs for each Task Manager for everything that I'm involving in or touching. And so, I eventually, this year just kind of said, "Screw that," and switched back to Apple Notes. Because for my own personal task management, I actually just use Apple Notes.
Joey Krug:
And the reason is, every other app you have to log in sometimes, sometimes you're logged out if you're traveling or whatever. Sometimes the app takes 15, 20 seconds to load. I may have two seconds to note something down, commit it to the notes, and then go back to what I need to be focused on. And so, I switch to that and it's way better, it's way more productive. People that I manage or work with, we also have now shared Apple Notes where it's effectively like a mini Asana or Task Manager with the item, current status, that kind of thing. And it's way better because I can check on it 24/7, and it takes two to three seconds versus 30 seconds where like, if it's 30 seconds, I'll check it at the end of the day, and I might forget to do it, it's just a pain. So Apple Notes is great.
Daniel Scrivner:
Yeah. That's fascinating. You guys have kind of built your own productivity app, using linked kind of network Apple Notes on the personal growth side. One question we always ask everyone, you may or may not have a great answer here, but I'm curious to hear your take. We always ask about a favorite failure. So something, and this can be the vein of your background, this can be an investment that didn't work out, this can be a company, or a protocol that you are a really big believer in that just didn't work out. This can be something super personal that you try that didn't work out, but something that, because it didn't work out, propelled you in a better direction, or taught you a lot of something valuable about the world. Any favorite failures come to mind?
Joey Krug:
I actually keep a list of big mistakes I've made, so I don't forget them. I mean, one on the investing side, I'd say my investing failures in the past have been, not investing in stuff because there were theoretical legal reasons why it didn't make sense to invest in it. And then, later the business model changed, or the founders evolved, or the legal landscape changed. Those are batteries not to invest in something, in my opinion. And so, I've changed my opinion on that. Obviously, if it's outright illegal, I don't want to invest, but if it's a gray area, or if it's like, the founders haven't launched, and they can do one tweak, and make it legal, and the founders aren't sure if they're going to do that tweak, they will make the tweak when their lawyers tell them they have to. I think being too conservative, there is a mistake I've made in the past.
Joey Krug:
The other thing, I think, is just being very cognizant of where you are in the market cycle and not deploying too heavily. I think the lesson I learned in the 2017, 2018 cycles, you may have a very large portfolio, and think to invest X percent into Y project, you need to deploy XYZ dollars, but if the market goes down 60%, you actually don't have that large portfolio. Even if you avoid some of the draw downs, say you happen to sell and you're only down 40%, you're still down 40%. Think of about position sizing in a way that's a bit more conservative than you probably actually should be. Stuff like that is another lesson I've learned.
Daniel Scrivner:
Super interesting. You may or may not have an answer for this, this is kind of a deeper question than I think a lot of people appreciate, but in your mind, do you have a definition of success and this can be personal, this can be professional, this can be kind of all encompassing. How do you think about that for yourself?
Joey Krug:
Yeah, I'd say for me, it would be like living a life that's enjoyable, you're actually having fun, you're happy to be doing what you're doing, and if you're making a positive contribution towards moving the world forward. I think a lot of it to me is tied to tech progress, moving the world forward. I really want to help push DeFi along, it's something that's actually like quite important to me. Those things are success. Also having a happy family, that's another area I think that I think's important. A lot of people, when they think of success, traditionally I think of financial success. I think it's more about what positive impact have you had? Not in a ESG way, but more just like, have you moved the needle on technological progress? I think it's a cool thing to try to aspire to.
Daniel Scrivner:
It's fascinating. No one's given that answer. Just a huge focus on kind of technical human progress. Last question: what are you most grateful for in this phase of your life?
Joey Krug:
I'm definitely very grateful for the team we've built at Pantera. I think it's a world class team, and we're having a million things going on. I think back to when I joined the firm, you had 150 million under management, or roughly kind of ballpark, and now we have 6 billion something. It's just insane scale, and the fact that everybody's working so hard, and the fact that people have managed to still stay sane throughout it, and I'm thankful for the team that we have, I think, because what we do, like wouldn't really work without the team behind us. So I think that's something I've been thinking about recently.
Daniel Scrivner:
Yeah, that's really well said. And obviously that's an incredible experience to go from 150 million to 6 billion, and still say stay in the firm. Well, thank you so much, Joey. I know people can find you on Twitter @joeykrug. What is your website? Is it joeykrug.com?
Joey Krug:
I may own that domain. I don't even know if I have anything on it right now. You can just find me on Twitter. Twitter is great, or email. Either of those are good.
Daniel Scrivner:
And I know people can also email you, especially if they have interesting projects, things they're working on a kind of DeFi crypto space at [email protected]. Thank you so much for joining me, Joey. This has been awesome.
Joey Krug:
Thanks for having me.
On Outlier Academy, Daniel Scrivner explores the tactics, routines, and habits of world-class performers working at the edge—in business, investing, entertainment, and more. In each episode, he decodes what they've mastered and what they've learned along the way. Start learning from the world’s best today.
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Daniel Scrivner and Mighty Publishing LLC own the copyright in and to all content in and transcripts of the Outlier Academy podcast, with all rights reserved, including Daniel’s right of publicity.
