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: Mercury
This episode is brought to you by Mercury, the fintech trusted by 200K+ companies — from first milestones to running complex systems. Mercury offers banking that truly understands startups and scales with them. Start today at Mercury.com
Mercury is a financial technology company, not a bank. Banking services provided by Choice Financial Group, Column N.A., and Evolve Bank & Trust; Members FDIC.

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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: Mercury
(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?

Patrick McKenzie (@patio11) shares his remarks to the Bank of England on critical vulnerabilities in financial infrastructure. Drawing from the July 2024 CrowdStrike outage which brought down teller systems at major US banks, Patrick discusses how regulatory guidance inadvertently created dangerous software monocultures. He also examines the stablecoin market, its impressive growth, and the elephant tethered to the room. He also delivers a message from Silicon Valley to other centers of power on the urgent necessity of waking up regarding AI, which almost the entire world currently far underrates.
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Full transcript available here: www.complexsystemspodcast.com/talking-to-the-bank-of-england/

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Sponsor: Mercury
This episode is brought to you by Mercury, the fintech trusted by 200K+ companies — from first milestones to running complex systems. Mercury offers banking that truly understands startups and scales with them. Start today at Mercury.com
Mercury is a financial technology company, not a bank. Banking services provided by Choice Financial Group, Column N.A., and Evolve Bank & Trust; Members FDIC.

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Links:

• The Bank of England: https://www.bankofengland.co.uk/ 
• Bits about Money, Why the CrowdStrike bug hit banks hard: https://www.bitsaboutmoney.com/archive/crowdstrike-bug-hit-banks-hard/ 
• Scaling Laws for Neural Language Models" by Kaplan et al: https://arxiv.org/pdf/2001.08361 
• Stripe Annual Letter 2024: https://stripe.com/annual-updates/2024 

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Timestamps:

(00:00) Intro
(01:48) The importance of implementation-level understanding
(03:00) Single points of failure
(04:25) Can a 22-year-old engineer close all the banks?
(05:18) The CrowdStrike incident: A case study
(08:34) The culture of "shut up and shuffle"
(09:54) Blameless postmortems
(12:25) What actually happened during CrowdStrike
(18:01) Five whys: Root cause analysis
(19:03) How software monocultures are created
(22:54) Understanding endpoint monitoring software
(25:25) Distributed systems and the nature of CrowdStrike
(31:22) The economics of software monocultures
(33:29) Why wasn't there defense in depth?
(37:05) Why was recovery so difficult?
(40:32) The domino effect across financial institutions
(43:36) What went right: Electronic systems remained up
(45:10) This was a near miss
(49:29) Potential policy responses
(54:03) Switching gears: Stablecoins
(01:01:37) The elephant in the room: Tether
(01:15:32) Who loses if Tether implodes?
(01:16:59) AI and the future of trading
(01:26:47) AI risks in the trading space
(01:30:41) Closing

Patrick McKenzie (patio11) is joined again by Ricki Heicklen to discuss Metagame 2025, a conference where 250 attendees were divided into Purple and Orange teams competing for territories across campus. Patrick built a complete roguelike RPG in 25 days using LLMs, discovering that providing minimal world-building context transformed generic fantasy outputs into emotionally resonant storytelling. They discuss the power and responsibility of game designers, how games create pedagogical experiences that traditional teaching cannot, and what happens when the line between player identity and character identity starts to blur.

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Full transcript available here:
www.complexsystemspodcast.com/narrative-mastery-character-bleed-in-games-with-ricki-heicklen/

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Sponsor: Mercury
This episode is brought to you by Mercury, the fintech trusted by 200K+ companies — from first milestones to running complex systems. Mercury offers banking that truly understands startups and scales with them. Start today at Mercury.com
Mercury is a financial technology company, not a bank. Banking services provided by Choice Financial Group, Column N.A., and Evolve Bank & Trust; Members FDIC.

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Links:

• Metagame: https://www.metagame.games/

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Timestamps:
(00:00) Intro

(00:25) Using games to teach trading

(00:57) Game design conference insights

(01:12) Ricki’s personal journey into game design

(02:41) Exploring different game types

(03:35) Challenges in game design

(04:44) Metagame conference overview

(08:23) Escape room design experience

(11:25) Building a rogue-like game

(15:35) Metagame mechanics and challenges

(18:25) Sponsor: Mercury

(19:37) Metagame mechanics and challenges (part 2)

(31:10) Event management and lessons learned

(44:00) Game mechanics and player roles

(45:09) Complex encounters and Plague Town

(48:44) Moral choices and player decisions

(50:59) Game design and narrative impact

(55:36) Character bleed and real-world influence

(01:02:00) Game design challenges and player agency

(01:24:16) Community and player interaction

(01:30:04) Wrap

Patrick McKenzie (patio11) is joined by Oliver Habryka, who runs Lightcone Infrastructure—the organization behind both the LessWrong forum and the Lighthaven conference venue in Berkeley. They explore how LessWrong became one of the most intellectually consequential forums on the internet, the surprising challenges of running a hotel with fractal geometry, and why Berkeley's building regulations include an explicit permission to plug in a lamp. The conversation ranges from fire codes that inadvertently shape traffic deaths, to nonprofit fundraising strategies borrowed from church capital campaigns, to why coordination is scarcer than money in philanthropy.
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Full transcript available here: www.complexsystemspodcast.com/bits-and-bricks-oliver-habryka/
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Sponsor: Mercury
This episode is brought to you by Mercury, the fintech trusted by 200K+ companies — from first milestones to running complex systems. Mercury offers banking that truly understands startups and scales with them. Start today at Mercury.com
Mercury is a financial technology company, not a bank. Banking services provided by Choice Financial Group, Column N.A., and Evolve Bank & Trust; Members FDIC.
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Links:

• Lightcone Infrastructure: https://www.lightconeinfrastructure.com/ 
• Lighthaven: https://www.lighthaven.space/
• LessWrong: https://www.lesswrong.com/ 

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Timestamps:
(00:00) Intro

(01:08) The origins and evolution of LessWrong

(03:54) Challenges of running an online forum

(05:57) Reviving LessWrong

(14:51) The unique structure of Lighthaven

(17:35) The complexities of conference venues

(19:14) Sponsor: Mercury

(20:14) The realities of conference planning

(25:32) Challenges of maintaining Lighthaven

(29:54) Navigating permits and regulations

(37:02) Impact of fire code regulations on traffic fatalities

(39:06) Economic analysis of safety regulations

(41:39) Housing policy and construction in Berkeley

(43:30) Fundraising challenges in the nonprofit sector

(46:44) Effective altruism and fundraising dynamics

(54:20) Lessons from religious fundraising practices

(01:05:36) Reflections on fundraising

(01:13:26) Wrap

Patrick McKenzie is joined by Clara Collier, editor and publisher of Asterisk Magazine, to discuss how we create institutions that bend towards truth. Clara explains why she launched a quarterly print magazine in the Internet age. She traces how 19th century German universities invented the modern infrastructure for rewarding knowledge production and training researchers at scale, and where our public science communication falls short of that heritage. The conversation examines why institutional trust has declined, particularly around science communication and public health, and whether we can rebuild trust in knowledge-producing institutions.
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Full transcript available here: www.complexsystemspodcast.com/building-institutions-that-bend-towards-truth-with-clara-collier-of-asterisk-magazine/
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Sponsor: Mercury
This episode is brought to you by Mercury, the fintech trusted by 200K+ companies — from first milestones to running complex systems. Mercury offers banking that truly understands startups and scales with them. Start today at Mercury.com
Mercury is a financial technology company, not a bank. Banking services provided by Choice Financial Group, Column N.A., and Evolve Bank & Trust; Members FDIC.
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Links:

• Asterisk Magazine: https://asteriskmag.com

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Timestamps:
(00:00) Intro

(00:44) The birth of Asterisk Magazine

(02:58) Challenges of print media

(04:41) The media landscape and Twitter's influence

(06:03) The art of long-form writing

(13:08) Editing and copy editing in magazines

(19:33) Sponsor: Mercury

(20:45) Editing and copy editing in magazines (part 2)

(25:24) AI in writing and editing

(30:33) The origins of research universities

(34:19) The flawed promotion system in academia

(34:40) The rise of research institutions

(35:32) The birth of modern research culture in Germany

(36:27) The global influence of German universities

(40:13) The American university system vs. German system

(41:50) The role of public and private partnerships in science

(42:47) Challenges in science communication

(56:22) The impact of COVID-19 on public trust in science

(01:06:42) Historical perspectives on medical trust

(01:11:15) Wrap

Patrick McKenzie is joined by Chris Best, CEO of Substack, to discuss how the platform created new economic infrastructure for independent media. They explore Substack's evolution from a simple newsletter tool to a full media network, the revenue guarantee program that attracted prominent writers, and the company's principled stance on press freedom during the "cancel culture" years. Chris explains how subscription-based business models create better incentive alignment than attention-based advertising, and discusses new features like AI-powered video production and Substack Defender, their legal protection program for writers facing lawsuits.
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Full transcript available here: www.complexsystemspodcast.com/how-blogging-went-legit-with-substack-ceo-chris-best/

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Sponsor: Mercury
This episode is brought to you by Mercury, the fintech trusted by 200K+ companies — from first milestones to running complex systems. Mercury offers banking that truly understands startups and scales with them. Start today at Mercury.com
Mercury is a financial technology company, not a bank. Banking services provided by Choice Financial Group, Column N.A., and Evolve Bank & Trust; Members FDIC.
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Links:

• Chris Best’s Substack: https://cb.substack.com/

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Timestamps:

(00:00) Intro

(00:53) The evolution of online publishing

(01:20) Substack's business model

(02:05) Challenges and opportunities in media

(03:47) The role of engagement in media

(06:03) The birth of Substack

(08:58) Making paid newsletters accessible

(10:54) Revenue guarantees and early success

(13:05) Substack's impact on journalism

(17:59) Freedom of the press and Substack's stance

(19:24) Sponsor: Mercury

(20:40) Twitter's influence on journalism

(24:09) Substack's role in modern media

(26:04) The impact of cancel culture on journalism

(26:53) The evolution of blogging and discourse

(30:53) Substack's expansion into podcasts and video

(32:42) AI and the future of media production

(38:20) Substack defender

(42:22) The growing network and future of Substack

(46:03) Wrap

Patrick McKenzie is joined again by Kelsey Piper, who has co-founded "The Argument" to revive principled liberal discourse after witnessing how coordinated social media campaigns replaced substantive disagreement in newsrooms. Their conversation traces this institutional breakdown from media to government, examining how DOGE's spreadsheet-driven governance nearly destroyed PEPFAR, America's most successful foreign aid program that had driven infant coffin manufacturers out of business across Africa. The discussion ultimately argues that rebuilding both effective journalism and competent governance requires returning to the hard work of engaging with ground-level reality rather than managing online narratives.

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Full transcript available here: www.complexsystemspodcast.com/prestige-media-new-media-with-kelsey-piper/
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Sponsor: 

This episode is brought to you by Mercury, the fintech trusted by 200K+ companies — from first milestones to running complex systems. Mercury offers banking that truly understands startups and scales with them. Start today at Mercury.com

Mercury is a financial technology company, not a bank. Banking services provided by Choice Financial Group, Column N.A., and Evolve Bank & Trust; Members FDIC.

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Links:

• The Argument https://www.theargumentmag.com/

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Timestamps:

(00:00) Intro

(00:31) The Argument

(03:19) Challenges in modern journalism

(06:42) The impact of social media on discourse

(13:37) The role of Substack and independent media

(20:13) Sponsor: Mercury

(21:30) The role of Substack and independent media (part 2)

(30:59) The PEPFAR program and its importance

(44:01) Impact of US aid cuts on global mortality

(45:25) Substitution efforts and their limitations

(47:54) PEPFAR's partial continuation and challenges

(51:21) Consequences of administrative decisions

(54:28) Elon Musk's influence and government actions

(01:00:14) Challenges in government accountability

(01:15:47) Reforming administrative processes

(01:24:45) The role of community input in development

(01:28:28) The power of constituent voices

(01:30:15) Wrap

Patrick McKenzie (patio11) is joined by Emmett Shear, co-founder of Twitch, former interim CEO of OpenAI, who now runs Softmax AI alignment. Emmett argues that current AI safety approaches focused on "systems of control" are fundamentally flawed and proposes "organic alignment" instead—where AI systems develop genuine care for their local communities rather than following rigid rules. 
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Full transcript available here: www.complexsystemspodcast.com/ai-alignment-with-emmett-shear/
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Sponsor: Mercury
This episode is brought to you by Mercury, the fintech trusted by 200K+ companies — from first milestones to running complex systems. Mercury offers banking that truly understands startups and scales with them. Start today at Mercury.com
Mercury is a financial technology company, not a bank. Banking services provided by Choice Financial Group, Column N.A., and Evolve Bank & Trust; Members FDIC.
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Links:

• Softmax - https://www.softmax.com/

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Timestamps:
(01:26) Understanding AI alignment
(04:42) The concept of universal constructors
(13:45) AI's rapid progress and practical applications
(19:08) Sponsor: Mercury
(20:19) AI's impact on work
(34:59) AI's sensory and action space
(42:10) User intent vs. user request
(44:35) The illusion of a perfect AI
(49:57) Causal emergence and system dynamics
(55:19) Reflective and intentional alignment
(01:01:08) Engineering challenges in AI alignment
(01:04:15) The future of AI
(01:26:40) Wrap

Patrick McKenzie (patio11) is joined by Will Wilson, CEO of Antithesis, to discuss the evolution of software testing from traditional approaches to cutting-edge deterministic simulation. Will explains how his team built technology that creates "time machines" for distributed systems, enabling developers to find and debug complex failures that would be nearly impossible to reproduce in traditional testing environments. They explore how this approach scales from finding novel bugs in Super Mario Brothers to ensuring the reliability of critical financial and infrastructure systems, and discuss the implications for a future where AI writes increasingly more code.
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Full transcript available here: www.complexsystemspodcast.com/software-testing-with-will-wilson/

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Sponsor: This episode is brought to you by Mercury, the fintech trusted by 200K+ companies — from first milestones to running complex systems. Mercury offers banking that truly understands startups and scales with them. Start today at Mercury.com
Mercury is a financial technology company, not a bank. Banking services provided by Choice Financial Group, Column N.A., and Evolve Bank & Trust; Members FDIC.

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Recommended in this episode:

• Antithesis: https://antithesis.com/

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Timestamps:
(00:00) Intro
(01:23) Database scaling and the CAP theorem
(08:13) Abstraction layers and hardware reality
(15:28) The problem with traditional testing
(19:43) Sponsor: Mercury
(23:16) The fuzzing revolution
(30:35) Deterministic simulation testing
(42:36) Real-world testing strategies
(47:22) Introducing Antithesis
(59:23) The CrowdStrike example
(01:01:15) Finding bugs in Mario
(01:07:37) Property-based vs conventional testing
(01:09:51) The future of AI-assisted development
(01:14:51) Wrap

Patrick McKenzie (patio11) is joined by Bean, a pseudonymous defense industry expert, to explore the intellectual crossovers between military and civilian domains. The conversation reveals how the defense industry's fundamental constraint of having only one customer (a monopsony) creates entirely different incentives than tech, leading to conservatism and 30-50 year product lifecycles. Bean argues that drones are largely modern iterations of cruise missiles we've had since the 1950s, and explains why current anti-drone defenses make swarm attacks less threatening than headlines suggest.
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Full transcript available here: www.complexsystemspodcast.com/defense-with-bean-of-naval-gazing/

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Sponsor:
This episode is brought to you by Mercury, the fintech trusted by 200K+ companies — from first milestones to running complex systems. Mercury offers banking that truly understands startups and scales with them. Start today at Mercury.com

Mercury is a financial technology company, not a bank. Banking services provided by Choice Financial Group, Column N.A., and Evolve Bank & Trust; Members FDIC. 
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Recommended in this episode:

• Naval Gazing: https://www.navalgazing.net/

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Timestamps:

(00:00) Intro

(00:29) The overlap between tech and defense

(01:35) Operations research in World War II

(02:55) Mathematical insights and military strategies

(05:28) The role of operations research in modern warfare

(16:59) Tech and defense (Part 1)

(19:48) Sponsor: Mercury

(21:00) Tech and defense (Part 2)

(26:07) Economics behind the defense industry

(32:07) SpaceX's early challenges and achievements

(33:00) The Super Hornet development story

(34:39) Military procurement lessons

(37:42) Aerospace industry retention rates

(38:42) Lockheed Martin's dominance and supply chain

(40:55) Drone technology and military applications

(46:53) Anti-drone defenses and future warfare

(48:01) Naval warfare and historical perspectives

(01:01:03) Wrap