Max Levchin: “The Net IQ of the World Is About to Go Up 50 Points”

**Molly O'Shea** (0:00)
Have you ever thought about opening up a coffee shop?

**Max Levchin** (0:02)
Totally. If I didn't do what I do for a living, I would just open a coffee shop.

**Molly O'Shea** (0:07)
Enjoying my coffee.

**SPEAKER_3** (0:08)
How did you get into this?

**Max Levchin** (0:09)
It's one of these self-fulfilling prophecies. So I grew up in Ukraine, and there's a culture of coffee drinking, and my dad was really into drinking espresso. So when I was five years old, he would buy a shot of espresso at a coffee shop. So I'd have this visual, like a bag and a shot of espresso. I'd be drinking it right alongside my dad.

**Molly O'Shea** (0:25)
For drinking espressos at five years old?

**Max Levchin** (0:28)
There's no prohibition on drinking espresso at eight years old.

**Molly O'Shea** (0:30)
I recently had Keith Raboy on last fall, and he said that you are a first-rate technologist and also a first-rate business strategist. So how did that combo develop?

**Max Levchin** (0:41)
I sort of walked in thinking, I'm going to get a computer science PGD and just be a professor, and walked out thinking, can't wait to start more companies. Majority of American banks derive a disproportionate percentage of their income from late fees. Affirm was founded in many ways to fight all of that, and we are mysteriously precise about the cost of credit. We'll do north of $47 billion, $48 billion of loans this fiscal year alone, and yet that's a drop in the bucket. We've been public for five years, and every single letter has a big Lebowski quote.

**Molly O'Shea** (1:10)
Have people picked up on that?

**Max Levchin** (1:11)
Until very recently, no one caught it. Then finally, one of the analysts wrote a note on us saying, Q2 fiscal 25, a quarter that really-

**SPEAKER_3** (1:19)
Really tied the room together.

**Max Levchin** (1:21)
Ah, I should have skipped it. Define- Define got it.

**Molly O'Shea** (1:35)
Walk us through your daily espresso.

**Max Levchin** (1:38)
Sounds good. For first, I need to learn how to turn on this scale.

**Molly O'Shea** (1:48)
Okay.

**Max Levchin** (1:49)
All right, this is a full...

**Molly O'Shea** (1:51)
Are we timing this too?

**SPEAKER_3** (1:52)
Do we need a timer?

**Max Levchin** (1:54)
It comes with a timer.

**SPEAKER_3** (1:55)
Really?

**Max Levchin** (1:55)
You have to time it.

**Molly O'Shea** (1:56)
Really?

**Max Levchin** (1:57)
Oh yeah. Okay. All right, this is a venerable classic, La Marzocco, made in... So these things, I think, made primarily in the US, but born and raised in Italy.

**SPEAKER_4** (2:13)
I'm a huge fan of this brand.

**Max Levchin** (2:14)
I own several of these. Before we do anything, gotta warm up the group and flush a little bit of water.

**Molly O'Shea** (2:26)
How many espressos do you think you've made in your lifetime?

**SPEAKER_4** (2:31)
That is a...

**Max Levchin** (2:34)
I could have tried to estimate it, but it will be a large number.

**SPEAKER_4** (2:36)
I made nine, ten today.

**Molly O'Shea** (2:40)
What?

**Max Levchin** (2:41)
Not all of them were for me.

**SPEAKER_3** (2:42)
Okay.

**Molly O'Shea** (2:43)
How many do you drink a day?

**SPEAKER_4** (2:46)
Five, six.

**Max Levchin** (2:49)
All right. First things first, we got to weigh out our beans. So I did prep the grinder, so the grinder is already... does not need any more adjusting. So the grinder is set. We're kinda being boobies.
This is, I just clipped a little bit of that.

**SPEAKER_4** (3:17)
It's not good.

**Max Levchin** (3:22)
A little bit over 20 grams, that's okay. This is a local roaster. Their name is Wrecking Ball, and the name of the actual espresso blend is Pillow Fight, which I think is a cool name. They're roasted very close to where I live in San Francisco, or at least they're sold very close to where I live in San Francisco. What I'm doing now is de-clumping. This is called WDT tool, or white distribution technique, and I am trying to break up any of the clumps of the grinds that were caused by static electricity as I ground them. This is making sure they're evenly distributed. Tamping my puck, as they call it. Gotta flush the group. You can never flush the group too many times.
Lock it in to make sure the pressure is... There we go. Probably want to edit that out. You want your surface dry so your scale does not get water on it.

**Molly O'Shea** (4:40)
Why is it important to measure it?

**Max Levchin** (4:42)
So, the perfect... I mean, it's all a matter of taste, obviously, but a good espresso should be just a little bit over two to one. So, two grams for actual drink, for each gram of the beans that you put into the basket. So, that's why I weight out. So, it's just over 20 grams. So, I want this to be just over 40 grams. I happen to like my espresso on a slightly shorter side. And so, I'll probably go for 40 Some people... The modern thinking around espresso is probably, you want to actually pull longer shots. And so, most professionals will probably pull like a 42, 43 gram shot for you.