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what the f what are you wearing Jason what oh Uber had a big week so this is the Uber Montclair crossover hat oh look
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at that all right and I also bought a Montclair shirt you bought that or I sent it to you oh what oh you got the
00:00:12
watch in the mug oh you don't know about the Apple Montclair watch or the commemorative mug
00:00:21
or the new tech you don't know about the new neckties that are coming from Montclair it's actually nettec oh my God
00:00:29
oh so good I'd just say somebody got their be quiet I'm not saying that I got a hundred thousand dollar sponsorship
00:00:37
but we don't have a rule in the agreement about logo placement do we listen Jay Cal if anyone was willing to
00:00:45
sponsor you every square inch your clothing will be covered in ads like a race car driver it is look you'd be like
00:00:52
wearing a jumpsuit every day you know Montclair sponsorships are great this is five five dollars plus 17 of shipping
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from France on its Etsy I'm ready to go [Music] Rain Man David said we open source it to the fans and
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they've just gone crazy [Music] how was everyone's week what'd you guys do this week ah just busy working
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um trying to be helpful where I can and that'll be the extent of my comments today how is Market Street this time of
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year look there's all sorts of wild report I've gotten all sorts of inbound from people asking me if I'm like
00:01:34
leaving craft Ventures to do something at Twitter no it's not true we're just Jason and I are just pitching in and
00:01:39
helping out while Elon establishes his permanent team at that company elon's the CEO he's running it he's the decider
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he's making the decisions and that some of us are just kind of helping out in any way we can and that's really the
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extent of it it's a you know very much part-time thing we're just helping a friend but it's been like
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blown up in by the media into something much more than it actually is it is a hundred percent accurate I am still
00:02:03
doing my day job podcasting investing in 100 companies a year just helping out on
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the margins uh that's it the end I do want to try talking about one issue that's already public because it's
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already been tweeted so Elon had a tweet this morning about how there's now like
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an Advertiser boycott going on and This falls on the heels of a bunch of reports that came out over the last
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couple of days that supposedly there's been a big influx of like racist tweets and Jason I actually saw what was really
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going on which was it's all not true I mean what happened is that within hours of Elon taking over the company on
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Friday there was a 4chan attack where basically people from this message board created Bots to post hundreds of
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thousands of spam messages that contained racist words and epithets and within hours this has been detected and
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Yol who runs the the trust and safety implementation he met with me and Jason and Elon directed him to
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shut it down and he UL actually posted a tweet story about it that's the only reason I feel comfortable talking about
00:03:05
it is because you already posted a tweet storm but maybe people don't haven't seen it or they haven't
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connected all the Dots here but what's really I think unfair about this is that as you've as you've seen it's not like
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your feed was all of a sudden filled with racist things these were spam accounts or bot accounts that were
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posting to zero followers they generally have zero followers or if they do have followers it's other bot accounts right
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so they're posting racist tweets Into The Ether so to speak it's not degrading anyone's experience it was shut down
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promptly but then what happens is these activist groups they're monitoring the fire hose right and so they publish a
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report saying that racist tweets have gone up 500 since Elon took over Twitter the truth is Elon hasn't even had a
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chance to change anything about the content moderation policies he's posted that like guys I haven't even I haven't
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changed anything about content moderation whatever the rules are they're the same rules that existed
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prior to him taking over and this is just an organized operation by people who want to create that report so then
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these activist groups basically publish this report they feed it to news outlets
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and then somebody then takes those those reports and then feeds them to advertisers and you get a boycott but I
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think the point here is that Elon didn't do this this is being manufactured by people who are not operating in good
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faith they are trying to manufacture an incident that they can then use to hurt the company yeah and it was thwarted
00:04:33
immediately and fixed have you guys seen episode 333 of the Lex Friedman podcast
00:04:38
he um he interviews Andre carpathy who is really I mean one of the great minds of our of our time particularly around
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Ai and ML and the question that Lex asked which Andre expounded on which I think is really
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interesting is what is the next generation of bots look like and I think where the problem gets very hard
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for all platforms so this is not a Twitter Twitter specific discussion is that you can now generate such real life
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like human images that are unique and you can also generate high quality text to things like gpt3 that's also you know
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that can offense essentially push the boundaries of you know a low-level Turing test
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I think the real problem over time for Bots for spam for coordinated attacks on any
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platform is that when you use these tools you're going to have to become very sophisticated in how you try to
00:05:39
detect them and then to block them it's a really interesting discussion between you know two pretty meaningfully smart
00:05:47
people carpathy was the head of uh autopilot at Tesla right autopilot Vision yeah so he's really smart yeah I
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have no doubt that Elon is going to do a much better job stopping bots on Twitter
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once he has a chance to do it because he's got this amazing team of AI engineers and and he's just going
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to be more focused on it you know what I like the most about what I heard this week is the idea that
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you can do either micro payments or subscription to third-party content providers because I think so much of my
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news feed is delivered to me through the Twitter app and then I click on an article and then it's like a paywall or
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it's some sort of difficulty in kind of accessing the content having some integration there or some ability to
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kind of make a micro purchase to read an article it's going to be I think a super
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feature the other thing that I would love Twitter to experiment with is if you have a micropayments model to
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Publishers it would be great if you could publish content without a byline allow The Economist and see what that
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does to information quality right you know if you if you if you do not get any credit to your individual name for
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writing stuff but instead it goes to the Masthead publication whatever it is the
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times the post I think it could have a really important Behavior change in how journalists cover the news it's worth
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experimenting with at least and if you're paying them enough money I think that you could probably demand that
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Facebook could probably demand that today you know strip the byline away and just it just says New York Times just
00:07:15
like today it just says The Economist yeah it is a um The Economist is a very polarizing gig in journalism for that
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reason uh there are going to be actually a lot of journalists who would prefer to
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have their byline taken off one of the problems with journalism today is even if you're doing reporting in good faith
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tramoth and you put your byline on there harassment you know threats Etc can become very acute if you're just
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covering certain topics and so I actually think a lot of you know writers and journalists would opt into this they
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might prefer it I think they should because I think the two ends of the spectrum are better than this you know
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Gross Middle that we have the end of the spec one end of the spectrum is you have
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the New York Times The Washington Post and the economists with no byline and no attribution to reporters the other end
00:08:01
is if you want to build a brand that's based on your name go start a sub stack yeah and I think that there's a very
00:08:07
good balance there and the New York Times could Syndicate that as well but if you separate the two all of a sudden
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the news becomes more likely to be truthful news versus you know well disguised opinion the the
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other issue is you know for readers if you do choose to do a no byline publication you're really going to need
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time to build trust and for people to understand what you're doing because they will think you're taking the byline
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off in order to pursue a certain agenda right so that is the the that is the suspicion that can build up The
00:08:36
Economist has been able to do this over decades with trusted reporting yeah and sub stack proves that you can have no
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reputation whatsoever and if you're publishing great content you can build a great business from scratch so yeah
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you don't need to pay your dues quote unquote by getting a byline at the New York Times to be a clever writer
00:08:54
you can start that business today and get paid so I think the New York Times should just focus on being the New York
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Times and sub Stacks should focus on individual people and I think if you could clean up the middle that would be
00:09:05
much better for all of us anyways I'm excited for you guys to help out and pitch in I hope you guys do some good
00:09:10
with it I'd love to come back and use Twitter more often can we talk about the reporting that happened
00:09:16
with the two guys that trolled the journalists and pretended to be fired employees because I actually thought
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that was such an interesting moment this week that all the journalists immediately parroted it because it fed
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their narrative Johnson checking done there was no reporting done and then several of them including I think
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Deirdre Bosa from CNBC came out and publicly apologized for that report and if folks uh listening aren't familiar
00:09:41
with what happened these two guys came out they pretended to be fired Twitter employees on Monday walked out with a
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box up and they were like hey we just got fired it's terrible life is awful no it's even worse husband and wife you
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know the guy's name was one guy's name is Rahul ligma and the other guy's name was like Mike Johnson so the whole thing
00:10:00
was ligma Johnson so I now here's what's so funny about due diligence hold on I read this story without giving away that
00:10:09
punch line to my kids all of my kids immediately started howling they're like Dad if you say
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these two names are ligma Johnson and I was like oh my God and so you know when when like you know pre-teens can figure
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this out but the journalism industry could not that is kind of a very telling sign Friedberg made the key observation
00:10:28
which is they didn't figure it out because they didn't want to because it fit their narrative so they don't they
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don't fact check things that fit their narrative this was my point about journalism I it just it was so poignant
00:10:38
to me this week when this happened particularly as it relates to Twitter and the importance of call it open
00:10:45
journalism or citizen journalism and the Integrity of kind of you know of the voices that we all kind of trust as our
00:10:52
our kind of journalistic authorities that these guys came out and they were pawned right outside Twitter's offices
00:10:57
into telling a story that fit their Sensational narrative and it was really a kind of poignant moment for me well do
00:11:03
you remember that story I think it was originally a rolling stone and then Rachel maddowell Amplified it where it
00:11:08
was in Oklahoma City where supposedly all these Mega Republicans were eating horse Pace because Trump told them to
00:11:13
and they were and this is basically I thought it was like a coveted therapy and then they were going to the
00:11:18
emergency rooms of all the hospitals and then they were turning away heart attack
00:11:21
victims because there are so many of these these people going to the emergency room anyway it all turned out
00:11:25
to be like a made-up story like a hoax but the media reported it because the story was too good right it just it fit
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too many of their preconceptions there's also one there's another Vector sex which is live coverage is
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um you know you really have to to be careful because when doing live people will call in and say oh they're at the
00:11:44
scene of an accident and then they will do a baba buoy or whatever you know kind
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of Charades and so without fact checking and without saying hey we haven't confirmed this yet but these two
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employees are claiming this people want to get real-time coverage it's fine to do real-time coverage I think everybody
00:12:01
in the audience has to understand so much credit what about the editor there was a picture and it said ligma Johnson
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why are you covering for these people I'm not covering I'm just trying to explain it no you're gonna even let me
00:12:18
unpack the whole point let me unpack the whole point there's also you interrupted
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me well here's the thing there is a different standard for live news coverage and then there we've ripped out
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fact checking from a lot of these Publications and basic fact checking and a little bit of time I'm explaining why
00:12:31
they make this mistake I'm not protecting them you want to know the reason they make it that's part of it
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but they've also ripped out fact checking and then they are in such a race to get the clicks on social media
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no no here's what's going on if the story fits their priors they run with it immediately and they don't do any fact
00:12:47
checking because they don't want to know that it's not true that's what's going on there is an element let's check a
00:12:52
story if it's a narrative they don't like because they're gonna they're gonna try and make sure it's not true yeah
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that's true of both sides and they'll use proxies this thing there's only one mainstream media this is the mainstream
00:13:03
media who's the alternative Fox is uh the the number one network the alternative to the number one network is
00:13:11
do you think journalists do this tell me the writer tell me the writer on sub stack wow there's a lot of different
00:13:18
ones there so I who got fooled what sub stock writer got fooled by ligma Johnson
00:13:28
fooled by ligma Johnson I don't think so I'm not defending don't make me just defend ligma I'm not defending we are
00:13:37
both sidesing it I'm not both sizing it I'm telling you what is happening in journalism today they have ripped out
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fact checking and they are in a race to beat each other because the first person
00:13:45
to get the story up gets a clicks that's the dysfunctional thing they try to create a story when there was no story
00:13:50
there they agree with that as well they went and camped out outside of an office
00:13:54
mid-market Street yes and they said hey there's this Sensational thing happening
00:13:58
and there was no Sensational thing happening correct and so the little drop that fell into their laps the little
00:14:04
thing that fell into their laps became the story because that's the story they wanted to see created there was no story
00:14:09
beforehand that then that there were all these people being fired walking out with boxes and then they said let's go
00:14:14
send live TV producers down there they sent the live TV producers down there and then the same things
00:14:20
they did the same thing in New York at Bears to read the cover when they had other major layoffs at Bear Stearns and
00:14:27
stuff like that during the financial crisis of course they sent people to do live coverage there not defending it I'm
00:14:31
just explaining to you what's going on in the background as well with live TV and and the gutting of newsrooms and
00:14:36
having no fact checking a lot of these stories go out but what about 20 years ago my 11 year olds and 10 year olds
00:14:43
better copy editors than these adults at these that's crazy incredible Publications my kids started howling
00:14:50
they were like Dad do you understand what you just said there's a league budget yeah I mean awesome I mean come
00:14:56
on this is like prepubescent humor that these people fell for it it's ridiculous
00:15:01
it's embarrassing it's certainly embarrassing yeah it is embarrassing and this connects with the 4chan board it's
00:15:06
the same problem this is a grievance industrial complex right they're manufacturing grievances it's funny in
00:15:14
the case of ligma Johnson it's not funny in the case of the 4chan board but these
00:15:18
are people who are inventing stories because yeah to manipulate media because they
00:15:23
know it's so easy to manipulate the media right anyways big shout out to Rahul ligma that was a great stunt well
00:15:29
played sir it happens to be a huge fan of the all-in podcast apparently sir come on as the bestie guesty anytime he
00:15:35
wants oh no well no definitely not please all right we should talk about layoffs and Tack lift 13 riff 700
00:15:43
employees let go yesterday stripe 14 riff a thousand employees open door chime Dapper Labs all hundreds of
00:15:51
employees Open Door the most significant they're 550 18 percent Dapper 22 percent uh and Twitter we'll
00:15:59
see what the Riff winds up being but that's occurring as we're taping here so and then Jason Apple did a pause Amazon
00:16:05
did a pause right and Google and Facebook yeah maybe trying maybe signaling a pause but haven't they've been hiring
00:16:15
like in absolutely uh at a crazy crazy pace and we'll pull up the chart here actually it's instructive to look at
00:16:22
Facebook and Google because they have not slowed down by any stretch of the imagination
00:16:28
just by the raw numbers uh this all started to Peak in June and now it's starting up again so there's a website
00:16:35
uh layoffs.fyi that's been tracking all these layoffs you can see the number of layoffs these are kind of major layoffs
00:16:42
and the number of employees impacted been pretty consistent in the third quarter it started to die down in
00:16:49
September from the Peak in May and June and now right yeah it feels like this is the
00:16:57
double dip we were talking about I think this is the beginning this is not even unpack it well I think that we had if
00:17:03
you take a very balanced view of what happened this week you have to start I think with the
00:17:08
Federal Reserve and really what they said is rates will probably be higher than all of you think
00:17:14
and they'll be higher for longer than all of you want and again without debating whether you
00:17:22
know that's going to come to pass or not the thing that you can do is you can build a little sensitivity model to
00:17:29
understand the mathematical implication of it and basically what it means is that the dollar that's right in front of
00:17:35
you is now meaningfully more important than the dollar that's far far away from you
00:17:40
so let's just assume that you know the FED funds rate goes to five and a half percent or so
00:17:47
even five let's let's go to the optimists and say it's only going to go to five tech companies have to achieve 500 basis
00:17:54
points above that minimum so we all have to generate 10 to 11 percent returns for us to be on a
00:18:00
risk-adjusted basis better than a Government Bond the problem with that is all of a sudden
00:18:06
you know if you're trying to generate cash even three or four years from now it's not worth that much you need to
00:18:13
generate dollars today and so you know they are really re-prioritizing the value of short-term profits and that's
00:18:21
going to affect how companies get money the cost of capital so how much dilution
00:18:26
you have to take so I think this is what companies are now bearing down for they're realizing oh man I need to get
00:18:34
my cost structure way in line it is way better now just to put think about this contrast it's way better to grow at 20
00:18:41
and be profitable than it is to grow at 100 and burn money because it's not clear where that second
00:18:47
company is going to get the incremental dollars they need for growth and that's just a mathematical realization when
00:18:53
rates are five percent risk-free rates are five percent so I think this is this is that moment where you see that pivot
00:18:58
from pivot growth to profit yeah yep we've been talking about it for six months but this is this is this is how
00:19:06
it is Manifest in Silicon Valley companies is of scale is through layoffs and cost reductions and cost savings
00:19:14
so the investments in future growth are reduced and the timeline to drive greater profits
00:19:22
is improved I think what if what Elon is going to do at Twitter or what is reported so this is nothing
00:19:29
to do with anything anyone told me just what I've read in the reporting it's accurate that he's going to cut so
00:19:34
deep he's going to cut 30 40 50 potentially of the employee base it really sets a new standard for how
00:19:42
profitable a tech company can get and again I'll give credit to a Twitter poster named post Market who I didn't
00:19:48
give credit to a few weeks ago when I read this tweet which I think was a good one which was
00:19:54
that elon's really going to show everyone just how profitable these tech companies can be just how lean they can
00:19:59
be run and you know when you're doing a 10 riff or a 13 riff you may or may not even be
00:20:06
getting to profitability with that riff when you cut 30 40 50 deep and you can actually turn a real profit on a
00:20:14
business an Enterprise scale business like a Twitter or like many other enterprise software companies that are
00:20:19
out there right now it really kind of sets a new standard that a lot of folks might then end up
00:20:23
saying you know what maybe we should go deeper and there could be the case that private Equity firms take a look at this
00:20:29
and there's a lot of these distressed mid cap and small cap software companies out there that private Equity firms now
00:20:35
realize wow you don't actually need 50 of the workforce in order to keep the product running and to drive to
00:20:42
profitability and you could see a bit of a flurry of buyout activity as more folks come in and maybe try and
00:20:49
mimic the Elon Playbook so you know that's one kind of prediction I think may arise if Elon is successful in
00:20:56
making Twitter a much more profitable Enterprise it could set a new model that catalyzes a lot of other M A activity a
00:21:03
lot of other buyout activity of these distressed small and mid-cap companies uh by uh by other actors can I build on
00:21:09
what you're saying Nick could you please just throw up that tweet that I sent just for
00:21:14
all of these guys to look at because I think it's incredible so to your point this is an incredible uh slide just an
00:21:19
incredible slide and essentially what it shows for those folks that are not watching this on YouTube is it
00:21:25
essentially shows the private software universe and then the public software Universe at different levels of
00:21:32
valuation so as an example right now there are 15 companies private companies that are valued greater than 10 billion
00:21:40
dollars and there are 40 public ones that are valued greater than 10 billion there are
00:21:45
50 companies between you know more than 5 billion but only 60 that are public that are valued more than five
00:21:53
and here's what's crazy there are 400 companies who have an average valuation of 3
00:22:00
billion and then there are already 70 companies in the public markets where they have a
00:22:06
billion dollars of next 12 months of Revenue and it just goes to show you to your point freeberg
00:22:13
if these folks have to generate an 11 hurdle rate their cost of capital is 11 percent
00:22:21
the companies on the left will have to go through a lot of very difficult cost cutting potentially head count
00:22:27
reductions you know repricing of the product all kinds of things yeah no not none of them have oh of
00:22:37
these many of these are the left tracker you're on the Left Right 400 there there's almost 500 companies here that
00:22:43
have to do an enormous amount of work so that they have a chance to be on the right hand side of this chart the point
00:22:49
is that you didn't have to do this when rates were zero there was just an abundance of free money and risk seeking
00:22:55
and duration that is now out of the market I think there's also a story that of the 200
00:23:01
companies that are software public software companies that you see on the right some number of them will need to go
00:23:07
private in order to do the restructuring that the market is demanding that they do in order to get rightly valued and to
00:23:13
your point it will happen at meaningfully lower valuations than where they probably went public or their last
00:23:18
drive around which will you guys as you guys enormous instructions yeah if you guys look at these 200 companies on the
00:23:24
right how many of them do you think go private over the next 18 months to get restructured Allah what Elon is showing
00:23:31
everyone is possible on Twitter 18 is 18 months is hard to predict but to your point Freeburg I think if you look at
00:23:37
the number of them that are unprofitable at least half of them will have difficulty and about so I think about
00:23:44
two-thirds of these companies really have no line of sight to profitability in the next two to three years and again
00:23:50
if you if you layer in this cost of capital argument all of those companies David will have
00:23:56
to raise money at very egregious terms in order to keep themselves going as a public business in which case their
00:24:05
alternative is to go private in a PE transaction so it's probably at least half these businesses I mean it's a lot
00:24:12
there's 100 PE deals to be done yeah 100 wow Stacks what do you think because you know these businesses and
00:24:19
the models I mean some of them it's hard to get profitable if you're a scaling SAS business right like you have to get
00:24:24
to a certain scale before it's possible well I don't I don't that's like a very specific question of like how many of
00:24:30
them are gonna get acquired by pe firms versus going public or going private after being public that's that's like a
00:24:37
very specific question I think the larger point is just that it feels to me like the economy is headed off a cliff
00:24:42
right now I mean I can tell you within our larger portfolio of companies like I can see the trajectory so after
00:24:50
q1 board meetings I would say about two-thirds of portfolio companies were hitting their numbers and one-third were
00:24:57
missing and it still appeared to be like problems related to those specific companies not a macro Trend I would say
00:25:04
after Q2 board meetings two-thirds were missing and one-third were hitting their
00:25:08
numbers and it you could start to feel okay maybe there's like a macro Trend here and I would say after
00:25:13
Q3 board meetings like now the entire portfolio is is reforcasting uh maybe there's like a handful of
00:25:20
companies here or there that aren't if you're one of those congratulations but like even the best companies our
00:25:26
portfolio now are seeing major headwinds and this is just I think an economy-wide
00:25:30
slowdown do you think there's restructuring possible I mean can these companies yeah because let me just ask
00:25:36
in the public markets do you think those public companies can get restructured as
00:25:40
public companies in order to yeah it just yes it will yes of course it is extremely expensive well it's expensive
00:25:46
I don't even think it's will I think it's just expensive yeah I mean coinbase as an example like
00:25:51
look take coinbase versus carvana right these are both businesses that issued convertible debt sort of right before
00:26:00
things got very very hard and if you look at where their convertible debt trades it's trading basically at an
00:26:06
implied yield of about 12 or 13 both companies now one is probably you know a legitimate bankruptcy risk which is
00:26:14
carvana that's what the market would think whereas the other one you know I think it has a very fortified balance
00:26:19
sheet and could weather the storm coinbase but unfortunately in a moment where you know rates are again the
00:26:26
risk-free rate goes to five five and a half our cost of capital to do business goes to 10 or 11. these guys have to pay
00:26:33
12 or 13 my gosh it's really really deluded to be in business right now so it just goes to show you that you can
00:26:41
stay public but if you want to get incremental money to cover your burn the only way you can do it without really
00:26:48
you know blowing up your cap table and doing a massive recap will be through convertible debt but it
00:26:55
has a huge overhang and you risk turning the keys over to the debt holders of the
00:27:00
company so the alternative for that business is to go into the hands of private equity
00:27:06
and get out of the spotlight of these public markets but public private Equity is very smart and the thing that's
00:27:14
happened to them is they can't raise debt right so what do you think they do they
00:27:18
just have to pay 50 less than what they would be willing to pay before because they have to write you know 100 Equity
00:27:24
check so right there is no free lunch anymore I think is the big is the big point to to point out anywhere in the
00:27:31
market right now I think one of the things I'm most concerned about or would be is I was talking with a friend who
00:27:37
works at a private you know unicorn software company any we talked about the numbers of the business and I was like
00:27:44
oh that company's probably worth X and I gave him a number and then I asked him how much money they've raised and
00:27:49
they've raised more than x so I was like dude your options are worthless like you
00:27:54
know this is a real problem I think that's probably going to become very systemic
00:27:58
for scaled unicorn software companies what happens to these businesses sacks in the market
00:28:04
you know as they kind of need another round but the value of the company is now less than the total cash that
00:28:09
they've raised that all is sitting as preferred stock listen it's it's survival of the
00:28:14
quickest those who are most willing to adapt the most quickly are going to survive and the ones that are stubborn
00:28:20
and refuse to accept the new regime the market regime are gonna die we showed that chart remember that chart from
00:28:26
Sequoia months ago on this podcast remember that where it basically showed what happens if you're a company that
00:28:34
doesn't cut burn until the very end then you're still going to run out of money and die but if you make the cut right
00:28:39
away quickly you you have enough Runway to weather the storm and I think that what we've seen is you know at my firm
00:28:47
craft yeah this is exactly it yeah we showed This months ago we've been begging our Founders to embrace this we
00:28:52
did a portfolio a review with our entire set of founders of our portfolio companies we did one in February when we
00:29:00
felt the markets were changing and we did another one in May and we showed the slide and this is the most important
00:29:06
thing for Founders to internalize is you have to make the changes quickly you know one way for them to think about it
00:29:12
is let's say say you're a unicorn company okay and you raised at the peak let's say second half of 2021 you raise
00:29:18
100 million dollars at a billion dollar valuation and let's say you've got 50 million left in the bank right so you've
00:29:23
burned 50 million a lot of these Founders are thinking that 50 million they've got left is only 5 dilution but
00:29:29
that's what it was historically if you were to raise a new round today you might only be valued at 250. so that 50
00:29:36
million you have left is actually 20 dilution and that's if you could even raise which might be very very hard the
00:29:43
most important thing Founders can do is forget about the historical terms on which you raise that money forget about
00:29:49
how much money you were burning in the past just think about how much money you have in the bank today impute evaluation
00:29:56
to it so you really internalize how much dilution that money represents and then
00:30:01
create a new plan moving forward to preserve that cash as long as possible can I say something else quickly on top
00:30:06
of this that's I think that's really good advice the thing that again people should do is
00:30:12
you should just build a little spreadsheet for yourself to understand what the alternative financing options
00:30:19
are for people who are in the business of investing so David to your point the current three-month t-bill rate is four
00:30:26
percent you know you can buy munis now between four and five percent that are that are
00:30:31
Triple Tax advantaged right you can buy uh high quality corporate bonds that are
00:30:36
six seven eight percent and so it's stocks that have a dividend yield of five percent of growth growing
00:30:43
Market leading growing and so all of them dividend yield exactly and so all of a sudden like turning around and
00:30:49
giving it to a company where there is no end in sight in terms of it doesn't get
00:30:53
you to profitability is a really really hard thing to do I was talking to an entrepreneur David
00:30:59
soloff just yesterday and he said it really well he's like listen you know I'm not a macro
00:31:06
Economist I'm not trying to forecast but he's like what I understood yesterday this is David
00:31:11
talking about the FED as an entrepreneur the angle of attack has changed the FED
00:31:16
has said this is not going to be some triangle Sawtooth it's not going to go up sharply and then come back down
00:31:23
sharply which is what we would all want if we wanted things to get back to normal sooner
00:31:30
the angle of attack is now a little bit slower which means it's going to take longer to get where we need to be
00:31:36
and then we're going to stay there for a lot longer than we want and when you roll those two things together a lot of
00:31:42
companies may run out of money and so if you can't get to default alive you have to look at your cost structure
00:31:48
and figure out how to right size this thing because the cost of capital is just going to be
00:31:54
really really expensive and this was the fed's goal right they wanted to take away this free Capital they want to slow
00:31:59
the economy down and it seems like they're making progress they did the 75 basis point
00:32:04
hike this week but we're adding jobs to the economy we have more job openings and we had 2.6 percent
00:32:11
GDP growth so I guess my question to the to everybody here is what is the Fed gonna have to do or can
00:32:18
they stop this consumer and this growth it's very strange right Powell Powell said he'd rather over correct
00:32:27
and break things because he has a toolbox to fix the broken bones but he doesn't have a toolbox to fix if they
00:32:34
under correct and they have rampant inflation I mean not more explicit you can't get
00:32:40
Jason so he's going to take rates until demand is destroyed and enough demand is
00:32:45
destroyed such that inflation is tamed but that has huge implications to all of us because we all have to do our job
00:32:52
trying to build a company trying to raise money trying to invest money it's just getting much much much harder
00:32:59
than I even thought so like you know for me I'm like wow I thought that we could
00:33:04
get through the worst of this by mid-23 but now you have to plan for the worst which means okay now I'm thinking that
00:33:10
man rates could be higher for much longer which means you know we could be in this market until early 25 and you
00:33:17
may say hey that's way too conservative yeah but you have to plan for conservatism in this point so how do I
00:33:24
invest money right now honestly I'm like hmm I should just put more into T bills
00:33:29
isn't that crazy if a company's like hmoth can have another 10 15 20 million bucks I'm like wow I mean I don't think
00:33:35
that that gets you anywhere and oh by the way that 10 or 20 million dollars I can generate four percent
00:33:40
what a what a tough trade-off right for well for somebody who has access to private markets which should be high
00:33:46
growth companies to take the guaranteed four over the 50x 25x10x whatever we're trying to bet on here yeah that's not
00:33:54
it's not just the guaranteed four but if you want to take Tech risk then you could go buy the corporate bonds of some
00:34:00
high quality companies for the 10 or 11 so you take moderate risk so you're also
00:34:03
competing with that not to zero risk can you explain that for the listeners what
00:34:06
that corporate debt is and why it you know pays more sure there are there are you know high quality public companies
00:34:12
tech companies that have bonds and that's corporate debt and they obviously have to pay a higher rate than what the
00:34:18
treasury pays because the treasury is is risk-free and corporations could default
00:34:23
so there is some risk to it it's not zero risk but you know it's like if you're willing to take Tech risk then
00:34:29
why wouldn't you buy a bond at 10 meaning the equity always has to beat that threshold return but but hey can we
00:34:36
just go back to the jobs report for a second I mean the U.S government could default but it's considered the least
00:34:41
likely to default of all issuers of debt in the world and that's right yeah that's why people call it the
00:34:49
risk-free rate because it is the least risky the U.S can always repay its debt because the debt is denominated in
00:34:55
dollars and the treasury can always at the end of the day print more money that would just be monetizing the debt other
00:35:00
countries that owe money in dollars and obviously don't control the U.S mint they can't do that so they could
00:35:06
actually default but since we're the world's Reserve currency we're never going to default however the dollars
00:35:12
that you get paid back by the US government might be worth a lot less in the future because of inflation and
00:35:17
that's the real risk you have to think about but there's no default risk right whereas with corporate debt there is but
00:35:23
let's just go back to this the Jaws picture for a second Jason you asked about this so there is news this morning
00:35:30
that we added 261 000 jobs in October and obviously given that there's an election in a few days then you know the
00:35:36
administration is eager to point to this but if you dig a little deeper in the report I just posted the link there you
00:35:42
see in the Raw numbers that there's actually 328 000 fewer employed Americans and the number of unemployed
00:35:50
Americans actually increased 36 000. so and the labor force participation rate declined for the Third
00:35:56
consecutive month to 62.2 percent so like I don't really understand like how all these numbers add up but the point
00:36:03
is like the data is very mixed our new and and this very definitely negativity in there
00:36:09
and this feels to me like the last gasp of the bull market where there's like this residual job creation but you look
00:36:18
at like just what's happened in the last week where it's stripe cutting I mean Stripes probably the single highest
00:36:24
quality I think it's probably the most valuable private company okay but but like software pure software
00:36:31
company they had a 14 cut you're starting to see now the riffs really start to pile up so I think we're at the
00:36:38
beginning now of a long cycle of the unemployment rate going up I mean it just feels like the economy is slowing
00:36:45
so fast the markets are you know they've been puking now for six months it just feels like this is the beginning of a
00:36:53
like really serious recession yet we had GDP growth yet we had job uh openings we
00:36:59
had two quarters we had two quarters of net negative GDP growth this is when we had the debate about what our recession
00:37:04
is it was true that if you looked at growth in nominal terms that appear to be strong and then it was net negative
00:37:11
once you subtracted the inflation rate you know we said several months ago my prediction was a double-dipper session
00:37:16
where you had this shallow technical recession then it bounced back in Q3 but now I think we're headed into the second
00:37:23
part of it which is the real recession a recession characterized by joblessness and you're starting to see economists
00:37:28
say we're going to go from three point something percent unemployment rate to say five or six percent unemployment
00:37:33
next year so I think we're just beginning to see the the job Cuts start to add up
00:37:39
this is I think this is what Powell met which is you know he'll take it as far as it takes and then he can fix it on
00:37:46
the back end by reintroducing you know quantitative easing and reintroducing lower interest rates to
00:37:52
stimulate demand but there's what are the odds he gets this right it seems to me that the FED
00:37:59
has a habit of reacting too slowly they were too slow to react to inflation my guess is that they'll be too slow to
00:38:06
react to the recession so we'll end up with a period of rates being higher than they should too long and then they will
00:38:13
correct they'll drop rates but that could be two years from now and meanwhile we could be in a pretty deep
00:38:17
recession two charts for you to look at the GDP uh by quarter and then after that the labor participation rate so
00:38:26
there's your GDP q1 Q2 being negative Q3 bouncing back we'll see what happens in
00:38:30
Q4 here's your fed Force participation rate for labor as we discussed the thing with the labor participation rate that
00:38:37
we're still not sort of like truly factoring in is like you know we had a million Americans die because of covid
00:38:42
and you know starting in that Trump presidency we lost like seven or eight million immigrants
00:38:48
so those eight million people have a huge effect on this number yeah right and it's not properly really factored in
00:38:54
because if if you see that at the start of the Trump presidency it's just it's it just fell off a cliff basically
00:39:00
and you also have people who retired early that was a big Trend and this all peaked in 2000 labor participation
00:39:06
hitting that like 67 68 I think it's the peak and just slowly going down as Boomers
00:39:13
retire early because they made so much on their 401ks and homes and then you're right your mouth we've
00:39:19
had negative we've really cut immigration in the last whatever five six years I think there's an element in
00:39:24
here that's missing on how much people individually are finding other ways to earn income that doesn't qualify and
00:39:31
show up in the labor force numbers people have set up Etsy stores Shopify stores
00:39:38
have tripled since covid people are making more money on YouTube on Instagram on Tick Tock than ever
00:39:45
before there's a whole new class of work that revolves around the individual creating their own business creating
00:39:53
their own income stream that's simply taken off and have taken off it was it was kind of
00:39:58
a trend pre-covered but it really took off during covid and there's an element of this that's really more about the
00:40:04
transition of how people work and how they earn that isn't reflected in these numbers I
00:40:08
don't think that the idea that everyone should go be an employee at a company is
00:40:12
necessarily the right way to think about Labor going forward the amount of money
00:40:16
that individuals are earning is probably the better way to frame this up going forward and as really thinking about the
00:40:22
earning power and the economic health of this country this is something important you're
00:40:26
bringing up here gig workers are about nine percent of the uh Workforce and uh Uber and Dara had um
00:40:33
they they grew over 70 this year but I think the big number that I watched for was drivers are making 36 dollars an
00:40:40
hour in the United States working for Uber so you're exactly right people are finding other options whether it's
00:40:45
doordash or Uber and that doesn't qualify in labor force right because they're no contract independent
00:40:51
contractors are counted yeah they are counted I that's based on my preliminary research if somebody wants to fact check
00:40:56
us that'd be great but my understanding is independent contractors which is what
00:41:00
gig workers are classified under are counted in labor participation I don't know how they're counted so uh we'll
00:41:06
we'll look that up and figure that out there was a story in BBC that the bank of England has now warned that the UK is
00:41:14
facing its longest recession since uh Records began some of this is getting to be fear porn yeah but look here's what I
00:41:23
think is scary about going into a recession is number one you don't really know how long it's going to take to get
00:41:27
out we know the average recession lasts about 18 months but the truth is once it
00:41:31
starts you just don't know and the second thing is you don't really know who's been stress tested people claim
00:41:36
that they can weather the storm but the truth is that there's no there's no way to simulate truly simulate a stress test
00:41:43
they claim they can but the only way is to really subject you know an institution to that pressure and that
00:41:49
stress and then you see if they come out the other side so that's the issue is you're just going into this it's there's
00:41:55
there's all there's a lot of unknown unknowns and and this is why I would just urge
00:42:00
Founders to be cautious is because if the recession ends up being shallower and shorter than people expect great
00:42:07
you'll be surprised to the upside but if the recession ends up being deeper and and longer than expected you don't want
00:42:13
to go out of business you want to be protected against that so again you know we've been saying this since February
00:42:18
and may but again I just reiterate I think it really makes sense for Founders to be conservative prioritize your
00:42:26
survival above all else you know this recession probably will last about two years you want to make sure you survive
00:42:32
it and to shama's point if you survive it with lower growth that's fine you can keep growing on the other end of this
00:42:37
thing but if you go out of business because you grew too fast then you're not going to get the chance to fix that
00:42:42
problem when the recession is over I just don't see anybody rewarding hyper growth that is burning a ton of cash
00:42:50
where you have to be back in Market every year because it's it's just very hard to feel
00:42:56
comfortable that the conditions on the field aren't going to be drastically different a year from now right it's not
00:43:02
like we know that it's going to be better or worse and I think that that uncertainty is actually really bad for
00:43:09
companies so to your point it's just like a lot of folks have tried to shy away David from actually revisiting their
00:43:16
valuations they've done these complicated converts and they've tried to basically you know
00:43:23
it's I think it's sort of like managing their ego or the board's ego and I think
00:43:28
like the next shooter drop has to be these Founders and these boards just saying okay let's just take the hard
00:43:34
medicine what's the real you know market clearing price and valuation let's get a
00:43:38
third party to price it and let's get new fresh equity and then move forward because if you don't do that and you
00:43:44
wait until everybody's trying to do it then it's going to be a really tough scenario so better to your point you
00:43:50
know this is why I like stripe it's so smart better to cut now again it's always hard to let people go
00:43:56
but it's better to do that now than 18 months from now because you just have no idea how much more expensive or hard
00:44:04
it's going to be then and who's going to even be in the business of lending money or investing
00:44:09
money in 18 months and you know that that sounds pretty crazy but it's it's like I think that
00:44:13
that's that's the moment that we're in to your point uh Friedberg I did a little research here and um
00:44:19
according to the FED of St Louis if you accounted uh casual workers informal workers
00:44:28
over doing over 20 hours a week of informal work AKA gig work you would increase labor participation between a
00:44:35
half point and a point if you counted all of them maybe even uh slightly more than two percentage points higher so
00:44:41
probably about a point uh seems like a realistic way to look at Labor participation and of the eight points or
00:44:48
maybe now the six or seven points the ten percent it would then account for 10 to 20 of
00:44:53
the 10 drop in labor participation it's just alarming statistics because if most
00:44:59
people have most of their personal net worth tied up in their home asset and their home values are
00:45:06
declining are going to decline and we're seeing this dramatic spike in Consumer Credit in the U.S it paints a
00:45:14
really ugly picture for the next two years wow guys I'm just looking at I'm just looking at the markets today git
00:45:19
Labs down 15 snowflakes down 13 Mondays down 14 percent uh at least down 30 percent in one day a Yelp is down 17
00:45:30
percent is down 16 percent so it's just a horrible oh my gosh the cloud computing index wcld has hit a new
00:45:40
low for the year it's down to 23 bucks I think the previous low was 25 is down almost eight percent today and this is
00:45:47
on a day in which the NASDAQ is down less than one percent so the point is they're rotating out of growth stocks
00:45:53
yeah it's just brutal and so listen if you're a startup founder you got to realize these are like some of the
00:45:58
highest quality public so Leo's down 40 today twilio is down 37 in a day today whoa but guys this is this is just math
00:46:09
you know it's not a judgment on any of these companies it's just pure math this is why I think you have to be utterly
00:46:15
unemotional in this moment and if you're if you're a CEO running a company particularly a SAS business
00:46:23
you have to really figure out how to how to right size your cost basis and make this money last profitable
00:46:30
industrial companies are Bill Gurley had a tweet a tweet about this a few months
00:46:34
ago about how the biggest mistake people make in riffs is they just do like a tepid riff like a 10 ish riff and they
00:46:41
have to come back and they do it again and they do it again this is what I think the the Elon action this week
00:46:46
really sets a standard he shows the entirety of Silicon Valley that you can cut deep and you can turn a profit and
00:46:52
you can do it fast and it could set a new standard for how folks are managing this Jack Welch used to in his
00:46:58
management principles recommend dropping the bottom 10 of people every year and so you know the 10 13 Cuts don't really
00:47:05
pass muster as a public market investor kind of looks at the the management across these different companies to turn
00:47:11
a profit they're going to say the folks that are making the deepest cuts the fastest are the ones that are going to
00:47:15
get valued it's unfortunate and it's a difficult circumstance for everyone in Silicon Valley to deal with from the
00:47:21
employees to the investors to the public and private shareholders it's really brutal one quick question for you guys
00:47:26
really it's really just this kind of Market motivation that's underway right now here's the chart uh and my question
00:47:31
for you is when do Google and Facebook stop this I mean if you look at the number of employees being added it is
00:47:39
truly extraordinary here's the chart and this includes the latest quarter so they
00:47:43
are not turning off hiring yet what do you think hold on didn't they announce a hiring freeze
00:47:52
they announced that they were at Google they announced that they were going to hold people accountable to better
00:47:57
performance and they were going to go do more with less and then they added more
00:48:00
people Facebook said that they would do a hiring three percent today yeah Facebook said it would do a hiring
00:48:06
freeze well whatever jobs last quarter yeah well you're right they just announced
00:48:12
the hiring freeze you look at Apple Apple just announced in non-r D functions a hiring freeze this is Apple
00:48:18
like the most valuable most profitable company in the world so if Apple basically is putting the brakes on
00:48:25
non-engineering hiring that tells you something about how fast the economy is slowing down I think that was a huge
00:48:31
signal yeah the point Freebird makes is so correct which is if you're doing a riff obviously there's a reason why but
00:48:38
I think we we're seeing too many riffs where the details of the Riff and the magnitude of the Riff don't match up
00:48:44
with what the objective of the Riff is the objective of the Riff for a lot of these companies should be to get them
00:48:51
cash flow positive or at least to put them on a Runway or a trajectory where they can get cash flow positive with
00:48:58
their existing cash on the balance sheet right they won't need to raise money again and we're seeing a lot of
00:49:04
companies where they don't achieve that and they have to come back again and again and hit it again and that creates
00:49:10
more turmoil for the company and it's more unfair for the employees by the way sex to that point I'll just say
00:49:17
how deep these come these companies are cutting and how you management is expressing shareholders how they're
00:49:22
going to turn a profit becomes a signal for those shareholders on whether or not
00:49:26
they want to stay in that stock and the companies that are doing it fast and are
00:49:30
doing it deep the investors and the shareholders say you do actually have a path that makes sense here I'm going to
00:49:35
stay in the stock cash today versus cash in the future sure off let me ask you a
00:49:38
question in terms of strategy for one of these companies let's say the Facebook Corporation or
00:49:44
perhaps even Google or apple even if they were to cut their expenses which might take obviously a
00:49:51
riff and then because their stock prices are so depressed right now maybe even a
00:49:55
mid cap one like a twilio or an Uber or an Airbnb if they were cut costs and then start buying back their shares
00:50:02
which some companies have been doing what would that do in terms of the Market's appreciation of those stocks or
00:50:07
management teams I think it's hard to tell I think that the if you have not lost investor trust
00:50:15
I think it would be really well rewarded if you have become unreliable and undisciplined
00:50:25
even those cuts I think would be met with some amount of excitement but but probably not a broad base support so
00:50:33
you know it then it just goes to narrative meaning if Google did it I think that people really trust Sundar
00:50:40
and Ruth and I think the stock would go Bonkers they would they would probably move very
00:50:46
quickly into the echelon of apple and apple is sort of a first among equals like they're just
00:50:53
they're just in a different class unto themselves Facebook I think is a little bit harder
00:50:58
because I think folks have gotten burned and you know they would have to make some really really deep Cuts but then
00:51:04
you know where do you do it you can't capitulate on this meta strategy but then the other part is where you
00:51:09
make all the money and so you have this huge morale issue that you have to manage so it's just a
00:51:15
really hard game to play just one more thought on on um on the rift stuff I think one thought
00:51:22
experiment for Founders is to think about what was your plan at the end of 2019 why do I say that because 2020 and
00:51:29
2021 were two of the most distorted years ever in the history of financial markets and the economy because we had
00:51:36
covet and then we had the reaction to covid right and so you saw there was this um you know zooms market cap hit
00:51:42
100 billion all the e-commerce companies were doing extremely well you you know you had all this money printing you know
00:51:48
you had zero interest rates and so on you had SAS companies hitting all-time Highs at the end of 2021 so we lived
00:51:55
through this incredibly distorted time so as a thought experiment go look at what your plan for 2020 was supposed to
00:52:02
be when you created it at the end of 2019 because that was the last time that you were thinking without any
00:52:08
distortions you know that were then created and I think if you were to go back and look at your 2020 plan again
00:52:15
created it at the end of 2019 you'd probably see that you could get by with half the head count you have now because
00:52:22
probably you doubled your head count during the last two years during these heady heady times and yet I think
00:52:27
Founders start thinking oh I can't go back to operating you know I can't operate at half the level of head count
00:52:32
but you were you were operating with half the level of head count by death definition at some earlier point I also
00:52:39
think sometimes I think what Founders say is what will people think if I cut 50 meaning all of a sudden the perceived
00:52:46
success of my business would be different and I think that this is where you have to realized no like there's a
00:52:51
lot of ego tied up in these things which slows people down from doing the thing that they need to do
00:52:57
yes it's a really it's a really it's hard to do I mean look at Airbnb as an example I mean they did this ginormous
00:53:04
riff during covid because they had no choice I mean they're they're Revenue went
00:53:09
essentially to zero and now the business is incredibly strong it's throwing off massive amounts of free cash flow and
00:53:15
the stock market seems to really love what Airbnb has done uh and a similar story over at Uber in terms of having
00:53:21
done significant riffs and probably could is still down almost 75 off its high right so when you say the stock market
00:53:30
love it so they're they're up today three percent so meaning they're not down 30 in one day but they have gone
00:53:37
down with the rest of the market they have gone down with the rest of the market
00:53:40
but it feels like the business I'm talking about the business fundamentals when you're throwing off almost a
00:53:44
billion dollars yeah now you're going to start people are going to perceive that
00:53:48
business maybe as uh of this cohort the flight to safety right or same thing with Uber throwing or free cash flow now
00:53:54
I think a lot of these names are gonna I don't know Airbnb right now but they do
00:53:58
on Uber I think the people throwing off the free cash flow are going to look pretty attractive
00:54:02
and be able to buy their stock back maybe all right let's talk about the midterms
00:54:08
a lot of big uh Senate races and obviously Governors uh Pennsylvania Georgia Arizona Wisconsin Ohio all
00:54:16
really important races sex what do you think well it looks to me like there's going
00:54:22
to be a republican wave there was an interesting article actually on CNN where they it's called five scary
00:54:27
numbers for Democrats and what they point to is that Biden right now has a 42 percent approval rating 61 percent of
00:54:38
the American people say he hasn't focused on the key problems so this is called the out of touch index 51 say the
00:54:44
economy is number one issue compared to only 15 for abortion and then 78 say we're on the wrong track I don't think
00:54:49
I've seen a right track wrong track index that was so negative and 75 percent of the country says we're in a
00:54:56
recession so you know when you look at polling numbers like that it must translate I think into a republican wave
00:55:04
and you have now Real Clear Politics currently has the GOP gaining four Senate seats so winning in the Arizona
00:55:10
Nevada Georgia and New Hampshire that's a big change from just a couple weeks ago and winning 31 House Seats so
00:55:17
this is this is kind of what it's looking like right now but look the the margin is still within the
00:55:23
within the margin of error on the polling so Nate silver has pointed out that within one standard deviation you
00:55:30
could either have a republican wave or you could have basically the Republicans fizzle out so it's going to be very
00:55:37
close but ultimately I think this breaks Republican yeah the to me the way that I've I'm looking at it right now is that
00:55:45
it seems like most scenarios the Republicans will have the majority in the house
00:55:51
and the real question is what happens in the Senate it's really really kind of a
00:55:55
coin flip and that's going to be really interesting to see so you know things where I thought would break Republican
00:56:02
in the Senate like Pennsylvania are now back to almost a you know a statistical Dead Heat
00:56:08
so it's a really interesting moment actually it's uh but most scenarios David I think you'd agree is that the
00:56:15
Republicans win the house and then there's a non there's a plurality of scenarios where they also win the Senate
00:56:21
the house will almost certainly go Republican but I think the Senate now the the official percentages are 55
00:56:26
percent likely to tip Republican but I I just think that in a wave year like this
00:56:31
where the wrong track sentiment is so high I think all these races that are a dead heat they're more likely to break
00:56:38
in One Direction as opposed to like a random distribution which is why I think you could just as easily end up with and
00:56:45
you know instead of it being a 5149 Senate it could be 55 45 because all these things could break the same way so
00:56:53
right now so I I would slightly disagree in Pennsylvania I think Oz has improved
00:56:58
as a candidate fetterman did that debate and since he suffered that stroke he kind of came across as somebody how do
00:57:04
we feel about that I I I had very very hard to watch that happen and yeah I mean the guy the guy has suffered a
00:57:11
stroke and is sad but he you know he doesn't present as someone who can be a senator right now I think what does the
00:57:17
science say about that like a re as a society is this a good idea to have somebody post-stroke be in office I'm
00:57:23
not picking any political side here I'm just talking about the the medical issue
00:57:26
Alice is actually doing the right thing right now which is he's not actually focusing on that issue because it's so
00:57:31
obvious he doesn't want to be seen as beating up on fetterman and instead he's a human he's focusing on the issues and
00:57:38
actually fetterman's issues are very unpopular in a state like Pennsylvania so I actually think for both reasons Oz
00:57:45
is going to win that I think fetterman's manifestly unqualified but also I think
00:57:49
his positions are fairly unpopular so I think Pennsylvania will will almost certainly tip so let me pull up the
00:57:55
chart here just so people can see Ohio is going Republican and then Arizona I think is really the interesting one
00:58:00
where Blake Masters is now tied after being behind Mark Kelly throughout this campaign he is now tied in New
00:58:09
is popular your guy is really unpopular and now he's tied interpretation it's the Peter too he was
00:58:18
he was doing really poorly I think because I think listen I think that I think that
00:58:23
Arizona is probably gonna be the closest race in the country I think it's gonna be a nail biter but I think Blake's
00:58:28
gonna pull that out sex what do you think are the biggest policy shifts that take place in this
00:58:34
country Host this predicted Red Wave is there anything that changes so just you know talk to folks about what's on the
00:58:42
docket from a legislative point of view going into the next congress with all these new candidates the reality is we
00:58:49
have a separation of powers in this country and you're gonna have to divide a government the Republicans will will
00:58:54
control Congress the Democrats will control the presidency and so as a result you're going to be largely in a
00:59:00
gridlock situation but gridlock may be a lot better than what we've had over the
00:59:04
last couple of years so you know you've had basically this orgy of spending and money Printing and I think that's going
00:59:10
to stop obviously the other thing that's going to happen is Republicans may not be able to pass
00:59:15
much legislation but they're going to do investigations and there's a lot of questions that need to be answered I
00:59:19
think about still about covid you know these lockdown policies that we had that started at the top at NIH why did they
00:59:26
happen we need to start having accountability for some of these horrible decisions that were made during
00:59:30
covid and there's been no willingness in Washington to hold anyone accountable at
00:59:34
a minimum they need to have some Congressional investigations and find out why we pursued such bad policies
00:59:40
over the last couple of years by the way did you see did you see what happened this week where the CDC
00:59:46
you know after this entire opioid epidemic and all of these lawsuits the CDC came out and actually said Hey
00:59:52
listen we need to really make sure that we're getting access putting opioids in the hands of
00:59:58
Americans who are really suffering with pain management and whatnot and I didn't
01:00:03
read the article to really understand the details but I just thought it was an incredible headline where it's like it's
01:00:08
just it's so counter to The Narrative of what we've been told is happening which
01:00:11
is like you know over prescription and misprescription if we learned anything during Covetous to question every
01:00:17
organization everybody and to really collect your own information while you know looking at these organizations we
01:00:25
trusted over time I know I look at the world differently now that you couldn't say covid was possibly a lab leak
01:00:31
without having your podcast taken down or being banned on YouTube and now propublica has done an investigation and
01:00:38
they're saying along with Vanity Fair and they're going to win a Pulitzer for this I bet
01:00:41
that this conspiracy theory from two years ago is probably actually the leading theory and that the the Wuhan
01:00:49
lab Lab was showing if you didn't see it reporting an incident in late November of last year uh before covet broke 2019.
01:00:58
it's really it's really incredible there was an article in the Atlantic that came out over the past week called
01:01:03
let's declare a pandemic amnesty no yeah investigation right so basically at everything yes all the experts who told
01:01:13
us Jason that we weren't allowed to have an opinion because we weren't expert enough that if we raise any questions
01:01:18
about the origin of the virus that it might have come from a lab that that basically needs to be censored the
01:01:23
people who said we had to do lockdowns and implemented all these authoritarian tactics now they're saying that they
01:01:29
need an amnesty that what that really means no one's looking no one's looking to criminally prosecute them what we're
01:01:34
looking to do is have some accountability around the public policy what they want is they want to pull the
01:01:39
expert card to say that they're the only ones who get to have an opinion and make
01:01:42
a decision but then when it all goes horribly awry they basically want to be completely insulated and unaccountable
01:01:48
no account in their decisions no way no way we're not going to give you full investigations we're in alignment on
01:01:54
this side by the way can I just yes hold on I just want to say sex we're in alignment on this for a rare moment of
01:01:59
Peace on this podcast the same thing after 9 11 shouldn't all Americans understand what happened after 9 11 and
01:02:05
what the failures were in our intelligence just so we can get better I I'm not picking a political horse here
01:02:10
but it's kind of crazy that you could people said to our podcast and other people who were questioning it forget
01:02:17
about what political party you're in just want to understand how the world Works what are the chances that this
01:02:23
breaks out in the one or two places where they're studying the coronavirus that you have a lab leak it was so
01:02:28
obvious to everybody the other reason why you need to have accountability for this is that there are still a long tail
01:02:33
especially around the damage that we did to our kids educationally yes and now and now the over prescription of
01:02:40
stimulants and so if you don't depression sensors you can't go after these problems like there was a there
01:02:46
was like stimulant prescription is now the single biggest epidemic in children it is now
01:02:53
twice as prescribed as contraceptives and Asthma drugs and why chamoth why are we doing this to get them to score
01:03:01
higher on a test to be more attentive in school well it's it's actually this negative feedback loop where these
01:03:06
children were miseducated during covet it had huge psychological and academic damage to them
01:03:18
our test scores have fallen off of a cliff relative to how we used to do relative to other countries
01:03:24
I think the teachers unions have found a way to try to explain it to basically Shield themselves from any
01:03:31
sort of critique and so the loot and then part of that Loop is then to look at a bunch of kids
01:03:37
that are underperforming in school and instead of saying well maybe these lockdowns and masking and all of these
01:03:43
things that we implemented actually had a huge impact they say uh you know you're misbehaving so let's put you on a
01:03:49
stimulant yeah it's crazy we're in that Loop right now just so you guys know the
01:03:53
data is outrageous twice as many prescriptions for stimulants as the sum of contraceptives and Asthma drugs for
01:04:02
All American Kids yeah it's not that suddenly everybody's got ADHD so we failed them we failed our children and
01:04:10
and we're going to use stimulants to have them ketchup weeks but we should be doing Summer Schools after school
01:04:14
programs we failed them because of our response to covet that is why we need answers to
01:04:20
all that stuff because you need to link these things together to have some real accountability absolutely here is the uh
01:04:26
just so we have the people see the numbers here's the 538 poll of uh how Joe Biden's popularity has switched this
01:04:32
is uh 654 days into his presidency started out really strong 54 and now a little rebound since the
01:04:41
summer obviously that uh dip started uh with the economy it's the economy stupid
01:04:46
and if we go down a little bit on the same page and you zoom in on the left there you can see compared to Donald
01:04:51
Trump uh he started out much more popular than Donald Trump day by day and now he's
01:04:56
just as unpopular as Donald Trump was at this point in his presidency well look I
01:05:00
mean look the setup is really interesting for 2024 because it's probably going to be the case that we're
01:05:04
in the middle of a recession going into that election cycle maybe we'll be sort of like getting ourselves out of it but
01:05:11
there'll be a lot of economic damage high unemployment and you know typically folks in power will have to sort of be
01:05:18
held accountable for that it's a really interesting setup that both Gavin Newsom
01:05:22
and Ron DeSantis have to figure out now and navigate if they're going to get the
01:05:27
nomination on each side and breaking news today sax would love to get your thoughts on this axio says uh and we'll
01:05:34
go to science Corner next that Trump's going to announce on November 14th that he is running for president look I I
01:05:41
kind of have the Joe Rogan philosophy on this which is why I give it oxygen let's
01:05:45
just wait and see there's certainly no needs to talk about it before it happens you know we're not even past this
01:05:50
election yet but but hey I want to go back to the the Biden popularity because I think part of the issue here is what
01:05:57
are the arguments that Biden is making to the country about why people should vote Democratic and he gave another
01:06:04
speech on Wednesday night where he basically claimed that if you vote for a different party that that is a threat to
01:06:12
democracy in other words the perpetuation of single party rule is what you must do if you care about
01:06:17
democracy that is a sales pitch that's not going to appeal to anybody outside of the viewers of MSNBC it's just not
01:06:24
he's not talking about the issues that really matter to the country you know what the country wants to know is that
01:06:29
he's focused on the economy he's focused on inflation he's focused on crime he's
01:06:33
focused on the schools and fixing this learning loss that Jamal was just talking about he's not doing those
01:06:39
things instead he's basically saying that the Democrats should be kept in power forever because there was a riot
01:06:45
at the Capitol on January 6 and look that was a stain on the country okay it was terrible that that happened
01:06:50
disgusting that is not a reason hold on a second that is not a reason to keep Democrats in power forever and actually
01:06:56
there's a um a liberal guy a liberal Democrat named Josh Barrow who wrote a pretty
01:07:00
good blog about this and what he said is the message is that there's only one party contesting this election that is
01:07:08
committed to democracy the Democrats and therefore only one real Choice available
01:07:11
if voters reject Democrats agenda or their record on issues including inflation crime and immigration they
01:07:17
have no recourse to The Ballot Box they simply must vote for Democrats anyway and that argument is just not flying and
01:07:23
actually he's a a Democrat who is pointing this out but I don't think that Democrats are getting the message on
01:07:30
this but I think they will after this election and they're gonna have to find a new sales pitch to The Country well
01:07:35
you know and he does have a good sales pitch doesn't each a month with these major bipartisan uh wins he had the
01:07:41
infrastructure deal got done the technology bill and the chips you got gas prices going down yeah GDP growth
01:07:47
you got job growth the problem is that those things happened frankly too early in his presidency and things are getting
01:07:54
materially worse so I just sent you a link can you just throw this up here for a second you know Jason you mentioned
01:07:59
this cheaper gas thing yeah but the reality is um if you look at this we have now depleted our strategic goal
01:08:06
Reserve by almost 50 percent yep so we are running out of oil that we can introduce into the
01:08:12
market at effectively zero cost to bring the price down and because we've lost our relationships with folks like Saudi
01:08:19
Arabia there's no way to influence them in order to produce more in fact they're
01:08:24
going to cut Supply so that they can control the prices that they have which that they can sell into the market and
01:08:32
so now what are we left with well the only three places where you can have incremental supply of energy which the
01:08:38
country still needs is from Russia Iran and Venezuela and so you know all of these things
01:08:45
Jason I think come back and really put Biden in a tough place because as as Sac says he does have to
01:08:51
answer to all of these things because these are his decisions look I still believe in the Democrats
01:08:56
you know I I'm hoping I gave a million bucks uh to the Senate pact trying to sort of tip the Senate I really think
01:09:03
it's important that we have a split government because I've kind of I gave up on the house I think it's clear that
01:09:08
the Republicans are going to win but the Senate is still is still up for grabs and the reason is because I think that
01:09:14
we need to sort of have stasis so that nothing bad happens between now and 2024 because I think the economic conditions
01:09:22
on the ground are going to be bad in and of themselves and then just the one last thing I'll
01:09:29
say is the instructive thing that I think we should look at is what happened in Germany
01:09:34
because what happened in Germany is really interesting when the economy turns and inflation is out of control
01:09:39
and energy is out of control what they basically did was they sidelined the European Central Bank they stepped
01:09:48
in with their own balance sheet and said you know what we're going to nationalize
01:09:51
assets and I know that this sounds crazy to say but if it can happen in a place like Germany I know most people would
01:09:57
say it'll never happen in America but I'm not so sure and I think that you want to make sure that there's a split
01:10:04
government so that these things are never possible and so hopefully there's some you know Common Ground in a
01:10:11
Democratic Senate and a republican house and we just kind of get through 24 and see where the chips land and I still
01:10:17
think it's going to be uh DeSantis versus uh Newsome Freeburg any final thoughts here on politics my first um
01:10:24
observation is that I think it's funny that chamoth and sax are funding opposite uh sides of the uh
01:10:30
yeah why don't you just guys just give the money to me and Friedberg to get a plan each other's money up yeah I could
01:10:37
think of other ways for you guys to use that money but David and I may have canceled each other out you're right I
01:10:41
mean yeah so far Peter Thiel made the better trade he's it looks like the teal wave in the Senate so look I would say
01:10:46
my very broad statement is democracies evolve in a cyclical nature over time right you often see swings
01:10:55
from one political party to the other and um it's just the nature that once someone's been in office they form the
01:11:02
new establishment and then folks in the next election cycle want to vote against
01:11:06
that establishment because there are things that they want that they aren't being given today and therefore the
01:11:11
Democracy forces a change from what is the current establishment back to the other side and generally political
01:11:17
parties seem to kind of adopt whatever the other side is and that's how the cyclical evolution of democracy seems to
01:11:23
play out the recent Trend that has been more alarming which I think we can kind of take pause to notice is the rise of
01:11:30
populism where populism is this really kind of vehement Die Hard opposition to elitism and the establishments that
01:11:37
everyone feels kept down by and everyone feels taken advantage of by and um the the rise of trump the rise of
01:11:44
bolsonaro the rise of Boris Johnson and I would argue even the rise of AOC Bernie Sanders and Elizabeth Warren all
01:11:52
similarly speak to the the crying voice of the the Democratic populations that they want to see these
01:12:03
establishments taken apart they don't feel like they're Fair they don't feel like they're just they don't feel like
01:12:09
the institutions that oversee us and are meant to service us are servicing us um and so there was this big rise the
01:12:16
problem is like a normal pendulum would swing back and forth between one side and the other with the rise of populism
01:12:21
you get such a strong push of that pendulum it can knock through a wall and I think we saw that on January 6th and I
01:12:27
think it gave a lot of people pause we saw the the motion of brexit knocking through a wall and we saw these kind of
01:12:35
very radical outcomes and then the cost of those outcomes blow up in our face and as a result I
01:12:43
think we're seeing a bit of a receding of the tides right now away from populism during this current electoral
01:12:49
cycle where folks are saying you know what maybe we just need to have some sort of an establishment so I can feel
01:12:54
safe and secure less than the volatile volatility that I've experienced of late look I think you look at the economic
01:13:00
mess we're in okay populist did not cause that okay populists did not cause 10 trillion dollars of money printing it
01:13:06
was Modern monetary Theory and the experts the FED who did that it wasn't populous who created the great financial
01:13:12
crisis of 2008 that caused the zurp and we're still living with all the downstream effects of that it was the
01:13:18
experts on Wall Street who said they could manage all these derivatives and the collateralized mortgage obligations
01:13:24
and all that stuff that they lost control over I would argue hold on it was not populous who caused the
01:13:36
horrible handling of that pandemic even though they were blamed for remember we were told it was a pandemic of the
01:13:41
unvaccinated then it turns out the vaccine doesn't stop it it was not populous who caused the reaction to the
01:13:46
pandemic it was the experts the CDC and falching people like that who shut down our economy who caused the learning loss
01:13:54
it was those experts so Freeburg listen you may not like this populist waiver that we have in the country and I get
01:13:59
that but it's in reaction to something real which is the failure of this expert class and if you want to stop having
01:14:07
this populist wave rise up we need to start having experts in position of power who actually know what they're
01:14:13
doing well one way to say that sorry Jake out hang on a second I don't have any opposition to the populist wave I'm
01:14:19
making the observation that the uh the effects of some of the populist movements have started to become too
01:14:25
volatile for people to feel like they should continue forward with that electoral path that was my observation
01:14:30
okay I'm not kind of criticizing the populist movement I'm just saying that events like January 6th and the
01:14:36
conditions in the UK for example are making people say wait a second maybe I need to take pause on the extreme the
01:14:42
bond market basically fired list trust I mean she's not a populist and you know in Bolson bolsonaro in Brazil he
01:14:49
actually just lost and there was this big narrative that somehow he was gonna not relinquish power and he just
01:14:55
announced that he will relinquish power right so you know some of the stuff that
01:14:59
is about how populists pose this great danger I think is threat inflation and that the threat is magnified by Elites
01:15:06
who want to stay in power and the truth of the matter is we need accountability for the people in power and when they
01:15:12
set the wrong policies and decisions they need to be replaced no more no more unaccountability yeah I
01:15:19
just just to my personal belief 100 agree that's all of these institutions accountability maybe competence and also
01:15:28
transparency and accountability like I think that's what the public wants I mean competencies
01:15:35
there's no way to perfectly react to the pandemic but in your mistakes owning them and explaining them would it be
01:15:43
much better than trying to obscurify it and asking for amnesty chamoth you're not um if you want to hear an incredibly
01:15:49
interesting interview because it's very thought-provoking of a modern Progressive uh but with a very
01:15:57
different mindset or sorry you know maybe you don't want to call him a progressive but is the president of El
01:16:04
Salvador naive bouquelli and he did this incredible interview with Tucker Carlson
01:16:08
on Fox News I encourage everybody to watch it on both sides of the political Spectrum
01:16:13
that man is impressive did we just get an admission that your mouth watches Tucker I watch I watched
01:16:19
that interview you watch the talker oh my Lord Jason's head's explode you know because I I try not to be against the
01:16:25
moment ignoramus it's an Entertainer I like to watch things on both sides but that interview is incredible He is
01:16:31
unbelievable impressive and it's a it double clicks into you know the skepticism that smart people like him
01:16:38
the outsider class has with The Insider expert class in a nutshell if you want to see it I would encourage you to watch
01:16:45
this interview because it's it's incredible incredible really really Jason The Peasants with pitchforks are
01:16:51
rising up against this Elite Class who put themselves up they've set themselves up as Lords they want exclusive control
01:16:58
over their blue checks and we're about to overturn this establishment because it is corrupt and it is incompetent
01:17:08
be great if the people who worked for us were confident back on Megan Kelly owned
01:17:12
and we're transparent you know I think that's why people are opting out of this is they don't feel
01:17:18
that there's a level of competence in these institutions nor ownership and transparency and it really is
01:17:24
frustrating whether it's education or it's health or you know any of these topics we've
01:17:31
talked about here on the show let's go to science corner and we can rap what do you got free bark for us to mock
01:17:36
I think we were going to cover the Facebook meta announcement that their AI research team had generated the physical
01:17:45
structure of 617 million proteins from these metagenomic data sets and so remember Alpha fold made this big
01:17:53
announcement that they had highly um accurate predictions of protein structure the three-dimensional shape of
01:17:59
proteins and remember proteins are kind of the Machines of biology that do everything from catalysis to enzymes
01:18:05
where they break stuff down and they're like you know they have all this structure that allows them to do
01:18:10
specific physical things and proteins are coded in DNA every three letters of DNA codes for an amino acid a string of
01:18:16
amino acids makes a protein and so you know we have about a million species where we've sequenced the entire Genome
01:18:25
of those species only about 3 000 Animals by the way including humans half a million from bacterial species
01:18:31
and then a bunch of viruses and other stuff but but call it about a million species that we've sequenced and so
01:18:38
you know earlier this year Google's Alpha fold project published the 3D structure of 200 million proteins
01:18:45
that they had derived from the whole genome databases that existed where we've gone through and figured out
01:18:50
what's the full DNA sequence of all these different species now when you look at the DNA in the
01:18:56
environment around us you were just to take the DNA out it turns out that we have seen very little of that DNA the
01:19:04
vast majority of DNA that you would find in a teaspoon of soil for example we've
01:19:10
never classified it's not part of a species that we've actually built the whole genome around we may not even know
01:19:15
what species that DNA is from and so when you take a teaspoon of soil you'll get about 100 billion microorganisms in
01:19:22
that soil from about a million unique species but you don't see those species because the way DNA sequencing or
01:19:28
shotgun sequencing works is DNA is chopped up into little 250 base pair of Lights little 250 strands and those 250
01:19:36
letters are read at a time and then statistically bioinformatics puts together all of that little DNA segments
01:19:43
and tries to create long strands of DNA to figure out what the genes are or what
01:19:47
the whole genome is and so shotgun sequencing gives us kind of a snapshot of the DNA but until we've done the hard
01:19:54
work of figuring out the whole whole genome we don't know what species that DNA comes from so when you take a sample
01:20:00
of soil or you take a sample of human poop and you sequence it or even a teaspoon of ocean water and you just
01:20:06
sequence the DNA in it you get all of these little segments of DNA that we've never seen before and you can string
01:20:12
them together statistically because you get lots and lots of copies of them and you can figure out the overlap and then
01:20:17
you can create these genes and a gene is a segment of DNA that codes for a protein and those genes make up the
01:20:23
metagenome or the combination of all the genes that we find in a in a piece of of
01:20:28
the environment and that meta genome comes from millions of species that we've never seen before so what Alpha
01:20:35
what they did at meta is they took all of those genes that we pull out of the soil or we'd pull out of the ocean and
01:20:40
they picked a bunch of random samples and they then predicted the physical structure of the proteins from just
01:20:47
those genes without knowing what organism they came from and this gives us a whole new universe of proteins that
01:20:54
we've never classified before or never seen before now I will just kind of speak a little bit critically about it
01:21:01
number one they didn't do what Alpha fall did what Alpha full did is they took 3D structures from typically x-ray
01:21:07
crystallography then they took the the DNA code and they built machine learned models to figure out the 3D structure
01:21:13
from the DNA code what these guys did at meta is they took the 3D structures and
01:21:19
the code and they basically did a fill in the blank they found all the metagenome data out of these samples and
01:21:25
a lot of it was missing and they filled in the missing blanks using kind of common protein structure that existed
01:21:32
out there in the wild that we already knew from the alpha full data and so they kind of did a fill in the blank and
01:21:37
as a result it allowed them to very quickly build these 3D models versus doing the hard and rigorous work that
01:21:42
Alpha fold had to do so they claimed that it was 60 times faster but it's actually an entirely different technique
01:21:47
and the second thing is that they represent that only about a third of it is high quality meaning only about a
01:21:52
third of the proteins that they've created structure for are really useful or or that could be kind of Applied uh
01:21:58
in terms of this is the real representation now why is this interesting and important proteins can
01:22:03
form the basis of new medicines so you know we can find proteins in the soil a genomes in the soil and proteins in the
01:22:10
soil that can kill certain fungal pathogens that can kill bacteria and those can be turned into fungicides they
01:22:16
can be turned into antibiotics we can find proteins that bind to specific things we can find proteins that fix
01:22:22
nitrogen from the atmosphere and those proteins can be turned into new types of fertilizer so you know searching through
01:22:28
this universe of proteins that exists in the metagenome will allow us to find new
01:22:33
molecules to do new and interesting things with in the applied engineering world
01:22:38
and I will say like this is what would the output of these be is what everybody's going to be thinking
01:22:42
antibiotics fertilizers I mean the idea of the metagenome is rather than start with the species and then take the genes
01:22:49
out of it just go get the genes the genes are already there they're in this they're in the ocean they're in the soil
01:22:53
and there's millions of genes hundreds of millions billions of genes that we've never seen before therefore there's
01:22:58
billions of proteins now we could randomly create proteins but the number of proteins that could exist is more
01:23:04
than the number of atoms in the universe because remember there's 20 amino acids
01:23:07
so 20 to the 200th power or 20 to the 300th power or 20 to the thousandth power meaning how many different
01:23:13
combinations of amino acids can you make that's more than there are atoms in the
01:23:16
universe so the best place to start is what evolution has already given us all the proteins that exist in the
01:23:22
environment so let's go find those proteins in the environment and then let's figure out what do we think they
01:23:27
can be used for can they be used in industrial applications in medicine can they be doing them in Material Science
01:23:33
you're saying Material Science and so you know a lot of drug Discovery mines proteins it tries to find proteins and
01:23:40
figure out what can these proteins be used for and now we have all these new data sets of proteins that are being
01:23:46
generated from these metagenomes and so it's amazing I mean you know look at the
01:23:50
world around you look everywhere up and down on the walls on the ground below you there are billions of species of
01:23:57
organisms that we've never classified before that are making billions of unique proteins that we've never
01:24:01
classified before and any one of them could unlock an amazing commercial opportunity
01:24:07
for industry so and for medicine and for human health that's what's really exciting about this ability to kind of
01:24:13
mine the metagenome silly question for you or maybe not silly uh we have gotten the precursors to DNA for meteorites if
01:24:22
I understand correctly what do they call them nucleobases nucleic acids yeah yeah
01:24:30
um thymine Etc like things that exist in DNA that are precursors we've never had DNA
01:24:37
from space obviously but we could at some point start to find DNA out there in space and this could have an even
01:24:43
crazier impact on what we built here is that the next card to turn over after we every human gene home what's here no
01:24:50
I wouldn't say so I like I think look if there's DNA that's coming to us for meteorites call it a couple hundred
01:24:55
genes you could pick up a piece of uh soil and find over a billion genes in that teaspoon of soil right so uh we
01:25:03
have far more to mine here on Earth and the low cost of DNA sequencing and shotgun sequencing coupled with
01:25:08
bioinformatics where we take all that so just to give you guys when you take a teaspoon of soil and you get the DNA out
01:25:14
and you read the DNA out of it sequence the DNA that's potentially tens of gigabytes of data and then you could do
01:25:21
that millions of times over and then you statistically can find genes and then statistically estimate what they
01:25:26
physically look like what those proteins look like and then you can start to build models around which ones do we
01:25:31
want to try and use for drug applications which ones do we want so there's so much work to do
01:25:36
it just in terms of what we have here on Earth and the tools are getting so cheap
01:25:40
and so available there are Labs that are all over the world starting to kind of spring up to do this work it's super
01:25:45
exciting adults it's kind of it you know just to put two ideas together I've said before like the
01:25:52
two big investable themes that I'm orienting my organization around is this one is that the marginal cost of energy
01:25:59
goes to zero and the second is that the marginal cost of compute goes to zero and the second one is really about
01:26:04
shifting compute to more parallelism on gpus and Asics and fpgas but that's why all of this stuff is possible the fact
01:26:12
that you know meta can do this and Google can do alpha fold is largely because the cost of all of this stuff is
01:26:20
you know trivial for these kinds of companies so it's really exciting it's going to move science
01:26:25
in my opinion out of this in Vivo in vitro experimentation model into silica and so those who can actually build
01:26:33
learning machines will solve some of the most important biological problems so I
01:26:37
I'm a real believer in this stuff I think it's super exciting when do you think this stuff actually hits Friedberg
01:26:43
our life that's always when people talk about these discoveries yeah a lot of people don't realize it but so many um
01:26:49
molecules that that are used in agriculture like fungicides to to kill fungus in the fields those are derived
01:26:56
from this sort of work a lot of antibiotics a lot of medicines are already derived from mining genomes
01:27:02
finding new proteins and seeing what those proteins can do because these proteins didn't evolve in the
01:27:07
environment randomly they evolved to do something and in many cases we can take that thing that they do and then harness
01:27:13
it into a product and that's what's so exciting and this this affects everything Material Science
01:27:19
you know agriculture human health it's uh it's a food it's really profound awesome all right everybody there you
01:27:27
have it that's another all in podcast in the camera by the way so many so many of
01:27:32
Freeburg stands were afraid Jay Cal that you and I were gonna make some joke and
01:27:35
we didn't no we didn't and so for all these fans I just I hope you guys can exhale
01:27:40
take a deep breath man have some you know eggless mail and uh enjoy your weekend
01:27:46
uh enjoy your week bye bye everybody see you next time love you besties love you
01:27:49
guys we'll let your winners ride Rain Man David's side we open source it to the fans and
01:28:01
they've just gone crazy with it [Music] besties [Music] is [Music] [Music]