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where were you on thursday were you in l.a i was at home i i got like a family to
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do well family have you you met them what were they like were they everything you
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expected me i had to meet the new kid he's 19. what's his [Laughter] major winner
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[Music] [Music] hey everybody welcome to another episode of the all-in podcast yes we made it to
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episode 47 in three episodes it'll be episode 50. no plans to do anything other than just trying to record this
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every week for you the loyal audience with us again coming off an amazing event a live event
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on monday uh tuesday and i don't know if it went into wednesday but david freeburg's the production board event we
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uh recorded our first live all in it seems like it went uh well on an av basis and the audience seemed to
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enjoy it what was the feedback freeberg so you know half the room were scientists and they'd never heard of
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this podcast before and they were like what the hell did we just show up to it's like these who are these four guys
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on stage drinking this wine talking about politics for an hour and a half um but and then dropping f-bombs and
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dropping off bombs and uh there was a little bit of uh kind of seasoning we had to do afterwards to get everyone
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kind of comfortable but no actually it was fantastic people loved it you guys were the highlight um and i thought it
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was super fun to do that in person i don't know what you guys thought it's cool energy it's super cool it was
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great and with us again of course uh david sacks the rain man himself and the dictator chamoth paulie hapatia what did
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you think uh saks of the live event format uh obviously half the audience were fans
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of the show half warrant which is i better than putting people randomly into it but i i'm glad that the people
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who are not fans of or have never heard of the show didn't walk out we didn't have walkouts so that was good
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yeah i mean look we were slightly more palatable to them than andrew dice clay or something like that
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but uh [Laughter] it was a good change of pace i mean i think some people commented that the
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lighting the production values weren't that great they seemed fine to us at the time
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but uh so we're gonna have to do better on that next time and other people speculated that we took we're easier on
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each other in terms of debating topics because we were in person i didn't feel that while sitting there but
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you guys tell me if you think that was true i thought you know we got a better read
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on each other in person and we had more dialogue than we normally would over a zoom i don't know if you guys felt the
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same very good i i think so and then i i kind of like the evening podcast the glass of wine there's something about it
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like you're just like a little yeah you're coming in for a landing yeah coming in for a nice evening the little
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cards after it could be a thing it could definitely be good i could definitely make harlem
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2012 a uh a regular part of taping this pod the problem is we taped too early on
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a friday right if we could change the taping to like happy hour or something like that it might work better oh my god
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harlan 2012 uh what is it that's a good bottle of wine oh my god j cal knows that look at him pretending
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that one pretending that's the it's the one with the round label i know it i know i'm looking at it
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right now oh my lord some of those go up in value those things looks like as high
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you guys think we could like record after playing poker for two hours so you're two hours into the wine
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and poker and then you record wouldn't work no way no way maybe two i think the wine yes poker no yeah
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i think uh for a first time the audio was great so that's you know job one is to get the audience
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consumption happens that way to do like a line of light in fredberg's face for all commentators you know it was my
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goal i actually got up and fixed that like no one else of the crew you know the dozens of people working there did
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anything about it my wife stood up and fixed the curtain dude without al you would be nowhere
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be nowhere in life she's she's she's a great person what what what was the empty seat about between me and chamoth
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i mean there was an effort that was if we wanted to bring up a guest so unfortunately all the people's names
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that were written on that piece of paper our quote-unquote besties did not show up on time yeah right exactly nobel girl
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girls didn't come and die and they all showed up at like nine o'clock yeah there might
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be a reason for that yeah it actually was the back channel sky date and the back channel was sky
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dating and somebody else waited outside because they knew they might get pulled up
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i got that from uh you're gonna have to beep his name out yeah it's your first time saying his
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name on the sky he's not going to no he's not going his name mentions are you kidding me he's
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been on my pocket he's been on this weekend he's one of the first 10 guests that was the last press appearance he
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did was 11 years ago he literally does not i mean everybody knows who sky dating is earthling
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everybody of our generation but it's amazing how um you know quickly the tech the tech crowd you know moves
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on so true there's a there's a famous story actually when um when mark andreessen
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met um mark zuckerberg for the first time zuckerberg didn't know that you know andreessen had created netscape i'm not
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even sure he knew what netscape was i think he said something like i created mosaic and he's like what's that oh
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right right yeah yeah so it's like yeah look in the tech industry we're all concerned about the future no one pays a
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lot of attention to history do you guys feel like last generations uh entrepreneurs and investors at this
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point well some of us are still currently creating things freeburg i can't mention the name of the app as
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per our anti-promotion rules but i have recently there's not a lot of kind of long
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careers in silicon valley right a lot of people kind of have because you're creating products
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well you consistently kind of if you have asymmetric success right you have these kind of like big bursts and then
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you know it's a it's a different kind of life you don't go kind of push again for
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the next hard entrepreneurial project typically not everyone obviously uh and then you end up seeing like a
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generation kind of die out like you know web 1.0 and web 2.0 and then you know you don't see them again you also see
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some adventure yeah i think i think there's a lot of truth to that that um and i worry about this with my own kids
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that i think deprivation creates motivation especially to do something as hard as
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create a company creates motivation welcome to david sax's infomercial no no i mean look i think you know people are
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coming to my tent that leads to fornication [Music] you know our friend beep has a has a saying that that sort of
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became famous when elon then repeated it which is that uh creating a startup is like staring into the abyss and eating
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glass and it is really hard to create these companies when they're successful and so
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not a lot of people want to do it again once they've reached that point and um you know it does take a certain amount
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of um like i said deprivation you know to do this which is why giving everybody the
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participation trophy and trying to make people's lives as easy as possible i mean yes you want
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you don't want to deprive people on the one hand but on the other hand it does often lead to to good things
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totally agree we're seeing a bit of a dry run of this if people believe that you know they
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have ubi or the government's going to take care of them i would be fine with ubi
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you know everybody getting a little bit of money and if it was a safety net the only
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thing i worry about is it seems like a little bit of money if you're clever means you could never work
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and then what happens to those people in society right like well i just i think it's anti-compassionate because what you
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do is you kick out the bottom rungs of the ladder of economic success when you basically pay able-bodied people not to
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work i mean they need those entry-level jobs that may not pay much better than the ubi are an important stepping stone
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to where they get to next in their career and i think it's it's demotivating and we've already seen in
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california we've been ubi ubi's not going to pay you to go to college but amazon will as an example so
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you're absolutely right there's a the the gi bill you know there's all kinds of examples where in history we've used
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you know entry-level jobs as exactly as they're meant to be an entry-level opportunity and on-ramp to work your ass
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off and to make something of yourself if you if you all of a sudden let people opt
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out of it then it's going to be a very um it's what they're not going to realize
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is by the time they get old enough where they will want to have some kind of purpose
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it'll be too late because then activating yourself in your 40s and 50s to essentially start your life is really
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hard i'll give you an example of this like you know right now i you know i would say i'm like fairly fluent in
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italian um that's pretty impressive but i uh but i started uh taking italian lessons and
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you know the last four or five percent of a language is brutalizing right because it's like it's every little
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grammatical thing you want to get it completely right and it's very um demotivating for me sometimes because
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i'm like god why the [ __ ] am i doing this um i don't have to i can get it by just speak it but i've made a commitment
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to myself uh same thing in biotech you know i got introduced to it by friedberg and and
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obviously nat and and now i'm trying to learn and it is a it is a grind and i think it's so easy
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to quit now you take that to the extreme and some random person that doesn't have
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necessarily the ability to fall back on the success that you know so we've all collectively had and you have to start
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from scratch my god it's it's really tough it's really tough at our age it is just hard kids are
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screaming in the background you're trying to manage all the stuff it's impossible so you think it's easier when
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you're in your early 20s yeah be careful what you wish for but why is it easier when you're in your
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early 20s isn't it always a grind to learn something and push yourself to develop yourself i mean well you have
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nothing so the theory is you have some motivation to get something right because
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you're going to climb up the mountain because like staying at the shore means you can go wash it out to sea or
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something hours hours hours and hours and hours to my 20s and 30s like it was like
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10 to 16 hour days i couldn't have every day of the office is that different today
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yeah i i don't work in the same way i did before because i i'm trying to do a different job um but
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i've earned the right and i've now put myself under pressure to do it differently because i have a different
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job to do right but when i was in my 20s and i was a pm you know grinding out a product or you
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know writing a feature spec or you know building a model and trying to put all these things together
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uh it was so much thankless work i learned a ton uh and it was all worth it right i was about to ask you do you
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regret it or not yeah no look this is the thing about work this is the thing about work-life balance that the people
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are always complaining about people are working too hard don't realize is that yeah you want to think about work-life
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balance but but across your entire life i mean one of the things you'll do in your 20s is work much harder to set
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yourself up to where you want to be in your 50s and so chamath doesn't have to work as hard in his 50s because
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he worked much harder earlier in his life and now he's got the skill set where he can delegate more um so yeah i
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think we're you know we really shortchange people when we tell them as young people that they don't need to
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work hard or in the extreme case of ubi that we're actually paying people not to
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work that's not developing the right habits they're going to make them successful
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later on and in fairness though if you look at minimum wage and you look at entry level
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jobs many of them paid too little historically these companies like mcdonald's i know it's a free market but
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we're paying very little we're talking seven eight dollars an hour and no benefits and you know this is kind of
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unnecessary greed in my mind and i think that's what my personal job was at i made
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an hour yeah i made four dollars and 25 cents an hour in 1996 as my first job cleaning cleaning a pool yeah
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250 for me when i worked at fordham's uh fordham's computer center i think it was four two
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no three three dollars it had gone to but when i started in the workforce in 88 it was 250 was the minimum wage what
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was the minimum wage where you were dude what was it like in that 19th century it
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sucks yeah tell us when i when i when i was working at when you killed the federals no i remember
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when i was in college i worked at a bar um and uh i mean i was there drinking so
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much i finally was like why don't you just give me a job so i might as well make some money
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while i'm sitting here and they pay me seven bucks an hour that's why i did my senior year oh
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pretty good yeah pretty good that's a pretty well-paying job seven bucks a month one of the other problems but one
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of the other problems of ubi that larry summers has been he's the former u.s secretary of treasury he's been on the
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record about um is the inflationary effect so you know there are pretty smart economists like himself who kind
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of highlight that as you give people everyone you know ten thousand dollars a year
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first of all it's gonna cost 10 trillion dollars whatever the estimate is to kind
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of fund that sort of program um and you know suddenly the cost of a burger goes from 49 cents to 99 cents or
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99 to 1.99 because there's uh you know much greater demand on that kind of area of the
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economy for consumption and so you see an inflationary effect which trickles its way through and so
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what ends up happening ultimately is by pumping more of that money in for free without productivity coming out of it
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you effectively see inflation and so it wipes itself out um and so this is kind of one economic theory on ubi is that it
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can actually just end up being within 10 years completely useless and pointless because then the basic costs of living
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climb so much that you need to raise the ubi again to give people basic living expenses
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and so it becomes this kind of nasty runaway effect so it's not really sustainable is one argument that's made
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against ubi but you know obviously different point than what we were kind of saying a moment ago
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anyway i think people i think people don't know what they want and if they get it they're going to
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um i think of look a form of a form of ubi does make sense and i do think we need to subsidize folks but you know i
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think maybe it's probably just a fancier word for welfare i grew up on welfare and i can tell you that i don't think
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our family benefited from it um psychologically we benefited from it socioeconomically because we needed it
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to not starve um but the the knock-on effects of you know when you're in that loop of
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again being in your 30s 40s and 50s not finding purpose you know which my parents had to struggle through
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uh coping you cope with alcohol you cope with depression the knock-on affects your kids i don't think we want to see
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that and so when people think about ubi i think they need to understand that you know we've
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run a long experiment in this thing called welfare you know what welfare does a lot of us have felt it
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and uh there needs to be a better way because if you just let people opt out i don't think you really understand what
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happens over long durations of time when you're not doing anything oh it's getting really weird right now right i
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mean the fact that restaurants are closing that have customers but they can't operate and so
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we're starting to actually see the effect of it you know in some sense what's the open job stat right now it's
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like 9 million open jobs in the us it's been bouncing from 8 to 10 million yeah there's more unfilled jobs than there
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are unemployed people right yeah or unemployment's unemployment is high but uh unfilled jobs is even higher
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yeah we've somehow moved away from a political consensus we had in the 1990s that i think made a lot of sense when
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bill clinton passed welfare reform with you know a lot of republican support is look we need to have a welfare system we
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need to take care of people who either can't work or can't find a job for for a good reason
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there needs to be a social safety net but if you're an able-bodied person who can find a job you should be working
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and um and that that that welfare reform they passed in the 90s did lead to a lot of
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people finding meaningful work which i think resulted in happier lives and somehow we've moved off that political
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consensus um that everyone kind of agrees yes social safety net but but able-bodied people should work to now we
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have this elite it's really an elite ideology of ubi which is look we're going to pay people
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not to work um which i just think is sort of like un-american isn't it also like a little insulting
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being like you know what don't even bother working you're making too little money we'll just give you money it's
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it's yeah it's like it feels insulting to people's dignity i'll be honest like i wouldn't want to take it i would
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rather go out and be i was a waiter or a bus boy i'll go be a waiter or a bus boy
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and make enough money to pay my rent and yeah one of the things you wanted for free yeah one of the things you hear is
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well your job's gonna be replaced by a machine anyway it's not productive work so why don't we just pay you
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to sit back and you know take yourself out of the economy well like you said the unfilled jobs number
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shows that even with all the automation that's happening in the economy and that's a trend that will continue
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there's still a need for you know human labor and i think there always will be and um and it's a little
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bit too soon to be throwing in the towel on the idea that entire groups of people
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can't productively work does everybody believe able-bodied people should work and not get free
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money it's not that it should or shouldn't i think the question is what's uh what's in folks's best interests well
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that's what i mean yeah but yeah so is it in best people's best interest our phrase is what you're saying is in
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people's best interests i think the i think the point where we're going to go wrong is when we couple ubi
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with um actually having to work or not work and i don't think that's the right idea
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i think we have to do a decent job of letting people find the things that they want to work on because everybody can
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find something that they want to work on and that shouldn't exclude you or disqualify you from getting ubi so that
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all that does is then just raise the general standard of living i think that idea is better the problem is when we
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talk about ubi what we are talking about it is in the exact way jason that you said
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which is letting people opt out so i mean think about how privileged that is to there are places in the world
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where there's not enough jobs and people are like wait a second an american has to be fulfilled with their job selection
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in addition to getting a job it that just seems like the height of entitlements like sometimes you just
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need a job because you need money to pay your bills right but you're saying if you get product
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if you get job job candidate you know citizen fit you the uptick will be better ubi is a
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benefit it's like universal health care we don't we don't make a decision about universal health care based on who does
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or does not have a job and so uh ubi should basically be about evening you know the bottom few rungs of economic
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viability so that everybody has a reasonable um ability to have a decent life that's
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a nice idea i think that makes a ton of sense but coupling it to having to work or not work where
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some people say oh great i can take this money and not work is the wrong way to figure this out we're talking politics
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why don't we shift to the the recall yeah all right uh so uh post morten on the uh newsome recall he he uh
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secretary of state says the recall cost over 300 million obviously um gavin knew someone in landslide hold on
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the 300 million point let me just take care of this real quick okay because i saw this all day on social media
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you know what yeah it did cost 300 million dollars but all the people crying about that clutching their pearls
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about the 300 million never said a word about the 30 billion the 100 times greater
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edd fraud that was perpetrated by our state and by our one party rule of the state and the recall process and
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the ballot initiative process is the only check we have on elected leadership in a one-party state so listen i'll
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start clutching my pros about the 300 million when they start uh talking about the 30 billion but look let's shift to
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the result of this what are you wait what are you referring to i'm not sure i know enough about this is this is the
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this is the edd fraud where 30 billion basically went to anyone claiming unemployment
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uh insurance and 30 billion and fake claims were paid out that process was so poorly administered
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so i mean people were just creating fake addresses they were just sending in claims from anywhere and um and 30
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billion went out so so look i mean that's the kind of incompetence and corruption that we have
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in california so zach your point is that because it's a single party state where
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the state where the democrats have super majority in the assembly and obviously have the the governorship that the only
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mechanism for the minority the republican party is to kind of run recall not even not the
00:21:28
republicans citizens i mean look let's remember how the um how the recall and the ballot initiative uh
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came to be that process it actually came from progressives early in the 20th century who said we need the people to
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have some direct democracy because special interests might usurp the uh the the electoral process and
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right and and get control over all these elected representatives and frankly that's exactly what's happened in the
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state of california but the people who you know have that power are progressives and so they want to amend
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or abolish the the recall process but so look i think 300 million once every 20 years to put the fear of
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god into politicians is not is money well spent in my view even if this particular recall wasn't close there are
00:22:16
much greater examples of waste fraud and abuse that the people complaining about
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this should be wanting to tackle and i'll believe them about the 300 million when they complain about the 30 billion
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but look this was a total shellacking for supporters of the recall and i i do think
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that whenever you suffer a defeat i think it's important for you to think about what went wrong
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you know and and certainly as a supporter of the recall i think it's worth doing a
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post-mortem um i think you know any political party when it loses needs to do some some introspection and so what
00:22:49
went wrong well i think a couple of things okay so if you if you go back to the polls a month ago or so it was a
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dead heat we even had that shock pole that newsom was down by 10. and then what happened well the
00:23:01
republican party basically consolidated their support around larry elder prior to that you kind of had this amorphous
00:23:08
blob of five different candidates who didn't have a lot of name recognition they were pretty moderate they were a
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hard target for for newsome to shoot at once the republican party consolidated around elder it provided a very
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uh convenient and rich target for for uh newsome to shoot at and so you'd have to say
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that tactically the republican party made it made a mistake there now i understand
00:23:30
why they did it i mean elder is smart he's charismatic he appeals to that base uh but he's not the moderate candidate
00:23:40
that like a schwarzenegger was or that i you know chamath i wanted you to run and
00:23:44
so falconer was sort of that candidate and so you kind of had a choice on the republican side between a moderate
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candidate who wasn't very charismatic which was falconer and a very charismatic candidate who wasn't
00:23:54
moderate and it really played into newsome's hands and he was then able to nationalize the election in in the wake
00:24:01
of that so he branded i think somewhat unfairly he branded elder as a as a trumper and he ran against trumpism and
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even biden came to california to denounce elders as a trump clone which look there's a lot of things you may not
00:24:14
like about larry elder i don't think it's fair to call him a trump clone but that's what they did and so they
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demonized him and so if you look at the issues that newsom ran on they were all national issues he was you know talking
00:24:27
about what was happening in texas with abortion uh and he he talked about covid we should come back to that one because
00:24:32
i think that is a state issue too we should talk about it but he started talking about issues that were really
00:24:38
more national issues he and and so the the recall moved away from the issues that had galvanized supporters in the
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poll just want polls just one month ago which were homelessness crime schools and school closures and
00:24:52
lockdowns and news was able to very effectively change the subject well you got everybody back to school
00:24:58
right if people didn't go back to school it could have been a different result i think the recall was very
00:25:03
helpful in that in in that i mean if you remember do you think policy has shifted
00:25:07
because of the recall sacks at this point and doesn't that ultimately kind of benefit the issues you were most kind
00:25:11
of concerned about look the 300 million was worth it just to get businesses open
00:25:16
and just to send a message to the the education unions that they could not keep schools closed for another year i
00:25:21
you know if you look at when newsome relaxed the lockdowns it was at every step of the recall process when when the
00:25:28
recall finally got enough signatures to get put over the top he all of a sudden started liberalizing the lockdowns he
00:25:33
knew they were very unpopular and he gave up on that issue and he got the education unions to stand down
00:25:39
on the issue of school reopenings i think because he was facing this recall so look i think that the recall was
00:25:44
worth it just just for that but um do you think things could have been different if there was a fringe
00:25:48
candidate like i don't know a sri lankan billionaire uh that was you know not kind of this this hardened
00:25:56
republican that they could yeah yeah i i blame i blame chamoth for this i think i think a candidate like chamoth
00:26:02
could have won okay a democratic centrist obviously i'm joking i don't i don't blame you chamath i
00:26:07
understand why you wouldn't want to run but but i'm saying a candidate like chamoth which is who i supported or a
00:26:13
candidate like schwarzenegger remember schwarzenegger when he ran in the early 2000s he was pro-choice and pro game gay
00:26:20
marriage at a time that gay marriage was not very popular he was socially very liberal you have to take those issues
00:26:25
off the table because california is not going to vote he was a pro-life candidate i think he was pro-gay
00:26:30
marriage before the clintons yes he was very early on on that he was he was socially very
00:26:36
liberal and very tolerant and you got to be in california in general do you think
00:26:39
the unions in california you know which is an issue that's been talked about a lot on this pod have been weakened
00:26:45
because of the recall and the voice that kind of rose up during this period of time or do you think that nothing's
00:26:51
really changed kind of long term i i think it's i i think it's a long-term project for to get the public
00:26:57
to see that the education unions are like any special interest which is that they will
00:27:03
pursue their interest at the expense of the general interest and they have to be
00:27:07
controlled again like any special interest i think because teachers are rightfully very popular
00:27:13
people haven't realized what the union bosses are up to i think that that has been exposed because of
00:27:20
covet and the school closures to a much much greater degree and i think that's that's a good thing well i mean if you
00:27:25
look at the recalls happening locally too with chesaputin and the san francisco school board
00:27:31
it seems like now the citizenship is saying oh we do have a recourse it's called doing a recall and stating our
00:27:37
opinion very strongly and then attempting to removing people and yeah i think that does change people's behavior
00:27:42
you can be sure chesaputin is thinking about outcomes a little bit more now than the implications of this recall i
00:27:48
think are really important um and i think it plays out in who runs uh in two years when um newsom is up for
00:27:57
re-election and absolutely it'll change who runs on the democratic side in four years uh
00:28:03
assuming new some wins you have to remember there have been a massive degradation in
00:28:10
the quality of life uh the most populous state in america which represents the fifth largest
00:28:16
economy in the world under one party control right so there is not a single law that cannot be passed
00:28:25
there's not a single program that cannot be implemented there's not a single idea
00:28:30
that can't be pursued yet we have had an absolute decline in quality of life under that rubric
00:28:39
and so when people really come to terms with that that's i think when there's a sea change and i hope the sea change is
00:28:44
not necessarily a democrat or republican thing it's back to centrism and i think it's checking
00:28:51
special interests exactly what sac says and realizing that just because you use a different name like union or something
00:28:58
else you're still a special interest and you need to actually be focused on the interests of the general
00:29:04
public our kids the environment water quality and if you can't walk into a state where everybody up another
00:29:12
ticket is on your same team and get [ __ ] done it's a really tough uh report card
00:29:19
yeah i'm just super uninspired by these guys like where is their audacious plan for california has anybody stated like
00:29:25
an audacious like here's what this state is no i mean no and that's what's possible we could be the best economy
00:29:31
with the greatest education system and we can build a million units should that be should that be the role of the state
00:29:37
government i mean like you know should or should well they're in competition they are they're in competition with
00:29:42
with florida and texas they have to compete for business and citizens and if it's not done at the state level we're
00:29:48
going to have to rely on the federal level and we know that that doesn't work because we have 50 states that are
00:29:53
increasingly more diverse every day so the whole idea with the constitution and the founding fathers was like we
00:30:00
have this incredible startup but over time i think we've decided that you know this startup is an umbrella organization
00:30:07
of 50 other startups it's a holding company and and there'll be these small little you know rules and differences
00:30:13
amongst these 50 states and that'll allow us collectively to thrive so you put out a tweet oh sorry go ahead no i
00:30:19
just want to i think we want to believe in that idea like there is no savior you
00:30:23
know what i mean there's no savior for 350 people and there's barely a savior for the 60 million people in california
00:30:30
but it's not going to happen by just throwing your hands up in the air and expecting some president to come around
00:30:34
because that's just too hard each state has to act like the citizens and be you know just rugged individualists who
00:30:41
are self-sustaining uh and resourceful and this state is not self-sustaining resourceful or ambitious and it's
00:30:49
falling behind texas and florida and other competitors so zach you were in a competition you put out a tweet saying
00:30:54
often or miami are you are you in the active transition phase or where are you at well i don't know i
00:31:02
mean we'll see i think the trend line in california is not good i think what you've already seen in the days since
00:31:06
the recall is that gavin newsom has now laid out the strategy for all progressives
00:31:12
uh in like even from san francisco to anywhere in the country of how they're gonna run and what they're going to do
00:31:17
is this that no matter how bad things get in terms of crime in terms of homelessness in terms of quality of
00:31:24
schools in cities and states that they have complete control over they're always
00:31:29
going to campaign against trump and trump-ism and they're going to demonize and authorize whoever the candidate is
00:31:35
on the other side as a trumpist whether they are or not that's going to be the playbook from now on and this is where i
00:31:41
think the attacks against larry elder were very unfair is before he even had a chance to define what he was about you
00:31:47
had publications like the la times calling him the new face of white supremacy i mean was it was like
00:31:53
unbelievable but black klansmen yeah they basically try to make him out for your black which look he is not okay
00:31:59
larry elder's a libertarian maybe his politics are not in the mainstream in california but he's not a black landsman
00:32:05
but look this is what the progressive playbook is going to be for the next two decades which is to demonize
00:32:11
anybody who stands up to them as basically being a a trumpist and um and and the irony of it will be
00:32:18
that they will have total control over over the the problems that people really can care about crime schools
00:32:26
homelessness and um and somehow you know that they what news improved is that you can whip
00:32:33
people up into you can stir their their partisan political tribalism when you do that
00:32:39
right that's why it's effective is he gets people just to see blue and um and he gets a free pass on these issues
00:32:46
that just a month ago people were very dissatisfied with now i i do think it's very very important that our republican
00:32:53
party not play into this and there was a very good editorial i think there's something to say how
00:32:58
come the republicans are still pursuing a trumpian you know their stream they're stupid
00:33:04
they are they look they're so dumb it's a really stupid strategy and there's two things they gotta fix right
00:33:10
away okay so number one rich lowry from nashville view had a police a piece in politico
00:33:16
where he said that this election uh the stolen election myth has become an albatross for republicans they have
00:33:24
to get off that um i think it's it's ridiculous that's gonna bring him down between two and the other thing is this
00:33:30
anti-vac stuff i mean you know voters completely forgot about the way that newsom locked down this state and then
00:33:38
broke his own lockdowns why because he's provacs even to the point of vaccine mandates whereas uh the republicans were
00:33:46
not and frankly i think chemoth your instincts on this were were right on which is
00:33:51
people given a choice between vaccine mandates or an anti-vax position they will take the the the vax mandates
00:33:58
speaking of instincts uh you want to go to the uh this week in facebook's dumpster fire
00:34:04
sure sure uh so i i mean where to begin uh this all started um on tuesday 2016 at
00:34:14
the last time of course graduate school of business okay well we'll get to your victory lap in a moment but just to
00:34:20
queue up this past week on tuesday the wall street journal reported that facebook conducted in-depth research on
00:34:26
the impacts of instagram on children's mental health from 2018 to 2020 but they never made the research public nor did
00:34:33
they make it available to academics or lawmakers who requested it you will remember that
00:34:39
last year or earlier this year facebook started floating the idea of instagram for kids so in addition to having this
00:34:46
research which they didn't share and here is the slide from a presentation it seems like the wall street journal has
00:34:52
somebody inside of facebook giving them everything literally but here is the quote from presentation
00:34:58
slides from 2019 internal facebook presentation slides we make body image issues worse for one
00:35:04
in three teen girls teens blame instagram for increases in the rate of anxiety and depression
00:35:12
this reaction was unprompted and consistent across all groups according to the wall street journal
00:35:18
uh and uh instagram obviously is a juggernaut over a billion monthly active users and over 40 of them are under the
00:35:26
age of 22. this is a really interesting issue because we are this is probably the first example of a broad-based
00:35:34
public policy public health issue that tech has created not necessarily amplified
00:35:40
right or exacerbated but actually created it now we're going to have to deal with this before i i want to issue
00:35:48
you guys how would you define that issue well i think it is a public health issue
00:35:52
if you have mental illness a large percentage of a cohort of our population uh subject to mental health issues and
00:35:59
eating disorders that's not a good place to be right i don't think that's what we
00:36:02
want as a healthy society in a healthy society our daughters and it's probably by the way it's probably not more than
00:36:07
just our daughters it's probably our sons and daughters that are going through these issues the question is
00:36:12
now about you know is it really a public health issue if you know about it what responsibility do you have to do
00:36:18
something and before i apply i just want to give you guys a little bit of data and just get your
00:36:22
reaction i actually want to go back to what's called the tobacco master settlement agreement
00:36:29
and the tobacco master settlement agreement was entered in november of 1998 originally between the four largest u.s
00:36:37
tobacco companies philip morris rj reynolds brown and williamson and lauriard okay
00:36:44
and the attorney generals of 46 states and essentially it was an agreement that basically said okay
00:36:50
we're going to net all these medicaid lawsuits together we're going to hold these folks responsible for the
00:36:56
downstream implications of the product that they've been selling our kids and our you know adults population
00:37:02
without the proper disclosures et cetera et cetera et cetera the pres the the what happened before this
00:37:07
tobacco msa in big tobacco though was there was about eight or 900 private claims that were filed from the
00:37:14
mid 50s all the way to the midnight david knows all this because he he made a movie about this
00:37:19
the reason why i think this is interesting is that whether it happens in the united states or someplace else
00:37:24
when i read that article my immediate thought went to the tobacco msa because i was like well okay there's
00:37:30
a public health issue that may or may not have been covered a cover-up you know it's definitely may or may not have
00:37:35
been covered up there could be criminal liability there's probably civil liability if you're you know a mother or
00:37:41
father who's lost their kid to an eating disorder or to depressed suicide anxiety
00:37:46
bullying suicide and i think like i think the article in the wall street journal yesterday was
00:37:51
about like human trafficking i mean these are some gnarly horribly complicated gnarly issues
00:37:58
to me that's how i can edit the dots so i just love to hear well i mean who's the jeffrey weigand in this case i mean
00:38:03
this is literally the movie the insider like somebody's leaking these documents out there's a deep threat inside
00:38:09
facebook yeah well yeah and that's what the brown and williamson was really about is that somebody had the studies
00:38:15
from the 70s of when correct me if i'm wrong david when the tobacco industry knew and did nothing and covered it up
00:38:21
and then they had the whistleblower so do you feel this is exactly analogous sax or how close to analogous are we
00:38:28
taking too big of a jump here well this this idea that social media is as bad for you as cigarettes has been
00:38:33
around for several years now and i've always wondered whether that was a hyperbolic claim i mean
00:38:41
it can it really be the case that using facebook is as bad for you as lighting something on fire and sucking
00:38:47
its carbonized ash into your lungs i mean i just you know i yes i think there's like a kernel of truth here in terms of
00:38:54
yes it does exacerbate body image issues but i don't believe that facebook or social media created those issues um
00:39:02
i mean these issues existed before and what facebook does is connect people in a more intense way than they were
00:39:10
connected and so it might intensify some of the social dynamics that already existed but i don't know that it created
00:39:16
them and if you're gonna blame facebook for this there's a lot of other places you could
00:39:20
blame too i mean why don't we be why don't we blame the met gala you know like um
00:39:26
you know look at all those well we have had actually blame on the fashion industry for making unrealistic body
00:39:32
types and the magazines and they stuff my kids can't wear the full body stalking to school that kim kardashian
00:39:38
wore to the met gala or whatever i mean and they're upset about that so should we ban the met gala or i mean let's look
00:39:44
at all advertising i mean all advertising just about focuses on unrealistically beautiful people and
00:39:50
what about tv and movies i mean hollywood tends to cast people are better looking or even the people
00:39:56
reading the news off teleprompters i mean so this like body image and self-esteem issue is everywhere in our
00:40:02
society and i think what social media does as it does in so many of these cases is
00:40:08
really just hold up a mirror to our society and it's it's not and yes there's a lot of
00:40:13
bad stuff happening on social media but that's because there's a lot of bad stuff happening
00:40:18
in our society well let me i you know here's one thing david the i there there have been other industries
00:40:24
that have influenced this but i don't think that they were as pernicious and as frequent in their use of as social
00:40:30
media you know when reading a fashion magazine or watching tv like slightly different than an
00:40:35
interactive version of that that you might use for five hours a day like tick tock or instagram and i just dropped in
00:40:41
an image into uh the the zoom chat there about suicide rates in the united states and this
00:40:46
chart you'll see goes up to 2018. and right around 2006 when we were at 11 percent uh eleven suicides i think per
00:40:53
ten thousand per hundred thousand uh you'll see from 2006 to 2008 we go from you know 10 or 11
00:41:01
basically suicides per 100 000 americans all the way up to 14. a 40 increase but
00:41:07
what's your that correlates directly with social media becoming part of what we're doing here but what's your
00:41:12
connection to what's happening i mean is that among teens i mean what what is that this is overall suicide rate so i
00:41:17
just think social media and the anxiety it produced could be actually having it i'm open-minded to that can i clear up
00:41:23
one thing saks i think that um your argument would be reasonable if the first part of your argument uh made
00:41:31
more sense and to me it doesn't and when you don't think that smoking and looking
00:41:36
at your screen for an hour a day are the same let me just in from my perspective
00:41:40
explain to you why they are the same whether or not you're ingesting something into your lungs or whether or
00:41:45
not it's your eyes at the end of the day you're still activating physiological pathways okay
00:41:51
there are specific chemicals that are being created through smoking specific chemicals that are created through how
00:41:56
your brain and your mind is reacting and all of these things when you're bathed in these chemicals for long
00:42:02
periods of time have known deleterious consequences some manifest in tumors which then result in
00:42:08
cancer you die lung cancer cigarettes but what we're learning is some of these things result in long-term imbalances of
00:42:16
these critical hormones and chemicals you need in your brain to stay healthy and that results in anxiety or the
00:42:22
propensity to overeat or the propensity to then throw stuff up and so i would be
00:42:28
careful about not assuming they're not physiologically the same i actually think they're more similar than
00:42:33
different at a core physiological level it's just that we're not used to the fact that something that that is
00:42:39
equivalent to looking at a screen could actually do that to you i guess the question is what's the what's the what's
00:42:44
the threshold for regulatory intervention if um if someone did this at the scale
00:42:51
let's say there was a social network that was had a hundred thousand users and people were actively using the
00:42:56
social network every day and having body issues or whatever the you know the the
00:43:00
concept that's gonna find that claim might be we're about to find out you know are we gonna end up creating kind
00:43:04
of a regulatory frame across all of these things and i think that this goes also to the point of scale because
00:43:10
um at the end of the day if you end up starting a business and you're not successful you don't really kind of find
00:43:15
yourself in the sort of framing of well what are you doing wrong all of the the companies that scale the assumption is
00:43:21
they did something wrong in order to get to that scale you know roloff both of um
00:43:27
sax's former colleague and and obviously famed investor now at sequoia capital um said that uh he always he only
00:43:35
invests in businesses that pursue one of the seven deadly sins because those are
00:43:40
ultimately the things that consumers kind of increment their consumption of there has to be a seven deadly sin
00:43:46
driver uh you know underscoring the success of any business that sells two consumers and if that is
00:43:53
actually true people aren't making kind of altruistic purchasing and consumption
00:43:57
decisions they're making decisions based on envy and based on greed and based on
00:44:00
gluttony and all of those drivers we kind of you know are effectively kind of related back to these
00:44:07
physiological drivers right and so like yeah no two things can be right what you
00:44:12
said can be right but i think what also can be right is are we really willing to
00:44:17
bet that now there are not 50 individually ambitious politically ambitious state ag's
00:44:23
licking their chops reading this stuff wondering how many kids in their state may have suffered from an eating
00:44:28
disorder or anxiety and blame it on one of these apps of course are we convinced
00:44:33
that not a single lawsuit will get filed are we convinced that there's not going
00:44:36
to be any class action and by the way that's just the united states what is somebody that's sitting around a you
00:44:41
know around a table of politicians desks in you know germany belgium uh france thailand
00:44:49
they're going to find their issue in this treasure trove of content that's being you know continuously drip fed out
00:44:55
to the public i guess my point is that this is today's issue and business success ultimately over
00:45:02
time in consumer markets will always ultimately be driven by products that have at scale deleterious effects on the
00:45:09
consumer market and those deleterious effects will be a result of some sort of kind of addictive or negative kind of
00:45:14
consequence that arises when folks use these things frequently and the market figures out how to optimize the
00:45:20
utilization of products to increase revenue to increase profit and that's what a free market does and i'm not
00:45:24
saying it's right or wrong i'm just pointing out that there isn't in my opinion something unique here i mean you
00:45:30
know coca-cola is the largest beverage company in the world they sell 40 grams of sugar in 12 ounces of water and
00:45:35
everyone buys that and they feel great from that and the sugar creates this addictive problem now we've got an
00:45:39
obesity epidemic i'm not blaming coca-cola but that's the general trend in cpg over the last 50 years increasing
00:45:45
sugar increasing salt and then the difference the difference is that this is not sugar
00:45:50
which is a generic compound this is for example no different than when purdue pharma started to make
00:45:56
fentanyl it's a really great drug it has incredibly superior advantages it's used
00:46:02
for a lot of very important things when that spilled over knowingly to a level of abuse and i don't think it was
00:46:09
a lot of abuse but there was enough that essentially was overlooked in in the building of a business
00:46:15
it started with state ags who stepped in and then it basically ultimately drove a
00:46:20
federal agreement states agreements a master settlement agreement around fentanyl and then purdue essentially
00:46:26
disgorging all the profits that they made so you're right free markets should act in however way they're going to act
00:46:35
but when those free market operators themselves are producing data that shows that oh [ __ ] hold on something could be
00:46:40
going wrong here um then i do think that politicians will step in regulators could step in i mean
00:46:48
what's crazy here is you know the fda could actually act like if the fda is willing to act on joule
00:46:54
what is the difference if the fda says they feel like let's just assume that somebody in the fda says we feel like we
00:46:59
should have a responsibility to think about mental health and eating disorders but that's the slippery slope right
00:47:05
what's the threshold right at what point do they say no we're not touching this and at what point do they say yes we are
00:47:09
touching this because at the end of the day any successful consumer product will
00:47:12
have some degree of deleterious effect exactly and well and this is why we have to have some perspective about it so
00:47:19
in preparation for the segment i asked my 11 year old uh girl daughter um i know jake how you don't think i talked
00:47:26
to my kids but actually i made no joke no joke i was thinking if you were the father she was
00:47:34
like who are you why are you in my room so the first thing she said is who are you and the second and after i said i'm
00:47:44
your dad and the second thing she said the second thing she said is i don't use instagram i'm like okay well what do you
00:47:50
use she said tick tock i'm like the worst so i'm like what do you what do you use tick tock for and she said well
00:47:56
i watched uh dance videos and i'm like well the i've been reading press articles that say that the only thing on
00:48:01
tick tock is sex and drugs and that it's you know it's it's bringing you into a vortex of
00:48:09
that and she said i don't i don't watch i watch dance videos and then smart as a
00:48:12
whip she said the only people who end up watching that are the ones who keep indicating she didn't use word
00:48:17
preference but she basically said that they keep getting that stuff because they like it and they keep getting fed
00:48:22
more of what they're watching so look i think we have to have a sense of perspective about this at the end of the
00:48:27
day products like facebook and instagram are ways for people to share content and consume content from
00:48:35
people they follow i mean that's basically it now is there a lot of bad [ __ ] on there yeah because there's a lot
00:48:39
of bad [ __ ] in the world and should facebook be trying to control this stuff absolutely um
00:48:46
but i don't at the end of the day think it's it's uh it's cigarettes if they banned kids from
00:48:51
using tick tock and instagram until they were 16 years old would you be opposed to that because i don't let my kids use
00:48:58
it and i have an 11 year old anywhere near we have a complete moratorium no social media is our rule i can't
00:49:04
believe you let your kids use social media i mean i'm not passing judgment but i mean like all they use it for is
00:49:09
to watch dance videos so um but i think sax's point is an interesting one which is you know based
00:49:14
on what your daughter said that that is effectively what's going on it creates an acceleration of the natural evolution
00:49:19
of these markets that historically may have taken call it 50 years for everyone to want to watch you know
00:49:25
mtv didn't emerge for 60 years until you know there was kind of radio um and television broadcast signals and then
00:49:32
everyone said you know what i want to watch rockers dancing on stage and go nuts and whatever the kind of consumer
00:49:37
demand was that eventually evolved there what's happening in social media is within seconds you make evolutionary
00:49:42
votes on kind of what you want in a media cycle and then all of a sudden a few hours later you're getting exactly
00:49:48
what you want over and over again and you can't say no and that that's effectively what digital media generally
00:49:54
social media in particular has some nuances to it but digital media generally has enabled is an acceleration
00:49:59
of the natural consumption trend that we see with humans which is they eventually
00:50:03
want to go to one of the seven deadly sins and that's what they kind of get stuck with we've definitely talked about
00:50:06
the danger of getting trapped in in an information bubble and and a feedback loop and i do think that is
00:50:13
a danger of these products but so is cable news i mean you know you look at twitter it's an
00:50:18
outraged machine and people get trapped in a cycle and they only want to they either follow people to get outraged by
00:50:25
them or just because they want to kind of self-indoctrinate themselves but that is basically why people watch cable news
00:50:30
as well i mean it is an outrage machine your friend tucker or rachel maddow on msnbc they're both
00:50:36
feeding different uh variations of of outrage and um so so my point is look i don't
00:50:42
think these problems are unique to social media i think they pervade hollywood and the entertainment industry
00:50:49
and even the news industry um maybe look maybe we should put warning labels on them at the end of the
00:50:54
day we don't prohibit cigarettes we have an assumption of risk argument we put warning labels on them maybe we need
00:51:00
warning labels on these instances influencers right you put it you put it behind a counter and there's a strict
00:51:05
prohibition on people under the age of 18 being able to use them and when it looks
00:51:10
like you know companies like jewel were trying to circumvent those things or make it appear
00:51:16
more valuable basically to hook kids at a younger and younger age when they weren't capable of making those
00:51:21
decisions um they were held liable so okay so there's a really interesting topic there
00:51:27
which is should people under the age of say 16 or 18 be prohibited my original question products
00:51:33
yes 100 percent 100 percent look if you if you think about 16 or 18 16 or 18. let's uh 16 100 18 16 100 and
00:51:44
then up there needs to be a way of opting up because i think 16 year olds are quite sophisticated but here's the
00:51:49
thing we are living longer and longer than ever it is very likely that we're all going to generally live to our
00:51:54
hundreds it's not the end of the world for these kids to have to wait an extra two or
00:51:59
three years until their literal physiology is a little bit better form so that they have better antibodies to
00:52:05
this [ __ ] and i think that if we as a adult population aren't necessarily going to
00:52:11
take responsibility for these kids i think we're doing them a huge disservice you don't let your kids run around
00:52:16
wherever they want you don't let them hold guns whenever they want you don't let them do a whole bunch of things
00:52:22
that they may think is okay but you know could have really bad consequences and so if you know that this stuff is
00:52:29
happening i think it's very different to look at a 22 year old and tell them what to do or
00:52:34
not to do that's not what we're debating but what that data was about was about long-term systemic health issues
00:52:42
to a large percentage of girls that's really [ __ ] up and a lot of the research that's come out i dropped a
00:52:50
couple of links in the chat you know i haven't read the studies but um they're starting to show a correlation between
00:52:55
suicide rates and depression in young kids with social media and it does skew towards females the theory is
00:53:02
uh females are uh more adept or more frequently in uh dynamic or complex social uh situations in other words
00:53:12
cyberbullying type situations where people use the social media to just kind of blow each other i mean look i think
00:53:18
you guys have a real point with respect to ages 13 to 16 because i don't think you're allowed to use social media or at
00:53:23
least the terms you prohibited under age 13. we all know that's a joke you and i
00:53:26
have had to build products that have to you know abide by copper laws and we always just kind of
00:53:32
laugh at it because they're [ __ ] right okay fair enough but what i'm saying is i think you guys have a real
00:53:36
issue that needs to be explored around what's the usage uh for ages 13 to 16. but look
00:53:43
what i worry about with these things is you're always playing whack-a-mole right
00:53:46
i mean you basically ban social media and all of a sudden these kids because they're very tech savvy they're going to
00:53:51
find themselves on text groups and text chats and they'll be in signal and you won't even be able to see what they're
00:53:56
doing i mean at least on social media that the whole point of that though that makes sense to me because i remember
00:54:01
when i was growing up and we all wanted to smoke it was a pain in the ass to get
00:54:05
cigarettes so most of us just said it's not worth it but yeah you're right a handful of people found a way to get
00:54:11
the cigarettes to sneak behind the school to smoke them that's fine but that's very different than jewel walking
00:54:17
into the middle of the lunchroom and passing out berry flavored vape pens yeah coconut peanut wow
00:54:23
that's baby basically insane well that's crazy obviously that's going to be created packaging if you look at the
00:54:28
paper why do you have a creative outrage around jewel and berry flavored vape look why do you care about jewel um or
00:54:35
why should we generally care about jewel and not care about soda companies making
00:54:39
40 grams per 12 ounces of sugar which is truly dangerous and damaging to the health because we've been drinking soda
00:54:45
for a long time and we've already accepted it so it's too late to accept it we essentially essentially long time
00:54:50
and then we had this kind of you know tobacco moratorium that's now kind of well you know
00:54:55
shut out smoking but free break if you say if you said right now covid uh is a disease of the old and the
00:55:04
obese you would be cancelled like somebody tried to say that that's recently the guy
00:55:09
no but the point is you're talking about like people are very sensitive about this obesity thing and the second you
00:55:14
say like we need to monitor you forty percent of americans with type two diabetes or whatever there's also
00:55:22
personal freedom and do you wanna drink a coke zero exactly water and so if you have personal freedom why should some
00:55:28
regulator tell you what social media tool you should or should not use right if we're talking about what are you
00:55:37
going to do with a 13 to 16 year old what are you going to do with the and 11 year old that's the best part of your
00:55:43
argument that's the best part of your argument is when we're dealing with minors i could i could see the argument
00:55:47
for more restrictions and and potentially support them depending on what they are i think that's something
00:55:51
what about ideas what about minors not being able to drink soda you have to be 16 year old to
00:55:56
drink soda i mean that's actually that's where most diabetes and obesity is rooted in this country
00:56:01
i'm open-minded to that position actually i know it sounds crazy but no i think that that that makes sense
00:56:06
drinking coconut cola makes no sense if we have a crazy obesity if we can actually show that
00:56:12
so let's ask the question though so let me let me ask you let me ask a second-order question about this which
00:56:17
is freeberg is right that drinking sodas for 13 year olds has got to be as harmful or more than using facebook okay
00:56:24
so why do we never hear about that i would argue that there's something else going on here with this massive amount
00:56:30
of attacks on social networking companies there's a lot of people who hate social networking in the traditional
00:56:38
legacy media because they've been disrupted by facebook by these social media companies and so they're working money
00:56:44
they took their money and they're looking to publicize any article about the negative effects of these companies
00:56:49
which they're not threatened by coca-cola they're not going to publish those kinds of studies so i just think
00:56:55
that there's an argument that perhaps i'm not saying you're wrong i think there's absolutely truth in what you're
00:57:01
saying it's all a matter of degree though and perspective and i do think that the traditional media has an
00:57:07
incentive to blow this out of proportion a little bit because they have an agenda
00:57:10
is what you're saying yeah absolutely and i think i think people in power look i think there's a positive thing
00:57:16
about social networking i mean because we haven't said one positive thing about it okay social networking overall
00:57:21
enables us to stay in touch with people we care about friends family and allows us to receive information
00:57:27
from people we want to follow okay we never talk about those positives i find it an incredibly convenient way to
00:57:34
consume things okay so we never talk about that but but here but here's why is because
00:57:41
social media is fundamentally a democratizing force right it enables people to coordinate in a much more
00:57:46
democratized way than they ever had been able to before i do think that is threatening to people in power and given
00:57:52
the chance they would like to suppress it um zuckerberg gave a speech a few years ago about social networks being
00:57:58
the i think called the fourth estate with the third estate being the press and in the same way that that there are
00:58:03
people who want us in power who want to censor the press i do believe that there
00:58:07
are people in power want to censor social networks because they don't like the disruptive democratizing force that
00:58:13
it represents and there is a lot of positive to that in the world you're i think you're mixing up a lot of
00:58:18
things there so yeah you're right and i don't think any of us are saying cancel these companies
00:58:24
and remove them from the internet i think what we're saying is there are very specific ways in which certain
00:58:29
features are built that they are expressed in features that are now apparently according to
00:58:36
their own work and exploration are linked to mental health issues so i think the point is people should
00:58:44
now decide whether to your point we should ignore it because the good vastly outweighs you know
00:58:51
what's a third of girls who the [ __ ] airs right i mean they're chicks so whatever
00:58:55
uh or you say uh actually this is a really big problem and so let's step up and fix it because somebody needs to
00:59:01
protect these people and when you're 16 or 17 or 18 do whatever you want like we
00:59:06
let people do today you want to drink a coca-cola every day get diabetes you can
00:59:10
do that nobody tries to stop you right you want to smoke a pack of smokes a day you can do that nobody stops you but we
00:59:17
do a lot of other things to try to help kids i think i think if we're only talking
00:59:22
about ages if we're talking about the minors the the kids i think you and i can find agreement on this issue i think
00:59:27
but but i do think that the demonization of social media goes well beyond that but look i think you've got a great
00:59:33
point with respect to the kids do you guys believe and this is a theory that's been growing that tick tock run by the
00:59:39
chinese government is trying to reprogram ethics morals and doing psychops basically if there's
00:59:46
on our children no jay there's something bigger than that i mean i think all of you guys probably upgraded to 14.8 ios
00:59:52
this week i hope if you haven't and everybody listening if you haven't please go upgrade it
00:59:57
but you know the israeli spy firm nso had apparently created a zero click exploit for the iphone
01:00:04
where you could turn on the camera and the microphone and basically spy on folks
01:00:09
completely unaware and you know jason and i were talking about this and and and i think jason you
01:00:15
were the one that said you're like yeah we've been living with that with tick tock for years it's not as if you know
01:00:19
nso just licensed it randomly to the saudi government i mean this tool has been available for a while so to your
01:00:24
point but do we think that the chinese government tick tock are trying to program our children to be more deviant
01:00:32
and to create social unrest and no you don't think that they're trying to steer them with the algorithm towards bad
01:00:38
results because they're not letting their kids play video games wall street did you see the wall
01:00:43
street journal article that i just sent to you guys wall street journal article basically created a bunch of kids
01:00:48
accounts and then did searches or what started to go down a rabbit hole and just with one keyword search you know
01:00:55
these kids went into deep you know kink bdsm this is a this is a pretty straightforward weighted tree algorithm
01:01:02
okay so like when you start on a branch of a tree and you keep clicking on those
01:01:06
things that's what you'll get this is no different than how facebook's algorithm
01:01:10
works how google search algorithm works for you once you start behaving with clicks or swipes or likes they use that
01:01:18
as a feedback loop and they basically weigh the next set of results so david's daughter is right if you click on sex
01:01:24
drugs and rock and roll that's it's not all you're going to get but it's going to be a large percentage of what you get
01:01:28
because the algorithm in a blunt way assumes that that's what you like yeah so i'm not sure that this is repeating
01:01:35
anything that's so im you know it's pretty obvious that that's how it should work
01:01:40
if they want to have maximum utilization well you know the thing that's slightly
01:01:44
different about tick tock is you know in facebook or instagram you build your feed and twitter and then it serves it
01:01:50
up algorithmically on tick tock it uses the entire corpus so if you do one search for a keyword now it's not just a
01:01:57
subset of what your friends posted in some ranked order it's the entire corpus of like long tail and so what they show
01:02:03
in this tick tock is like how quickly a child who just types in one key word can
01:02:08
be have their feed be 90 drug use and you know sadomasochistic whatever you're into uh sex i don't know
01:02:21
if the content is obscene then it should be taken down to begin with okay and um
01:02:26
look my takeaway from this conversation is that uh we need to do something different for kids i don't know if it's
01:02:33
a it's a flat out prohibition or what but but but yeah but look so so the tick tock algorithm thing if you want to keep
01:02:41
seeing more and more content related to something fine the algorithm is going to
01:02:44
give you more and more of what you want as a consumer but maybe for kids there needs to be some guard rails around that
01:02:49
and we don't direct we don't direct kids towards certain kinds of content around
01:02:54
you know sex or drugs or violence i have to constantly remind parents like youtube kids should not use youtube
01:03:00
because it goes really to crazy dark places and there's kids youtube and kids youtube they add each and every video
01:03:07
now you still get some of that consumption and unboxing of things and your kids will ask you to buy
01:03:12
a bunch of stuff but you're not going to get straight up sex violence and you know everything
01:03:16
i'll tell you what does happen my uh i i put kids youtube on my kids my four-year-old's ipad
01:03:22
and then the other day she said she saw some like scary horror thing on there and she couldn't sleep and she woke up
01:03:27
in the middle of the night because you know if we're not doing our job as parents curating the content and
01:03:30
curating what our kids are doing and we're leaving it to this app uh we're totally left
01:03:35
and uh and that that's what i realized i did my laziness in like just thinking like oh there was something she wanted
01:03:41
to watch i put the app on there and didn't pay attention for a few weeks and all of a sudden she had gone down the
01:03:45
rabbit hole found something scary i use a i don't know if you guys use this but i use an app called custodio
01:03:51
it's with a q q u s t u d i o and you can kind of like lock down all these devices and then at the end of
01:03:58
every week it gives you an email of all the app usage and all the links that these that my kids clicked on or just my
01:04:05
oldest one he's the only one that has a phone but that's nice and you had a discussion
01:04:11
with him about that like hey yeah it's a privilege to have this and yeah it's going to tell me what you do i agree
01:04:16
it's still super super hard but this is why i think you need to have some blunt force
01:04:20
instruments right now and my blunt force instruments are you're not allowed to have
01:04:24
um well the ones that we've they're not allowed to have tick tock snapchat facebook instagram twitter yes
01:04:31
hard no and the only reason we allow youtube is because a lot of the school links
01:04:38
are the videos inside of youtube and so you can't lock it down but that's why i use this custodio app to see what
01:04:43
they're watching on youtube even then though it's not perfect by the way this thing that just came from the pentagon
01:04:48
there's a total friday news drop i mean talk about a friday news drop i don't know what we don't know what you're
01:04:53
talking about u.s military acknowledges kabul drone strike killed 10 civilians including seven children
01:04:59
we knew this they're just confirming something that had been exposed new york times did excellent
01:05:04
reporting on this excellent reporting by the new york times that was incredible journalism
01:05:08
i mean did you guys see that they were like watching frame for frame of like a video then they were like going to
01:05:13
google maps they were comparing colors of cars they were looking at sides of buildings
01:05:18
uh incredible reporting by the new york times it was really the i mean it's obviously a tragedy was the final
01:05:24
debacle of our afghanistan involvement this was a foreign aid worker who actually he was there as an aid
01:05:32
worker and um they had him on video loading up his car with uh plastic jugs of water and
01:05:39
somehow they thought these were explosives or something like that and he was doing his errands and then he
01:05:45
comes home and they hit the the car with you know a massive uh missile from one of these
01:05:51
reaper drones and it kills him as well as um you know it's basically 10 members of his
01:05:56
standard family including seven children now the i i mean i i think i understand why this
01:06:04
well we don't exactly know why this happened and i think it needs to be investigated obviously the military in
01:06:11
kabul was on high alert because we had just had that bombing at the airport and it was the bloodiest day for america in
01:06:17
afghanistan i think we had three 13 soldiers killed a few days before this but but it just shows the kind of mistakes
01:06:25
that we can make even fighting drone warfare you know the idea was the term casualties of war exists for a reason
01:06:31
like this is how war works you cannot do it perfectly it's messy everybody innocent people dies that's why war is
01:06:38
the worst thing but how did we should be the last resort right and how do we ever
01:06:41
think we're going to win hearts and minds in this country by you know like we we made two we talked about this it's
01:06:47
like they're they're not interested in democracy like in the way we want them to be and the west wants them to be we
01:06:53
by the way that's forcing it down their throats is not gonna work we we could have maintained a base there there were
01:06:58
better ways to exit but let's fix the schools in california first yeah i think that's i think
01:07:04
that'll ultimately i think people are going to forget those images of people on planes and just think thank god
01:07:10
that's over i think now that there hasn't been 20 you know and hopefully there's not another 911.
01:07:15
all right uh let's wrap with um ellen powell wrote a piece for the new york times uh op-ed section section on uh
01:07:23
sexism in tech using the elizabeth holmes trial as the main example um she was also on tech checks the nbc show
01:07:32
and discussed her op-ed uh quote holmes should be held accountable for her actions as chief executive of
01:07:40
theranos and it can be sexist to hold her accountable for alleged ver serious wrongdoing and not
01:07:49
hold an array of men accountable for reports of wrongdoing and bad judgment she uses travis kalanick and adam newman
01:07:56
as examples of men who have engaged in questionable unethical even dangerous behavior in tech without much legal
01:08:02
penalty and that they both went on to start new companies her main example however if
01:08:07
bias is tech executive kevin burns who is the former ceo of jewel j-u-u-l uh who helped the e-cigarette vaping
01:08:16
company raise uh 12 billion dollars but he left jewel amidst a lot of legal blowback and
01:08:23
just this past week with a bunch with a bunch of cash with about yeah i mean of course you get the secure the bag on the
01:08:28
way out adam newman too um and uh don't drop that don't drop the bag you have one job to
01:08:35
do don't drop the bag yes run um but don't do not drop the bag so i mean she meant she mentioned other
01:08:43
stories like uh juicero if you guys remember this company um a couple years ago they raised 100
01:08:48
million dollars pre-launched right it was a juicer that you know was supposed to
01:08:53
enjoy my juice from my juicer oh yeah the claim that they made was that inside of the packets was like fresh vegetables
01:09:00
and this thing squeezed the fresh vegetables and fresh juice juice came out and it turns out that the bag was
01:09:05
just filled with juice and so no no i think the bag was filled with shaved vegetables or whatever but
01:09:10
you could squeeze the bag you could squeeze it would squeeze the bag so that it was already pre-juiced is what um you
01:09:15
know uh olivia zolowski who's now it uh uh she basically put they she she kind of made a whole video and put on
01:09:23
bloomberg they had juice in these packets and they were telling people what they thought fresh juice
01:09:29
yeah so they could have opened the drawer sorry sorry they could have put it into a machine and paid seven dollars
01:09:34
the juice then took that juice put it in a bag yeah that was supposed to be fresh
01:09:38
vegetables sold that as fresh vegetables to then get juiced i charged eight dollars a bag for this
01:09:45
stuff um were invested in that who invested in that who wrote a hundred million dollars
01:09:50
google ventures anyway a lot of people would like to kind of say it was a huge it was a huge like you know better for
01:09:55
the planet story but it turns out that the hardware didn't work and then they ended up kind of faking it until you
01:10:00
make it it's very similar to their notes in the sense that there was a piece of hardware that made a claim that wasn't
01:10:04
necessarily true and granted no lives were at risk in this particular case but some might argue lives were at risk in
01:10:11
the case of jewel but i think you know you see this a lot more in these kind of hardware and particularly in life
01:10:16
sciences companies um you know there's a business like like zymergen's a good example right it's
01:10:21
very hard tech very deep tech uh josh hoffman did an incredible job fundraising raise a 400 million dollar
01:10:27
round from softbank took the company public then they go public and a few weeks later they're like oh wait sorry
01:10:32
we don't actually have any product or any revenue and we talked about this a few months ago a few weeks ago and the
01:10:38
stock completely collapsed there's another company called berkeley lights which went public and uh yesterday
01:10:44
scorpion capital one of these short sellers put out a 160 page report on these guys
01:10:48
showing that berkeley likes his product actually it's a hardware life sciences hardware that cost 2 million
01:10:53
they've sold it into all the pharma companies and scorpions saying look this thing doesn't work it's a total fraud
01:10:58
like there's no the machine doesn't do what they claim it does okay but so to allen powell's point
01:11:05
is there a double standard or not right and so these were all run by male ceos and nothing happened to them and um
01:11:12
are they all white as well um yeah yeah they're all white all right first of all let's take it easy on the
01:11:19
white guys two months it's three on the white guys on the bottom no i'm asking a qualifying
01:11:25
question it is um so here's what i'll ask is i mean is this a surprise that white dudes
01:11:31
will get a hall pass i don't think that's a shocker yeah it's considered it's considered entrepreneurial failure
01:11:35
but when it comes to the woman that everyone i think was excited about seeing succeed because she was a woman
01:11:41
it becomes fraud and i think well you know there's two different things yeah is it free book is there two different
01:11:46
things between you know where she obviously misled people in a premeditated way and lied to them like
01:11:55
taking their blood sample and then putting it in a fake machine then doing it in the back on an abbott
01:12:00
machine and then bringing the results back and making it on her theranos edison machine i mean this is literal
01:12:06
wire for a securities fraud in these other cases is it people who are ambitious if you look at the juicer oh
01:12:12
it's kind of like this is a stupid idea that got over funded he put he put juice
01:12:15
in a packet and told you no no he put he put chef shaved vegetables in the packet and then used hydraulics which is
01:12:22
actually real that's actually not correct watch the video that olivia put on bloomberg a few years ago which i
01:12:27
just showed you pictures of it i mean maybe there's a different one what they showed is that it was already squeezed
01:12:32
yes there was shavings in there but it was already squeezed like all right well that guy should go to chat like take it
01:12:37
all back i mean it was like it was like a crazy story when this came out and everyone's like oh my god like it was a
01:12:42
standard like hardware is really difficult you know novel hardware technology is really difficult so you
01:12:47
fake it till you make it in some cases you launch a product it doesn't even work um you know and and there's just
01:12:52
and this isn't just in hardware it's also in life sciences you see this a lot where you ship a product i would
01:12:57
probably say that if if regulators believe that those ceos tried to commit fraud
01:13:06
they would have done challenges right maybe they still will they should follow up with those folks so why do you think
01:13:11
they went after elizabeth holmes because it was actually illegal i think there's i think there's one really
01:13:17
important there are two things at play in theranos which is different number one is
01:13:23
the kinds of investors that were involved here are extremely powerful folks not necessarily you know technology
01:13:32
capable but very very well-known highly connected people in the establishment and the
01:13:40
second was that they were operating in a regulated market which has very strict laws look i've
01:13:47
tried to build competing products to theranose for years i've been pretty public about this i've tried five or six
01:13:53
times they failed every single time i couldn't even get out of the starting line you know these tests would never
01:13:58
work without with a single drop of blood it just didn't make any sense the only version of this problem that has been
01:14:04
solved well is the ability to detect cell-free cancer dna in blood right using a very
01:14:10
small quantum of blood companies like garden and grail have actually done and built a great business
01:14:16
out of it but it requires extremely sophisticated machinery sold to them by illumina and others so
01:14:22
if you're operating in a regulated market the bar is higher there is a lot more scrutiny
01:14:30
and then on top of that i think she compounded it by including folks and raising capital from folks that may not
01:14:36
have actually known and been able to diligence and so that's the cycle of fraud that may or may not have occurred
01:14:41
there and she has to or they have there's a burden to prove that it's very different i think over here in
01:14:48
an unregulated market where you can just kind of build whatever you want and if smart investors look nick just put in
01:14:54
the group chat so um the investors in juicero were google ventures kleiner perkins thrive
01:15:00
capital i mean these are all very sophisticated folks that um you know made a decision and
01:15:06
um you know it's probably not the case that they were lied to i understand why they made the juicer oh mistake because
01:15:11
at the time fresh pressed juice using hydraulics was a thing and this guy said that's what
01:15:17
i'm going to do i'm going to use hydraulics i'm going to squeeze the vegetables so you get the best stuff i
01:15:21
understand why they fell for it because my my wife jay was buying that pressed juicery juice in l.a you remember this
01:15:29
trend it's pure sugar that stuff is pure sugar well it's vegetable juice too but
01:15:32
it would cost like 11 because they would use so much vegetables and i saw these presses they used it's incredibly
01:15:38
inefficient but the juice tastes really great but the thing i have a problem with that with ellen pow's story is she
01:15:43
brings up you know uh the uh harassment stuff and uh you know this is an issue of gender
01:15:50
et cetera but on this week in startups i've been covering fraud after fraud i don't know if you saw app annie
01:15:57
got an fcc finder yesterday what happened jason because i saw that annie they told people who were using
01:16:02
their analytics products building apps there's like 8 million people that they would never sell their data except in
01:16:07
aggregate and then they went to wall street people and said here's actually we'll sell you the data um and you can
01:16:12
trade on it and so yeah yeah so i don't think that's like insider trading exactly but it might be
01:16:19
but anyway it's like that's the whole point of that that's the whole point of reg fd the
01:16:24
whole point is if somebody knows something if you're a financial actor jason and you know something so like if
01:16:29
if all of us were sitting around a table um you know when somebody said something
01:16:34
about a random public company if that's not public information if that's not known two things have to
01:16:40
happen number one is i when i receive it must not do anything with it and that second that person who disclosed it
01:16:49
needs to then file an 8k and say oops i accidentally said this right so there's nowhere where this is an end around
01:16:55
around things like regular fd i think that's a really big deal well and then i guess the question is like what happens
01:17:00
with people who use planet labs or whatever to you know to satellite images of the
01:17:03
target parking lot or put people as spotters outside of starbucks and count the people coming in and out is that
01:17:08
public information that's public but if you have terms of service that says one thing yes and you're violating that but
01:17:14
then you may also be violating reg fd so they haven't gone after people for on the other side of the trade for
01:17:20
securities fraud but they charge him with securities fraud he pays 10 million bucks i think he's in the penalty box
01:17:24
can't be um you know run up be a public officer for three years then we had headspin i don't know if you saw that
01:17:30
sas company but headspin was involved in just basically straight up lying about their sas software then
01:17:37
you have tether the stablecoin they've been banned from new york by the doj they've been banned by the canadian
01:17:43
regulators for the first two crypto exchanges there and supposedly the doj is investigating them and then there's
01:17:48
about five icos in new york that have been prosecuted already so i know ellen's saying like they're not
01:17:53
processed but i'm seeing them all the time yeah they're just not right the press is not
01:17:58
obsessed with them because let's face it elizabeth elizabeth she was weird i mean the voice
01:18:05
there's a lot of peculiar things about her that you don't see in other folks who are boring right by the way what you
01:18:10
just said is was part of the sexist claim that ellen made which is that we talked about her dress and how she
01:18:16
dressed and how she talked we don't talk about that kind of stuff when it comes to other entrepreneurs and are they of
01:18:21
course they did adam newman they were talking about him being a hippie walking around with bare feet being six seven
01:18:27
every profile she's she's wrong in that case every profile of andy newman talked
01:18:31
about his personal life and his wife is married to what's her names no buenos paltrow's
01:18:36
cousin yeah so ellen's 100 wrong on that one yeah and did it didn't elizabeth holmes
01:18:42
make it relevant by dressing deliberately styling herself in the fashion of steve jobs with the black
01:18:47
turtleneck and the glasses i mean you know she she portrayed herself as the next steve jobs i mean it
01:18:52
was part of the grift so yeah exactly now did gender play into it yeah but i think not necessarily in the
01:18:59
way that ellen powell thinks in this sense that the media wanted to believe so badly
01:19:05
that the next steve jobs was going to be a woman that they kind of looked past what should have been staring them in
01:19:11
the face i mean look if a man had gone out there wearing the black turtleneck and the john lennon glasses or whatever
01:19:17
they would have said who is this clown i mean yeah exactly but they suspended they suspected you have to dress up as
01:19:25
steve jobs in the next episode of free birthday you can make it work can we all do it can we see let's do a halloween
01:19:30
episode where we all show up i'll do elizabeth holmes for halloween episode but no but that's like a nested steve
01:19:35
jobs so like you're going to be elizabeth we should all do our own versions of it
01:19:39
elizabeth and steve jobs i i think saks you're entirely right i think i think you're right i think this is the way
01:19:44
that gender has played into it is that there's a lot of people who really wanted the elizabeth holmes story to be
01:19:50
true and frankly she used that yeah in order to perpetuate her fraud she may not have used it but she was
01:19:56
definitely influenced or she benefited no no she used it she definitely used it i want to ask you guys kind of a
01:20:01
controversial question um you know because this story made me think a lot about some of what's gone on in
01:20:08
businesses that i know of and where i know that there is to some degree fraud and misrepresentation
01:20:14
happening by the ceo and founder and this is a little known secret in silicon valley or a little spoken of
01:20:20
secret um which is that you know more often than not if you know about fraud at a company
01:20:26
in silicon valley you're encouraged to keep your mouth shut because the idea is at the end of the day if they're gaining
01:20:30
lots of capital and you know more capital floats all boats and more money will rush into that market and so if
01:20:36
there's businesses that you're competing with that are committing fraud rather than raise your hand which then people
01:20:40
say hey look if you're going to raise your hand and claim fraud and talk negatively about another company
01:20:45
people are going to start doing that about you and they're going to start doing that about your portfolio um and
01:20:49
so you guys know this right like you're discouraged from calling out these sorts
01:20:53
of moments when you see them in silicon valley because there is the perceived kind of look we're all in a club
01:20:58
together we're all in it together we got to be careful not to talk smack because
01:21:01
then capital will stop coming in people will come after you and we're much more of kind of a supportive open community
01:21:07
but there is have you guys experienced that i have with at least two companies in
01:21:11
the last year and you know i've kept my mouth shut because and by the way i don't think there's
01:21:15
necessarily harm going on but i know of misrepresentation but the investors are like look we'd love to see these guys
01:21:20
succeed because that would be good for you in this way because then you would be more money flowing in and yadda yadda
01:21:24
and there's always a narrative around why you don't want to do this you know why you don't want to call these things
01:21:29
out i called it out and i've still got a crazy founder denouncing me years later
01:21:33
i mean look i i hate who has an sec enforcement against him yeah exactly a sanction um so yeah i mean look i
01:21:42
you you're right freeberg that there's very little upshot to doing it um but but look i i hate but we have to
01:21:49
distinguish between fraud and sort of uh puffing okay here's the thing that i think you know ellen
01:21:55
powell's kind of missing is when she criticizes all these founders who are visionary and evangelical and and
01:22:02
promoting something that ends up not working that is not fraud i mean every startup we ask the
01:22:08
founder how are you going to change the world what is your big idea what is the big dream and then they lay out this
01:22:14
really pretty unrealistic set of things unrealistic in the sense that it comes true maybe one out of a thousand times
01:22:19
right every startup their founding mission is a bit of an over promise and just because it doesn't come true
01:22:26
doesn't make it fraud i think that a lot of people out in the non-silicon valley
01:22:30
investing world would interpret that as fraud because the founder told them something that ends up not happening not
01:22:36
ends and this is why you really it's very dangerous to take money outside of silicon valley because people don't
01:22:42
really understand this distinction okay just because it doesn't work out and what you said ended up not being true
01:22:47
does not make it fraud what is fraud is when you lie about i've said it before when you lie about the past and what
01:22:53
elizabeth holmes is accused of doing by these prosecutors is again lying about the present-day capabilities of her
01:22:59
product and actually falsifying documents she actually falsified documents that is the fraud that is the
01:23:06
line you cannot cross they change blood test results listen said another way sacks elizabeth holmes vision of taking
01:23:12
less blood and letting and doing more tests with it and being more efficient is a completely valid thing to pursue
01:23:18
chamath just said he pursued it five times and failed completely completely failed
01:23:24
tens of millions of dollars burned in a pile but what we all buy into here is what if it does
01:23:29
work more than a thousand times what we would elizabeth did was she lied about the results and she said how did she lie
01:23:35
about the results she lied about real people's blood test results like actual civilians well i have some empathy for
01:23:42
elizabeth jobs in the following way when i was told when i uh i think i told the story i was asking
01:23:53
an investor hey what's the hottest company around this is in you know 2013 or 14. he said theranose
01:24:01
and there was no way to get connected to the company so then i was like you know i had heard just the bullet
01:24:07
point one drop of blood full characterization of your you know be able to do a blood test etc i thought
01:24:14
this is an incredible idea but because i had no way of getting connected now thank god that turned out to be a good
01:24:19
thing i was like well [ __ ] it i'll just start my own version i'll figure out how
01:24:22
to do this and and and jason as you said it turned out to be much much harder than i thought and five different
01:24:28
iterations five different teams and you know phds from mit stanford everything we couldn't cal tech we couldn't figure
01:24:35
it out so it's not wrong to want to believe that something is possible and it's not
01:24:41
illegal to do that but as david said the minute that you try to you tell lies about the past in
01:24:46
order to basically then change the future in a way that shouldn't happen that's real that's really unfair yeah
01:24:52
it's uh what do you think of the defense that balwani uh this fengali defense i saw
01:24:59
kara swisher and some new york times reporters and other reporters were basically
01:25:06
not buying it um and we talked about this last time didn't we yeah yeah i'm just curious if
01:25:12
you have been following the trial i i think it's hard for somebody who in the moment took credit for every decision
01:25:19
for every piece of press for claim to be the jobsee and micromanager to all of a
01:25:24
sudden now turn around and say no that wasn't me making the decisions i was under the spell of somebody else i think
01:25:29
that's a tough argument to make yeah also i think uh you know this is going to come out but she
01:25:36
actually fired balwani so if she fired him how was she you know it's harder to do the
01:25:42
schwangoli defense i think um well but maybe they were both guilty maybe it could be an answer
01:25:52
all right listen we'll close on this mailchimp has sold to intuit for 12 billion dollars in the largest
01:25:57
bootstrapped acquisition ever uh we all know mailchimp uh and we all know quickbooks it's a huge deal
01:26:05
i have one issue with this and i don't know if it's true or not but apparently none of the employees have any equity
01:26:11
yes and that was what i was about to get to employees didn't have equity however
01:26:15
um and i've known mailchimp for a while uh for over a decade been using the product i know the founder had them on
01:26:20
the podcast before have they been a sponsor of your pod they sponsored in the first year i think or two um and
01:26:27
were you an angel investor i was not i tried to be and he said we're never gonna ever raise money and um
01:26:33
he said he was never ever gonna sell and he was also never going to sell i i they gave 12 billion reasons to change
01:26:40
his mind exactly they gave him uh the 20 uh my understanding was employees got a
01:26:46
20 cash bonus and they were amongst the highest paid uh you know in the industry
01:26:51
so their plan was instead of giving people some big reward at the end they were just distributing
01:26:56
cash basically they were just distributing cash so if you had 100 if you were 150k developer you got 30k on
01:27:02
top that's not an unreasonable way to run a business that has no outside investors that you know and employees
01:27:07
know that going in they didn't go in with the expectation of equity they went in with the expectation of a high salary
01:27:12
and a big bonus and they got it i do that a few companies few companies that i own i do that but what i also do
01:27:18
is i let them buy into the company every year i just think that it's a good principle
01:27:23
to have like an ownership in the business i think you should be paying a lot of money and we should pay cash
01:27:27
bonuses for for achieving results we do that but then what we also say is if you
01:27:32
want to buy equity come and buy it but you're probably right from a performance perspective tomorrow i don't think it's
01:27:37
necessarily a moral obligation to do that right how this guy wants to run his business up to him you know
01:27:42
people made the choice yeah i mean people that work at your house you don't give them equity in your
01:27:46
house right i mean you own the house you give them cash or people who play for a
01:27:50
basketball team are not allowed to get equity in the team but in other countries right i think in soccer you
01:27:55
can yes but i think one of the best things about silicon valley is the fact that there's a there's a practice of
01:28:01
giving broad-based options to everybody in the company and there's all those great stories about the chef at google
01:28:07
who got rich and the secretaries at microsoft who got rich and that is a beautiful thing about the techies
01:28:13
it's wonderful you never and you never hear about that when all the press is doing is writing stories about greedy
01:28:18
vcs and all that kind of stuff they they talk about vc but they don't bring up the point that in these non-vc
01:28:23
companies the employees never end up with anything someone who came from nothing can afford a beautiful home and
01:28:29
have their life taken care of forever because they work really hard at a great company that worked at and that's that's
01:28:35
the most common story and it's never reported but yeah and by the way look there's there's nothing wrong with
01:28:39
bootstrapping your company so congrats to this mailchimp founder for doing it i mean certainly you know like as a
01:28:46
investor i have no desire to describe what yeah just explain what bootstrapping is sex really strapping is
01:28:51
just when you don't raise outside money and he did it himself and he basically found the prophets yeah he founded the
01:28:56
company with the prophets which is just amazing but but but here here's the thing about that is uh he did this he
01:29:01
started the company back in 2001 at the nadir after the dot-com crash and there was very little money going into new
01:29:08
starts back then and he managed to create this so kudos to him but the environment now is very different if you
01:29:13
look at the amount of funding that goes into startups i mean it's now in the hundreds of billions every year and so
01:29:18
if you have this mentality of i'm going to bootstrap it you're probably going to
01:29:22
lose to a competitor who's simply willing to raise money and pursue that same idea with more funding now look i'm
01:29:28
not in the business of pushing money on people who don't want it i'm just saying
01:29:32
realistically the times are different now if you can bootstrap a business great go for it but i do think that if
01:29:37
you're in competition with someone who can raise vc money you're going to be at a disadvantage
01:29:41
hard to compete your son yeah what about aoc what she wore to the met gala tax the rich she wrote it she attacks
01:29:49
the rich dress to the met gala dave portnoy dave pornoy had the best tweet about this which is she's about to go
01:29:55
have the best night of her life partying her ass off with all these rich people and she's wearing this
01:30:00
taxi rich it's total hypocrisy uh this is classic socialism where they do this uh virtue signaling while being
01:30:09
friends and hanging out with the people the owners of capital they're purporting
01:30:13
to deride and frankly it's just like the mass things i mean you've got the servant class working at the met gala
01:30:18
wearing masks uh while every while all the uh guests of the the gala are don't have to wear a mask i mean it's like
01:30:26
them all over again well she she uh she also dropped some merch you can buy attacks the rich
01:30:31
there's an official aoc team can't believe that that's true that's what makes it the most awesome she goes to
01:30:35
the thing and now she's selling 58 sweaters t-shirts sweatshirts a 58 sweatshirt a 28 dad hat
01:30:43
a 10 sticker pack 27 tote bag it's like a hat for dad's like for us you know oh yeah attacks the rich dad that's the
01:30:53
rich yeah wow i didn't know dad hat was a category i know dad jokes and dad bods
01:30:57
i've never saw a dad hat dad fantastic fantastic yeah i thought it was kind of gross
01:31:03
is it wrong to buy some of this i i think that it's kind of cool actually i mean the tax the rich hat is pretty
01:31:09
funny it's pretty cool oh my god if you were attacking a sweatshirt i think if the best thing is if i bought this
01:31:14
sweatshirt and wore it around wearing on cnbc do your next scene if you were attacking the rich hat on cnbc that
01:31:21
would be peak chamoth i think that would be peak that'd be great get it signed by uh all right anybody
01:31:28
got any plugs anybody have plugs the the craziest thing about that dave portnoy tweet was that it got fact checked can
01:31:35
you believe that it got fact checked i mean it was just mind-blowing that this is what when you say fact check they put
01:31:41
a factory check they put a warning label on it oh god so the morning warning uh liberals and
01:31:47
socialists at twitter don't agree with this tweet right no exactly warning somebody in the outcrowd dave
01:31:54
portnoy is criticizing somebody in the in crowd that by definitely additionally definitely gets a seat at all in summit
01:32:00
right he definitely is the is the uh hyper mechan fake story uh from rachel maddow is that fact checked
01:32:08
or no no she posted some update or other but begrudgingly presenting other information but i mean the story should
01:32:15
have been completely retracted and it wasn't no i'm just curious whether there's a
01:32:18
fact check double standard no there's oh absolutely there is no fact check on that for some reason the rachel maddow
01:32:24
tweets when unfact checked as far as i know they're still on fact checked you know what you should wear the get
01:32:30
the rich hat and then get your buy the hamptons uh shirt and wear those on your next what a great
01:32:37
combo tag can i show you guys a great piece of merch hold on sorry i'll be back in a
01:32:42
second yeah oh he's going but can i just say i don't know here we go it's merch for the beep app
01:32:48
i don't i don't look good in hats no you don't no no i've wanted to wear a hat for a long
01:32:53
time but i just it just doesn't here we got good on me let's see this is my favorite piece of merch
01:32:59
which is somebody made oh buzzies like friends that's fabulous absolutely great wait
01:33:05
can we just say by the way there's a person that did make a besties merch site none of us knows who he is but
01:33:11
there's an incredible thing that he tweeted at us right j-cal which is he's paying his way through college yeah he
01:33:15
puts a note into it he he told me he made like five grand over the summer right and so you know he's probably
01:33:21
making like 30 grand a year off of merch if you're anybody's interested in some besties merch we don't make a single
01:33:26
dime from it but there's a young hard-working dude paying him paying his way through school i don't know it's uh
01:33:31
bestie apparel he's bestie apparel right that's the apparel bestiapparel.com we don't really want to encourage too many
01:33:37
people to go crazy doing this but this is our guy i guess and uh i mean he's paying his way through school for
01:33:43
him yeah and i think they did um you know the the the shirts that people wore on their all in bar crawl came from
01:33:50
that uh but i really want to do the i want to do this on the rich i'm buying this tax
01:33:54
the rich sweatshirt boys and the t-shirt and the sticker pack i'm going for all of it
01:33:59
you got me aoc you got me on the hook do they have a men's bikini uh with taxidera rich on the back side for you
01:34:06
for when we're in italy i would buy that we could how about we get matching speedos
01:34:10
should we do our walk i always threatened to buy a speedo she always says oh we have to buy speedos next time
01:34:15
we're in italy and we have to do our bestie walk from peer-to-peer on the beaches of italy in a speedo can you
01:34:21
imagine if that image got leaked of us in speedos i did i did the best to walk with sex all right boys i gotta go i
01:34:27
gotta eat lunch all right love you besties love you guys take care we'll let your winners ride
01:34:35
rain man and it said we open source it to the fans and they've just gone crazy with it
01:34:47
[Music] besties [Music] we should all just get a room and just have one big huge orgy because they're
01:35:06
all just useless it's like this like sexual tension but they just need to release
01:35:14
[Music] we need to get back [Music]