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Meet the college dropout who invested in Figma–and 22 other Thiel Fellows

It’s fine, he said so.

Browder recently opined that sleep is better in phases, which is also how most people imagine success as a venture capitalist. But just as Browder skips some sleep phases, he has also skipped some phases in becoming one of the top investors of note today in the world of early-stage startups.

The argument that Browder has done this not by hitting home runs but by bunting, as he was born somewhere between third base and home plate, is a reductive one. Yes, Joshua is the son of notable investor and Putin archnemesis Bill Browder–yet the disruptive path he chose for himself far belies the inherent advantages (and dangers) of his surname. 

Joshua is a college dropout. His late registration became an un-registration when he decided to leave Stanford to become a Thiel Fellow. In exchange for $100,000 and a priceless network, Thiel Fellows are incented to drop out of school to build real-world startup businesses. Twelve years after Peter Thiel launched his eponymous program, it’s more popular than ever–and significantly harder to get into than any of the hyper-elite colleges the Thiel Fellows leave to start building businesses.  

I had Joshua on my podcast last year, where we focused on his work as the founder of DoNotPay, the world’s first robot lawyer. DoNotPay has changed the world of consumer-focused legal technology from its launch six years ago. What started as a way for teenage Joshua to get out of his many London parking tickets, has grown to an uber-popular platform to “fight corporations, beat bureaucracy, and sue anyone at the press of a button.”

So while it was no surprise to me that Browder used his success at DNP as a springboard to launch his own venture capital fund, Browder Capital, how quickly he has managed to go from the crowded on-ramp to the Silicon Valley fast lane has been astonishing to witness. Browder has been remarkably successful in translating his own experience in building, growing, and now scaling DNP to become a trusted advisor and mentor to the founders in whom he invests. 

Browder Capital is an investor in Figma, a company that on Thursday announced it had been acquired for $20 billion by Adobe. The move allows Figma to retain its unique brand, with founder Dylan Field still firmly at the helm for now, but with a reporting line to Adobe senior management. The acquisition deeply strengthens Adobe’s position in the online collaboration space as more and more of us choose to work globally and remotely.

I talked to Browder on Friday morning about the Figma exit and the evolution of his firm. I began by asking what he would say to people who argue that his investing in so many Thiel Fellows is an unfair advantage since he’s such a deep insider. Browder has invested in 23 Thiel Fellows to date–more than 10% of all the young people who have ever participated in the program. 

“I think investing in so many Thiel Fellows is part of the intentional design of the fellowship. For those who argue that it’s a design flaw, I’d encourage them to spend more time looking at the fellowship and join in on some of the early investment rounds.”

Browder has truly excelled at leveraging ecosystems around him, so creating new ecosystems through Browder Capital was a natural progression of his work. 

“To be honest, before I dropped out of Stanford, I was a bit uninspired with what I saw. Many of my classmates just wanted to go to work for Google. I wanted to build things and be surrounded by people who felt like they had nothing to lose and would go all in to create unique, meaningful things. I look for more of these people every day so I can invest in them.”

Browder has always believed that especially in very early-stage investments, it’s all about identifying the right founders. So when I inquired as to what drew Browder to Figma, it brought a very succinct answer:

“Dylan.”

While Browder’s investment in Figma was relatively recent and wasn’t part of the seed round, his long relationship with Dylan Field made it easy to invest.

“I’ve never met someone so on the ball, yet humble, as Dylan. While I’ve met lots of successful tech people, Dylan’s truly rare humility was a big deal for me. We spent time together in L.A. interviewing candidates for the Thiel Fellowship and I left so inspired by him. I knew I wanted to back anything he believed in.”

Browder is drawn to people with a genuinely profound curiosity and the drive and energy to create things from that place. As he told me, “Nerdy people. I’m incessantly looking for the best nerds.”

When you’re only 25 and already a Silicon Valley pro, the lessons you learn as an investor are exponential. Life comes at you fast and the most successful people have to internalize those lessons even faster to stay in the game. Browder says he will always specialize in ultra-young founders who are 16-25 and are often high school and college dropouts. 

“I always bet on the founder, which was part of my lesson learned with Figma. It took Dylan a decade to build his idea into this remarkably successful iteration of Figma. So if I can continue to find young technical geniuses who are also outstanding people, I think the future is very, very bright.”

This is echoed by the founders in whom Browder invests his money and time. Adam Guild, another Thiel Fellow and founder of Owner.com, told me he sees a new generation of investors in Browder–one that is far more active than activist:

“Taking investment from Browder Capital was one of the best decisions we ever made. Josh invested in us since the very beginning, when I was only 19 and has been our most helpful investor relative to check size. He responds to text messages at all hours of the night. Three years later, we have gone on to raise over $25 million.”

When Browder thinks ahead to what he can accomplish as an investor over the next decade and what kind of mark he wants to make on the industry and the world, it all goes back to his early-stage thesis. 

“Young people are the future and I want to give many of them the opportunity I’ve had to be in the center of the Valley and have the right introductions and networks to succeed. I want to tell people that they’re never too young to start a successful company and that they shouldn’t listen to anyone who tells them no.”

Browder has a piece of parting advice for those looking to get into the startup world. 

“Young people need to stop believing that they need to work at Stripe for 10 years to start a company. They just need to start a company.”

Aron Solomon, JD, is the chief legal analyst for Esquire Digital, the editor of Today’s Esquire, and a Pulitzer Prize-nominated writer. He has taught entrepreneurship at McGill University and the University of Pennsylvania and was elected to Fastcase 50, recognizing the top 50 legal innovators in the world.

The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not reflect the opinions and beliefs of Fortune.

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Wall Street hit with $2 billion in fines over employees using WhatsApp and other unauthorized messaging apps

U.S. regulators reached settlements with a dozen banks in a sprawling probe into how global financial firms failed to monitor employees’ communications on unauthorized messaging apps, bringing total penalties in the matter to more than $2 billion. 

The Securities and Exchange Commission announced $1.1 billion in fines and the Commodity Futures Trading Commission disclosed $710 million in penalties in separate statements Tuesday. Those levies — against firms including Bank of America Corp., Citigroup Inc. and Goldman Sachs Group Inc. — combined with JPMorgan Chase & Co.’s $200 million in fines from December, bring the total to $2.01 billion, making them the biggest penalties ever against US banks for record-keeping lapses. 

“Finance, ultimately, depends on trust. By failing to honor their record-keeping and books-and-records obligations, the market participants we have charged today have failed to maintain that trust,” SEC Chair Gary Gensler said in the agency’s statement. “As technology changes, it’s even more important that registrants appropriately conduct their communications about business matters within only official channels, and they must maintain and preserve those communications.”

Tuesday’s announcements cap months of discussions between regulators and the banks. Morgan Stanley said in July it was nearing a settlement that would see it pay a $200 million fine, with other major banks also disclosed setting aside similar figures as part of their second-quarter results without specifying the reason.

JPMorgan had been the only bank until now to reach a settlement with the regulators, and was the first to report the fines, in December. Even managing directors and other senior supervisors at the largest US bank had skirted regulatory scrutiny by using services such as WhatsApp or personal email addresses for work-related communication, regulators said at the time.

Finance firms are required to scrupulously monitor communications involving their business to head off improper conduct. That system, already challenged by the proliferation of mobile-messaging apps, was strained further as firms sent workers home shortly after the start of the Covid-19 outbreak.

In the SEC probe, eight firms agreed to penalties of $125 million each: Barclays Plc, Bank of America, Citigroup, Credit Suisse Group AG, Deutsche Bank AG, Goldman Sachs, Morgan Stanley and UBS Group AG. Jefferies Financial Group Inc. and Nomura Holdings Inc. agreed to pay $50 million apiece, and Cantor Fitzgerald LP agreed to pay $10 million.

Bank of America had the biggest CFTC penalty, at $100 million, followed by Barclays, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, Morgan Stanley and UBS at $75 million each. Nomura was fined $50 million, Jefferies $30 million and Cantor Fitzgerald $6 million.

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Ray Dalio says the U.K.’s policies ‘suggest incompetence’ and warns other governments not to make the same mistakes

Ray Dalio added his name to a growing list of critics of the U.K.’s new spending plan, unveiled last week by Prime Minister Liz Truss and Chancellor of the Exchequer Kwasi Kwarteng.

The billionaire investor—who founded what is now the world’s largest hedge fund, Bridgewater Associates, in 1975—argued the plan’s aggressive tax cuts will raise the U.K. debts to an unsustainable level and cripple the pound.

“Investors and policymakers: Heed the lesson of the UK’s fiscal blunder,” Dalio wrote in a Tuesday tweet. “The panic selling you are now seeing that is leading to the plunge of UK bonds, currency, and financial assets is due to the recognition that the big supply of debt that will have to be sold by the government is much too much for the demand.”

On Monday, in response to Truss’ new spending plan, the U.K.’s bond market experienced the largest one-day sell-off in its history, pushing the total losses in the country’s stock and bond markets since Truss’ appointment as prime minister on Sept. 5 to over $500 billion. Meanwhile, the pound sank to a record low of $1.05 against the U.S. dollar on Monday morning, and although it has since risen to $1.07, the currency remains near a 40-year low vs. the dollar. 

After the new Truss spending plan was announced, the U.K. Debt Management Office said that it will raise its debt issuance by 72.4 billion pounds for the current fiscal year to 234.1 billion pounds.

The new spending plan will also push the U.K.’s debt to GDP ratio to around 101%, the highest level of debt the U.K. has held since 1962, according to Deutsche Bank.

Deutsche Bank, UK Office of Debt Management

In Ray Dalio’s view, this rapid increase in debt, coupled with the lack of demand for the pound on the global stage, is a recipe for disaster.

“That makes people want to get out of the debt and currency. I can’t understand how those who were behind this move didn’t understand that. It suggests incompetence,” Dalio said. “Mechanistically, the U.K. government is operating like the government of an emerging country, it is producing too much debt in a currency that there is not a big world demand for.”

The investor went on to argue that this should be a teaching moment for governments around the world to not increase their debts to unsustainable levels.

“I hope, but doubt, that other policymakers who are doing similar things…will recognize that they are risking a similar outcome—and that investors will see this too,” he said.

Analysts are also worried that the U.K.’s new spending plan, which was designed to spur economic growth and help alleviate the effects of high energy prices in the short term, could end up exacerbating inflation in the U.K. overall. And consumer prices already jumped 9.9% from a year ago in August.

“The government is trying to balance support for consumers and businesses with measures that might trigger further inflation, whilst also trying to reinvigorate a stagflationary economy,” Giles Coghlan, chief market analyst at global Forex broker HYCM, told Fortune. “Such a large fiscal package could contribute to elevated prices in the medium to long term that could inflict further damage to an economy and currency that are already on their knees.” 

The potential inflationary impact of the new spending plan has increased calls for the Bank of England (BoE) to dramatically hike interest rates, with some economists even calling for the U.K.’s base interest rate to move from 2.25% to as high as 6% next year

That’s bad news for the U.K.’s homeowners. Monthly mortgage rates will increase immediately for 2 million people on tracker or variable interest rate plans if the BoE follows through with its next rate hike. And another 1.8 million homeowners with fixed-rate deals will also be forced to pay significantly higher rates next year, according to U.K. Finance.

With the U.K. facing more interest rate hikes ahead, rising government debts, a sinking pound, and a European energy crisis, Deutsche Bank’s chief economist, David Folkerts-Landau, said he now believes the country will experience a severe recession that lasts three to four quarters.

“We’re thinking in terms of a recession that will be deep and long,” he told Bloomberg on Tuesday. “It’s the price we have to pay for financial stability and for getting on the right track.”

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Artificial Intelligence: A.I. is solving traffic problems to get you where you’re going safely

“I haven’t met anyone that really loves traffic,” says Karina Ricks of the Federal Transit Administration.

Except, possibly, professionals like her who are tasked with reducing it.

Ricks has made her career out of caring about traffic patterns. Before her current role as the associate administrator for research, innovation, and demonstration at the FTA, she was the director of mobility and infrastructure for the City of Pittsburgh in Pennsylvania. She has spent countless hours thinking about cars, public transit, roads, and pedestrians—and how to make it all flow more smoothly.

“When you’re in the peak times for travel, when the system is so full, it only takes a small disruption to cause really big problems,” Ricks says. “The work is to quickly flag those disruptions and rapidly retool the system to operate around them.”

What Ricks aims to optimize affects anyone moving from point A to point B, especially in cities. She explained that congestion is the number one problem when it comes to traffic, and a common occurrence in metropolitan areas. Add to that the number of variables at any given time, including human operators of vehicles and geography, and it results in a mind-boggling puzzle to even attempt to solve.

If there were an easy way to reduce traffic, it would have been actioned in the past 50 years, she said. Instead, she, government organizations, and startups in the space, such as Lyt, are all looking at an immense amount of traffic data available—from traffic sensors to ride share data and even bike and scooter data from smartphones—and using it to inform decisions on how to get people to work, home, and the grocery store safely and quickly.

That solution involves artificial intelligence and machine learning.

“There are tasks that humans just aren’t good at that machinery is, and that’s recognizing patterns,” explains Tim Menard, founder and chief executive officer of Lyt, a software technology platform providing mobility solutions for cities. “A.I. is a great technology to use, because you’re looking at all parts of the system. You can start feeding it different information, and you can put that into a system that can make operational changes.”

Menard started Lyt after studying intelligent transportation systems for more than 13 years. His company uses vehicle data to solve traffic problems, especially when it comes to the efficiency of public transit options. For Menard, the end goal is to “make more cities equitable by making public transit reliable, predictable, and faster.”

Both Ricks and Menard believe that the way to reduce traffic is to get more people onto public transportation, such as buses, subways, and light rail systems. Public transportation is the safest surface transportation mode, with fewer injuries and fatalities. It’s also a speedier way to move a larger number of people.

Ricks explained that most of congestion is caused by “low-volume vehicles,” ie. single-occupant cars. Those drivers are human; some drive faster, some slower; some change lanes often, others stop abruptly when a traffic light flashes yellow before red. Because humans behave so differently, there is a level of unpredictability in the traffic system. Much of her work aims to make mass transit more enticing for commuters.

“You’re reducing the rate of crashes that might occur when you’re reducing the number of vehicles that are there,” Ricks added.

With that in mind, Menard started looking at the Internet of Things for his cloud platform, pulling data from smartphones, automotive sensors, public transportation logs, and delivery vehicles to understand traffic patterns at various times of the day as well as during special one-off events, such as a sports game at a local stadium. He said that the first hurdle was to operate from a place of known information rather than guessing; in the past, he explained, it took a human looking at a video screen for hours and hours to even begin to make an estimate on next steps.

He launched in San Jose, Calif., where for the past three years, he has collaborated with the city to optimize bus routes by 20%, thereby reducing fuel consumption by 14% and emissions at intersections by 12%. Using a predictive estimated time of arrival at each traffic light, his platform reduced the travel time between bus stops by optimizing bus lanes and traffic lights to ensure buses could move as effectively as possible without disrupting other traffic. He now works in other northern California cities, including additional Bay Area towns and Sacramento, as well as in the Pacific Northwest: Seattle and Portland, Ore.

Menard is also looking at bicycle and pedestrian traffic, something he says is of interest and priority to many transit authorities. He has worked to make bicycling safer by creating dedicated, curbed bike lanes with their own traffic signals synced with those of vehicle traffic to help avoid car-bicycle collisions. For pedestrians, Ricks explained that foot traffic uses sensors and adaptive controls to adjust settings in real time based on needs—a moment when the A.I. algorithm and real time data intersect.

Another benefit of A.I. technology for traffic patterns surrounds first responders. Menard employed machine learning to analyze data from emergency vehicles like ambulances and fire trucks to improve speed. He noted that in many urban environments, congestion and traffic patterns prohibit first responders from promptly arriving on scene or to a hospital with a life-or-death situation. In Sacramento, Calif., he tackled this problem.

“It was literally night and day better in under 15 minutes,” he said of taking a look at amassed data from all the relevant stakeholders in the city. There, he improved the slowest 10% of the emergency vehicles by more than 10 miles per hour, allowing them to arrive 70% faster on any response. Even the performing top 10% of vehicles saw an improvement of 6 miles per hour.

For every single-occupant car that swaps to public transit, there is one less vehicle on the road causing congestion. Menard regularly reminds people that when they are sitting in their car, stuck in traffic, they are surrounded by many other people doing the exact same thing. If they traded to a shared vehicle—a high-occupancy mode of transit—they may speed along very quickly.

But it’s always challenging to inspire commuters to change habits, so the new option needs to be compelling enough to motivate them to adjust the way they operate. “What you want in a transit system is to show up now [and] there’s a bus ready to get you in a timely fashion,” Ricks said. “We need to address traffic in order for transit to be that attractive alternative. There’s quite a bit of work to still do.”

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