Jim O'Shaughnessy on OSV

O’Shaughnessy Ventures is Here | Jim O’Shaughnessy & Patrick O’Shaughnessy on Infinite Loops Ep. 140

Check out the Episode Page & Show Notes

​​Key Takeaways

  • O’Shaughnessy Ventures (OSV) is a company that invests in creators in the areas of art, science, and technology to help promising creators and their inspiring ideas succeed 
  • For most of human history, a genius was born, lived, and died, and no one knew a thing about him or her; today’s technology changes that 
  • The Great Reshuffle: Jim’s thesis that all the old business models are collapsing, and that very different, new ones are taking their place
  • “I believe that AI is the third technology revolution.” – Jim O’Shaughnessy
  • We need as much cognitive diversity as possible for technologies like AI to work; it is currently very Western-centric
  • Humans cannot prophesize future knowledge, and thinking that we can is a bug in the human operating system
  • Big Tech used the AI algorithm to maximize revenue, but these objective functions can also be used to maximize things like creativity and happiness 
  • The guiding principle for OSV: asymmetric opportunities that are win-win 
  • Every system other than capitalism – many of them religions – promised people that they would be fed and housed, and they all failed over the millennia 
  • Jim believes the free market system succeeds because it is most aligned with human biology and the world 
  • Traditionally, networks were where you went to school and where you grew up; but today, networks are being redefined as geography, time, and space all collapse
  • Luck exists, and if you’re reading this you probably hit the cosmic lottery, but you must still play the hand that you are dealt 
  • Money is a technology that is used to bring ideas to life 

Intro

  • Jim O’Shaughnessy (@jposhaughnessy) is an American investor and the founder, chairman, and CIO of O’Shaughnessy Asset Management. His areas of expertise include quantitative equity analysis, portfolio management, research decisions, investment models, and podcasting. Jim has most recently launched O’Shaughnessy Ventures, which can be followed on Twitter @osventuresllc
  • In this conversation, Jim O’Shaughnessy is joined by his son Patrick to announce the launch of O’Shaughnessy Ventures, what he plans to achieve with the company, open vs closed AI, his multifactorial North Star, free markets, the technologies that he’s most excited about, making the next great Hollywood film, and so much more 
  • Check out these Podcast Notes on Jim’s conversation about the Future of AI 
  • Host: Patrick O’Shaughnessy (@patrick_oshag

What Is O’Shaughnessy Ventures? 

  • O’Shaughnessy Ventures is a company that invests in creators in the areas of art, science, and technology to help promising creators and their inspiring ideas succeed 
  • Jim has thought about starting this company for over ten years
  • We are at an inflection point in society; geography, time, and space are all collapsing due to technological advancements 
  • The pandemic advanced trends that were already there by 7-10 years, in some instances 
  • For most of human history, a genius was born, lived, and died, and no one knew a thing about him or her 
  • Today, technology allows us to find the genius in Bangladesh, or in a small European village, for example 
  • O’Shaughnessy Ventures will help reveal how magical the world is 
  • Jim wants to be a part of the exciting growth stories that are occurring all around the world 
  • The Great Reshuffle: Jim’s thesis that all the old business models are collapsing, and that very different new ones are taking their place

On O’Shaughnessy Ventures Not Having LPs

  • The upside of being a fiduciary: it teaches you to take on as many perspectives as you can from parties that have different interests 
  • The downside of being a fiduciary: it limits what you can invest in
  • Removing the principal-agent problem from OSV provides a “huge advantage” for Jim’s ability to make asymmetric bets that win 
  • The OSV Fellowship will find and fund creatives with $100,000/yr to pursue their passions 
  • Jim feels liberated from not having to be a fiduciary with OSV 

A Case Study: Jim’s Investment in Stability AI

  • “I believe that AI is the third technology revolution.”Jim O’Shaughnessy 
  • AI will be in everything in 5-10 years from now, according to Jim 
  • AI will change every industry because it is an omniuse technology; hopefully, AI will mostly change industries for the better 
  • Jim became passionate about the closed AI vs open AI debate and did not want his grandchildren to live in the dystopian-closed-AI-panopticon
  • Jim’s investment in Stability AI is to help create the open AI future 
  • We need as much cognitive diversity as possible for technologies like AI to work 
  • Currently, AI has a significant Western bias in its input data 
  • Book recommendation: The Beginning of Infinity: Explanations That Transform the World by David Deutsch
  • Humans cannot prophesize future knowledge, and thinking that we can is a bug in the human operating system 
  • Physicists in 1900 didn’t have opinions on the internet because it didn’t even exist 
  • Stability AI is now competing in the Game of Thrones of AI; the competition is coming for it 
  • Generative AI will exponentially increase human creativity, not stifle it 
  • AI will likely enable breakthroughs in science and disease treatments that will fundamentally improve the human condition
  • AI is a tool that humans use to improve human life

Surprises, Big Tech, Open AI 

  • Big Tech used the AI algorithm to maximize revenue, but these objective functions can also be used to maximize things like creativity and happiness
  • Many researchers at Big Tech companies are leaving them to work at places like Stability AI, some for no salary at all 
  • Within a tech company, there is often a mismatch in objectives between the C-suite and the engineers engaging with the actual tech 
  • Jim expected artists to universally hate the Stable Diffusion model, which turned out not to be true 
  • The artists are seeing that the AI is just a tool to make their art better; it is a human-machine collaboration 

OSV Today vs. A Year From Now 

  • O’Shaughnessy Ventures launched on January 1, 2023 
  • It announced the following verticals: Infinite Films, Infinite Media, Infinite Adventures  
  • Hollywood doesn’t make “Rudy” anymore; the Marvelization of Hollywood has stopped inspiring movies from being made, so Jim wants to create them at OSV  
  • The days of people staying at the same firm and getting a gold watch are done; Jim believes that people will have multiple careers with multiple groups 
  • The guiding principle for OSV: asymmetric opportunities that are win-win 
  • The Infinite Media vertical will work with content creators in the podcasting industry, for example
    • A focus on special-purpose podcasts, such as fishing
  • There will be new aggregators of substacks like the legacy media did with the news 
  • “Venture Capital” was originally “Adventure Capital”   
  • Hopefully, the OSV Fellowships will lead to companies that O’Shaughnessy Ventures will fund and seed 
  • OSV’s goal is to connect passionate, innovative thinkers with funding 
  • Plugging these creatives into “the network” might help improve the world 

The O’Shaughnessy Ventures Team 

  • OSV lives on the web and will source its team members through the web
  • OSV will leverage network effects to grow its team and creative pursuits  

Jim’s North Star, Free Markets, The End Game  

  • Jim has a multifactorial North Star 
  • Jim O’Shaughnessy is a passionate free markets guy 
  • Free markets have succeeded where every other ideology has failed 
  • Book recommendation: The Genius of the Beast: A Radical Re-Vision of Capitalism by  Howard Bloom
  • Every system other than capitalism – many of them religions – promised people that they would be fed and housed, and they all failed over the millennia 
  • The free market is the only system that has delivered on its promise 
  • Jim believes the free market system has succeeded because it is most aligned with human biology and the world 
  • The free market and human biology are both complex, adaptive systems 
  • Jim’s purpose in life is to be useful; being useful makes Jim happy 
  • Jim is not “doing OSV for the people”, he is doing it for himself, and because he loves to do this 
  • You can miss Jim with the phony-SBF-EA-type motivation for running a business
  • Traditionally, networks were where you went to school and where you grew up; but today, networks are being redefined as geography, time, and space all collapse 
  • Jim thinks virtual reality and psychedelics will be helpful in creating a better tomorrow
  • Psychedelics may help people tell themselves new stories about themselves and help them heal various mind-body problems 
  • OSV End Game: Put together the funding, the groups, and the experts to build systems from beginning to end that improve the human experience

What Jim O’Shaughnessy Is Most Excited About

  • Jim will likely spend most of his time on Infinite Adventures and Infinite Films in the early days of O’Shaughnessy Ventures 
  • “Trying” and “experimenting” will bring Jim the most joy in life 
  • In the coming years, robber-baron type fortunes are going to be made by companies using these new emerging business models 
  • People that attribute all success to luck are the unluckiest people in the world
  • Luck exists, and if you’re reading this you probably hit the cosmic lottery, but you must still play the hand that you are dealt 
  • Money is a technology that is used to put ideas into actions
  • Ideas that are not put into action are daydreams 

What Readers & Listeners Should Do 

  • Jim encourages you to visit the website OSV.LLC and see all the available opportunities that interest you 
  • The only way to be good at creation is, to be honest in understanding what interests move you 
  • The internet removes all of your excuses!
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Notes By Stan Rizzo

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