Invest Like the Best with Patrick O'Shaughnessy

William Hockey - Building the Operating System for the Dollar and Silicon Valley Heresy - [Invest Like the Best, EP.463]

March 17, 2026

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  • Founders who avoid venture capital, like William Hockey with Column, gain the freedom to pursue long-term, non-consensus bets that venture-backed companies cannot afford due to pressure for short-term growth metrics. 
  • Silicon Valley's consensus culture isolates founders from the realities of the broader world, whereas constrained societies in emerging markets breed a different, often more necessary, type of innovation. 
  • The highest entrepreneurial risk is often taken by early-stage employees who sacrifice immediate financial stability, while founders, especially second-time founders, often de-risk their proposition too much by relying heavily on external capital. 
  • The venture capital model is optimized for hyper-growth (above 30% off a billion-dollar base) and may not suit businesses whose growth aligns better with market rates or slower, more consistent scaling. 
  • The global reliance on the U.S. dollar for trade, even between geopolitical rivals like China and Russia, grants the U.S. an unparalleled national security advantage through financial sanctions. 
  • The greatest beneficiaries of AI will likely be entities with massive distribution and large, inefficient cost structures (like established brands or large banks), rather than pure-play AI companies, as AI drastically cuts operational costs. 

Segments

Column’s Software Bank Model
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(00:03:48)
  • Key Takeaway: Column operates as a software company that owns a bank to leverage regulatory rails for building unique financial infrastructure.
  • Summary: Column is a software company that owns a bank, allowing it to build infrastructure that non-bank software companies cannot replicate. This backend powers payments, deposits, and credit for major fintechs like Ramp and Wise. The business model is primarily software-driven, generating over 90% of revenue from API calls, similar to a pure-play tech business.
Innovation from Emerging Markets
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(00:06:46)
  • Key Takeaway: Visiting constrained societies in emerging markets provides founders with unique creativity and perspective on global dollar usage unavailable in consensus-driven Silicon Valley.
  • Summary: Emerging markets foster unique creativity because founders operate in highly constrained societies, leading to different types of innovation than those seen in abundance-focused environments like San Francisco. The US dollar is fundamentally global, and emerging markets often rely on it more heavily due to local currency instability, creating a greater need for US financial services. Companies like CASPI in Kazakhstan demonstrate how controlling financial services allows for rapid cross-selling and vertical expansion.
Critique of Silicon Valley Culture
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(00:16:02)
  • Key Takeaway: Silicon Valley’s elite-dominated culture leads to building software primarily for elites, causing a loss of touch with the needs of everyday Americans and the rest of the world.
  • Summary: Silicon Valley and Beijing are criticized as the most consensus-oriented societies, which is excellent for consensus-driven research like AI but poor for building broadly applicable products. Elites building for each other leads to drinking their own Kool-Aid, resulting in perspectives that do not resonate outside of major tech hubs. This lack of real-world exposure lowers the ability of local companies to build relevant software for the broader population.
Self-Funding and Founder Ownership
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(00:19:30)
  • Key Takeaway: Building a company without venture capital allows for true long-termism, avoids the ‘hamster wheel’ of constant fundraising, and preserves maximum equity for founders and employees.
  • Summary: By growing based on earnings and avoiding venture money, Column maintains 100% ownership for employees and the founder, which fosters genuine long-term orientation. Venture-backed companies are often forced to chase consensus trends (like AI or stablecoins) to optimize for the next fundraise, leading to winding paths. Self-funding enabled Column to make non-consensus, multi-year investments, such as acquiring a regulated bank, which would not be fundable by VCs.
Extreme Personal Risk and Conviction
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(00:28:39)
  • Key Takeaway: Funding Column required pledging over a billion dollars in Plaid stock to secure $70 million in debt, leading to near bankruptcy multiple times via margin calls.
  • Summary: The founder funded the initial bank purchase primarily through debt secured against Plaid shares, highlighting that the self-funded narrative involved extreme personal financial risk. This intense pressure, where solvency was constantly threatened, is viewed as a critical, creativity-inducing part of the founder journey that is often removed in today’s safe startup environment. The founder believes starting companies has become too safe, attracting founders who act more like employees and lack the necessary existential stakes.
Specialization Over Generalism
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(00:37:35)
  • Key Takeaway: True value creation for builders comes from becoming the best in the world at a niche, boring specialization, often requiring deep study of obscure, historical topics.
  • Summary: The best builders are specialists who find extremely boring, niche topics interesting over decades, contrasting with generalist topics like AI that attract too much competition. Leverage is found by extracting one small, critical insight from thousands of pages of specialized material, such as 19th-century Chinese banking history. Builders should avoid confusing themselves with investors; the goal is to create indispensable value through deep expertise in a specific domain.
Earnings, Sustainability, and Customer Trust
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(00:46:01)
  • Key Takeaway: Column prioritizes high profitability and sustainability because customers in financial services require assurance that their critical vendor will exist for the long term.
  • Summary: Profitability is viewed as essential for longevity and mitigating risk, which is paramount when serving customers who place high trust and switching costs on the service provider. The company allocates earnings across employee investment, growth, and capital reserves to weather potential multi-year market downturns. Enterprise software companies often cannot ingest massive amounts of capital efficiently, making sustainable earnings a better strategy than maximizing growth at all costs.
Venture Model Suitability Analysis
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(00:50:25)
  • Key Takeaway: The venture model requires consistent, high-percentage growth off large revenue bases to justify capital intensity, unlike businesses growing at market rates.
  • Summary: The VC model is fundamentally built for companies that can act like an ATM, consistently returning $1.30 for every dollar invested, which necessitates growth above 30% off billion-dollar revenue bases. Growing from zero to $900 million is significantly easier than maintaining 30% growth off a $1 billion base. Founders must intensely evaluate if their business model aligns with the capital structure demanded by venture funding.
Dollar Dominance and Global Trade
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(00:52:53)
  • Key Takeaway: The U.S. dollar’s role as the operating system for global trade provides the U.S. with unique, non-military national security leverage.
  • Summary: Most economies trade less than 10% with neighbors officially, but unofficial trade, facilitated by dollar rails, is closer to 90%, demonstrating deep global connectivity. The U.S. possesses a unique luxury, being able to sustain businesses solely within its borders, unlike most nations dependent on international trade. Even trade between adversaries like Qatar/Switzerland or China/Russia is largely denominated in USD, highlighting the dollar’s critical, often unrecognized, soft power.
Financial Services and National Security
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(00:56:02)
  • Key Takeaway: Financial services, particularly the control over the dollar system, is the primary pillar of U.S. national security strategy, preceding military action.
  • Summary: Silicon Valley is increasingly recognizing its role in national security, with financial services being the most important component. Sanctions, enforced via the dollar system, allow the U.S. to enforce dominance without risking boots on the ground, as demonstrated by the economic collapse preceding intervention in Venezuela. This financial control is a strategic weapon that other nations, like France, lack the same depth of control over global commerce to deploy effectively.
Future of US Financial Infrastructure
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(00:58:43)
  • Key Takeaway: The U.S. financial infrastructure is fundamentally robust and technologically capable, with implementation friction, not underlying tech, limiting 24/7 service for smaller institutions.
  • Summary: The ideal future for global financial services should remain U.S.-bound to maintain decentralized power, contrasting with systems where financial control accumulates solely with government elites. The Federal Reserve already possesses the capability to move and clear money 24/7 faster than crypto or stablecoins, meaning the issue is implementation constraints in smaller banks (like staffing limitations), not the core infrastructure’s ability.
AI Impact on Industries and Brands
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(01:02:29)
  • Key Takeaway: The primary value accrual from the AI tidal wave will go to entities with massive distribution and large, inefficient cost structures, not necessarily the AI researchers themselves.
  • Summary: The biggest beneficiaries of AI will be the largest, most inefficient brands because AI offers massive cost-cutting potential against their existing moats. Financial services, being headcount and technology-focused, are ripe for disruption or massive benefit realization compared to industries like railroads where human costs are a smaller fraction of total expenditure. AI can potentially remove friction in financial UX by improving fraud detection, which currently necessitates slow processes to protect vulnerable consumers.
Entrepreneurship and Risk Tolerance
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(01:06:34)
  • Key Takeaway: It is a good time to be a founder in non-AI sectors because the intense concentration of capital and talent in AI creates less competition elsewhere.
  • Summary: The best companies often emerge during challenging environments, and it is currently cheaper and less risky to be an entrepreneur than ever before. Founders should target industries where the smartest people are not currently focused, as consensus areas like those highlighted by YC requests are often saturated with intense competition. Resilience, taught by being comfortable taking risks (like being punched in the face), is a critical trait for founders that is often overlooked in favor of purely academic preparation.