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all right everybody welcome back to the
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number one science politics technology
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and business podcast in the world for
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five years running we're about to hit
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our fourth anniversary here episode
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200's coming up and a bunch of lunatic
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fans are getting together you can join
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them allin.com
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meetups holy cow we got the domain name
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Allin fantastic go to allin.com meetups
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and uh Hey subscribe to our YouTube
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channel we're going to do some sort of
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crazy event for the million subscriber
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party we're like 300,000 away gentlemen
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this is nuts huh you imagine this thing
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made it to 200 episodes wow we have
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allin.com how much do we spend on this
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this is great guys I negotiated it I got
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it it took me two
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years and I got a sick deal on it I
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don't even want to say because I you
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know I don't want to change it but I
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think I got it don't say I'll just say
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you leave it out I got it
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for or so and that's a million doll
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domain just so we all know five letters
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in the dictionary so good for Branding
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good job J thank you my friend yeah now
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we have allin.com tequila oh I love it
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exactly exactly and you can yum yum yeah
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I got you sax.com didn't I you have the
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domain nam.com I negotiate that for you
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wow we have all the way back to episode
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one this is
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incredible oh the new website yeah this
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is great oh can I tell you if I website
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all allin.com allin.com
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that's our website it's like this thing
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is real yeah it's like a real thing
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after four years we got our sh together
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this looks great here we go and I want
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to give a shout out to podcast AI one of
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our um remember those fake all-in
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episodes that became a startup podcast
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Ai and they built our website for us so
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shout out to the team over there all
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right ladies let's move on and uh I am
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of course your executive producer for
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life and the moderator the all in
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podcast and if I may just a tiny plug if
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you're a found found ER we are having
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our ninth cohort of founder University
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it's a 12we course I teach on starting
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companies what you stop I'm just giving
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a Qui plug for found University I I need
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to get a plug because I go to AR one and
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buy Super gut bars
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$3.99 you can pick them up this
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afternoon let your winners
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[Music]
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ride and instead we open source it to
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the fans and they've just gone crazy
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with love
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you speaking of that your people use me
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in an ad freedberg so don't talk about
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plugs a few weeks ago when I shouted out
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that glue AI was hiring Engineers we had
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like a 100 applications just from that
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from glue AI looking for engine plug on
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the show yeah for glue AI yeah right
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that's awesome for glue Ai and if you
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haven't tried super gut free Berg's team
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literally made an advertisement with me
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talking about super gut it didn't tell
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me and we're still hiring so okay well
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there you have it so go to founder.
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university to apply for my 12we program
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check out I'm running a
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GoFundMe tr get a new yeah go to
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GoFundMe freberg for what more Xanax to
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deal with your panic attacks all right
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let's get started everybody enough of
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the shenanigans hurricane season
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is upon us as freeberg had predicted
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hurricane Milton made land fall on
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Wednesday evening along the west coast
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of Florida as as many of you
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know it's been downgraded it it started
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as a category 5 potentially then a
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category 3 and then it looks like it's a
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category one now so I guess these things
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are quite
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random leading up to Milton though 6
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million Floridians across 15 counties
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were ordered to evacuate that's a lot of
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people moving out and it was a pretty
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powerful storm it ripped off the roof of
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the Tropic Canfield in
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Tampa so far the death toll is at 4 but
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it's expected to rise sadly and just two
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weeks ago hurricane helain swept through
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six Southern States killing over 220
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people tragically devastating Western
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North Carolina and entire towns were
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wiped
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out these are also beyond the tragic
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human losses are economically staggering
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in terms of the losses ACU weather
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estimating the total economic damage
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could be between 145 and 160 billion
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from Helen and Moody estimates the
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property damage alone could be as high
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as 26 billion tons to get into here FEMA
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starlink saving the day tons of stuff
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but free uh back on episode 182 you
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predicted this would happen what's
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causing all this and let's just start
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with the science angle I guess before we
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get into the other political and um
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insurance issues well I think if you'll
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remember when we talked about this a
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couple months ago the sea surface
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temperature was at kind of a record high
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in the Atlantic and warm oan
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temperatures Drive moist air up that
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evaporates the warmer the air the faster
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the evaporation and that starts to cause
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the movement of the air which drives
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ultimately the hurricane and then the
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hurricane sucks up more warm moist from
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the ocean and it creates a feedback loop
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so the more energy you have in the ocean
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the more likely you are to accelerate
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wind forces in storms and that's why you
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get these massive hurricanes that
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suddenly form seemingly overnight go
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like in the case of Hela that hurricane
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went from a c 2 to a c 4 or C 5 in like
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48
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hours because of the energy that's
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stored up and 90% here's an interesting
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stat 90% of the energy that we get from
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the Sun is absorbed and stored in our
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oceans the other kind of fact that's
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playing into this if you pull up that SC
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that nature article and this is
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something that I think you guys may
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remember we talked about so this was an
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article that came out a paper a science
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paper that came out a couple of months
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ago and in this paper these scientists
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identified that removing sulfur dioxide
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from cargo ships that travel across the
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oceans is actually causing accelerated
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warming in the oceans and the reason is
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that the sulfur dioxide forms cloud
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formations and those as they travel
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across the oceans and those cloud
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formations reflect sunlight and in the
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absence of those cloud formations that
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sunlight makes its way into the ocean
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and you get more ocean warming and by
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their estimation removing sulfur dioxide
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which causes acid rain and that's the
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reason it's been pushed to be removed
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and they started removing it in 2020
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2021 from cargo vessels by removing
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sulfur dioxide we are now going to see a
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doubling of the rate of warming of the
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oceans in the 2020s and going forward
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let me pause there for a second just to
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make sure people understand what you're
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saying emissions from cargo ships block
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sunlight which then of course reduces
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the heat absorbed by the oceans and so
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we're now choosing between pollution of
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the air or overheating of the oceans am
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I correct in summarizing that that's
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roughly it and um what is the pollution
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again sorry I just understand dioxide go
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yeah that goes into the fuel of cargo
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vessels and a couple of years ago they
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started to implement these mandates that
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sulfur dioxide no longer be used in the
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fuel as a result when sulfur Dio oxide
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is emitted from these vessels it goes
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into the atmosphere and it actually
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triggers cloud formation so now you have
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these clouds that are forming and Nick's
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going to pull up this image right now
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yeah here you can see that so all of
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these tracks are these cargo vessels
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moving across the ocean and as they move
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across the ocean they create cloud cover
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that cloud cover actually reduces the
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warming in the ocean because it reflects
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sunlight so now that sunlight energy
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gets absorbed into the ocean so this is
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another driving force that some people
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are now speculating maybe accelerating
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the warming of the oceans that we're
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seeing which drives these extreme storm
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and and hurricane events and so this
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becomes a more frequent event now a lot
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of people can I ask you a question does
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that mean that we're mean reverting
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meaning if we improve the quality of the
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fuel source that are used in
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shipping doesn't that then mean that
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we're reverting back to what would have
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happened in the absence of these dirty
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fuel
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sources yeah so in addition no no I'm
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asking I'm asking you the question is
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that true or not um so yes we are no
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longer reflecting as much sunlight and
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so for several decades we had bad fuel
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sources artificial we had artificial
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cooling effec we had an artificial
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Cooling and now we take but that's
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counter to The Narrative of what we all
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think is
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happening oh well the argument is that
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we've actually been warming the
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atmosphere which we have been we can see
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the data that shows that everywhere all
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over the Earth not just about sunlight
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coming in on the oceans and not just
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ocean warming but the the atmosphere is
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warming the planet is warming and so
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this is by by blocking the sunlight
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above the oceans we were artificially
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dampening that effect and we were
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reducing the amount of heat energy that
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was getting into the oceans so now by
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taking that away we're seeing the heat
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energy in the oceans accelerate and now
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the oceans are getting much much warmer
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the pollution was good turn out it the
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Paradox here is that it was creating a
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blocker for sunlight and to your point
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shth exactly like shouldn't we just be
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going back to what was normal but at the
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same time in the same system we had
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heated things up so this is a
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multifactored system uh that we're
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dealing with freedberg and I guess the
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takeaway from all of this is that we got
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to be really careful with what we do
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with the environment right well I mean
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let's talk about economics right so what
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how much real estate do you guys think
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is on the Florida coastline what's the
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real estate value sorry fre can you just
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anchor this like was it that it was
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supposed to be a category five and now
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it's category three when it hit land
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right so what happens typically When
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Storms hit land is they no longer have
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that hot ocean pumping energy back into
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the storm that keeps the feedback loop
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going so the storm cycle starts to break
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down all hurricanes when they hit land
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they start to break apart and so the
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category which measures the wind
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speed actually reduces this is just a
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natural thing that happens but this was
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a category five hurricane when it made
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landfall I believe it was category four
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so you know it was a massive hurricane
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we should not dismiss it because my
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understanding was Helen was Cat 4 when
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it like hit North Carolina but I read
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yesterday that what happened yeah what
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happened with Helen was it was is cat
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three when it hit Tampa or something is
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that not right yeah yeah so that's right
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but what happened when helain hit North
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Carolina it was not a cat four uh what
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happened is as that storm moved Inland
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it hit the the mountains and the first
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Mountain it hit are on Western North
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Carolina that area is elevated there's
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mountains there so when a heavy hot
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storm runs into cold mountains all the
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moisture dumps out it's like it runs
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into it and suddenly everything
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precipitates out of that storm and
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that's why some parts of Western North
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Carolina got like 18 some high some
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people measured as high as 30 inches of
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rainfall in a couple of hours so this
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insane dumping happens when that hot air
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hits cold hits a cold region and
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suddenly everything all that warm
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moisture precipitates out and dumps to
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the ground so it ran into a mountain
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it's effectively why everything fell out
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in North Carolina wa wait so you're
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saying that it wasn't Democrats who
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basically uh right blame me who did it I
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thought Nancy Pelosi cast a spell or
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something and well isn't there a lot of
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geoengineering conspiracy theories uh
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going on in your cohort I mean what's
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your I don't think so but venod wants us
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to be very clear that we need to we need
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to stop all this disinformation that
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somehow Democrats were behind that storm
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well there are we can assure everyone
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that it was just online that there's a
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ton of um geoengineering being run by
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government agencies to drive these think
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people aren't taking that seriously well
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I mean the or the origin of this though
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freeberg is people have done experiments
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for decades on trying to control the
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weather or you know alter the weather
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and and they're doing that in the Middle
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East by seeding clouds and creating more
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rain we saw that with the Dubai floods
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they said that that might have been
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caused by overseeding of clouds which
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they're doing there and then there have
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been experiments just to you know for
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the crazy laser people conspiracy the
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theist on X there actually have been
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experiments with lasers you know being
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shot into hurricanes and storms
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correct are you Alex Jones is that what
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we're doing well no I'm not saying Alex
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Jones I'm just saying that's the origin
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of where people are kind of building on
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this there have been okay so so let's
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just talk about the the hurricane the
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amount of for you to debunk it is what
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I'm doing here yeah putting particulates
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in clouds to accelerate
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precipitation is I mean we've done that
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for hundred years you know you can do
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you can increase the precipitation rate
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when there's already clouds that have
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formed but that has nothing to do with
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creating 200 M hour wind speed that
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requires an extraordinary amount of
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energy all of this energy that the
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oceans are like giant batteries and when
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a hurricane gets going that battery is
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accelerating the hurricane and the
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hurricane sucks up more power from the
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battery and it creates this incredibly
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dynamical system there is no human
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created Energy System that can for form
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a hurricane a hurricane is an
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extraordinarily powerful natural
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phenomenon that arises from the amount
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of energy that can come out of very very
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very hot oceans relatively speaking so
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you know that's really where these
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hurricanes are coming from now they're
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going to be more frequent if the ocean
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temperatures remain elevated as they
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seem to be and continue to be elevated
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and this can be a function of generally
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the temperatures warming on Earth
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generally the removal of sulfur dioxide
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generally these alino linia Cycles
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there's a lot of factors but it seems to
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be the case that we are having a very
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significant trend of continuously warmer
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oceans and those continuously warmer
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oceans means that we're going to have
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what used to be called a one in 500e
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storm which is what Asheville is being
00:14:16
termed at one in 500 year these sorts of
00:14:18
storm events can happen every couple
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years and we're now looking at one in
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100y Year events happening every 2 to
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three years in the United States with
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the uh the hurricane activity that we've
00:14:27
been seeing I think a lot of conspiracy
00:14:29
theories are built on actual experiments
00:14:31
that happened this one project storm
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Fury I'm sure you know about was to try
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to modify hurricanes by putting in some
00:14:39
chemicals that would uh freeze them and
00:14:42
dull them so they're they're kind of
00:14:43
building on break it apart yeah break it
00:14:45
apart so you know there there there have
00:14:48
been experiments here with altering
00:14:49
weather altering hurricanes but that
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doesn't mean it's Putin Pelosi or you
00:14:55
know the alumin so let's get let's get
00:14:57
back to Brass talk so let's talk about
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the economics so there's there's 500
00:15:01
billion to a trillion dollars of real
00:15:02
estate value on the Florida coastline
00:15:05
and what used to be a one in 100 Year
00:15:07
event the average Florida homeowner
00:15:08
historically has been paying about 1% of
00:15:10
the real estate value in insurance so
00:15:12
now if your real estate is likely to be
00:15:14
wiped out one out of every 20 years
00:15:17
instead of one out of every 500 years
00:15:20
the cost of insurance gets to the point
00:15:22
that it is untenable for most people to
00:15:24
pay for their insurance Florida has a
00:15:27
stateb reinsurance provider called the
00:15:29
Florida hurricane catastrophe fund and
00:15:32
this fund issues debt to meet its
00:15:34
coverage demands because it reinsures
00:15:36
insurance companies in order to in
00:15:38
incentivize them to come into the state
00:15:40
and underwrite home owners you should
00:15:41
explain the loop here which is you go
00:15:44
and get a mortgage the bank says you
00:15:47
need to get insurance if I'm going to
00:15:49
lend you the money to buy the home so
00:15:51
then a bunch of insurers need to decide
00:15:54
that they're willing to underwrite that
00:15:55
area and then when they give you that
00:15:57
insurance they then want lay that risk
00:15:59
off and go to reinsure is that the cycle
00:16:02
that's right and what's happening is
00:16:03
they would normally underwrite that risk
00:16:06
they would say this is going to cost
00:16:08
you're going to lose the value of your
00:16:09
home every 100 years or every 200 years
00:16:11
but now the models are showing because
00:16:14
of the frequency of these sorts of
00:16:16
hurricane events and the severity of the
00:16:17
hurricane events that maybe you'll lose
00:16:19
the value of your home once every 20
00:16:21
years or once every 30 years and no
00:16:24
consumer is going to be willing or able
00:16:26
to pay that much for the insurance on
00:16:28
their home so the state over the last
00:16:30
several years has had to step in and
00:16:32
effectively subsidize the insurance and
00:16:35
now the state reinsurance vehicle only
00:16:38
has statutory liability maximum of7
00:16:41
billion in a single Hurricane Season now
00:16:44
I think they got lucky with Milton today
00:16:46
but some were estimating that the Milton
00:16:48
losses were going to be in excess of a
00:16:49
hundred billion bigger than Katrina it's
00:16:52
likely as of this morning the
00:16:53
reinsurance um websites are all saying
00:16:55
it's probably a 40 to 50 billion loss
00:16:58
event still exceeds the state's
00:17:00
reinsurance capacity so you can kind of
00:17:02
think about Florida State's reinsurance
00:17:03
thing being effectively bankrupt it
00:17:05
doesn't really have the capacity to
00:17:07
underwrite the insurance anymore so the
00:17:09
real question for everyone is is the
00:17:11
federal government going to have to step
00:17:13
in and start to support the price of
00:17:15
homes because if they don't well it's a
00:17:16
terrible precedent to set because if you
00:17:18
do it for Florida then you'll have to do
00:17:21
it in Texas and Louisiana and missia
00:17:24
with wild CIA Arizona there's there and
00:17:27
Texas there's going to be no way
00:17:29
to create a clear demarcation of who
00:17:31
gets a bailout and who doesn't which
00:17:33
which will mean that everybody will get
00:17:35
a bailout or nobody gets a bailout
00:17:37
that's right and if everybody gets a
00:17:38
bailout and if you think about how
00:17:40
systematically unpredictable at least in
00:17:42
the southern
00:17:43
states the weather is you're going to be
00:17:45
talking hundreds of billions of dollars
00:17:47
a year probably the total value of all
00:17:49
mortgages in home homeowner mortgages in
00:17:51
Florida is $454 billion and those people
00:17:55
typically have you know a debt to equity
00:17:57
ratio probably on the 50-day 80% range
00:18:00
so if the value of your home dips by 25%
00:18:02
because everyone starts selling their
00:18:03
homes leaving Florida or they can't get
00:18:05
insurance then the people that live in
00:18:08
Florida most of them have their net
00:18:09
worth tied up in their home are going to
00:18:11
see their personal net worth wiped out
00:18:13
or cut in half so it's not just an
00:18:15
economic problem it's a social problem
00:18:17
that now there are so many people that
00:18:19
have put their entire net worth into
00:18:20
their home the value of their home is
00:18:22
written to a point that no longer makes
00:18:24
sense given the frequency at which homes
00:18:25
are going to get destroyed that's
00:18:27
probably the reason why they'll have to
00:18:29
do it because they'll exactly but then
00:18:31
that calculation will have to happen for
00:18:33
every single homeowner in every single
00:18:34
state at where this is this is an issue
00:18:38
yeah wait free are you saying the entire
00:18:40
Florida coastline is no longer
00:18:42
economically viable no it's totally
00:18:44
viable it's just the question is what
00:18:46
are you willing what price at what price
00:18:48
will you pay 5% of your home value for
00:18:50
insurance every year you know will you
00:18:52
pay 2% 3% if the expected life of a
00:18:55
house is 20 years then no that's not
00:18:59
that's not viable it becomes very very
00:19:01
untenable well it used to be one in 500
00:19:03
year now it's proba does this apply to
00:19:05
the entire Coastline or just parts of it
00:19:08
well I mean you saw that the range at
00:19:10
which these events can happen is all
00:19:11
over the place and the and the challenge
00:19:13
is the events are getting more
00:19:16
significant because of this warm ocean
00:19:18
weather that we see this warm ocean
00:19:20
temperature only freberg is that now
00:19:23
people are building the first couple of
00:19:25
floors in highrises in Miami and homes
00:19:28
on stilts with concrete and with
00:19:31
resistant you know saltwater resistant
00:19:32
material so there is a counter to this
00:19:34
so we might be looking investment in
00:19:36
climate resilience that's right yeah so
00:19:38
it might actually be an opportunity to
00:19:40
upgrade all these homes to resistant
00:19:42
ones uh using another set of
00:19:44
Technologies but the bailout is really
00:19:46
interesting to sacks because Florida's
00:19:49
got a lot of Electoral College votes
00:19:51
doesn't it like I I hate to bring this
00:19:53
back to
00:19:54
politics but you know promising people
00:19:57
bailouts is
00:19:59
how these politicians seem to be getting
00:20:01
votes these days yeah but is anyone
00:20:02
talking about a federal bailout I mean
00:20:04
is that this is something you're predict
00:20:06
free BR is saying is that there's a
00:20:08
there's a pretty obvious parade of
00:20:10
Terribles here where the question will
00:20:12
have to be answered one way or the other
00:20:14
because if you only have a17 billion
00:20:16
reinsurance fund and there's 50 billion
00:20:18
of damage somebody's going to have to
00:20:21
come in and cover the Gap and if it's
00:20:22
the insurance companies expect your
00:20:25
insurance premiums to double or triple
00:20:27
that's right and that's what happened in
00:20:28
California and by the way State State
00:20:30
Farm left a lot of California this is
00:20:32
what I was going to say most of these
00:20:34
big insurance companies have already
00:20:35
done the calculus to realize that these
00:20:37
regions are no longer profitable enough
00:20:39
to justify the downside risk that's
00:20:42
bigger problem so then the the ones that
00:20:44
are left are insolvent reinsurers or
00:20:46
insurers that are just funding
00:20:48
short-term arbs because they know that
00:20:51
the odds are they're going to get wiped
00:20:52
out so they'll price gouge effectively
00:20:54
so you know a different example is that
00:20:56
here where I live in Meno Park we're not
00:20:58
in a flood plane we're not in a fire
00:21:01
region none of that stuff but in order
00:21:04
for us to get home insurance you have to
00:21:07
now go through a risk assessment and in
00:21:10
our specific case we were like hey what
00:21:12
should we do with our roof and they were
00:21:13
like you got to take the roof off if you
00:21:15
want home insurance we're like well home
00:21:17
insurance is probably a good thing to
00:21:18
have was it a wood Shake roof on your
00:21:20
house it was a be you saw our house it's
00:21:21
a beautiful wood Shake roof and we had
00:21:23
to remove it and the two choices were a
00:21:26
$350,000 like iron materials yeah or or
00:21:30
like 70k for composite and it's like
00:21:33
this is insane and yeah the cost of
00:21:36
insurance was just egregious in the
00:21:39
absence of going in one anyways we ended
00:21:41
up getting the for most homeowners when
00:21:43
the cost of insurance gets to a certain
00:21:45
threshold you don't have budget for it
00:21:46
you can't afford it and so that's a lot
00:21:48
of why the insurers leave they'll
00:21:49
underwrite anything at any price but
00:21:50
they just know that most consumers can't
00:21:52
afford it here's some other interesting
00:21:53
statistics related but unrelated in the
00:21:55
early 1900s the City of Phoenix Arizona
00:21:58
averaged 5 days a year of temperatures
00:22:01
of 110° or warmer by the 2010s Phoenix
00:22:05
averaged during the 2010s 27 days a year
00:22:08
where the temperature was 110 or higher
00:22:12
since 2021 Phoenix average plus days 42
00:22:16
days and in 2024 it's been 70 days so
00:22:19
far this year that the temperature is
00:22:21
over 110 so this is affecting and so
00:22:23
there's there's increased risks in
00:22:25
California with wildfires increased risk
00:22:26
with hurricane there are a lot of these
00:22:28
factors and I have friends that work in
00:22:30
reinsurance and in the insurance markets
00:22:32
even even if you don't get affected by a
00:22:34
wildfire or disaster when that that
00:22:37
article was in the Wall Street Journal
00:22:38
it I think it said that the the number
00:22:40
of average days above a hundred was like
00:22:42
hundred something yes and right and the
00:22:45
Prof they profile this retired woman who
00:22:47
is an insurance adjuster or something
00:22:50
and the whole point of the article was
00:22:51
not that her her house was destroyed or
00:22:53
at risk but the cost of electricity has
00:22:55
gone just absolutely skyh High even with
00:22:57
solar pan even with storage you need to
00:23:01
basically lean on the grid and the grid
00:23:04
now just charges you an exorbitant
00:23:06
amount of money and so these these folks
00:23:07
were paying thousands of dollars a year
00:23:09
so if you imagine the the trifecta you
00:23:13
have all of this climate risk that could
00:23:15
destroy your home you're paying an
00:23:17
enormous premium for home insurance and
00:23:19
then you're paying an enormous premium
00:23:21
for electricity from the mainline power
00:23:23
utilities it's it's not sustainable yeah
00:23:27
and just for back
00:23:29
FEMA manages something called the nfip
00:23:31
national flood insurance plan and it's
00:23:36
historically about 50% cheaper than
00:23:38
private flood insurance they have 4.7
00:23:40
million active policies providing 1.3
00:23:43
trillion in coverage but they instituted
00:23:46
a new risk assessment system and that
00:23:48
caused rates to increase
00:23:50
and yeah it's uh because of all this the
00:23:54
policies have decreased over the last
00:23:56
couple years meaning less people have
00:23:57
flood insurance at the same time that
00:24:00
these things are getting worse and so
00:24:04
yeah this is a really tough issue I
00:24:06
wonder if this is an opportunity
00:24:09
chth if you think about historically how
00:24:13
Insurance worked it worked in
00:24:14
communities where people would help each
00:24:16
other out and do barn raising kind of
00:24:19
events when somebody had a problem so if
00:24:21
we just put on our entrepreneurial hats
00:24:23
here if you look at the cost of
00:24:25
insurance if a hundred different people
00:24:27
bundled the cost of their homes together
00:24:29
put money into some sort of platform
00:24:32
like an Uber Airbnb Marketplace and
00:24:34
there was some management structure here
00:24:36
of self- insurance because I know some
00:24:37
people are doing self- insurance for
00:24:39
healthare at their companies for this
00:24:40
kind of thing do you think there's going
00:24:41
to be a new business opportunity here
00:24:46
exist Jason it's called a mutual and
00:24:48
those are like a good chunk of the
00:24:50
industry are mutuals where it's uh the
00:24:52
shareholders are the members and they
00:24:54
all share the risk and the ownership the
00:24:56
problem is those things work because
00:24:58
have broad Geographic coverage if you
00:25:00
had to go just into Malibu and
00:25:03
self-insure the rates would literally be
00:25:06
the greater than the value of the home
00:25:07
right no one would pay into it so you
00:25:09
actually if you do proper underwriting
00:25:11
what's happened in the last couple of
00:25:12
years is all the reinsurance companies
00:25:13
and all the insurance companies have had
00:25:15
to reer write the rates that they charge
00:25:16
for insurance because the frequency of a
00:25:19
disaster has gone up and the new price
00:25:22
that they should be charging is so high
00:25:23
it doesn't matter how the capital
00:25:24
structure is set up it's simply there's
00:25:27
there's one big event that's going to
00:25:29
cause a big wipe out for a large number
00:25:31
my personal belief is I think that the
00:25:33
the real estate markets in some of these
00:25:35
places are um meaningfully mispriced and
00:25:41
specifically what I mean is that they're
00:25:42
massively overpriced that's right
00:25:44
because I think when you actually
00:25:45
account for the climate damage and the
00:25:49
long-term Financial stability of the
00:25:52
insurers and the
00:25:53
reinsurers I don't think that many of
00:25:56
the markets that have seen the
00:25:59
crazy sky high prices I'll name two to
00:26:00
be specific West Palm Beach and Malibu
00:26:05
so both ends of the coasts these things
00:26:07
just don't make sense and I think people
00:26:10
view these things as Investments but on
00:26:12
the west coast when you deal with things
00:26:13
like soil erosion and other things I
00:26:16
think it's a there's it's a Calamity
00:26:18
waiting to happen and I think on the
00:26:19
East Coast when you factor in the
00:26:22
extreme weather conditions even Jason
00:26:24
your comment about rebuilding these
00:26:26
homes in a more foolproof way doesn't it
00:26:28
because it you won't be able to rebuild
00:26:31
the entire State there's a lot of people
00:26:33
that just can't afford it there's a lot
00:26:36
of folks that will not have adequate
00:26:40
coverage so I just think these are
00:26:42
disasters waiting to happen
00:26:43
unfortunately yeah it's uh and saxs
00:26:46
there's a movement right
00:26:48
now a lot of people even of means are
00:26:51
renting their homes and so in the real
00:26:54
estate market what are your thoughts on
00:26:55
that just renting versus buying now
00:26:58
becoming like a something that you know
00:27:02
people in the in the top half of
00:27:04
homeowners or potential home owners are
00:27:06
now electing to not own their home and
00:27:08
rent have you been mon honestly I hadn't
00:27:10
heard that I mean the the trend that I
00:27:13
thought was happening was that you had
00:27:14
these big funds like black rock or
00:27:17
whatever buying up huge numbers of homes
00:27:19
and then running them to low-end homes
00:27:21
yeah lowend or medium yeah you know to
00:27:24
families I thought that's what was going
00:27:26
on I hadn't heard that that's the high
00:27:28
end of the range that people were
00:27:30
running well if you think about it like
00:27:31
there's there seems to be a cap when you
00:27:33
have a $10 million home of what you can
00:27:35
possibly rent it for and it's it's the
00:27:38
the the prices are now making more s to
00:27:41
keep more sense to keep your money in
00:27:42
the market or in other places and then
00:27:45
rent I'm just hearing are are you long
00:27:47
real estate in Florida or Coastal
00:27:50
California if you could or do you treat
00:27:51
them differently I think they're
00:27:53
different but Florida's like I mean I
00:27:56
don't know how you do the math
00:27:59
on I just don't know what you do on a
00:28:02
trillion dollars of real estate value
00:28:04
with half a trillion of
00:28:06
mortgages when you have real exposure on
00:28:09
loss more frequently than one in 100
00:28:11
years they're to your point they need to
00:28:13
be repriced and how do you repic those
00:28:16
homes in the significant level that they
00:28:17
need to be repriced without causing
00:28:19
massive economic and social consequence
00:28:22
that's what's that's what's kind of I
00:28:23
think challenging me in thinking about
00:28:25
what's the path here so is a was a good
00:28:27
thing that I sold sold my Miami place
00:28:29
last once again Sak makes a great trade
00:28:33
pretty awesome well done SX top ticked
00:28:35
it again well done Saxy poo just like
00:28:40
beep I really love I love that house on
00:28:43
the you love that house where do you
00:28:45
think I stayed when I was in town you're
00:28:47
so selfish I lost a I lost a place to
00:28:51
stay I mean the yacht access alone being
00:28:54
able to get out on the bay and get on a
00:28:55
boat the ski do all this great stop H
00:29:00
all right let's uh let's keep the
00:29:01
freeberg train going here huge news
00:29:03
Alpha creators just won a Nobel Prize in
00:29:06
chemistry two members of Google's
00:29:08
deepmind AI research team Demis hassabis
00:29:11
and John jumper received this year's
00:29:14
Nobel Prize in
00:29:16
chemistry they both work for Google's
00:29:18
deep mine as you know and freeberg again
00:29:21
all in getting there first explained
00:29:23
what Alpha fold was back on episode 14
00:29:27
in December
00:29:28
of 2020 that was almost four years ago
00:29:32
freeberg maybe um you could explain did
00:29:34
we did we predict that they would win
00:29:36
the Nobel Prize at the time I believe
00:29:37
you did we'll go check the receipts
00:29:40
using search Eng it was it became it
00:29:43
became much more likely that they would
00:29:45
win the Nobel after they won the
00:29:46
Breakthrough prize I mean just to just
00:29:49
to point this out but yeah yeah shout
00:29:51
out Yuri M shout out Yuri and Julia and
00:29:54
Julia because when those guys won that
00:29:57
award for
00:29:59
2023 and you you heard the extent of
00:30:03
what they've done it was almost like
00:30:06
obvious that they were going to win a
00:30:07
Nobel after the fact so I think the
00:30:09
really interesting thing is actually in
00:30:11
this community I think the Breakthrough
00:30:13
prize is actually meaningfully more
00:30:15
relevant and a positive directional
00:30:17
indicator to breakthrough science well
00:30:18
it's kind of like winning Sundance or
00:30:21
can you win the Palm Door you become a
00:30:23
favorite to win at the Oscars right in
00:30:26
the Academy Award so that's actually
00:30:27
interesting the Regional or more
00:30:29
industry Centric award could lead to the
00:30:31
next one so freeberg just explain to us
00:30:34
why this is so important before we I
00:30:35
just think it's much more rigorous than
00:30:37
the Nobel I think the Nobel can be a
00:30:39
little bit gained I think oh interesting
00:30:41
okay what do you think freeberg explain
00:30:43
to the audience why this is important
00:30:45
and and what's transpired we talked
00:30:47
about it four years ago there's been a
00:30:50
long challenge in Biochemistry on
00:30:54
understanding or predicting or
00:30:57
visualizing
00:30:58
the threedimensional structure of of
00:31:00
proteins because remember proteins are
00:31:03
produced by long chains of amino acids
00:31:06
and those amino acids are kind of create
00:31:09
like a bead beaded necklace and then the
00:31:11
whole necklace collapses on itself in a
00:31:13
very specific way and that
00:31:15
three-dimensional molecule that big
00:31:17
chunky protein does something
00:31:18
structurally physically and so trying to
00:31:21
understand the shape of a protein is
00:31:24
really hard I mean we've used kind of
00:31:25
X-ray Imaging systems to try and identif
00:31:28
it and tried to build models to identify
00:31:30
how does that quote protein folding work
00:31:32
how do those amino acids collapse on
00:31:33
each other to create that
00:31:35
threedimensional construct and if I
00:31:36
don't know if you guys remember in the
00:31:37
early 2000s there was a Stanford folding
00:31:40
at home distributed computing project do
00:31:42
you guys remember this yeah it would use
00:31:45
people's machines and extra CPU like the
00:31:47
set at home project to precisely yeah
00:31:50
exactly right yeah so it's like it ran
00:31:51
on the background of your computer it
00:31:52
used your CPU Cycles when you weren't
00:31:54
using your computer and it tried to
00:31:56
model protein folding and so this has
00:31:58
been a a problem that folks have tried
00:32:00
to tackle with compute for decades to
00:32:03
figure out the 3D structure this is so
00:32:05
important because if we can identify the
00:32:07
3D structure of proteins and we can
00:32:09
predict them from the amino acid
00:32:11
sequence we can print out a sequence of
00:32:14
amino acids to make a protein that does
00:32:16
a specific thing for us and that unlocks
00:32:19
this ability for humans to create
00:32:20
biomolecules that can do everything from
00:32:22
binding cancer to breaking apart
00:32:25
pollutants and Plastics to you know
00:32:28
creating entirely new molecules to
00:32:31
running in some cases like what David
00:32:32
Baker did at University of Washington he
00:32:34
shared the Nobel Prize creating micro
00:32:36
Motors mini motors from proteins that he
00:32:39
designed on a computer and so this
00:32:41
becomes I think this great like big Holy
00:32:43
Grail in Biochemistry and the alpha fold
00:32:46
project at at Deep Mind inside of Google
00:32:48
solved this problem and and by the way
00:32:50
since since then they've come out with
00:32:51
Alpha fold 3 they've launched a drug
00:32:54
Discovery company called isomorphic Labs
00:32:56
where they're basically basically
00:32:58
predicting molecules that will do
00:32:59
specific things for a Target indication
00:33:02
and then they use the alpha fold models
00:33:04
to actually design and develop those
00:33:06
molecules and there have been literally
00:33:09
dozens of companies that have been
00:33:10
started since Deep Mind was published
00:33:13
and probably several billion dollars of
00:33:15
capital that's gone into companies that
00:33:17
are creating new drugs creating new
00:33:18
industrial biotech applications using
00:33:20
this protein modeling capability that
00:33:22
was Unleashed with Deep Mind a number of
00:33:24
years ago so it really has transformed
00:33:26
the industry it'll be a couple years
00:33:27
before we see a transform the world but
00:33:30
uh it's it's it's an exciting kind of
00:33:31
thing yeah not to um virtue signal here
00:33:34
but those are plus-size proteins now
00:33:36
freeberg they don't like being called
00:33:37
chunky you got to call them plus-sized
00:33:39
proteins plus- siiz proteins yes one one
00:33:42
really difficult technical question for
00:33:44
your free B is there any way for you to
00:33:46
take this amazing breakthrough uh and
00:33:48
make saaks interested in it is there any
00:33:51
possible Vector here for it relate to
00:33:54
Sachs and get him off his BlackBerry
00:33:57
right now
00:33:58
Blackberry I think he's playing chess
00:34:00
with TL and JD Vance is watching them
00:34:03
play chess I think that's what's going
00:34:05
on right now it's really hard I mean the
00:34:06
poor audience here is watching saaks
00:34:08
looking down all right let's keep this
00:34:10
train moving here enough of the
00:34:12
shenanigans anyway congrats to the teams
00:34:15
the
00:34:16
very I mean it's just great and David
00:34:18
Baker at the baker lab in University of
00:34:20
Washington also breakthrough Prize
00:34:22
winner yeah what's interesting to me is
00:34:25
like these two nobels these guys but
00:34:28
also Jeffrey hinton's you know you're
00:34:31
really seeing now the convergence of the
00:34:34
hard sciences and computer science
00:34:36
totally in a really meaningful way and I
00:34:38
think that that's so interesting and
00:34:40
cool I think in the group chat chth you
00:34:43
had an interesting hey maybe there
00:34:44
should be a computer science
00:34:46
award for you know a Nobel computer
00:34:49
science award and uh I actually think
00:34:51
it's the opposite now which is that it's
00:34:53
amazing to see folks using computers
00:34:58
to improve our understanding of the
00:34:59
Natural Sciences and I think that that's
00:35:01
a really great place to be so what Demis
00:35:04
and John and David are doing in the life
00:35:06
science is amazing What Jeffrey Hinton
00:35:08
you know did you know TW 30 and 40 years
00:35:11
ago and 20 years ago in terms of
00:35:13
training deep neural and that's also
00:35:15
really amazing in related new all
00:35:17
computer based yeah all computer based
00:35:18
and in related news Benny off just
00:35:20
nominated himself for excellence in CRM
00:35:23
management so congratulations to Benny
00:35:25
off on nominating himself for a what is
00:35:28
that com a why are you attacking Benny
00:35:31
off a the audience what did he do
00:35:35
wrong it's a joke they're just jokes
00:35:38
have you not learned anything from the
00:35:41
people that attack you it's not an
00:35:43
attack it's a joke Ben off has done so
00:35:45
much for philanthropy just ask him if
00:35:49
you dude he's doing the best can doing a
00:35:52
great job how I got Dr with exactly can
00:35:55
you people have a sense of humor about
00:35:57
no but it's not even it's not even funny
00:35:59
if you had said something else I mean
00:36:02
okay give me a give me a funnier nobell
00:36:04
go ahead go runs a 300 billion market
00:36:07
cap he's chomping the bit to come back
00:36:09
on the Pod and explain why AI is not
00:36:12
going to disrupt SAS really oh we see he
00:36:14
wants to be back on the he's texting me
00:36:16
he wants to come on we'll check in we'll
00:36:18
check in in a hundred billion dollar
00:36:21
sh he had his chance that chance is
00:36:23
closed he shot his shot and it did not
00:36:26
land that door was when he insulted our
00:36:28
guests about not being able to afford
00:36:30
dis when he called you all in people
00:36:33
pores oh my God now you're piling on
00:36:36
anybody coming to dream Forest 2025 okay
00:36:38
let's move on sorry anyways leave Benny
00:36:41
off alone J it's like leave Britney
00:36:45
Alone that famous meme leave Benny off
00:36:48
alone so how many new enemies do you
00:36:50
want to
00:36:51
create I just just jokes they're just
00:36:55
jokes this when you thought was running
00:36:58
out of feuds you know I'm not in the
00:37:00
feud with anybody I'm making stupid
00:37:02
jokes the reason people tune in is
00:37:05
because you laugh and learned did you
00:37:06
guys see that that tweet that uh
00:37:09
somebody suggested throwing a conference
00:37:11
with all of J Cal's haters Jason
00:37:15
con
00:37:17
jcon jader jader convention what is it
00:37:21
called Jers Jers yeah J yeah J haters
00:37:25
Jers yeah I'd like to shout out my Jers
00:37:27
they're just jokes folks I love you Mark
00:37:31
I'm Penny off oh come on the Pod
00:37:34
zck I think somebody could launch a
00:37:36
successful Summit just doing that it's
00:37:38
like it's like a readymade
00:37:40
audience and they're clearly passionate
00:37:43
clearly passionate all the YC Founders
00:37:45
will be there keynote day one Palmer
00:37:48
lucky keynote day two David
00:37:53
Sachs I think it would rival the all in
00:37:55
Summit in terms of The Passion of the
00:37:57
fans three of us would show would be so
00:38:01
devastated I think it's
00:38:04
hilarious i' have
00:38:06
to Benny off I like Benny off what I
00:38:10
don't I'm trying to make enemies with
00:38:11
Benny off he's just got to have a sense
00:38:13
of humor oh my gosh Megan Kelly special
00:38:17
chat Megan Kelly and fmer lucky wait
00:38:20
does Zuck hate you too why did zck oh my
00:38:22
God Jal was just so I was brutal to Zuck
00:38:25
in the early days brutal yeah why well
00:38:27
he just
00:38:28
anyway we'll get to it later but you're
00:38:29
right like you know throwing a
00:38:30
conference for Jay haters would just be
00:38:33
like a ready made Jers Jers that is an
00:38:35
underserved and passionate demographic
00:38:38
it would be bigger than passionate
00:38:39
demographic just just look at Sax's
00:38:42
replies Community with shared values hey
00:38:44
man if I can get 25% of those ticket
00:38:46
sales I'm in let's go all right let's
00:38:50
keep the train moving
00:38:51
here we have an update on the doj's
00:38:54
antitrust suit with Google looks like
00:38:57
they're going for the breakup as chamath
00:39:01
predicted you remember the Bloomberg
00:39:03
report back in August we covered it on
00:39:06
episode2 Google is found liable for
00:39:08
maintaining a monopoly in Search and
00:39:10
digital ads now the doj is
00:39:13
working on the remedy right okay they're
00:39:16
guilty so now comes time for the remedy
00:39:18
and the doj is quote this from Bloomberg
00:39:21
considering asking a federal judge to
00:39:24
force Google to sell off parts of its
00:39:26
business and according to this filing
00:39:29
the doj is specifically considering
00:39:31
structural remedies that would prevent
00:39:33
Google from using products such as
00:39:35
Chrome Google Play That's the App Store
00:39:37
on Android and Android itself to
00:39:40
Advantage Google search 32-page document
00:39:43
released by the doj Lays out several
00:39:46
options and we'll go through them and
00:39:47
talk about them here the obvious one
00:39:50
terminating Google exclusive agreements
00:39:53
with Hardware companies like apple
00:39:54
they're the default search engine there
00:39:56
for 30 or 40 billion a year Samsung
00:39:58
that's a layup uh separating Chrome and
00:40:00
Android my God that would be drastic
00:40:02
ripping that out of the Google ecosystem
00:40:05
prohibiting certain kinds of Data
00:40:07
Tracking that's a layup as well or other
00:40:10
behavioral and structural changes for
00:40:11
the company I'm going to pause there
00:40:13
freedberg and get your thoughts on this
00:40:15
as a former googler and you interviewed
00:40:18
Sergey at the summit but I don't think
00:40:20
we talked to seray about this because
00:40:22
obviously he would not be able to talk
00:40:23
about it so what are your thoughts here
00:40:25
on a potential REM
00:40:27
I think we've talked about this I mean
00:40:29
look I've shared in the past my belief
00:40:33
that companies that are big that have
00:40:35
excess Capital that then invest that
00:40:37
excess capital in R&D can be a net
00:40:39
benefit for all of us look at Bell Labs
00:40:42
Bell Labs had a monopoly on through
00:40:46
their association with
00:40:49
AT&T with developing radar microwave the
00:40:53
transistor integrated
00:40:55
circuitry information Theory
00:40:57
everything that is the basis of the
00:40:59
internet Computing even nuclear
00:41:02
technology and so on it's because they
00:41:04
had this extraordinary Capital flow from
00:41:07
the scale of the business and they were
00:41:08
able to invest in R&D similarly Google
00:41:11
Acquired and invested for many many
00:41:13
years in Deep Mind and we just talked
00:41:15
about how demison team won the uh uh the
00:41:18
Nobel Prize for the work that they did
00:41:20
and they by the way published the
00:41:22
protein structure for 200 million
00:41:24
proteins for free out of that service I
00:41:27
just want to zoom out for a minute and
00:41:29
talk about the fact that this isn't
00:41:32
about you know whether Google has a
00:41:34
monopoly in search that prohibits
00:41:35
competition or in ads that prohibits
00:41:38
competition but are do is it really
00:41:41
worth penalizing any company that's big
00:41:44
particularly do we lose the benefit of
00:41:45
those big companies investing in
00:41:47
technology that pushes us forward Google
00:41:49
also invested in whmo for years and
00:41:50
years and years which arguably spurned
00:41:54
and drove investment from many other
00:41:56
companies in self-driving technology and
00:41:58
if Google hadn't done that would
00:41:59
self-driving have taken off the way it
00:42:01
did I don't know same with Kitty Hawk
00:42:03
and Larry's investment in EVs and that
00:42:05
that spawned a lot of evall investing
00:42:08
and similarly if you think about Amazon
00:42:10
and their investment in AWS where they
00:42:11
were burning cash for many
00:42:13
years that turned out to spawn arguably
00:42:17
a lot of interest and investment in
00:42:19
cloud and so I I don't think that these
00:42:21
big companies are bad just because
00:42:23
they're big I think we should take apart
00:42:25
the monopolistic antitrust
00:42:27
actions and behaviors that they take and
00:42:29
then identify ways to remedy those
00:42:31
behaviors verus just saying or that's
00:42:34
big should be taken apart because there
00:42:36
is a tremendous benefit to be gained
00:42:38
from the R&D dollars that they all put
00:42:40
into things that you know move the whole
00:42:42
industry forward and I think that
00:42:44
leadership's important to need it
00:42:45
otherwise if you got a bunch of startups
00:42:47
that are trying to get $10 million
00:42:49
checks from VCS I'm not sure they're
00:42:50
going to build AO and I'm not sure
00:42:51
they're going to build Amazon Cloud and
00:42:54
I'm not sure they're going to build a
00:42:55
deep mind you know protein folding
00:42:57
company and publish it for free so I
00:42:59
don't know that's just my point of view
00:43:01
onam what's the likely how we should
00:43:03
think about this stuff jth you kind of
00:43:04
nailed this one pretty good with these
00:43:07
predictions tell us we'll be sitting
00:43:08
here five years from now what will have
00:43:13
occurred unfortunately not what freeberg
00:43:16
just said it'll be the opposite there'll
00:43:18
be some form of forced remedy I'm
00:43:21
sympathetic to freeberg argument I don't
00:43:23
think that it's really a good thing in
00:43:25
the end because I do think there are
00:43:26
some incredible
00:43:28
examples of Google specifically
00:43:32
reinvesting in a way that's really added
00:43:34
value in the
00:43:35
world I think the problem though is
00:43:39
that the Technology Innovation cycle has
00:43:42
gotten too elongated so you're not
00:43:46
seeing creative destruction be the
00:43:48
natural force that keeps all of these
00:43:51
companies in their own swim lanes and so
00:43:54
they are allowed to become two and too
00:43:58
profitable and I think it becomes an
00:44:01
obvious Target for politicians I think
00:44:04
that's a really good observation there
00:44:07
about the timeline of this because if
00:44:10
you look at this I have started now and
00:44:13
I know many people are starting their
00:44:15
search Journey on Claude and chat GPT
00:44:18
every day I'm doing 30 40 50 queries and
00:44:20
follow-ups per day I force my entire
00:44:23
team to do that as well and so just as
00:44:27
there's an actual viable competitor to
00:44:29
Google this action has reached I don't
00:44:32
know the halfway mark this is going to
00:44:35
wind up being completely meaningless
00:44:36
saxs if chat GPT does build a viable
00:44:40
competitor coexist that siphons off
00:44:43
search am I wrong
00:44:46
here well it is ironic that frequently
00:44:50
the government takes actions on these
00:44:52
monopolies at precisely the moment
00:44:54
they're subject to the greatest
00:44:55
disruption totally same thing happened
00:44:57
with Microsoft in a way but it was still
00:44:59
a good thing that the government acted
00:45:01
when it did because there was a risk of
00:45:03
Microsoft porting over its desktop
00:45:05
Monopoly into this new era of the
00:45:07
internet I think it's still a good thing
00:45:08
to be looking at breaking up Google I
00:45:10
actually think that would be good at the
00:45:11
end of the day it might even be good for
00:45:13
shareholders this thing should be
00:45:15
probably three separate companies like
00:45:16
we've talked about in our previous show
00:45:18
but it is true that Google is facing the
00:45:21
most existential threat to its search
00:45:23
Monopoly and it is Monopoly in the form
00:45:26
of
00:45:27
open AI at this point in time I have one
00:45:30
final thought here and piece of advice
00:45:32
for Sergey and the team over there and
00:45:34
and I told Sergey directly they have to
00:45:36
get good at making apps to go use chat
00:45:40
GPT you take out the app and it's a
00:45:42
wonderful beautiful experience when you
00:45:44
go try to figure out how to use Gemini
00:45:47
it's like shoehorned into search results
00:45:49
and then it's like some subdomain that's
00:45:51
why people aren't using it Go by The
00:45:53
Domain in chat.com and make a dedicated
00:45:55
app just for and I kick ass you're 100%
00:46:00
right you suck at apps we said this when
00:46:04
when you asked about the bare case of
00:46:06
open
00:46:07
AI if the doj is going to go after
00:46:11
Google and by the way the interesting
00:46:13
thing Jason and I mentioned this to you
00:46:15
is that in the same article that floated
00:46:18
the trial balloon about this remedy of a
00:46:20
Google breakup the headline in the Wall
00:46:22
Street Journal which I think was very
00:46:23
purposeful said Google and meta so I
00:46:26
think that they have given their
00:46:28
brothers they being the powers that be
00:46:30
at Washington will probably want to take
00:46:33
a run at both of these companies they'll
00:46:35
start with the one that they think they
00:46:37
can disassemble the quickest and then
00:46:40
they'll go to meta
00:46:41
afterwards my strong advice to meta and
00:46:46
Google is if this is going to
00:46:50
happen you got to go out kicking and
00:46:54
punching and fighting and scratching and
00:46:56
I think the most thing is what you just
00:46:57
said Jason which is you are the front
00:47:00
door through the
00:47:01
internet and there is this completely
00:47:04
new emerging
00:47:06
technology and where is the same
00:47:09
response to chat
00:47:11
GPT that you had to X or that you had to
00:47:15
Snapchat or that you had to Tik Tok
00:47:18
because if it's going to happen it's
00:47:19
going to happen and then you might as
00:47:21
well just go for it yeah build the apps
00:47:24
make them kick ass make the chat G PT
00:47:27
alternative and get it to billions of
00:47:29
people
00:47:31
yesterday that would be the most logical
00:47:35
Game Theory thing to do to build up a
00:47:39
pool of users that you will rely
00:47:42
on
00:47:43
when the doj tries to come with some
00:47:46
consent decree or whatnot so this is the
00:47:48
time to build up the Assets Now as
00:47:51
aggressively as possible yeah and uh
00:47:53
selling YouTube would be the ultimate I
00:47:55
know that the ad Network you pointed out
00:47:57
free bar are connected but if they
00:48:00
distributed if they SP out I'll give you
00:48:02
I'll give you something about the ad
00:48:03
thing can you imagine $500 billion going
00:48:06
into Google's coffers in YouTube shares
00:48:09
they have 500 billion in cash
00:48:12
chamal I had a I talked to a company he
00:48:15
a CEO of a of a public consumer facing
00:48:18
company and this
00:48:19
was in the context of some 8090 stuff
00:48:24
and he said that he and and two other
00:48:27
CEOs the three of them you guys would
00:48:30
all know these are very big companies
00:48:32
the three of them combined are
00:48:33
particularly large and they said they've
00:48:35
had multi-year road maps to try to build
00:48:39
a reasonable set of tools in advertising
00:48:41
and it's been
00:48:42
impossible and partly why is that the
00:48:45
the tools that the big folks offer are
00:48:48
so good that they just cannibalize and
00:48:50
run over the entire market and so what
00:48:52
they hear from CMOS is we would love to
00:48:55
advertise on your company your site but
00:48:57
a your tools are substandard and B even
00:49:00
though your inventory is cheaper you
00:49:02
just don't give us the same scale and
00:49:05
breath that we get in these other big
00:49:06
places I'm not saying that that's either
00:49:09
right or wrong but through the lens of
00:49:12
probably what the doj sees is when a lot
00:49:14
of these folks write letters to them
00:49:16
talking about what they're going through
00:49:17
this is what they're saying and I
00:49:20
suspect that if you could actually have
00:49:23
a more fragmented Market in some of
00:49:26
these key Market markets it's going to
00:49:27
be a little bit easier for these smaller
00:49:29
companies to have a business now you
00:49:31
could say well tough luck you tried and
00:49:33
you couldn't build it I get that
00:49:34
argument and I and I think that that at
00:49:36
some point that is legitimate but the
00:49:37
problem is if you're public and you're
00:49:39
trying to make your company profitable
00:49:41
what do your engineers want to work on
00:49:43
they want to work on consumer facing
00:49:44
forward features and so what always
00:49:46
falls off the list it's the stuff at the
00:49:48
end the tech yeah and so anyways it's
00:49:51
this recursive negative Loop that a lot
00:49:52
of these other companies are in in the
00:49:55
shadow of these big companies that I
00:49:56
think is going to cause the doj to try
00:49:58
to do something you know this is a great
00:50:00
setup for m&a it's a great setup for
00:50:02
IPOs starting to look like and this is a
00:50:05
multi- Administration case that's been
00:50:08
going right I think this started under
00:50:10
Trump went into Biden and is now going
00:50:12
to continue on to Trump or or
00:50:14
Harris so what are your thoughts here
00:50:18
Sachs well in terms of the political
00:50:20
environment for m&a next year yeah yeah
00:50:22
I mean so obviously it depends which
00:50:24
administration's in power
00:50:26
a lot of Democrats you know prominent
00:50:29
Democrats in Tech like Mark hubin or
00:50:31
Reed Hoffman have been making the case
00:50:32
that if kamla is President she's going
00:50:35
to be much more hospitable and friendly
00:50:38
towards m&a and they've been saying
00:50:40
explicitly that they want Lena KH fired
00:50:43
well in response to that AOC just came
00:50:45
out and said we're gonna have a
00:50:46
Throwdown if you do that so I don't go I
00:50:50
would not expect a substantial
00:50:52
difference or Improvement in the in the
00:50:55
regulatory permissiveness uh towards m&a
00:50:59
if uh if we have a democratic
00:51:01
Administration if that if you have Trump
00:51:04
in office next year I think that there
00:51:07
there will be an opening up of of m&a I
00:51:09
think the Republicans have their own
00:51:11
issues with big Tech but those issues
00:51:13
tend to revolve around censorship and
00:51:16
bias and search results and llms things
00:51:18
like that as opposed to bigness per se
00:51:21
so I think it will be easier to get m&a
00:51:24
done next year if you have a republican
00:51:26
Administration absolutely I am going to
00:51:28
be printing money in a trump
00:51:30
Administration it is going to be obscene
00:51:32
how many m&a deals and IPOs are going to
00:51:34
occur there is such a huge
00:51:37
backlog but I do think there I do think
00:51:39
the Democrats want to get this moving as
00:51:41
well and I I was talking to Reed Hoffman
00:51:44
uh and you and Peter teal in the
00:51:46
Illuminati meeting and they voted 190
00:51:48
to2 to replace lenina Con in the
00:51:50
Illuminati meeting chamat why didn't you
00:51:52
make the Illuminati meeting last week
00:51:54
I'm shocked that you weren't there I'm
00:51:55
not I'm not inv to that people don't
00:51:58
know that you're being fous Jason oh
00:52:00
really they don't understand that I'm
00:52:01
joking about the Illuminati they often
00:52:03
don't they often don't well I'm sorry to
00:52:06
the low
00:52:07
IQ listeners who don't know that the
00:52:10
Illuminati is not real oh now now you're
00:52:12
insulting the audience no I'm insulting
00:52:13
the ones who believe there's an
00:52:15
Illuminati he's trying to sell tickets
00:52:17
to the Jad trying to sell tickets to the
00:52:19
jader
00:52:20
ball with buck nasty Zuck nasty J cow is
00:52:25
the biggest hater in the tech industry
00:52:28
you ever see the haters ball sacks I
00:52:31
have not SE Chapelle show no Cham it
00:52:34
looks like between the time we mentioned
00:52:35
it on the Pod it's it's actually
00:52:37
happening here it is the jader ball is
00:52:39
happening there it is lenina David Sach
00:52:43
wait why am I there well because you're
00:52:45
a headliner you're you organizing I
00:52:47
think you're the host I'm gonna be a
00:52:48
keynote you're the I'm the I'm okay wow
00:52:52
I'm the MC there look there's there's
00:52:54
Zuck nasty and there's Palmer lucky
00:52:56
you guys don't know this bit from
00:52:58
Chappelle the haters ball from Chappelle
00:53:01
oh my God it's the funniest bit on
00:53:04
shabelle show it's literally I mean I
00:53:07
saw a lot of Chappelle Show I never
00:53:08
remember God just show the real picture
00:53:10
Nick um on the Chappelle show they have
00:53:12
all of these pimps who have a yearly
00:53:16
convention which is their player haters
00:53:18
I've seen this I've seen all they do is
00:53:20
sit there with like a toothpick in and
00:53:22
they hate on each other make fun of each
00:53:24
other I've seen it is the Fest bit in
00:53:27
the history of the Chappelle show all
00:53:29
right let's keep the train moving here
00:53:31
CRV is giving back or maybe not calling
00:53:34
down 275 million from their LPS Charles
00:53:36
Riv Aventure shout out to my pal George
00:53:38
Zachary and Greek brother from CRV
00:53:41
historically they invest in early stage
00:53:43
startups they did door Dash air table
00:53:45
Twitter back in the day they had two
00:53:47
funds that they raised back in 2022
00:53:49
billion dollar early stage fund and a
00:53:51
500 million growth fund sometimes people
00:53:54
call that an opportunity fund or a
00:53:55
Select Fund
00:53:56
the New York Times reported CRV is going
00:53:58
to give back about half of that 275
00:54:00
million to investors or technically
00:54:03
probably not call it down the four
00:54:05
Partners at CRV gave an exclusive to the
00:54:08
New York Times so either getting ahead
00:54:10
of this story or uh maybe you know who
00:54:12
knows what the motivation here is but
00:54:14
the reason they gave is that the market
00:54:16
conditions for late stage have worsened
00:54:18
dramatically and that the valuations are
00:54:20
still too high yes the rent is too high
00:54:23
and that there aren't any exit options
00:54:25
as we just talked about with the
00:54:27
administration no IPOs no m&a and that
00:54:30
VC map doesn't work in the late stage so
00:54:33
I'll just stop there there's a bunch of
00:54:35
other notes here obviously this isn't
00:54:37
the first time this has happened I think
00:54:38
Founders fund cut the size of its eighth
00:54:40
Fund in half from 1.8 billion to 900
00:54:42
million they didn't actually give the
00:54:44
capital back to VCS like they're saying
00:54:46
CRV did here again I'm not certain if
00:54:48
that's what's happened or not they put
00:54:50
the extra 900 million into its ninth
00:54:52
fund if they decide to raise that which
00:54:54
I'm assuming Founders fund will if you
00:54:56
have any thoughts on this I I guess
00:55:01
Trend we got two stories here so I don't
00:55:03
know Trend P did this and he gave back
00:55:06
quite a large piece of his fund a couple
00:55:08
of years ago and then CRV just did it I
00:55:11
I want to make sure I get the citation
00:55:13
right I think it was Thomas lefont at
00:55:15
kotu who said this it was really
00:55:17
powerful it made a huge impression on me
00:55:19
which is that the NASDAQ creates about
00:55:21
$800
00:55:22
billion of Enterprise Value a year and
00:55:26
he brought that up in the context of
00:55:28
private markets have to exceed that in
00:55:30
order for it to be a real viable
00:55:32
alternative to just owning public
00:55:35
indices and so if you factor in il
00:55:37
liquidity risk and the
00:55:39
duration you have to probably generate I
00:55:42
don't know a trillion $1.2 trillion
00:55:45
dollars of Enterprise Value in private
00:55:47
Tech every year that just seems like
00:55:49
it's really hard to do where is all of
00:55:51
that value getting created so I think
00:55:54
that Venture need to go through a phase
00:55:57
where it rationalizes you know this is
00:55:59
sort of what I said at David's LP day
00:56:01
which is I think that LPS have made a
00:56:04
couple of very big
00:56:06
mistakes and I think the biggest mistake
00:56:08
that they've made is by smearing too
00:56:10
much money across too many General
00:56:12
partners and I think if you had to redo
00:56:15
it a it's probably a lot less money in
00:56:18
total but B and the example I gave there
00:56:21
was instead of giving $50 million to
00:56:23
craft and $10 million to somebody else
00:56:25
you're better off giving $60 million to
00:56:27
craft and not even having that other GP
00:56:30
because that GP makes everybody's life
00:56:32
complicated they overpay they Mis pay
00:56:34
they're probably not supposed to be a GP
00:56:36
in the first place and so they force
00:56:38
returns down and then when you contrast
00:56:40
that again to a public market that is
00:56:43
systematically creating $800 billion
00:56:46
dollar of Enterprise Value a year this
00:56:49
is an incredibly tough game and it's
00:56:50
getting much much harder so I think that
00:56:53
if you just take a step back these are
00:56:55
the right things to do because you're
00:56:57
much better off having a smaller pool of
00:57:00
capital that you can concentrate into
00:57:01
the things that matter you're probably
00:57:03
better off having smaller teams versus
00:57:05
bigger
00:57:06
teams and you're probably better off
00:57:10
trying to forge LP relationships where
00:57:13
they're not doing 50 fund Investments
00:57:17
because it just makes the entire
00:57:18
industry lag public liquid Alternatives
00:57:22
and I think that that's just not good
00:57:23
peanut butter getting spread a little
00:57:25
bit than there any thoughts uh freeberg
00:57:28
on this trend if we can call it that or
00:57:32
is this like maybe they're reacting
00:57:35
right as the market is changing and
00:57:37
valuations are getting more reasonable
00:57:39
and the exit opportunities are getting
00:57:40
more reasonable it seems like this was
00:57:41
the right reaction two years ago but
00:57:43
maybe it's the wrong reaction now what
00:57:45
do you think freeberg for a venture firm
00:57:47
to return Capital they need to have at
00:57:50
least one or two big Winners and so if
00:57:53
that winner needs to be a 10x or 20 X or
00:57:56
30X of the fund because most of the
00:58:00
investments in the fund are not going to
00:58:01
work you need to be able to enter at a
00:58:04
reasonable price and there needs to be
00:58:06
enough opportunity relative to the
00:58:09
capital trying to invest in that
00:58:10
opportunity out there for to make sense
00:58:12
so in a market where there is excess
00:58:13
Venture Capital where valuations are at
00:58:17
a premium and where you don't see the
00:58:20
exit path the m&a or the IPO events that
00:58:22
make sense that you can actually realize
00:58:24
that model you should take less capital
00:58:28
and make fewer Sher Investments and I
00:58:31
think that that's what some folks have
00:58:33
realized they don't want to be chasing
00:58:35
um you know highly valued inflated
00:58:38
opportunities and they don't want to be
00:58:40
putting Capital into tier b or tierc
00:58:43
opportunities just for the sake of
00:58:45
deploying Capital this is a really
00:58:47
interesting moment where you can kind of
00:58:49
see who are the the right folks in terms
00:58:52
of thinking longterm in Silicon Valley
00:58:54
longterm in terms of building an
00:58:56
investment practice in private
00:58:58
Venture and maybe who are folks that are
00:59:01
trying to build their AUM stack and
00:59:03
folks who have done reasonably well like
00:59:04
Founders fund has probably the most
00:59:06
exceptional track record in Silicon
00:59:07
Valley as a venture
00:59:09
firm they are very cognizant of the
00:59:12
market conditions and I think that
00:59:14
they're being very smart by the way the
00:59:15
other thing I've heard from LPS is
00:59:17
they're similarly trying to find more
00:59:20
concentrated Capital themselves so
00:59:22
they're trying to put more Capital to
00:59:25
work in fewer managers and so there's a
00:59:28
real weat from the chaft moment
00:59:30
happening in Silicon Valley venture
00:59:32
right now what I think a couple years
00:59:34
ago was hey everyone's going to go do a
00:59:35
startup a few years ago became
00:59:37
everyone's going to go do a venture fund
00:59:39
and now I think the froth that has
00:59:40
occurred because of that is being
00:59:41
cleared out and to just explain this
00:59:43
math before I get Sax's thoughts on this
00:59:46
if this was a $500 million fund let's
00:59:49
say they were putting $25 million into
00:59:51
each we'll take management fees out of
00:59:54
it $25 million into each opport Unity at
00:59:56
a billion dollar valuation they would
00:59:57
own 2 and a half% obviously of those
01:00:00
firms they need to get probably a 30
01:00:04
billion power law exit of 30X ax in
01:00:07
order to just return the fund there'll
01:00:09
be some dilution obviously along the way
01:00:11
that's why it's not 20x and the number
01:00:13
of companies that go from a billion to
01:00:16
30 billion per cycle is incredibly low
01:00:19
Uber coinbase
01:00:22
Airbnb I it's a really short list huh
01:00:25
sax and recent
01:00:27
history I
01:00:28
mean look just just go back to the crb
01:00:31
thing you said at the outset of the
01:00:33
conversation that this was either a
01:00:35
growth fund or an opportunities fund
01:00:37
that makes a really big difference
01:00:39
explain please because well an
01:00:41
opportunities fund typically exists to
01:00:45
back up your winners in other words if
01:00:47
the Venture fund is producing some big
01:00:49
Winners the opportunities fund exists to
01:00:52
deploy more Capital into those into
01:00:54
those companies as opposed to growth
01:00:56
fund which is you'd be underwriting
01:00:57
brand new companies from scratch
01:00:59
typically an opportunities fund is
01:01:00
limited to companies that you're ready
01:01:02
an investor in through your Venture fund
01:01:04
so that makes a big difference I mean if
01:01:06
CRV has a billion dollar Venture fund
01:01:08
and only a $500 million opportunities
01:01:10
fund it may just be the case that they
01:01:12
don't need all that Capital to back up
01:01:14
the winners they can do their pratas out
01:01:16
of the main fund so I I suspect that
01:01:20
that might be what's going on I actually
01:01:21
think this is a pretty good time to have
01:01:23
a growth fund a lot of the the yeah well
01:01:26
because a lot of the uh crossover
01:01:28
Capital has left the ecosystem okay a
01:01:30
few years tigers and that sort of
01:01:34
cohort yeah well tiger and and um
01:01:37
SoftBank are still around but there are
01:01:39
other very large investors hedge funds
01:01:42
and so on who had come into the
01:01:44
ecosystem with billions of dollars a few
01:01:46
years ago and now they've left and some
01:01:48
of those funds that you're talking about
01:01:50
like tiger used to be $10 billion funds
01:01:51
now they're $2 billion funds right
01:01:52
they've been right sized they're not
01:01:54
violently doing I mean the tiger deals
01:01:57
my understanding was they weren't
01:01:58
joining the board in a lot of the cases
01:01:59
and they were Outsourcing the diligence
01:02:01
and that was a pretty violent Pace I
01:02:03
don't know what this is the best time in
01:02:05
probably five years to have a growth
01:02:06
fund H interesting but to to your point
01:02:09
about the size of the Venture fund the
01:02:10
bigger the Venture fund the bigger the
01:02:12
winner that you need to make that payoff
01:02:14
obviously yes and so because of the
01:02:16
power law so to take an example I don't
01:02:19
know let's say you've got a billion-
01:02:20
dollar Venture fund let's say that at
01:02:23
IPO you own 10%
01:02:26
of whatever that that winner is and
01:02:28
because of the power law your your fund
01:02:30
performance is really determined by your
01:02:32
best outcome right yep so in order to
01:02:36
take a$1 billion Venture fund and say
01:02:38
deliver a 3X you know so three billion
01:02:41
of returns and your best company you own
01:02:44
10% of that implies you have a $30
01:02:46
billion winner in that fund and there
01:02:49
are precious few outcomes where you have
01:02:51
a $30
01:02:53
billion IPO right yeah I me very count
01:02:56
them on two hands the last cycle like I
01:02:59
just did you got you got Uber you got
01:03:01
Robin Hood you got coinbase strike will
01:03:05
eventually come out you got SpaceX well
01:03:07
that was two cycles ago so I mean yeah
01:03:09
you're going to need to have a
01:03:10
meaningful ownership position and a
01:03:11
massive company in order to make a fund
01:03:13
that big payoff the the data that I
01:03:15
think LPS look at shows that smaller
01:03:18
Venture funds tend to perform better for
01:03:20
this reason 50000 million funds so yeah
01:03:25
I personally want the pressure of a
01:03:26
billion dollar Venture fund that would
01:03:28
be really hard as a five or $600 billion
01:03:32
Venture fund you kind of need to have or
01:03:35
or want to have like a decacorn outcome
01:03:38
to make that a great fund but to have to
01:03:40
have a $30 billion plus outcome it's
01:03:42
it's even more difficult moving on Pew
01:03:45
just published uh some really
01:03:46
interesting research on Tik Tok uh if
01:03:48
you don't know the Pew study they've
01:03:49
been doing it for decades it's very well
01:03:51
respected um and uh bipartisan or
01:03:54
nonpartisan 4 in 10 us adults aged 18 to
01:03:58
29 are now regularly getting their news
01:04:00
from Tik Tok here's some charts for you
01:04:02
to take a look at as you can see the
01:04:05
younger generation is really spending a
01:04:07
lot of time on Tik Tok and getting a lot
01:04:09
of their news there I know this because
01:04:11
uh yeah I I've talked to a bunch of kids
01:04:13
about this and people that use Tik Tok
01:04:16
52% are regularly getting their news
01:04:19
from the platform and that number has
01:04:21
skyrocketed compared to other social
01:04:24
platforms take a look at this chart
01:04:26
here's X 59% of people say they get
01:04:28
their news at X it's really a news
01:04:30
platform so that makes total sense you
01:04:32
look at Facebook it's you know 48% right
01:04:35
now Reddit 33% YouTube
01:04:38
37% in 2024 Instagram 40% but Tik Tok 52
01:04:43
up from 22% so it's no longer just
01:04:45
dancing and this is the reason I think
01:04:47
many people in the government were
01:04:50
concerned about the attack Vector that
01:04:52
the CCP would have in the United States
01:04:55
they still control the company for
01:04:57
services like Snapchat LinkedIn and
01:05:00
WhatsApp and next door it's below 20
01:05:03
below 30% get their news from there
01:05:05
there sure truth social there uh sacks
01:05:07
57% of people get news there and Rumble
01:05:09
48% so what what's your takeaway from
01:05:12
from this just
01:05:14
sax looking at it and this impact that
01:05:17
Tik Tok has is this concerning on a
01:05:18
national security level since the
01:05:21
algorithm is a black box and you could
01:05:22
tweak it if you really wanted to to
01:05:24
Really change sentiment and um young
01:05:27
people are obviously very impressionable
01:05:29
on this platform and they're big users
01:05:31
of it well I thought there was other
01:05:34
data in the study that should calm
01:05:36
people's fears that Tik Tok would
01:05:38
somehow be used as a political weapon so
01:05:40
in the same survey you're talking about
01:05:43
95% of adults that use Tik Tok say they
01:05:46
use it because it's entertaining so
01:05:48
that's the main reason people use it and
01:05:50
only 10% of accounts followed by us
01:05:53
adults post content related to political
01:05:55
social issues okay that's posting and
01:05:57
the main reason right sure yeah but so
01:05:59
so basically 90% of the accounts that
01:06:02
get followed aren't even posting
01:06:04
political or social issues they're there
01:06:07
for entertainment as people watching
01:06:09
Dance videos as people yeah watching I I
01:06:12
mean I the main thing I use it for is to
01:06:15
watch wrestling highlights so uh you're
01:06:18
a wrestling guy yeah I'm a wrestling fan
01:06:21
what yeah you're into this Kabuki
01:06:24
theater of wrestling this new
01:06:27
information I get my WWE on on Tik Tok
01:06:31
because I don't to watch the whole yeah
01:06:33
favorite are you a Hulk Hogan guy are
01:06:34
you an Undertaker guy Vince McMahon I
01:06:37
mean Jimmy Jimmy Superfly
01:06:39
snooker who are you Andre is I know all
01:06:42
those names but uh I like I also love
01:06:44
the Road Warriors uh Ultimate Warrior I
01:06:47
loved I I was a huge wrestling fan that
01:06:49
was the one thing that my dad and I
01:06:51
bonded over we would watch wrestling
01:06:54
every Saturday did you ever watch the
01:06:56
the specials on Saturday night like the
01:06:59
oh yeah oh those are so that that was
01:07:01
the era of Hulk Hogan for sure Saturday
01:07:03
night's Main Event Randy Savage Savage
01:07:07
Savage is great Savage yeah I mean look
01:07:08
my my all-time favorite was Stone Cold
01:07:10
Steve Austin Stone Cold is great I
01:07:12
marked out the hardest for Austin he was
01:07:14
he was anti-woke before antiok became a
01:07:16
thing totally this is crazy you guys are
01:07:20
into
01:07:21
wrestling I'd say flare number two for
01:07:24
me wait wait hold on have you gone to a
01:07:27
wrestling did you only like the WWF at
01:07:29
the time or did you like the NWA as well
01:07:31
that their moments when when Hogan
01:07:34
turned heel and joined the the uh was it
01:07:38
the NWO that was like a big moment I'm a
01:07:40
big uh Andy Kaufman wrestling fan that
01:07:42
was my only interest is when when Andy
01:07:44
Kaufman came in
01:07:45
there and uh trolled them but have you
01:07:49
Kaufman yeah that well that was like in
01:07:51
the 1970s wasn't it or it was the late
01:07:54
his 80s remember he was on
01:07:56
with Jerry Waller and he he comes to a
01:08:00
wrestling match Sach in the South and
01:08:03
was where I grew up in my hometown of
01:08:05
Memphis right so he goes there and he
01:08:07
gets in the ring and he says all of you
01:08:10
rednecks I want to show you some new
01:08:12
inventions this is called soap and this
01:08:16
is called a washcloth and you used it to
01:08:19
clean yourself and he's like just
01:08:22
mocking the southern accent and Jerry
01:08:24
law remember Jerry laa smacks him and on
01:08:28
Letterman oh it's the greatest it was a
01:08:30
huge deal I mean where I grew up because
01:08:32
that this was like on the local news yes
01:08:35
when I grew up in Memphis there was no
01:08:37
professional sports teams okay all we
01:08:39
had was the Memphis State basketball and
01:08:42
and uh wrestling every Monday night at
01:08:45
the mids South Coliseum that was it that
01:08:47
was like professional sports in Memphis
01:08:49
you also had probably like some state
01:08:51
fairs or you know like best goats best
01:08:53
sheep or something Lawler was so popular
01:08:57
that he could have been elected mayor in
01:08:59
fact I think there was talk at one point
01:09:00
of him becoming mayor wow I mean the
01:09:03
intergender champion Andy coff did you
01:09:06
guys like mouth of the South Jimmy Hart
01:09:08
oh yeah course he was amazing he was
01:09:11
like the main heel manager for a while
01:09:14
yeah okay this is before the WWE took
01:09:16
over I guess it was called WWF back then
01:09:19
but they were all these little Thoms and
01:09:20
kingdoms and Midsouth wrestling was like
01:09:23
one of those kingdoms and Lawler was
01:09:25
like the king of it and then you had all
01:09:26
these guys come in and out and wrestle
01:09:28
fredberg you ever watch wrestling and
01:09:32
what do you think of this Tik Tok survey
01:09:34
I don't watch wrestling okay very good
01:09:37
and Tik Tok survey anything where are
01:09:38
you no any thoughts looks like they
01:09:41
gathered some reasonable data okay there
01:09:43
you go there's there's your hard point
01:09:45
my point was that it's mostly an
01:09:47
entertainment app where people go to
01:09:49
watch Dance videos wrestling Clips style
01:09:52
influencers and so on and I think that
01:09:54
this idea that it's somehow a propaganda
01:09:56
tool around you know programming our
01:09:59
youth I think that's a moral Panic
01:10:00
that's been exaggerated what do you
01:10:02
think the odds are that Tik Tok is
01:10:05
hacked to allow you to passively listen
01:10:07
even when the app is not being used
01:10:10
zero you think it's definitively zero no
01:10:13
like 5% I think that's very unlikely
01:10:15
yeah because some someone said that that
01:10:20
was that was a there was some code that
01:10:23
enabled that in the early version of the
01:10:24
app and then some other people audited
01:10:26
it and they said they did not find
01:10:27
evidence that there was any technology
01:10:29
and Apple's got a very good audit system
01:10:30
for this did those same people audit
01:10:33
WhatsApp and then it turned out that it
01:10:35
was they passively listen yeah does
01:10:38
WhatsApp passively listen yeah it's one
01:10:39
of the it's one of the most well-known
01:10:40
breaches well maybe they do maybe it's
01:10:43
maybe I'm 100% certain that the CCP is
01:10:45
using it because they the people have
01:10:47
tracked already journalists using it so
01:10:49
if they've already done it it's 100% now
01:10:51
I don't know about the passive listening
01:10:53
but any thoughts on 50% Plus young
01:10:55
people getting their news here shamat
01:10:57
any news on that I mean obviously we
01:10:59
don't have evidence that it's being used
01:11:01
currently to manipulate people but it's
01:11:02
over 50% of young people are now getting
01:11:04
their news there or say they're getting
01:11:06
their news there I bet more than 50% of
01:11:08
young people are getting their news from
01:11:10
podcasts and those podcasts get chopped
01:11:12
up and clipped and then people watch
01:11:13
them on Tik Tok yeah for sure I bet
01:11:15
that's how it's happening there are a
01:11:17
lot of people who think this show is a
01:11:19
Tik Tok show and they don't know it's a
01:11:21
big show yeah we'll have to prepare for
01:11:24
a bre New World in the following way
01:11:26
there was an article I think it was in
01:11:28
the Wall Street Journal that said that
01:11:30
Russia and Iran were paying low-level
01:11:34
Street criminals to create chaos okay
01:11:37
and I and I read that article and I
01:11:39
thought okay well what does this mean if
01:11:41
you actually extrapolate this which is
01:11:43
that
01:11:45
the hot Wars are very complicated not
01:11:48
worth doing
01:11:50
these disruptive fissures are the better
01:11:53
way to sew chaos
01:11:55
and it occurred to me then that tying
01:11:58
this back to something that we saw
01:11:59
before it does make sense for a lot of
01:12:01
folks to sponsor a lot of longtail
01:12:04
content that say a lot of different
01:12:05
things I think that that just is pretty
01:12:09
obvious and so I think that if you put
01:12:11
these two ideas together it stands to
01:12:13
reason that a lot of people will be
01:12:17
paying influencers a lot of money to
01:12:20
create all kinds of content that is
01:12:22
specific to a perspective that they have
01:12:24
and then on top of that if you can
01:12:25
algorithmically amplify one over the
01:12:27
other you know you're you're going to
01:12:30
have issues is it the biggest issue in
01:12:32
the world probably
01:12:34
not probably wouldn't swing an election
01:12:36
but it would cause chaos and we just had
01:12:38
the the southern district of New
01:12:41
York Target that Russian Russia Today
01:12:44
was giving $10 million to four
01:12:46
podcasters didn't even know they were
01:12:47
getting paid by the Russians they just
01:12:49
picked them because they like their
01:12:50
opinions and they gave them 100,000 an
01:12:52
episode to to promote Pro Russian
01:12:56
positions if the Russians were actually
01:12:57
doing it it's the stupidest use of $1
01:12:59
million ever because great those
01:13:03
podcasters already had their own
01:13:04
channels they're already putting out
01:13:05
lots of content and this other content
01:13:07
is a drop in the bucket I think Jamal
01:13:09
the issue with what you're saying is
01:13:10
just there is so much content out there
01:13:13
already people create it for free people
01:13:15
create it you know because they're they
01:13:17
have a career in it there's a whole long
01:13:19
tale of influencers there is so much
01:13:22
content out there already through
01:13:24
podcast through websites it's all being
01:13:26
chopped up that trying to do it as some
01:13:29
sort of disinformation strategy I think
01:13:31
is very hard to do because it's just
01:13:33
when there's billions and billions of of
01:13:35
Impressions any effort that you try to
01:13:38
engineer ends up just being a drop in
01:13:40
the bucket I agree yeah it's defin it
01:13:43
makes sense in theory but it makes sense
01:13:45
in theory it's very hard to do in
01:13:47
practice Yeah the goal is not to win any
01:13:50
specific argument it's to create
01:13:53
mistrust in the entire news ecosystem in
01:13:56
the information system so that people
01:13:58
give up trying to figure out what the
01:14:00
truth is and that's what the Russians
01:14:03
doing that on their own the mainam media
01:14:05
lies so much that's what's creating the
01:14:07
distrust as are the Russians paying off
01:14:09
podcasters okay let's how is1 million
01:14:12
going to accomplish anything if that
01:14:13
story is even true great question great
01:14:15
question may I answer
01:14:18
it conspiracy theory not a conspiracy
01:14:21
theory at all these were very low-level
01:14:23
mid like you know tier B CD podcasters
01:14:26
if you give them $100,000 per episode
01:14:29
they can spend more money buying cameras
01:14:31
promoting their shows hiring people so
01:14:34
you're just finding people and dropping
01:14:36
money on their head so they can do more
01:14:37
of the same so it's a very smart
01:14:39
strategy in fact I think I think it's
01:14:41
the stupidest thing I've ever heard they
01:14:42
took podcasters who are already
01:14:44
successful and paid them to release
01:14:46
content through a less watched Channel
01:14:49
That's the yes it was it was just more
01:14:50
about getting the money to produce more
01:14:52
content and then they in the these guys
01:14:54
are
01:14:56
these guys are already live streaming
01:14:57
like 247 oh there's a puppy oh here he
01:15:00
goes freeberg trying to win more people
01:15:02
over with his puppy love unbelievable
01:15:05
this guy is absolutely
01:15:08
ridiculous unbelievable all right listen
01:15:11
let me give saak some red meat here he
01:15:13
got he got his little steak Tata with my
01:15:16
Russia Today story got your little amus
01:15:18
BGE and now I give you your Tomahawk you
01:15:21
ready saaks you want your Tomahawk you
01:15:23
want it rare here it comes
01:15:25
2024 election update the betting markets
01:15:28
and polling indicate a really tight race
01:15:30
but maybe Trump is surging this week
01:15:33
poly Market which is a betting Market
01:15:34
has Trump 55 to 45 versus kamla Ki
01:15:40
another betting Market 5248
01:15:42
Trump bada and points bet those are
01:15:45
offshore booking and poly Market is also
01:15:47
offshore 5248 Trump Nate silver friend
01:15:51
of the Pod his algorithm has it 5347
01:15:55
KLA real clar polling that's an
01:15:58
algorithm has KLA with a two-point lead
01:16:01
New York Times Sienna comma with a
01:16:03
three-point lead Reuters ipso pretty
01:16:05
well trusted uh three-point lead for
01:16:07
kamla NPR PBS Maris pole has com with a
01:16:11
two-point lead so sportbooks and Betty
01:16:14
markets are favoring Trump slightly
01:16:17
while the polls are slightly favoring
01:16:20
comma Sachs I sliced it up nice for you
01:16:24
you got nice 10 slices of meat here
01:16:26
which slice you going for well I think
01:16:29
your recitation of the polls there kind
01:16:32
of mixes up a couple of things there's
01:16:34
popular vote polls and then there's
01:16:35
Electoral College which goes state by
01:16:37
state if you look at pretty much now all
01:16:39
the main pollsters you look at Tony
01:16:42
Fabrizio you look at real clear politics
01:16:44
they're now showing that Trump is
01:16:46
winning the electoral college right now
01:16:48
he is up in almost every swing state
01:16:50
including I think Michigan which is
01:16:53
pretty surprising clearly there's been a
01:16:55
huge swing towards Trump over the last
01:16:57
week or two and look there's still 25
01:17:00
days to go so anything can happen I
01:17:01
don't want to overstate this but yeah
01:17:02
this is a good example right here
01:17:04
showing
01:17:05
thatal college is is 296 to 242 what is
01:17:10
fabrio he's just a republican pollster
01:17:12
but his accuracy is pretty high I've
01:17:14
never heard of it FAO well another guy
01:17:17
who I think is more neutral is Mark
01:17:19
Halprin who is a pundit who has been
01:17:22
very accurate this election cycle
01:17:24
remember he's the one who broke the
01:17:25
scoop that Biden would be replaced by
01:17:28
Harris and he even said exactly when it
01:17:30
would happen and uh he predicted it down
01:17:33
to the day he was exactly right about
01:17:36
that and if you follow his account he is
01:17:38
now saying that both Republican and
01:17:41
Democrat insiders that he talks to are
01:17:44
both saying the same thing which is
01:17:45
their internals are now showing Trump
01:17:48
ahead in every swing state or almost
01:17:51
every swing state and uh things seem to
01:17:53
be breaking Trump's way right now again
01:17:55
there's 25 days left but if you're
01:17:57
wondering why is Harris all of a sudden
01:17:59
doing interviews it's because their
01:18:02
internals started showing that she was
01:18:03
in trouble so they decided to get her
01:18:05
out more and or is it the other way is
01:18:08
it that the her Howard Stern interviews
01:18:10
or whatever are causing her to lose
01:18:12
votes well yeah exactly well so you know
01:18:14
which one is it do you think because I
01:18:15
don't know when I don't have the dates
01:18:16
of all these polls versus that no I
01:18:18
think it's it's what I predicted a
01:18:20
couple of months ago it's the Doom Loop
01:18:21
so what I said two months ago is that if
01:18:24
Harris gets behind she's going to have
01:18:26
to abandon this sort of basement
01:18:27
strategy of not doing interviews she's
01:18:29
going to have to start doing interviews
01:18:30
the problem is she's not good at
01:18:32
interviews and if she does more
01:18:33
interviews she's gonna fall further
01:18:34
behind in the polls and it could cause a
01:18:36
doom Loop so that's where we appear to
01:18:38
be right now I said that on August
01:18:40
30th okay shamat your thoughts I think
01:18:43
that Donald Trump is basically stuck to
01:18:45
his strategy which
01:18:48
is he is a generational retail
01:18:53
politician I just heard parts of what he
01:18:56
did with Andrew
01:18:58
Schultz another great sort of you know
01:19:01
podcast I think David's right that the
01:19:05
editing and the massaging of the Kamala
01:19:07
hara's talking
01:19:08
points
01:19:10
are galvanizing the people that have
01:19:12
already decided and turning off the
01:19:14
people that have already decided to vote
01:19:15
for Trump and she's losing the folks in
01:19:17
the middle and so this is what's causing
01:19:20
her to have to be out there and and
01:19:22
she's gonna have to deliver a very crisp
01:19:26
message and I and I think that right now
01:19:28
it's been a little bit lacking which is
01:19:30
why you're seeing the
01:19:32
polls at least the Electoral College
01:19:34
which is really what matters at this
01:19:35
point turn
01:19:38
Trump so she's going to have a bit of an
01:19:41
uphill fight between here and November
01:19:43
the other thing I'll say is that if
01:19:44
you've seen what's happening in the
01:19:46
appet court it's not clear whether the
01:19:49
the
01:19:50
Trump case is going to get overturned
01:19:52
before the election but if that does
01:19:55
that could be very meaningful momentum
01:19:57
for
01:19:58
him and then I think the third thing is
01:20:00
that we should now Buckle in because if
01:20:03
the last two elections are any guide
01:20:06
there are going to be a bunch of
01:20:09
spanners in the works between now and
01:20:11
November the wait what did you say
01:20:12
spanners spanners in the works yeah what
01:20:15
does it mean what do you call it wrench
01:20:16
in the system you mean like an October
01:20:18
surprise you mean like some crazy turn
01:20:20
of events okay freeberg any uh thoughts
01:20:23
here would you like to shck test this
01:20:25
and see what you want in the numbers or
01:20:27
do you have some objective thoughts here
01:20:29
what what's your what's your
01:20:31
take you know there's on the polling
01:20:33
data or yeah where we're at in the
01:20:36
election you pretty open-ended here you
01:20:38
can look at the you can make a note on
01:20:41
overall what you see between the betting
01:20:43
markets and the polls and
01:20:45
that disparity you could just talk
01:20:48
generally about where you think we are
01:20:49
you could talk about coma on Howard
01:20:51
Stern and doing a bunch of interviews
01:20:53
with friendlies where you at right now I
01:20:55
didn't see her interviews okay I saw
01:20:58
some excerpts on Twitter oh boy yeah let
01:21:01
me just follow upon a point jth made Jam
01:21:03
said that she had to be crisp if you
01:21:05
look at any of these interviews they're
01:21:07
the opposite of crisp she's asked
01:21:08
softball questions by by like Stephen
01:21:10
Cole bear saying why are you running for
01:21:12
president how are you different than Joe
01:21:14
Biden yeah and she doesn't have good
01:21:16
answers she starts free associating she
01:21:19
gives these very long-winded answers
01:21:20
that don't go anywhere she says she
01:21:22
can't think of a single way she's
01:21:24
different than Joe Biden when when
01:21:26
pushed on that it's very strange these
01:21:29
are she definitely did the most favorite
01:21:30
shows I wish she would do some
01:21:31
challenging shows I think she's got to
01:21:33
do Joe Rogan all in and um what would be
01:21:37
another good podcast for her do your
01:21:38
moth if she really wanted to like do the
01:21:41
adversarial thing or something more do
01:21:43
adversar do an adversarial just come to
01:21:45
Allin come and have a conversation come
01:21:47
and have a normal conversation here yeah
01:21:48
no I'm just thinking like it seems like
01:21:52
ZX if she comes and has a has a
01:21:53
conversation
01:21:55
you'll be respectful yeah this whole
01:21:58
idea that I didn't treat Cuban
01:21:59
respectfully is nonsense just watch the
01:22:01
tape I don't think he thought that I
01:22:03
know somebody somebody asserted that no
01:22:07
I mean I the all if you look back on
01:22:10
every single presidential related one we
01:22:12
did here they were all respectful and
01:22:14
they were all conversations I think the
01:22:16
Cuban one dipped because of both of you
01:22:18
into a bit more of a debate and it was a
01:22:19
lot more crossover than the other he
01:22:21
wanted that that's
01:22:23
what I agree back to him he likes to
01:22:26
come out he likes to do his thing that's
01:22:28
exactly what if you look at all the
01:22:29
other ones I'm trying to think of a
01:22:30
moment where it if you look at the other
01:22:33
Dean B Phillips Chris Christie VC boring
01:22:37
gotta go love you guys see you later
01:22:40
this has been another amazing episode
01:22:42
The Allin podcast episode 199 make sure
01:22:45
you go to allin.com
01:22:47
meetups make sure if you're starting a
01:22:49
company you go to founder. university if
01:22:51
you're an engineer please go to I'm
01:22:53
doing whatever okay please David Sachs
01:22:56
make sure you go to um super gut glue AI
01:23:00
if you're an engineer and if you like
01:23:02
potatoes go to aal.com and order your
01:23:04
potatoes pre-order a subscription I mean
01:23:06
if we're doing sell some let's sell some
01:23:09
super 890 890 go to
01:23:13
899 we'll see everybody next time on the
01:23:15
all in
01:23:19
byee Let Your winners
01:23:22
ride Rainman David
01:23:27
and instead we open source it to the
01:23:29
fans and they've just gone crazy with it
01:23:31
love you
01:23:35
[Music]
01:23:39
Queen besties
01:23:42
are that's my dog taking a your
01:23:47
driveways oh myit meet we should all
01:23:51
just get a room and just have one big
01:23:52
huge orgy cuz they're all just it's like
01:23:55
this like sexual tension that they just
01:23:56
need to release
01:23:57
[Music]
01:24:03
somehow we need to get merch our
01:24:08
[Music]
