Patrick McKenzie (patio11) sits down with Intercom co-founder Des Traynor to examine customer support through the lens of Conway's Law, Goodhart's Law, and several decades of accumulated organizational scar tissue. They discuss how AI agents are democratizing white-glove service, why modern LLMs have retrained user expectations around “chatbots” very quickly, and the surprisingly liberating effect of talking to something that will never judge you for missing a loan payment.
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Full transcript available here: www.complexsystemspodcast.com/des-traynor/

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Sponsor: MongoDB

Tired of database limitations and architectures that break when you scale? MongoDB is the database built for developers, by developers: ACID compliant, Enterprise-ready, and fluent in AI. Start building faster at mongodb.com/build

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Timestamps:
(00:00) Intro
(00:29) Intercom and its evolution
(00:51) Challenges in customer service systems
(02:54) Scaling customer support in startups
(04:53) Organizational inefficiencies and customer experience
(06:53) Metrics and their impact on customer support
(12:40) Human capital issues in customer support
(15:53) AI's role in customer support
(17:01) Future of customer support roles
(20:09) Sponsor: MongoDB
(20:53) Future of customer support roles (continued)
(26:19) AI and customer interaction
(26:55) The myth of artisanal customer support
(27:45) Fin Guidance: Evolution and user behavior
(29:10) Fin's impact on customer support efficiency
(33:30) Expanding Fin's capabilities beyond support
(42:50) AI in government and other sectors
(49:20) The future of AI connectivity and integration

Patrick McKenzie (@patio11) reads his latest Bits about Money essay explaining why he “loves Regulation E more than any rational person does.” He explains how Reg E created a privately-administered legal system processing over 100 million complaints annually—dwarfing the formal U.S. court system—and why banks are now trying to avoid these obligations for Zelle's nine figure fraud problem.
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Full transcript available here: www.complexsystemspodcast.com/the-magic-spell-reg-e/

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Sponsors: MongoDB & Framer
Tired of database limitations and architectures that break when you scale? MongoDB is the database built for developers, by developers: ACID compliant, Enterprise-ready, and fluent in AI. Start building faster at mongodb.com/build

Building and maintaining marketing websites shouldn’t slow down your engineers. Framer gives design and marketing teams an all-in-one platform to ship landing pages, microsites, or full site redesigns instantly—without engineering bottlenecks. Get 30% off Framer Pro at framer.com/complexsystems.

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Links:

• Bits about Money,  One Regulation E, Two Very Different Regimes
• Full version of "Doesn't Matter, That's Reg E": https://suno.com/song/173bbd67-92f7-4868-930f-efeca4b373c0

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Timestamps:

(00:00) Introduction
(02:46) These newfangled computers might steal our money
(12:45) The contractual liability waterfall in card payments
(20:35) Sponsors: MongoDB and Framer
(22:23) The contractual liability waterfall in card payments (continued)
(23:47) Enter Zelle
(25:46) Zelle is an enormous fraud target
(32:23) Banks may attempt to extend the Zelle precedent
(35:02) Reg E encompasses almost every technology which exists and many which don't yet

Our annual year-in-review episode covers some recurring themes from 2025 and some behind-the-curtains discussion of running a podcast. Patrick McKenzie (patio11) sits down with producer Sammy Cottrell to discuss the most popular episodes of the year,  the impact of AI coding tools, the challenges of video podcasting, Sammy's role as a "fixer" finding guests, and much more.
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Full transcript available here: www.complexsystemspodcast.com/2025-in-review-with-sammy-cottrell/

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Sponsor:

Framer is a design and publishing platform that collapses the toolchain between wireframes and production-ready websites. Design, iterate, and publish in one workspace. Start free at framer.com/design with code COMPLEXSYSTEMS for a free month of Framer Pro.

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Timestamps:

(00:00) Introduction

(01:38) Launching video podcasts this year

(02:52) AI ethics and risk discussions

(04:29) Supporting LessWrong and LightHaven

(07:24) Adventures in AI-assisted hobbies

(12:38) Most popular episodes of the year

(19:45) Sponsor: Framer

(20:52) Popular episodes (continued)

(29:06) Setting up a podcast studio at Lighthaven

(32:31) Internal company podcasts

(38:03) Year in review and investigative journalism

(43:02) Creating Isekai

(49:13) Wrap

For this week's holiday-inspired Complex Systems, Patrick reads his essay from Bits about Money on the gift card paradox: a legitimate payments rail, yet also a primary vector for fraud that leaves victims without recourse.
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Full transcript available here: www.complexsystemspodcast.com/gift-cards-and-the-fraud-supply-chain/

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Sponsors: Givewell & Framer 

Support proven charities that deliver measurable results and learn how to maximize your charitable impact with GiveWell. Go to givewell.org, pick “Podcast” and enter Complex Systems at checkout.

Framer is a design and publishing platform that collapses the toolchain between wireframes and production-ready websites. Design, iterate, and publish in one workspace. Start free at framer.com/design with code COMPLEXSYSTEMS for a free month of Framer Pro.
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Links:

• Bits about Money, Gift cards accountability sink https://www.bitsaboutmoney.com/archive/gift-card-accountability-sink/
• Global China Puise, Moving Bricks https://globalchinapulse.net/moving-bricks-money-laundering-practices-in-the-online-scam-industry/ 

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Timestamps:
(00:00) Intro
(04:02) Most businesses do not run their own gift card programs
(06:40) Sponsors: Givewell and Framer
(09:00) Most businesses do not run their own gift card programs (part 2)
(10:27) Gift cards are not regulated like other electronic payments instruments
(12:07) Why do we choose this difference in regulation?

In this episode, Patrick McKenzie (patio11) walks through how perpetual futures work, from funding rates to liquidations to the surprise of automatic deleveraging. Perps are the dominant trading mechanism in crypto (6-8X larger than spot volume) and exist primarily to let exchanges and market makers run casinos more capital-efficiently. He explains why this intellectually interesting innovation probably won't escape crypto, despite what crypto enthusiasts might expect.
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Full transcript available here: www.complexsystemspodcast.com/understanding-perpetual-futures/

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Sponsor: Framer is a design and publishing platform that collapses the toolchain between wireframes and production-ready websites. Design, iterate, and publish in one workspace. Start free at framer.com/design with code COMPLEXSYSTEMS for a free month of Framer Pro.

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Links:

• Bits about Money, Perpetual futures, explained www.bitsaboutmoney.com/archive/perpetual-futures-explained/ 

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Timestamps:
(00:00) Intro
(02:36) Beginning with the problem
(06:49) Perps predate crypto but found a home there
(08:19) Multiple settlements a day
(10:30) Convergence in prices via the basis trade
(13:44) Sponsor: Framer
(15:11) Leverage and liquidations
(18:46) We have altered the terms of your unregulated futures investment contract
(21:50) An aside about liquidations
(25:14) Will crypto successfully "export" perps

In this episode, Patrick McKenzie (patio11) is joined by Ben Reinhardt, founder of Speculative Technologies, to examine how science gets funded in the United States and why the current system leaves much to be desired. They dissect the outdated taxonomy of basic, applied, and development research, categories encoded into law that fail to capture how actual breakthrough science happens.
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Full transcript available here:
www.complexsystemspodcast.com/the-economics-of-discovery-with-ben-reinhardt/

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Sponsors: GiveWell & Framer

Support proven charities that deliver measurable results and learn how to maximize your charitable impact with GiveWell. First-time donors can go to givewell.org, pick “Podcast” and enter COMPLEXSYSTEMS at checkout to get $100 matched.

Framer is a design and publishing platform that collapses the toolchain between wireframes and production-ready websites. Design, iterate, and publish in one workspace. Start free at framer.com/design with code COMPLEXSYSTEMS for a free month of Framer Pro.

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Links:

Speculative Technologies: https://spec.tech 

Ben Reinhardt's website: https://benjaminreinhardt.com 

Bits About Money: https://www.bitsaboutmoney.com/ 

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Timestamps:

(00:00) Intro
(00:26) Understanding focused research organizations (FROs)
(01:52) The evolution of science funding
(03:59) Taxonomy of research: basic, applied, and development
(06:14) Challenges in science funding and research
(08:12) The role of process knowledge in research
(18:52) The bureaucracy of tech transfer offices
(20:00) Sponsors: GiveWell & Framer
(22:33) Critique of tech transfer offices
(25:20) The burden of bureaucracy on researchers
(44:34) Emerging solutions and optimism in research
(46:58) Wrap

Why do billions of dollars of stock trade hands based on napkin math and vibes? Billy Gallagher, CEO of Prospect and former Rippling employee, joins Patrick McKenzie (patio11) to walk through the information asymmetry that costs less-sophisticated employees massive amounts of money. From understanding when to early exercise options to navigating 83B elections and tender offers, they discuss the critical decisions that have a shot clock ticking the day you sign your offer letter.

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Full transcript available here: www.complexsystemspodcast.com/understanding-equity-at-tech-companies/

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Sponsor: Framer is a design and publishing platform that collapses the toolchain between wireframes and production-ready websites. Design, iterate, and publish in one workspace. Start free at framer.com/design with code COMPLEXSYSTEMS for a free month of Framer Pro.
–

Links:

• Prospect: www.joinprospect.com/

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Timestamps:
(00:00) Intro

(00:44) Billy's professional journey

(01:07) Equity management challenges

(02:29) The importance of equity compensation

(04:53) Equity grant structures in startups

(06:09) Understanding vesting terms

(07:09) The value of equity over time

(08:48) The myth of options as lottery tickets

(11:23) Career tailwinds from startup experience

(14:25) Breaking into the tech industry

(15:16) The role of equity in compensation

(17:49) Employee equity plans and dilution

(19:59) Sponsor: Framer

(21:06) Stock options vs. RSUs

(21:55) The decision to exercise options

(27:11) Tax implications of exercising options

(33:03) The role of HR in equity management

(36:14) Bootleg spreadsheets and vibes-based investing

(38:09) Navigating tax complexities in different scenarios

(41:31) The importance of extended exercise windows

(44:18) Challenges with tax residency and remote work

(49:43) The role of accountants in managing equity

(53:41) Understanding the 83(b) election and QSBS

(01:01:03) Tender offers and secondary sales

(01:08:38) Strategies for exercising and selling options

(01:12:28) Navigating financial decisions in startups

(01:16:59) Wrap

Patrick McKenzie (patio11) reads his essay on title insurance, a service designed to never be performed with a "laughably low" 5% loss ratio compared to 50-80% for almost all types of insurance. The typical American moves every seven to eight years, paying a $500 annual tax for basically no good or service. This is due to a quirk about how America records real estate ownership: it mostly doesn’t. Confused? Welcome to the joyous anarchy that is American real estate.
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Full transcript available here: www.complexsystemspodcast.com/the-4-000-insurance-policy-designed-to-never-pay-out/

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Sponsor: Framer is a design and publishing platform that collapses the toolchain between wireframes and production-ready websites. Design, iterate, and publish in one workspace. Start free at framer.com/design with code COMPLEXSYSTEMS for a free month of Framer Pro.

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Links:

• Bits about Money, Working title (insurance) https://www.bitsaboutmoney.com/archive/working-title-insurance/

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Timestamps:
(00:00) Intro
(01:59) What is "title," anyway?
(02:48) Distributed versus centralized database design in property rights
(04:50) A quick digression for privacy-minded buyers
(08:21) High confidence and complete confidence are different
(11:28) Title insurance and title searches
(14:33) One very quirky risk transfer and a statistical artifact
(19:14) How title insurance is sold
(20:03) Sponsor: Framer
(21:34) How title insurance is sold (cont’d)
(23:36) Is there anything to be done here?
(25:47) Potential innovations in title insurance

Patrick McKenzie (patio11) reads his Bits about Money essay on deposit insurance, explaining this critical financial infrastructure, with some thoughts on its performance during 2023. He covers what deposit insurance actually covers (and critically, what it doesn't), how fintech users often misunderstand their exposure to counterparty risk, and the anatomy of bank failures. This is infrastructure you rely on as much as electricity: ubiquitous, critical, hopefully invisible, and worth understanding before it matters again.
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Full transcript available here: www.complexsystemspodcast.com/how-deposit-insurance-actually-works/

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Sponsor: Framer is a design and publishing platform that collapses the toolchain between wireframes and production-ready websites. Design, iterate, and publish in one workspace. Start free at framer.com/design with code COMPLEXSYSTEMS for a free month of Framer Pro.
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Links:

• Bits about Money, https://www.bitsaboutmoney.com/archive/deposit-insurance/ 

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Timestamps:
(00:00) Intro
(03:10) The covered peril
(07:07) Anatomy of a bank failure
(12:55) Keeping your bank hydrated
(19:58) Sponsor: Framer
(23:20) Orderly bank failures
(28:25) The cost of insurance
(30:15) The ultimate backstop
(31:48) Deposit insurance as ubiquitous infrastructure

In this episode, Patrick McKenzie reads his essay about the financial infrastructure that makes buying windows painless. When a window installer can originate, underwrite, and fund a $25,000 loan in 15 minutes before leaving your house, it's because four parties—window companies, facilitating platforms, specialized banks, and capital providers—have built a system that actually works. Patrick explains how modern consumer lending learned from 2008 to create better underwriting, clearer compliance, and properly distributed risk, all in service of enabling commerce in the real economy.
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Full transcript available here: www.complexsystemspodcast.com/home-improvement-lending/

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Sponsor: Framer is a design and publishing platform that collapses the toolchain between wireframes and production-ready websites. Design, iterate, and publish in one workspace. Start free at framer.com/design with code COMPLEXSYSTEMS for a free month of Framer Pro.

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Links:

• Bits about Money: https://www.bitsaboutmoney.com/archive/window-modern-loan-origination/ 

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Timestamps:

(00:00) Intro
(02:46) Why not just have banks loan money for home improvement?
(06:43) Modern installment loan origination as a service
(09:58) Sponsor: Framer
(11:09) Modern installment loan origination as a service (part 2)
(15:17) What's the actual product offered?
(19:03) How does this pie get divvied up?
(24:12) Is this unsecured lending?
(26:12) Should we be happy this Rube Goldberg machine exists?