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hey everybody welcome back to the all
in podcast besties i have reunited it's been a bestie summer chamoth how are
you doing you're back in america yes
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i am back in america back in america uh
feels great uh good summer yes i had uh
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seven weeks in italy it was really incredible what
is the vibe in italy post-pandemic obviously they
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had the the roughest of any nation i think
except for china and wuhan um with cover 19.
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how's the psyche there no it's incredible because
they're i mean they're so resilient they basically
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decided that they don't ever want to go through
it again so everybody wore a mask and um people
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socially distanced there's lots of dinners outside
no restaurants were really seating people indoors
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you'd walk into a store and you'd have to put some
you know purell on your hands and wear a mask and
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there was like you know 40 50 cases a day
and then i keep looking at the news when i
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was there 60 000 a day here i was it's it was
just really it was sad and then on top of that
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to see the riots the fires i mean there's a
you know it's been a disturbing summer here
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uh how are you doing david sachs you're
back in san francisco and uh you got to
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spend a little bit of time in an undisclosed
location as we we know from the last couple
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episodes of the podcast how is san francisco
right now how has your bestie summer been
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uh it's been great um yeah i was i guess i can
now disclose that my disclosed location was uh
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was mexico specifically cabo and that was it was
a great place to be for a couple of nobody cares
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yeah exactly um but actually um it it it was great
it was a great place to be in the early stages
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of the pandemic because everyone was wearing
masks you know they did take it really seriously
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and there were very few cases and seemed like it
was under control at least in the area i was and
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then um you know we came back to san francisco
for for school for for the kids school which
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um you know i'm not sure we have to be here but um
but that's that's yeah that's school actually open
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are they going to school or they keep pushing it
out two weeks like my kids are yeah it's we don't
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they're not going in person yet but i think they
keep trying to figure out when they're gonna be
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able to start doing that so it's all zoom based
right now yeah which means no learning right i
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mean do you think these kids are actually
learning on zoom or do you think it's just
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glorious a little bit i mean a little
bit i think it's it's it's difficult yeah we gave up on it and free burger are you
there i'm here barry yeah how's your bestie
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summer been uh during this crazy time i've
been in the bay area i've been um crossing
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all seven layers of uh dante's inferno here in
california moving from the outer layer of covid
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to the middle layer of california's proposed
wealth tax to the uh inner layers of extreme heat
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smoke and the absolute central layer of pain more
recently my three-year-old daughter decided 34
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nights ago to not sleep anymore so um yeah we've
been living living the life it's been glorious
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and um you know i wear a mask now for kovid and
then i wear another mask on top of that mask for
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the smoke so we're just living the california
dream what my parents immigrated here for
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you know paradise well i guess that's a good place
to start and um just if anybody cares i spent uh
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you know i've been lonely and i tweeted i'm lonely
and i got about 50 phone calls from people who
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are like i can't imagine j-cal being sad but i
actually had a talk with my wife and i said what
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are the symptoms of depression because i i think
i might have depression and i went through and i
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was like i don't have depression i'm just i have
great empathy for all the people suffering and
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you know i just being isolated you guys know me
very well better than anybody like i like to talk
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to people and it's been really difficult for me
to be totally candid to be isolated like this and
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the podcast is is great and doing this podcast is
great but man i miss people i just missed what are
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the what are the symptoms of your depression just
before you were self-diagnosing i'm just curious
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i was i i was feeling like um just sad about
watching the riots and watch people shoot each
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other and then watching you know the the the
wildfires watching people die unnecessarily
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and then watching the madness for the election
it was just all becoming like i wouldn't say
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overwhelming but it just made me very sad that you
know so many people can't go back to work and then
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the stock market's ripping and it's a very i don't
know how you guys feel but it feels very surreal
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right because in our world and i don't know how
your portfolios and investments are doing you
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know a lot of the companies we've invested in as
angel investors um are doing just wonderfully and
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we're investing more than ever but then you turn
on the television it's like the doom scrolling
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is crazy so i had to just stop doom scrolling
i think that was the key thing chamoth was just
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looking at twitter is that the trending topics is
so depressing and just so overwhelming at times
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that i took three days off this weekend and went
camping and i literally didn't pull up twitter and
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i felt much better so i think it's really twitter
related like just opening up the trending topics
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i don't know if you did that on your holiday
in italy but it really is a quick way to get
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depressed the best thing is that i was using it
in a different time zone and so i was basically
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out of the flow and it makes a huge difference
because then you're not in the emotional turmoil
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of people's immediate reaction and so you can
just kind of uh move on and then also i just had a
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really fun summer because i really tried to detach
and not use my phone i had a you know i kept my
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meetings to a few hours a day and then otherwise
i was doing things yeah you you want to know you
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want to want to know my phone call to jaycal it's
like hey jake al i i saw on twitter that you're
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you're sad and lonely it's like yeah yeah it's
like are you suicidal it's like no okay goodbye
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but i do i do want to thank you david
for having me down to cabo and we got to have some good times to watch some good
movies uh gladiator extended cut was great
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uh some other movies that we watched could
get us cancelled so we won't admit that we
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watched history of the world or any other mel
brooks movies but we had a good time played a
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couple rounds of golf and that was good times uh
but let's talk about california because i think
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you know we're all residents
currently of california but let me just put it out there how many people
on the call are considering uh leaving california
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anybody is that going through anybody's mind right
now because it's going through um for well it's
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not for me um but uh i think that california is
sort of emblematic of what could happen if you
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actually have um you know the legislative bodies
plus you know the the top sort of political leader
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up and down on one ticket i mean you know you
you basically have like massive rife incompetence
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and it's been compounded you never i mean
you know if people who are democrats would
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have said oh the best thing that can happen for
democrats is if you have you know local cities
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plus an assembly plus the state senate plus the
governor as a democrat republicans would have said
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the same thing for republicans but as it turns
out uh it basically creates the worst outcomes
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and so instead what you need is a little
diversity of ideas and a little push and pull
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um but california is like a bunch of clowns in a
clown car right now it's a joke but i'm not going
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to move now part of it i'm not going to move is
i i've you know my taxes i've set up in such a
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way where california can't get access to most of
my assets anyway so you know they can pounce in
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definitely yeah david how are you uh sax how are
you feeling about california right now um and just
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the craziness in san francisco the homelessness
problem in san francisco has become acute during
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this it's it's really well it's it says on top
of it and it's it's a disaster it's a disaster
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um i mean i'm not uh i'm not leaving or anything
but it's certainly a topic of conversation that's
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come up a lot and i do know people who have
left um i know a couple of people who you know
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prominent people in the venture community who've
recently moved to austin and it's a horrible time
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for the the city and state be proposing all these
new taxes as just take one example because people
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are already realizing that because of covet
and and this new sort of work from home and
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zoom uh business culture where you can kind of
work from anywhere that people are realizing they
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don't need to be in san francisco or in silicon
valley anymore to be you know in the technology
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industry and so at precisely the time that
people were reevaluating where they wanted to be
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realizing that that could be anywhere california
is now you know proposing to massively increase
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the cost of being here um so it's it's horrible
timing and then you know you do have this uh sort
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of seemingly chronic uh issue in san francisco
particularly with with the sort of homeless
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problem uh just seems to keep getting worse um and
there's there's sort of this um weird hostility
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to technology and tech workers um here that i
think it somehow uses a scapegoat to prevent
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the city from dealing with its real problems and
what do you perceive those real problems to be in
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in the city um i mean you use the term homeless
i think most people looking at the problem
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as one person candidly told me you know what we
have is not and i wouldn't say who said this but
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it's a prominent person they said this you know
jason the issue here is this isn't a homeless
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problem this is a junkie problem and the use
specifically is that i'm using that term because
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that's the term to refer to people who are
addicted to opioids methamphetamine fentanyl
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and that if you were to actually unpack what
we're calling a homeless crisis it's actually
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a crisis of drug addiction and specifically
fentanyl and i don't know if you guys saw
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we're gonna hit something like 500 overdose deaths
this year we're like going to double last year and
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it's all fentanyl which is a particularly you know
deadly drug so i mean how much do you think that
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is the problem david huge i mean it's it's you're
right that homelessness is not the the cause of
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the issue that homelessness is the consequence of
long-term drug addiction and mental illness i mean
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this is the it's the end state and uh you're
right the city is it's not really tackling the
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underlying issues in fact it's kind of eating and
abetting them i mean how many millions of needles
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does the city give away every year and that it
only collects a small fraction of them with the
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remainder ending up on the streets um it's just
it's bonkers and i think part of the problem is
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that we keep saying that until we uh it
is that we can't demand any uh improvement
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in the situation in terms of homeless people
you know we have this like poop squad in
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in san francisco that's literally cleaning poop
off the sidewalks because um homeless people
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are using our sidewalks as as like a latrine
basically as a bathroom and and what you keep
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hearing is that well we can't do anything about
that problem until we solve the homeless problem
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and that's a and certainly we should try to
solve that problem but it's a very long term
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you know difficult and tractable problem
in the meantime we can certainly do things
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like demand that homeless people not do that yeah
and the policing seemed to there seems to be a
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distinct issue with policing right now i watched
the san francisco tenderloin twitter account
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david freeburg and they've arrested something like
260 meth meth and fentanyl dealers but we have a
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uh d.a chessa i believe his name is who doesn't
believe in prosecuting any of those crimes uh
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related to drugs or petty crime freeberg what is
the city turned into for you as somebody who's
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been a long-term investor in the bay area um well
i moved here after i graduated college in 2001 and
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i loved san francisco it was it was a quieter
city in a quainter city i honestly um over the
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years have found uh the traffic and the congestion
and the buildup of the city to be frustrating i'm
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a little bit of a anomaly in this sense because i
think a lot of people you know think that the city
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should continue to grow and progress and build
housing and so on those are all uh you know fine
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objectives but i think the quality of life
has degraded for some time in the city as as
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infrastructure hasn't kept up with the uh the
changing pace of uh companies growing here and
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as a result we've kind of got this ballooning
inflating budget that's been poorly managed
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you've got um i forgot the statistic but there's
um some number of thousand people plus that are
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city government employees in san francisco earning
over 300 000 a year um and so there there's a
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there's a chronic kind of bureaucratic issue um
that is the cancer that has caused uh you know a
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lot of the follow-on crises that i think we're now
experiencing acutely here in the city now in terms
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of leaving to your earlier question i you know
um i was really like i've just been like everyone
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you know like that i caught kind of talk
about the dante inferno layers it's also like
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for me growing up it's like a seven layer burrito
it's like one layer of [ __ ] after another um
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start with the beans and in the middle you got the
sour cream and um you know this city's just gotten
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um kind of and the state has gotten more and more
difficult to live in and i and i was certainly
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thinking and talking to my wife like we gotta
leave her family's here so we're not gonna leave
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the state but then i did a call last week that uh
that i think 18 of us were on with governor newsom
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and um you know he made a couple of really
interesting points that really did honestly reset
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my perspective you know i've tried to take a step
back and think a little bit more broadly about
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the long-term opportunity in california the way
this state operates uh right now it's the fifth
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largest economy in the world they ran a surplus
their refinance their debt they've done a great
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job kind of managing kind of the fiscal gap that
that's that's being created by the copic crisis
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um and you know governor newsome made a point
like we have had the california exodus story
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that's percolated and cycled really for decades uh
he pointed out an article which i've not been able
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to find but i've been looking forward from time
magazine from 1959 that were like declared this
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is the year everyone's going to exit us out of the
state and we hear it every couple years there's
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some crisis that precipitates the mass exodus and
it hasn't happened because it is a great place
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to work it's diversified industrial base it's not
just tech tech is a lot of the growth but there's
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a lot of industry here largest ag producer largest
um large military aerospace industry and on and on
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and on uh this is a it's a great um diversified
economy it's a great diversified cultural
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base it's by the oceans it's by the mountains
it's an incredible place to live and work and
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i don't think any of us want to give that up
and uh and the the media has done a great job
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kind of um magnifying these these small stories
that aren't really a story governor and eusa
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made the case that this wealth tax proposal
you know was one assembly member it didn't
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even get into committee it wasn't even really
being considered but it kind of created this
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this press flourish and everyone got involved and
everyone i know kind of freaked out about it and
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it became this kind of another catalyzing event
but it wasn't really real so if we kind of broaden
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our perspective a little bit both in terms of
space and time i think we get a little more
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kind of comfortable with like of all the places to
live and all the places to work this is the best
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and you can go see some taxes and move to austin
but i mean then you got to go live in austin you
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know whatever well it's it's it's the best it's
the best you're right that is the best in terms
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of climate geography natural beauty uh resources
and the industries that have developed here and
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have you know strong network effects but it's not
the best politically i mean it's among the worst
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politically and it seems like the politicians are
doing everything they can to mess it up i mean i
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almost wonder if there's like a resource curse
issue particularly with san francisco where you
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know there's this thing in and um i mean this
this observable thing with governments that
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um that sometimes you get a resource curse
where if there's like a lot of oil in the
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country or something uh you end up with with a
government that's not very good because people
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just spend all their time going to war to try
and capture it and i kind of wonder if you
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know san francisco has been the beneficiary of
being proximate to silicon valley this enormous
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like wealth creation prosperity job creation um
ecosystem that had nothing to do with creating
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and i would say two things to build on what you're
saying um the first is i think that when the
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economies in an environment are really really good
all the really really smart people want to go into
00:17:14
those economies and that leaves generally
dumber people to do things like politics
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so uh and that's less true in places that have
shittier economies uh yeah faster and and i
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actually think that that's that's practically
true we may not want to think it and it may not
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may sound a little harsh but it's true and
you know the the way that you reverse it is
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what singapore does which is you make the civil
servants the highest paid people in the economy
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right and you treat them like knowledge workers
and you say wow look i'm going to pay this person
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250 300 000 a year you're shocked at the quality
of the person you get that's the the first comment
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i want to make the second one though is is that
unlike all these other times where i think people
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have been um you know sort of uh prognosticating
the doom and gloom of california the the thing
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that's different now is that because it is such a
dominant political environment for the democrats
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it's much easier to judge if they actually know
what they're doing and if they are going to do
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things that are aligned with the sort of like the
moral code of the party that elected them and so
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like let's just talk for example about the fact
that uh we are not going to have police reform
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of any kind in california which is where
you'd think would be the first state where
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people got their act together and said okay if
we really believe that we need to reform police
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we can do it in our own backyards but that
legislation is going to get blocked because uh
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californians have decided that they care
more about the alignment to police unions
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than they do to the right of law into social
justice for minorities and blacks that's crazy
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we should be the most progressive
is your point on this chamath and the point is to say it explicitly is the
politicians are in the pocket of the unions
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and because they're in the pocket of the police
unions and the education unions we cannot make
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forward progress even though we're supposed to
be the most liberal of all locations correct
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that's in summary yeah exactly the we we actually
if we believe that we have you know up and down
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the ticket the ability to implement justice right
at least justice in the vein of the democratic
00:19:26
party and what that platform represents or for
example all of the people that were out protesting
00:19:32
okay uh during black lives matter during that
entire movement i suspect the overwhelming
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majority are democrats slash progressives or you
know let's just say the majority or at a minimum
00:19:44
plurality okay but then the idea that then you
have a state the most populous and the richest
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filled up and down the ticket with people who are
theoretically aligned with those political values
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but then when push comes to shove and the
legislation hits the floor it basically
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gets mothballed to me is inexcusable
and disgusting yeah i mean look at the housing issue we just had a bill that was
an incredibly simple bill i think it was 11
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yeah sb 11 20. i know if you followed this one
but i've been following it on the twitter and
00:20:18
it was a very simple piece of legislation any
single family home lot could have a duplex on
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it so you could have two homes on a single lot
and they couldn't even pass that in a city where
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you know a firefighter a teacher etc cannot
live within 90 minutes of where they work
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and they couldn't even pass that um well also
there's there's also ab5 right i mean jason as
00:20:40
uber's third or fourth investor yeah sure
you got something to say about that right
00:20:48
i think third or fourth but uh here we go
to the vc bragg's controversy can we just
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yeah could we just can we just pin down exactly
which one it is so you could just say you're
00:20:57
the fourth investor or something like that it's so
much better to say third or fourth and that was my
00:21:01
obviously but um you know ab5 is another one look
at all the careers in which you can be david sacks
00:21:08
a freelancer and the high the more money you
make the more you get to dictate your schedule
00:21:13
but if you are poor and if you are in an
entry-level job the california government
00:21:18
will not let you even though 70 of drivers
for these services want to be freelancers
00:21:24
and the services themselves said they will put
into a fund for healthcare like they literally
00:21:28
uber you know dar is like hey we're going to put
money into this lift is going to put money into it
00:21:32
they still will not let people decide for
themselves what shift they want it makes no sense
00:21:38
i mean and and it trickled into like journalists
too i mean there's they said now journalists
00:21:44
can write if you if you write 30 articles a year
for a single outlet you're technically considered
00:21:50
an employee even though you're writing the
articles on your own time with your own research
00:21:54
and you're getting paid for successful art for
good articles that are accepted and then there
00:21:58
was this follow-on controversy about translators
it's like well translators takes five minutes to
00:22:03
translate an article so why would 30 articles
apply to a translator and obviously when you
00:22:08
have that degree of confusion and complexity
something's off right yeah and it's such a it
00:22:12
feels like virtue signaling yeah yeah well i think
well i mean the reason why av5 happened is it was
00:22:19
at the behest of the teamsters right they're
trying to unionize the uber and lyft drivers
00:22:24
and they can't do it unless they're employees
and so you know the the author of the the bill
00:22:30
lorena gonzalez who's sort of in their back pocket
um you know that's why she put forward the bill
00:22:35
and then the absurdity of it was that you know
they realized after introducing it that it would
00:22:41
ensnare all these other occupations like the
writers and journalists and photographers and
00:22:46
translators and yeah even like people like
manicurists and so on right and so what they've
00:22:51
been doing is they've been now modifying the
legislation to exclude all of these categories and
00:22:57
in the process they're kind of laying bare what's
really happening here which is this is all about
00:23:03
either basically shutting down or forcing
uh uber and lift to comply with um with the
00:23:09
will of the teamsters and it seems like the
legislation blinked when uber and lyft said
00:23:15
well we'll just shut the service down so what
your thoughts on when that happens saks dude
00:23:18
what do you think will happen who who
will win this ab5 shutdown a showdown well that whatever they yeah they threatened
to basically stop service and they got a stay
00:23:28
i think from a judge uh yes so so 85 doesn't go
into effect until november when and there's a
00:23:34
ballot initiative that they're sponsoring
to get 85 overturned so i think you know
00:23:40
i don't i don't try to predict whether it's
going to win or not but that to me is like
00:23:44
whether if ab5 were defeated by a ballot
initiative in november that'd be a really positive
00:23:49
sign for the state of california i'll say there
was um on this call with governor newsom last
00:23:54
week he did point out that ab5 was more of kind of
a law of inevitability as a result of that whole
00:24:02
dynamics uh state supreme court decision where
the uh you know the supreme court basically said
00:24:09
look here's the criteria that defines an employee
versus an independent contractor um you know they
00:24:14
get to decide what work they do or what hours or
whatever and there's like some set of criteria
00:24:18
and they said look uber drivers and all these
other kind of technically independent contractors
00:24:21
don't meet those criteria fully therefore they
are employees and as a result california assembly
00:24:28
tried to and had to effectively codify what it
means to be an employee versus an independent
00:24:32
contractor and i'm not arguing for the case i'm
just saying what was conveyed by the governor
00:24:36
last week on why this ended up coming to bear now
if they strike it down there's going to be some
00:24:41
other law that's going to pop up because this of
the state supreme the dynamics decision and that's
00:24:45
kind of you know something's going to have to get
written down so sax don't you think it ultimately
00:24:49
ends up just being some sort of negotiated point
between all of these industry leaders and you
00:24:55
know the state to kind of figure out okay what's
everyone going to compromise on to get something
00:24:59
written down that's law i mean possibly i mean
dynamex is not like constitutional it's not a
00:25:05
constitutional decision so the legislature can do
whatever it wants here you know and so if you were
00:25:11
going to respond to dynamics you don't have to
kind of enshrine it um so and i guess there there
00:25:18
was certainly some question whether dynamex would
apply to uber and lyft in in this way you know
00:25:27
they could have made they could have made
their arguments um in front of a court right
00:25:31
okay look the problem is now and whatever applies
to california applies to every state legislature
00:25:38
how are these people supposed to figure
this out i'm sorry but like you know who
00:25:43
are we entrusting here to go and then all of a
sudden understand the nuances of lift and uber
00:25:48
and really understand the job that they do versus
the translators versus the this person versus the
00:25:54
that person versus the dynamex decision again i
think 20 years ago i kind of would have believed
00:26:00
that politicians were generally some of the
smartest people um you know frankly amongst us um
00:26:07
and it really did attract a certain level of
intellectual person who cared about legislating
00:26:13
but you know now basically you just have like
you know jerry falwell juniors running around
00:26:18
i mean these these are they're all just running
around until they get caught on instagram and
00:26:23
get fired i mean they're just uh they're not the
smartest people that we're dealing with and so
00:26:28
what was what was gavin newsom's answer to
that that's really what i would you know
00:26:32
the jerry falwell junior point didn't
come up tomorrow but we can follow it does seem to me that if if they do become
full-time this would be a tragedy for the people
00:26:46
who are trying to just do 10 to 20 to 30 hours of
gig work like what happens to those poor people
00:26:53
who wanted to fill in between when they dropped
their kids off of school and picked them up and
00:26:57
just grabbed a couple hours here there as a
second gig like if this actually does pass in
00:27:03
their full time honestly guys honestly you guys
are such you you're you're you're honestly look
00:27:11
it won't affect them it'll affect the
long-term profitability in the margins of the companies that have to hire them as
full-time employees and they'll have to like
00:27:18
you know make a bunch of rules and blah blah
blah but it has huge operational implications
00:27:22
and it has really terrible op-ex implications
for a company but for the person that wants to
00:27:28
work 10 hours json they'll still be able to work
10 hours so i think i think the point is that on
00:27:32
a specific shift like they're gonna have to
come in at a certain shift time i think the
00:27:36
point is like the entire public markets who all
of a sudden think that a business looks one way
00:27:42
has to figure out that it's really a cost plus
business and what it really means is you if you
00:27:47
were comfortable with uh a 60 or 70 reduction
in the market cap of some of these companies
00:27:53
you'd be okay with ab5 and i think that's where
the tension is where the people that made the law
00:27:57
don't care about the market cap because they
don't own the stock anyways and the people
00:28:01
that are reacting to ab5 are the ones that own the
stock and are really thinking about the market cap
00:28:07
well but the drivers the drivers are mostly on
the stock and they're against it the driver's own
00:28:12
eight shares david i mean come on no no that's
what i'm saying is they're not shareholders
00:28:16
for the most part but this really does reduce
their flexibility to contract for their labor
00:28:23
no but i think what you're saying will
happen which is that they will create a you know ab5 prime which is a modification
that's neither this nor what it was
00:28:34
uh but it seems that the tailwinds are pretty
clear which is that we're moving to a place where
00:28:40
these companies have to get built in a very
clever way and even if they are super clever
00:28:46
in capturing consumer demand the unit
economics are going to be pretty shitty and i just think we have to own that and and
probably what it means more than anything else is
00:28:55
it's not a real venture kind of business and so
you may be deficit financing it or building it
00:28:59
in a very different way than we used to right
but it doesn't have to be that way what you're
00:29:03
saying is is i think that this law will have
very adverse consequences for their business
00:29:09
okay i mean i grant you that um but it's it's
what why is the the state interfering in the
00:29:16
relationship between uber and its drivers in
this way when everyone's happy with it no but
00:29:19
it's not i think what actually is happening is the
state is effectively capturing the excess return
00:29:25
of uber and lyft meaning i think if you just
take a pure unemotional economic view at this
00:29:31
it's like any other market if there's a huge
amount of margin available and there are not
00:29:35
many competitors what happens is somebody comes
in to take the excess margin so you think that's
00:29:41
the government that wants to take it and the
unions want to take it absolutely yeah absolutely
00:29:47
should we let them then dictate what hours people
work the thought exercise that i would ask guys
00:29:52
if there was in a market 90 different
competitors for transportation would ab5 have been written past adopted and my answer
to you would be that it would not have been
00:30:06
so uber and lifts and doordash's success is what
leads to people wanting to get cut and get a slice
00:30:12
the oligopolist model of success where not
enough other companies are pulled through
00:30:17
got it well that gives us a good segue
into by the way sorry last point on this
00:30:21
yeah and the funny thing is the people who
created the problem are the ones that hate
00:30:24
it the most which are the investors because they
pile in the incremental dollars into the winners
00:30:29
trying to king make a winner through capital and
now what's happening is their rate of returns are
00:30:34
basically getting taken away and i think that
in in in a weird way that's also kind of fair
00:30:41
well i i i would just disagree
slightly in the sense that just because this has big distributional consequences like
basically who who makes the the surplus uh doesn't
00:30:54
mean it also doesn't have a huge deadweight loss
associated with it and whenever you prohibit
00:30:58
people from engaging in the type of economic
contracts relationship that they want to engage in
00:31:04
you're reducing um surplus and so i so i hear what
you're saying but and i think there is i think
00:31:11
this is all about regulatory capture right this
is the teamsters trying to capture a big piece
00:31:16
of the value of uber through their politicians
the legislature so you're right about that but
00:31:21
i also think that we should care about it not
just as uber shareholders but as consumers of
00:31:26
the product because it's going to get worse well
and also the products going to go away in certain
00:31:31
jurisdictions i mean if freeburg wants to get
an uber north of the golden gate bridge or in
00:31:37
the east bay somewhere they're just not going to
have the economics for some communities yeah to
00:31:43
even operate the service so just like ubereats and
postmates stopped delivering to treasure island
00:31:48
a lot of the drivers were in their local
communities at home with uber turned on
00:31:53
and when they or doordash and when they
got a call they would leave their house
00:31:56
and that was part of the magic of it is you
could just be sitting there you know netflixing
00:32:00
or hanging out with your kids and then a good call
comes in and then you leave your house that's why
00:32:03
you would have that like one minute pause if you
ever saw it you know in an uber ride where it's
00:32:07
like why isn't the car moving it's because that
person's at home and they were capturing the one
00:32:11
ride every hour in their local you know suburban
area but if you force them to be hourly uber's
00:32:18
gonna say you know what it's not worth having an
eight-hour shift in you know whatever suburb and
00:32:23
and the service will go away and then guess who's
gonna not have service and transportation i think
00:32:29
sorry i was saying it was like sax's point like
you know from a consumer perspective or chamat's
00:32:33
point if you end up with 90 of these service
providers and um i'm a consumer i'm less likely
00:32:40
to order a cab or order a ride share service
or i'm less likely to order food for delivery
00:32:45
i don't want to deal with 50 [ __ ] apps i don't
want to have to like go find the one app that has
00:32:49
the contract with the one restaurant then the
natural market dynamics the the way that the
00:32:54
market naturally evolves is i want simplicity as
a consumer i want efficiency that's what makes me
00:33:00
want to use it more and when you take that away
because you're interfering from a regulatory
00:33:04
perspective and how that market operates the
product sucks for me and yeah the shareholders
00:33:09
ultimately suffer i i think to your point the
way that that would probably get solved is you
00:33:13
have people that are higher order in the consumer
behavior that own these relationships that enforce
00:33:19
basically uh a user experience for example
facebook and google and apple essentially say
00:33:27
we're abstracting all these services because
there's 90 of you google says i'm going to put
00:33:32
all of you guys on the map view um you know yelp
says the same thing and essentially what opens
00:33:37
what happens is there's some like open way where
essentially a service provider can turn themselves
00:33:43
on and broadcast into a network that says i'm
available to do a for b and it all gets fixed now
00:33:51
that's a future state which was the original
idea of uber by the way was to make a marketplace
00:33:56
like that and now uber is talking about doing a
franchise exactly what you're saying chamath is
00:34:00
let some franchisee take the east bay and
then provide their inventory network i think
00:34:05
franchising is a really really smart business idea
and i think that particularly in transportation
00:34:11
um and a lot of these services that have this
natural dynamic to be local um where there are
00:34:18
an infinite sum of many local markets i think it's
it's like a burger king it's like a mcdonald's and
00:34:25
the the company that moves to a franchising model
and then figures it out i think will be a huge
00:34:30
winner um and that will be in that will be a very
asset light really operationally uh sophisticated
00:34:38
very well run highly profitable business i think
let's talk about the public markets um wait jason
00:34:45
can we just talk about the police brutality thing
in california i just want to get your choices
00:34:49
it really it really bothers me that california
like i bet you there's going to be states that
00:34:55
are um diverse in its democratic and republican
composition and some republican states uh that
00:35:03
passed comprehensive police reform and
california will be one of the laggards what do you think if you could wave a magic wand
chamoth what are the one two and three things
00:35:13
take a minute to think it through and everybody in
the call can what are the one two and three things
00:35:18
you would do to change policing in the united
states i have my own list but i'm curious what
00:35:23
you guys think and i actually put a tweetstorm
out about my number one thing um what are the
00:35:29
specific tactical things let's get tactical
first uh i mean the first one that i've always
00:35:33
been a big fan of as i've studied it at least
from 10 000 feet is ending qualified immunity
00:35:38
explain why and what that is you know qualified
immunity is essentially that they're there there
00:35:43
is this immunity that uh certain individuals
have and that they uh that they're not subject
00:35:48
to prosecution and so um you know they essentially
have a carp launch to behave in ways that can be
00:35:55
good in some cases very very bad in other cases
gray in other cases yet there's no adjudication
00:36:01
of their behavior and so you have to allow people
with solid dispassionate detached judgment to be
00:36:08
able to enter and say hey listen you are way out
of line here and there are consequences for it
00:36:13
and people coming in doing those jobs need to
understand those consequences versus you have a
00:36:20
carte blanche to basically do whatever you want
and i think let's talk specifically about the
00:36:24
mer well the shooting involving i won't say murder
right now um because i think all the facts are not
00:36:29
in but jacob blake was shot in the back um he was
obviously not listening to the police the police
00:36:36
then followed him to his car there's a discussion
of if there was a knife on the floorboard
00:36:41
and point blank they shot him in the back
multiple times and i've heard both sides of
00:36:46
this you know this person is not listening to
the police this person is going into the car
00:36:50
they're reaching potentially for a weapon and the
cops had no choice it seemed to me that you know
00:36:56
the training of a police officer might
actually be that that was a legitimate tuning
00:37:00
um but that means maybe they have to rethink
policing because you could have easily taken
00:37:06
that person down with it even the most modest
of a chokehold or a tackle and when we see
00:37:10
that it feels like that's the raw shock test
right there of like how you look at shootings
00:37:14
um in police when you saw that shooting i take
it chamoth of j blake and i i saw it and i i just
00:37:21
like i i i can't see these anymore they they send
me off the rails for days uh but yeah i did see it
00:37:28
yeah and so i mean when you look at something like
that that's clearly training has to change because
00:37:33
i i believe that based on police training and
qualified immunity this is going to be considered
00:37:40
even though it's shocking to see it
i think it's going to be considered um you know an allowed shooting or yeah and
there's not going to the person person's not gonna
00:37:49
be prosecuted because the person was clearly not
listening and there was a knife on the floor and
00:37:52
he was going for it and you know it seems to me
like we really need to change the actual training
00:37:57
the average is six months of training so i think
that's one of the top things that has to change is
00:38:01
these these police officers have to be trained
not to fire first but to to use other tactics
00:38:08
so so for me the first one is that the second one
for me which i'm a really big fan of is that there
00:38:14
needs to be a new way to actually intercept 9-1-1
calls and instead of um deploying police officers
00:38:22
we have a separate branch of people that we you
know massively pay and train that are effectively
00:38:28
you know social workers plus plus and negotiators
yeah and and they should be deployed in all kinds
00:38:33
of situations um where i think that what
what people want is a de-escalation and i
00:38:41
think that sometimes the words de-escalation
and police don't really sync up and in most a
00:38:47
lot of people's minds they think of escalation so
people who are trained to de-escalate i think uh
00:38:54
and so for example like you know all of the mental
health checks all of the mental health issues
00:39:00
could probably be domestic like this domestic
disturbances would probably go into that category
00:39:05
the the third one is i would very much rationalize
uh drug use um just because i think the amount
00:39:12
of low level offenses and arrests around drug use
is antiquated for people's general views on drugs
00:39:19
and i think that it needs to sort of
correlate to how society views it and then
00:39:23
um you know the the last two that i would give
you is that there's a concept of no knock warrants
00:39:28
that's how brianna taylor was killed insane it's
kind of really scary the idea that we could all
00:39:34
be sitting in our houses right now as we are
and literally the police can just charge in
00:39:40
i mean totally unnecessarily i mean she was being
for some like low-level drug idea they're going to
00:39:45
knock the doors in and of course the person's
going to try to protect themselves that's
00:39:50
their house sacks they knocked the doors in and
they were plain clothes wearing police officers
00:39:57
so people are coming and they did it at like
midnight when she was asleep so yeah people
00:40:02
busting into her house at midnight screaming
making noise and not dressed as cops that's
00:40:08
that's crazy yeah and then the last one i
would give you is militarization of police
00:40:13
um a lot of these ideas by the way are justin
amash's ideas i i've retweeted and i followed
00:40:18
but he was the one that put me onto these
things um but you know like you have all this
00:40:22
excess military equipment in the army that gets
basically passed through and now directly sold
00:40:26
into police departments especially post 911 we
we basically militarized that so those are facts
00:40:31
what are what are your ideas around policing
and how we should change it you've heard shamans
00:40:35
i i don't have more detailed ideas than than
chamoth i think he's given some good ones um
00:40:40
for sure i mean i think we definitely need better
training and i think better oversight over the use
00:40:46
of force um the the body cam idea jason you you
tweet about i think that's pretty interesting too
00:40:52
um i think you're right explain that for a
minute the body cam idea i had was i asked
00:40:57
does anybody know and you know does black live
matter or another organization track which police
00:41:02
departments because we could get a list of every
police department that exists in some database
00:41:06
somewhere do we actually know what percentage
actually have body cams and what model they use
00:41:10
and what percentage are working because one of the
things that i think has happened this year is you
00:41:16
know the live streaming and the live video and the
number of smartphones out there has resulted in
00:41:22
us being able to see what black and brown
people have been telling us for decades which is
00:41:27
they're murdered by cops and now we get to see
it and you know when you see george floyd get
00:41:32
murdered it's fairly obvious that's what happened
we don't have a video they have the video of
00:41:36
rhianna taylor getting murdered so that's from a
cop webcam i'm sorry body cam so i was thinking
00:41:41
we should just start with that as a basic which
is every single cop car should have a 360 camera
00:41:46
in every cop it should be a federal mandate and
i don't exactly know how federal mandates were
00:41:50
at sacks but don't you think there should be a
federal mandate for just cameras and car cameras
00:41:56
i think i think it's a good idea i think the
use of cameras is a good idea um i mean maybe
00:42:00
not recording the police officers when they're
sitting in their car but every time there's like a
00:42:05
clue you know like yeah they pull somebody
over sort of you know like fourth amendment
00:42:10
type search and caesar seizure type situation
yeah i think it would make sense to have that
00:42:14
on video why not yeah i mean you've got to think
every police will behave better go ahead freeburg
00:42:20
um there was a case the other day uh a young
um guy i think he was 19 years old was shot in
00:42:26
dc named dion k i don't know if any of you guys
watch the body cam footage um and so he was a 19
00:42:33
year old black man he was shot he died um but in
the body cam footage you can see that he pulls out
00:42:38
this gun and throws it and when he pulls out the
gun and flings his hand around he's got the gun
00:42:42
in his hand that's when the cop shot him and so
there was about a hundred protesters that showed
00:42:46
up but it's largely become a non-story as a result
of the facts associated with the body cam footage
00:42:52
but i just want to propose something
else that's a little bit more radical maybe my libertarian ideals kind of cross with my
socialist ideals and forming this this concept but
00:43:02
perhaps um you're a socialist no yeah i don't
know i've never been accused of that but um if we
00:43:09
uh if we trace back you know the uh these systems
are really chaotic everything you're talking about
00:43:15
is layers and layers of bureaucracy and ideas
and [ __ ] we should do to manage the problem
00:43:19
but there is kind of one common you know butterfly
effect butterflies at the source of all of a lot
00:43:25
of what we're talking about which is guns if
there weren't any guns in the united states
00:43:30
i would not feel threatened as a police officer
i would never have any reason to feel threatened
00:43:34
and i would never have any reason to pull a
gun the reason i always make to pull a gun
00:43:38
as a police officer is my life is threatened
and in the absence of firearms i have no right
00:43:44
to pull a gun and that's the case in like the
uk for example where there are like no police
00:43:48
officer shootings of civilians because they're
never under threat of being killed by a gun
00:43:54
so there's a simple answer which is get rid of
the guns but you know a little too controversial
00:43:58
and um obviously many layers to that argument um
especially from kind of both sides but i would
00:44:06
say um you know much much of what's going to go on
now and in the future it's just chaos theory it's
00:44:12
going to be building more layers of complexity
it's more entropy it's more kind of associated
00:44:16
complexity to try and resolve the underlying
problem of all of this which is that we've got
00:44:20
guns on the streets we've got guns in people's
hands and therefore you know there's always this
00:44:25
threat against every individual that their life
might be taken by another well let me make a
00:44:30
prediction right now there's not going to be any
new gun control legislation for a generation um
00:44:35
because of the the looting and writing that's
going on uh gun sales are an all-time high i
00:44:41
mean every single gun store that ammunition gets
sold out you can't you can't get guns you can't
00:44:45
get ammo and there are more first-time gun buyers
in the united states the last several months than
00:44:50
there's ever been um i mean the the ranks of the
nra must just be swelling right now um and so so
00:44:56
this idea that you're going to get gun reform i
don't think it's going to happen people aren't
00:45:01
going to support it and you know i think you know
use the word i think idealistic i mean i i think
00:45:08
it's like a little bit naive um to assume that
you're going to be able to get rid of all the guns
00:45:14
in the hands of bad actors there are a lot of
people in this country who feel the need to
00:45:18
have a gun to protect themselves um and you know
the cops can't always get there quickly enough um
00:45:25
and a lot of people feel the need to to have that
for self-defense i also think the minimum amount
00:45:30
of training for a police officer should not be
six months i think they have to re i mean if we
00:45:34
really want to have the society move forward and
you know to solve our issue of race which is you
00:45:41
know like the original sydney of america we're
gonna really need to start thinking about making
00:45:47
you know police go back to school for 18 months
12 months and rethink how we how we address
00:45:51
this situation because it's just tragically
unfair that one group of people's children
00:45:57
has to worry when they're driving in a car and
you know other people on this call don't have
00:46:01
to worry right and you know uh that is just
crazy let's um take a hard uh shift to the
00:46:09
economy and then we'll go into um the election
what do you think trump you've been talking a
00:46:14
little bit about the economy and the stock market
ripping again and we seem to have hit a pause uh
00:46:20
but we did have like a massive rip with tesla and
amazon tesla and apple i guess doing a stock split
00:46:26
and we hit all-time records why are
we hitting all-time records jimoth we have the most important thing that's happened
i think in economics in the last 10 years
00:46:36
um the federal reserve jerome powell gave this
landmark speech and he basically said we are
00:46:41
going to keep rates at zero for the next half
decade uh basically and five years at zero yeah
00:46:48
i mean quite honestly it could be a decade
but they're gonna let inflation run before
00:46:54
they basically match it with rates there's no path
to any near-term inflation of any kind whatsoever
00:47:01
um and so jason my honest perspective is you
know you're basically going to get paid to be
00:47:09
long equities because uh your risk-free rate is
zero and will soon be negative and what are you
00:47:16
supposed to do if you're an asset manager what
are you supposed to do with you know your take
00:47:21
california back to using california let's just say
your calpers you're the california pension system
00:47:26
and you have hundreds of billions of dollars then
you need to generate five or six percent a year
00:47:33
to make sure that your pension isn't insolvent
and the government is paying you zero
00:47:39
okay so that eliminates that option no
treasuries for you you're long equities um and when everybody is in that situation
you're overwhelmingly long equities
00:47:49
and you know the you cannot
fight the fed and so you cannot wait them out it's not like you can say oh
don't worry they're going to change their mind
00:47:57
uh they will change their mind but in reaction to
market conditions that are out of your control so
00:48:02
uh all of these opportunities in my opinion
are generally buying opportunities and uh
00:48:08
i'm generally bullish i'm more bullish now than
i was before so you can't put your money into
00:48:14
treasuries you can't put it into a savings account
obviously you can't put it you you it doesn't seem
00:48:18
like real estate or commercial real estate is
a great bat right now uh so your options are
00:48:25
private companies or public companies correct jama
um i think it really is just public companies and
00:48:31
i don't even think it's private companies
so meaning wherever capital is constrained
00:48:37
the returns um again these excess returns are
getting eaten up um and so the the most unimpeded
00:48:44
market for gains right now is the public
markets i mean like no offense but i think
00:48:48
that if you're a very good stock picker in the
public markets you're generating better returns
00:48:52
then uh sequoia benchmark name your best venture
fund you know i see all these people spouting
00:48:57
off uh on twitter about how good they are
in the early stage markets it's all kind of
00:49:02
small dollars and not that meaningful
you know i'm on the call right i'm on the call i mean you're literally talking
to the guys spouting off about hitting home runs
00:49:14
saks what are your thoughts on this like private
markets obviously is the op where we operate both
00:49:19
david's free berg and sachs um and you're seeing
great deals i think i i've invested in twice as
00:49:25
many companies during the pandemic as i did before
in the same six-month period what are you seeing
00:49:28
in the private markets and what do you think what
is your take on best cc's public markets exactly
00:49:33
you know we saw some of the best deals that we've
seen uh during covid and um you know i'm i'm very
00:49:40
bullish about the state of entrepreneurship in
the u.s i mean just the the number of interesting
00:49:45
companies doing interesting things and the the
infrastructure that makes it so easy for founders
00:49:51
to get started and create new companies it's so
much easier now to create a to create a company
00:49:56
that it was 10 years or 20 years ago and of course
it's easy to point all the ones that don't work or
00:50:01
that don't seem like good ideas but uh but there's
so many more experiments that are happening and i
00:50:06
think it's gonna i'm you know i'm very bullish
about that part of the the american economy
00:50:11
and freeberg what are your thoughts on private
markets and obviously you're building private
00:50:15
companies you have unlimited capital to build
them i take it given your track record i spend
00:50:21
most of my time accepting rejections from
my very close investor friends in my various
00:50:26
projects so i wouldn't say that that ever
becomes true i'll tell you the truth uh um
00:50:31
still selling every day dialing for dollars but um
no there are certainly more investors more capital
00:50:38
more risk risk-taking um more kind of valuation
extending than i think as um it was the case
00:50:44
uh pre-covered i think jamaat's point is right
though uh there is uh so so much more liquidity
00:50:52
available through access to retail and
international market um participants um in in a
00:50:58
public setting than there is in a private setting
and it is because of this liquidity premium and
00:51:02
the easy access to putting capital in um it's
just extraordinary how much as i've watched
00:51:08
close friends and companies and companies i've
invested in i'm sure you guys have done the same
00:51:12
transition from private to public uh
the valuation jump is extraordinary like on on a metrics basis right so whatever
the metric might be you get public there is this
00:51:22
flurry of of market participation as a result
it drives up there's a multiplication you're be
00:51:28
sorry can i just say something that's such a
such an important smart thing that friedberg
00:51:32
said so jason for example like all of us we're all
still in the private markets and i'm not trying to
00:51:38
take away from the private markets but what david
said is so important if you used to look at a sas
00:51:42
deal you'd price that sas deal 10 times ar right
then there's a little bit of inflation you know uh
00:51:49
the rates go up um the prices that people pay
go up now all of a sudden we're paying 12 times
00:51:54
15 times now it's 20 times if you're growing a
hundred percent rate every year so what's happened
00:51:58
the market has become more efficient and the
excess return is getting eaten up and so you're
00:52:03
like okay well that's still really good and you
wait four five six years and you think you're
00:52:07
going to get paid the crazy thing is like once
that company transitions to the public markets
00:52:13
i mean all of a sudden if you actually turn the
investor base over and you actually create a float
00:52:18
so that public market guys can buy it they'll pay
30 times that's right 35 times 40 times so there's
00:52:25
a massive multiple expansion so companies should
be going public sooner if you think about this
00:52:30
like if i'm trying to raise money for one of
my companies i'm going to call on my 10 20 30
00:52:35
friends that i know that are investors in private
markets and say hey guys do you want to look at
00:52:39
this company and maybe i'll get two or three
interested parties and maybe we'll kind of agree
00:52:43
on what a fair valuation would be if i could take
that same company and instantly make it available
00:52:48
to a million investors and all i need to do by the
way is raise 10 million dollars all i need is some
00:52:53
small number of them to write a couple hundred
dollar check and i'm able to fill that that round
00:52:58
out the valuation as a result of the liquidity
available in that market is so much higher
00:53:03
because there everyone's gonna there's
gonna be much more participation in bidding
00:53:06
and so you know what i think chamath has tapped
into with the spat vehicle and um what robinhood
00:53:12
is realizing and and i don't think that we all
talk about this enough but there's this massive
00:53:17
massive massive market of international investors
of small of international retail investors who are
00:53:23
now rushing into u.s equities freeburg didn't
we see that in the ico craze as well where
00:53:29
you you i think if we took anything from the ico
craze it was and the global appetite for risk
00:53:34
and the dot-com boom before that and i think
we have to give best ec a lot of credit here
00:53:38
for leading the spak movement i mean what's your
take on everybody copying you down this backpack
00:53:43
champ at this point i had desktop metal as
an early angel investment that just spacked
00:53:47
um i co-led the place thank you yeah and they told
me that thank you for the markup um and i've been
00:53:53
hearing like i'm get if i'm getting inbound as an
angel investor from i literally got a cold email
00:53:59
from some high profile people they're like hey can
you do you have anything for us to spack i mean
00:54:03
this is like the third or fourth time people are
coming down to my [ __ ] level of angel investing
00:54:07
saying can you introduce us to the com guys
can you choose something to rob in it i'm like
00:54:10
i think you can go direct to them but what is your
take on how many spacks have been created since
00:54:16
you like literally single-handedly restarted
the smack movement i think because i don't
00:54:21
think you've ever got a record about this uh i'm
really proud of what we did when we created this
00:54:26
thing two years ago i said i want to basically
create a new way of doing ipos i called it ipo
00:54:31
2.0 i reserved ipo a through z on the nyse i i
hope um uh to fulfill that um and i think i will
00:54:40
um but taking a step back for a second in the year
2000 there were 8 000 public companies in america
00:54:47
on the american stock exchanges and in the year
2020 there are 4 000. so we've shrunk in half the
00:54:56
number of public companies while at the same
time we've you know 10x the amount of comp uh
00:55:01
the amount of capital and the number of people
so we don't have a large enough surface area
00:55:07
in the public markets that's why companies
are better off going public because they're
00:55:11
going to have a much more receptive audience of
people that are dying to own growth of any kind
00:55:17
what's the earliest and the media and that people
should go public well so here's the thing so like
00:55:22
if you're like one of 30 companies in a venture
portfolio that's growing at 50 plus percent
00:55:29
you're one of 30. but when you go public you're
one of one you know when you're growing 50 60
00:55:35
percent you you become very unique all of a sudden
you're a sort of a one percent kind of a company
00:55:40
you're an outlier and so you get treated you
know incredibly well so that's the backdrop
00:55:47
i think a company should be going public around
year five year six um what revenue footprint uh
00:55:53
about 50 million you know at 50 million and when
they're doubling i think that they should be going
00:55:57
up and you know it allows them to build capital
slowly it allows them to basically contain control
00:56:03
it minimizes dilution um i think it's a really
powerful model and then on on the number of
00:56:08
spacks what i would say is i think it's really
good that the market is getting diversified i
00:56:13
think what's going to happen is like the the thing
with smacks is it's going to be no different than
00:56:18
in some ways the banks that preceded us which
is that there's going to be a distribution you
00:56:23
can go to goldman sachs and that'll mean some
one thing you can go to merrill lynch or b of a
00:56:29
or ubs or jeffries it'll mean other things you
can go to allen and company it'll mean yet another
00:56:34
different set of things and i'm sure there's
going to be a you know an organization that
00:56:40
is all about cost some is going to be all about
relationships um so i just think that's going to
00:56:46
be the distribution my personal perspective it's
probably us and maybe one or two other people who
00:56:51
really dominate the space and i'll tell you
the only reason why i say that i think it's
00:56:56
going to be really important when these people
try to get these facts done what they're going
00:57:00
to realize is it's really hard and it's hard for
a couple reasons number one is you have to marry
00:57:05
operational insight and public market
sophistication and the founder will get really smart about being able to figure out
whether this person is just a financial arbitrager
00:57:16
or if the person has enough operational experience
to deeply understand the business why you have to
00:57:21
translate it to the public markets well that's
one huge thing that i think that people will
00:57:27
um will start to will start to hone in on
um anyways there's a bunch of other things
00:57:32
but um are you now competing with what i want to
sacrifice agree with the 50 million yeah yeah sure
00:57:39
um i'm i'm cool with that you know i invest
well before that so i'd be i'd be happy for you
00:57:44
probably have a bigger portfolio 50 million dollar
investment yeah it is it's great for for for me
00:57:49
and jason and i you know i i think jamal deserves
a ton of credit on this soul spac thing it is i
00:57:54
don't know if all the listeners um are aware of
this but this back thing's become a huge wave
00:57:59
um there's a ton of people creating them kevin
hart says a new one reed hoffman has a new one
00:58:04
they're you know the east coast hedge fund guys
pincus and um and then the east coast hedge funds
00:58:09
like bill ackman whatever they're all creating
them so tremoth has really started a wave here
00:58:13
and i think the appeal of a spac to a founder
i'll put in a plug of why i think it's a good
00:58:18
idea for a founder to consider this is because
you essentially what what founders are used to
00:58:24
is doing you know private rounds right you agree
on a on an amount raise an evaluation and it's a
00:58:30
percent dilution and you're done that's it
and it's simple right and and when you ipo
00:58:36
and need to raise money it's not like that you
have to then work with an investment bank they'll
00:58:40
put together a book you do like a road show you
do this whole dog and pony thing you don't know
00:58:45
how much money you're gonna get at the end of
that process or what the valuation is gonna be
00:58:48
and then on top of that we know statistically
bill gurley's published all the stats
00:58:53
the investor banks are going to rip you off so you
know so that what a spac does is it prices like a
00:58:59
late stage private round you just agree with the
spec promoter on a valuation and an amount raised
00:59:06
and then on top of it you get kind of a direct
listing along with it all of a sudden you start
00:59:10
trading as a public company and so a spac is like
a combination direct listing plus private round
00:59:17
and i think that's going to be appealing to a
lot of founders as they start to discover this
00:59:21
more and more sax in a way you're saying it's
going to feel more like doing a series d than
00:59:25
it does at roadshow and yeah i think that comfort
level for somebody like robin hood or com or data
00:59:32
stacks or thumbtack or any of these companies that
you and i are every company in your portfolio i'm
00:59:37
just saying listen i got two ipos and i've got two
ipos in two years this is i think this is going to
00:59:43
be the new thing for an early stage investors is
we're not going to count unicorns anymore we're
00:59:47
going to count specs we're going to count public
listings right and and i think that's the other
00:59:51
thing by the way the other the other thing that
i'll say to founders is one is i think you need to
00:59:57
you need to think about do these people have the
combination of operational and financial acumen in
01:00:04
the public markets um and investing experience in
the public markets and the operational credibility
01:00:12
to describe the business and i think you can trade
off one for the other if one is so deep meaning if
01:00:17
warren buffett was doing us back you'd say well he
has no operational experience but he's so credible
01:00:22
in the public markets then you know that's all
that matters but you need to be super super deep
01:00:28
in one or have a really brilliant and thoughtful
level of credibility in the publics meaning an
01:00:33
early stage investor who isn't married to somebody
who can basically say i know how hedge funds work
01:00:38
i've made them money and i'm gonna make them more
money and mutual funds etc is troublesome the
01:00:43
second thing is for founders you have to really
make sure you understand what is in it for the
01:00:49
person that's doing this back i mean in every deal
i write a minimum of a hundred million dollars
01:00:54
personally and that's a lot and so i skipped in
the game i feel very much at risk and so i take
01:01:00
a lot of time to make sure these things go well
and then the third is that for the spa person
01:01:06
what i'll tell them is they're gonna find that
there's a bunch of landmines um and i'm not gonna
01:01:12
you know say it up front because i think it'll be
fun for them to find out themselves along the way
01:01:18
but these things are hard the first one took
me two and a half years uh they're hard yeah
01:01:22
they're hard they're hard hey let's uh swing to
the election now um and uh talk a little bit about
01:01:29
the flip-flopping we're all doing because we've
gone from trump's a lock to trump's not a lock
01:01:34
uh you know and we've had many different theories
but here we are uh are we 60 days out now how many
01:01:40
days till the election is it exactly 60 and then
the first debate is september 29th yeah yeah so
01:01:45
we're we're at the 55 of 56 days mark the taping
of this and the first debate i think is september
01:01:51
30th so we're we're about three weeks away from
joe biden and trump going at it what's everybody's
01:01:58
handicapping now the mark the markets seem to be
saying even money or a slight edge to joe biden uh
01:02:05
what what are our thoughts i uh i think that uh
i think biden's looked the crispest he's looked
01:02:14
okay and so um is that actually encouraging or not
encouraging i think it really is because i think
01:02:20
he's a really good like i said he doesn't have
to uh be better than donald trump he just has to
01:02:26
not be donald trump for a lot of people and so you
know he becomes a very good do no harm alternative
01:02:33
because you know to support donald trump you
have to have a view to support joe biden you can
01:02:39
have no view um and i think that that in general
that's a that's a demand maximizing thing to do so
01:02:47
i think he's relatively well positioned it's the
crispest i've ever seen him on television there's
01:02:52
less stuttering there's less not stuttering but
like less like mental gaps yeah you know the
01:02:59
what do you think of the vp choice kamala i think
safe so i i agree with tremoth that that was kind
01:03:05
of the the take or theory on biden like a
month or two ago is that he could just run
01:03:10
as a protest vote against trump um and um and
and that's why the basement strategy appeared
01:03:16
to make sense is that he would say nothing do
nothing go nowhere and just and just try to run
01:03:22
as a protest vote against trump and i think that
was working a couple of months ago when you know
01:03:28
a covet seemed a lot worse uh b the economy seemed
a lot worse we're now down to about eight percent
01:03:34
unemployment we were at 13 or 14 um and uh c
you know trump had seemed to kind of mishandle
01:03:43
the the reaction to to floyd he seemed
to be inciting it but now we have this this issue of the the looting and violence and
predominantly democrat-run cities and i think you
01:03:53
know trump has sort of found his sales pitch now
um in opposing um the basically the the radical
01:04:01
left um and these these mobs and and protests that
seem to be uh you know causing uh tremendous uh
01:04:09
unrest and uh looting and violence in our
cities and i think it's i think it's a in
01:04:15
combination with the improving conditions of the
economy and covet i think it's a winning pitch
01:04:20
for him unless biden finds a more compelling
way of responding which he has not to date
01:04:26
um i think you know somebody like bill clinton
would know exactly how to respond i think he would
01:04:31
you know just better instincts yeah well i think
you know he would pull a sister soldier to use a
01:04:36
term from the the you know political dictionary
where you know maybe he would take this crazy
01:04:40
new book in defense of looting and figure out you
know and give a speech denouncing that i mean he
01:04:45
would find somebody to his left who represents you
know a fringe of the the left that he presumably
01:04:51
doesn't support and find a way to distance
themselves or denounce them like yeah maybe
01:04:57
like antifa like you know the the anyone you
know any of the leftovers in portland looting
01:05:02
in portland i think there's a lot of targets
nobody wants nobody wants to support that and
01:05:06
so biden comes out and says hey we don't support
that and it gives him that law and order vote
01:05:11
but and he hasn't done he hasn't really done
that i mean so two of my favorite political
01:05:14
pundits right now are andrew sullivan and matt
uh taibi who are you know very uh they're strong
01:05:22
supporters of biden they're very anti-trump
but they think he's failing on sort of this
01:05:27
these issues uh because he's not he's not figuring
out the right way to uh to denounce what's
01:05:33
happening i think a lot of this has to do with
when kids go back to school and the death rate
01:05:38
uh of kovid and as i was tweeting and i got i got
a lot of people angry at me um about tweeting this
01:05:46
but i said i think this is a setup for trump to
go into the first debate with you know well under
01:05:51
you know six seven hundred deaths a day
and then the next debate in october with
01:05:55
you know call it three or four hundred that's a
day and basically declare that he did solve kovid
01:06:00
because we've been trending down for five
weeks now and he started wearing a mask
01:06:05
six weeks ago seven weeks ago july 11 was the
first day he wore a mask a cynic would say
01:06:09
he almost timed mask wearing which is
obviously what we talked about in the first
01:06:14
episode or two of all in podcasts was our
discussion about why is wearing a mess so
01:06:18
difficult for him and it seems like he slowplayed
it he's you know he set his he slow played he hit
01:06:25
a set on the turn and here he is like he wore the
mask on july 11 he wore it four months late but
01:06:30
guess what as chamath was saying everybody wears
a mask and every and these things go down in italy
01:06:36
we're going to come into the first debate what if
it's 400 deaths a day and then the second debate
01:06:40
it's 200 that's the day and then our kids are
back in school in october which seems to be the
01:06:45
case right all the schools are saying you know be
ready for october to open and what if he actually
01:06:49
does have a vaccine that has so much credibility
or any of these high-speed testing machines come
01:06:54
on i mean this could be a setup of all setups
for him to just you know drop the microphone
01:06:59
hey look the economy has had an all-time
high and kova debts are at an all-time low
01:07:04
well i mean yeah i think democrats are on fire
that to me seems like the the trajectory i mean
01:07:09
um we spent a long time on this pod talking about
what a disaster uh san francisco and california
01:07:16
are those are one-party states and cities and i
think you know we're not just electing a person
01:07:21
as president we're also electing a party and a
movement and a governing philosophy and however
01:07:27
much uh trump is um you know disliked by a lot
of people i think a lot of people are looking at
01:07:33
you know i i think they they may like joe biden
personally and and think that he personally is
01:07:38
safe but they don't like the movement and the
party and the governing philosophy that is now
01:07:43
associated with biden so if you had to put your
entire net worth on it chamath biden or trump
01:07:51
uh biden i think sacks entire net worth i
i i would uh i predict trump at this moment
01:07:59
wait you predict but you but you wouldn't put your
entire net worth on if you had to i could see your
01:08:04
hesitation you want trump trump to win oh sure
but you would you wouldn't put you wouldn't put
01:08:08
your entire net worth on him but yeah of course
not you would put it this is this is about a 55
01:08:14
sort of thing so biden has a 55 chance of
winning so even though you're voting for trump
01:08:19
you are not going you would not put your fortune
on fighting you you asked me who i predict right
01:08:25
now i'm predicting trump you'll remember on the
last part i predicted biden so it moves depending
01:08:30
on what i see yeah i mean yeah and i'm going to
go with yeah but it just knows jason i think i
01:08:35
think a better way to get a better answer is not
to force somebody to put their entire net worth
01:08:39
on the line it's just okay who do you think is
going to win who do you think is going to win sex
01:08:45
how many times have to answer this question
you think trump's going to win you actually
01:08:49
yes yes i do actually really that's fascinating
and it's free remember that i remember it's the
01:08:55
first time i've seen it i think it's i think it's
the same as it was last time for me and has been
01:09:00
most of this process it's a coin
flip and it still is a coin flip and uh there's a lot of noise between here and 60
days from here all right well then if we if we do
01:09:10
think it's a coin flip freeberg what happens if
trump is elected again some people think this is
01:09:15
all institutions are broken forever america
is broken forever hyperbolic that that's the
01:09:20
perception on both sides right so the perception
and the motivation on both sides is democracy is
01:09:25
crumbling and the resultant action is to elect the
the person you think will restore democracy the
01:09:32
reality is both candidates to some degree might
move us a little bit further away from democracy
01:09:37
and um some might argue that trump makes us feel
a little bit more like an autocratic dictatorial
01:09:43
regime and some might say that biden makes us
feel a little bit more like an aoc socialist
01:09:48
regime it's not all the way as if we had bernie in
the seat but um you know the the reaction uh isn't
01:09:54
necessarily let's go back to the middle let's
become a centrist government let's uh let's have
01:09:58
good political debate and a good by the way the
one show i've been watching a lot of lately just
01:10:02
to nostalgia to chamoth's tweet earlier today make
me feel better about life is west wing where you
01:10:08
know jed bartlett is the president and he wants
a great national debate we all want to have this
01:10:13
intellectual exercise of coming to the truth
and coming to the best decision for the nation
01:10:17
and i don't think anyone feels like that's the
case today nor will that be the case tomorrow
01:10:22
with either of these guys in the seat and i
think the the point then becomes well who's gonna
01:10:26
better align with my values and you know um it is
really a crumbling democracy kind of motivation i
01:10:32
would guess if you were to survey people as
to how they're making their choice if trump
01:10:36
is elected freeberg do you feel it is an acute you
know existential crisis for america as a democracy
01:10:42
you personally i don't i don't think democracies
end um with a bang i think they end with a whimper
01:10:48
and i think that's been the case historically
and you know no democracy has uh has lasted
01:10:55
our our democracy in the u.s has has lasted longer
uh than many um but democracies i'll just tell you
01:11:03
my point of view on this democracies ultimately
enable uh freedom of operation and free markets
01:11:08
that um that result in greater progress than any
other governing system the problem with progress
01:11:14
is that progress is asymmetric you have some
people who progress at a much greater rate um than
01:11:20
than most and and it is that delta that
motivates the end of that system ultimately
01:11:26
while everyone in the united states or the average
and even the bottom quartile of the population in
01:11:31
the us is better off than they were 50 years ago
in terms of income and health care and shelter and
01:11:35
access to food and access to all these things
they're the top one percent of the us is further
01:11:40
ahead than the median and it is that delta
that motivates the end of democracy and it
01:11:44
is that is which is then perceived to be unfair
about this governing system and that ultimately
01:11:48
results in fascism or socialism and then fascism
results socialism ultimately restricts anyone
01:11:54
from progression and that's why fascism and
socialism ultimately end up in in some sort of
01:11:59
you know democratic outcome and it
is a cycle and you know we're kind of in this you know awkward phase of trying to
figure out what the hell we're going to be next
01:12:07
and i don't think that awkward phase is realized
in the next presidential term but it is going to
01:12:11
be realized in our lifetime i think that that's
a really good point i completely agree with that
01:12:18
go biden go please win uh okay wrapping up here uh
media selections uh of your bestie summer bestie
01:12:25
book bestie tv show bestie binge what do you got
you got a bestie book recommendation saks you got
01:12:31
a bestie uh yeah my my recommendations will be
a little different you know i've been i've been
01:12:36
subscribing to a lot of newsletters on sub stack
yeah and i found that to be pretty interesting and
01:12:42
like i mentioned two of my favorite writers
especially around um you know politics and
01:12:46
election time andrew sullivan and matt taibi so
check it out windows open enough to get to those
01:12:55
two who are super polarizing they actually kicked
andrew sullivan out of new york magazine for
01:13:00
making other writers at new york magazine feel
unsafe with his words all my favorite writers
01:13:05
seem to have been cancelled at some previous
publication and now they've set themselves up on
01:13:09
sub stack so it is amazing how the overton window
has closed uh besties do you have a bestie binge
01:13:15
a bestie book or a bestie newsletter or a bestie
podcast you want to share with the besties i would
01:13:20
give a shout out to a book uh called americana
which is about uh it's a history of american
01:13:27
capitalism told in chapters for every call it like
you know five to seven or ten year decade period
01:13:34
it's really interesting for people into business
it's written by a guy named boo srinivasan
01:13:40
okay bestie freeberg what do you got best a queen
of quinoa i took a week off and hung out at the
01:13:46
beach and i've been to watched uh godfather one
two and three as i've done several times in my
01:13:52
past i also watched uh one of my favorite top
five films of all time there will be blood by um
01:14:02
it's just such a beautiful film it got me down
yeah it got me down this research path on the
01:14:08
standard oil company and i ended up first off
i ended up reading all mario pouta's godfather
01:14:14
uh which is very graphic and interesting but
if you've seen the movie i don't think you get
01:14:17
much more from the book um but then um i started
reading ron chernow's um biography of uh oh yes
01:14:24
rockefeller yeah and so i don't know if anyone's
made it through that 727 page two i got about
01:14:29
500 pages in it is detailed it's detailed so it's
not you know it's not probably um you won't gain
01:14:36
as much from it as perhaps reading a wikipedia
article but uh the standard oil the the era if
01:14:42
you think about what technology is what we call
technology in the us today in our world and and
01:14:47
it's mostly software and now in increasingly
biotech um you know there have been different
01:14:53
eras of technology and different areas of monopoly
uh and and just hearing the story of the railroads
01:14:58
and standard oil and what took place in this
country it's incredible and it's so analogous
01:15:04
to what's gone on and and um the outrage and the
dissent and the fake news that goes on about these
01:15:09
people as they've been successful um you know
it really is uh history teaches us everything
01:15:14
and it's uh so i just you know um i just in
the era of standard oil just learning about
01:15:19
um the stories of that time and the people of
that time this is one vote that's that's been um
01:15:24
you know an interesting part of the tale besties i
gotta go i love you guys love you too i'll see you
01:15:29
jason and fried burgers i'll see you on thursday
yeah stake it up let's go outside uh i'll just
01:15:34
give my closing the fish that ate the whale a
book about sam zumari who was the banana king
01:15:41
and uh another uh interesting book you might like
i love capitalism by ken langone who um you know
01:15:47
built uh he built uh home depot and it's a pretty
great story about both stories of capitalism
01:15:54
and i think you all like them freeburg if you
like the um yeah the books you were talking
01:15:58
about yeah all right everybody we'll see you next
time and uh don't forget to rate and subscribe
01:16:03
and uh we'll be taping another episode
in another five six seven or eight weeks
01:16:08
hopefully earlier than that uh take
care sacks take care free burger take care of chim off and we'll see you
all next time on the all in pakist