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hey everybody Welcome to episode 125 of the all in podcasts on a historic day we're taping 420 really excited that
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SpaceX was able to launch Starship and it made it off the launch pad and Incredibly successful today day today we
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have of course with us the Rayman David sacks the Sultan of science David Friedberg and of course the dictator
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tremath polyhapatia but two special guests are here special guests Gavin Baker from a tradies how do you pronounce it a
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tradies house of tradies House of tradies if you know Dune and then SpaceX board member Antonio gracias one of the
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First Investors in SpaceX Antonio a big day for you maybe you could just tell the audience what happened today why
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that is so important in the history of this company well first I want to thank you guys for
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letting me uh come on and have a little chat with you about this today was extraordinarily important for
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for SpaceX I think for America and for Humanity and the Starship is the realization of
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the vision hat Elon had 20 years ago 25 years ago even as a child really to to go to Mars
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and the engineers here at SpaceX and on the entire team working extremely hard or really just to get this this vehicle
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off the pad Asiana said right this is a brand new vehicle everything about it is
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new so the engines the material science the structure the design all of it new and the most important thing here was to
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get off the pad so we acrylic data and this technology platform is the platform that allow us to go to Mars so from a
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non-engineer standpoint why this is important is that what we've proven with this flight we got past a point called
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maxq which is the point at which the vehicle takes maximum stress that's how I think about it I'm sure Engineers
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would tell us a lot more description to it or David Friedberg give you a better script to it but it's the most funnest
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rest in the vehicle which means this vehicle will get to orbit and this is the vehicle that's going to
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take us to Mars so today's the day that all of the hard-working people at SpaceX
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accomplished a goal of making the human race space fairing when we look back in history I believe this will be the day
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when you mark the the technological development that we broke through and built a vehicle that could actually go
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to Mars now when we look at it obviously it didn't make it to orbit maybe you can
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give some context into what is the typical life cycle of a new rocket ship coming out the Falcon the original one
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has done I think 224 missions 222 of them successful I think 160 or so actually landed themselves yes and so
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you had two or three mulligans I think in the development of that maybe two actually
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so what can we expect here when are they going to stack and rack and launch the next one Antonio let's see what's the
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timeline here to getting to orbit what would we expect versus some of the other projects that we've seen like the
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Russian Rockets so look this is um a brand new vehicle and whenever we develop brand new
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vehicle it takes a long time development you know my understanding all this is as
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again a Layman and sort of as a board member non-executive year is it it'll take at least called two or three months
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two or three months to really get the pad rebuilt and get another vehicle back on for testing uh maybe longer
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but it's really important to note here that we've gotten sort of used to the idea that SpaceX launches rockets and
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all these Rockets come back and all those vehicles are stable because the Falcon 99 heavy are so stable and
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they're so well engineered and they're amazing vehicles but the most reliable vehicles on Earth in human history
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this is a brand new vehicle this was a huge win I mean it was an enormous room for the company an enormous room for the
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country just getting it off the pad and collecting the data and now we know it works we just have to get it stable now
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get up to orbit so it's it's really it's it's a hard problem but it's a soluble problem from
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here and the the we learned here is that this vehicle does work amazing can you guys talk about like the
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impact of this vehicle cost to launch payload like the big metrics that are that kind of help realize
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that outcome govern I think I saw you did a bunch of really good tweets on this you shared some of the metrics that
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I that I thought were really succinct and really helpful yeah sure so when this is I think it's a long road to full
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reusability um you know the first step will be CCA Zilla catching the booster doesn't it doesn't have uh legs like the
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Falcon 9 and then the second step will be landing the Starship which is really hard
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but once you do that they should be able to send over a hundred metric tons to orbit at a
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variable cost of under two million dollars per public data this these are public
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statements I would never confirm or deny those damages this is Gavin's map on the back
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of the envelope two million dollars is the cost to get 100 tons into orbit that's that's the the metric variable
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cost variable cost so but I think the point gav is making if I might just play that is that it is a step function
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change it's not like a small change it's an enormous change right can you compare
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that to the numbers before for folks to understand the Falcon 9 Mass to useful orbit is 17 metric tons
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and the variable cost that you know I I have seen Elon tweet about is somewhere around 15 million dollars
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so you are lifting more than five times the mass to orbit and based on other statements at 100
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metric tons is a very conservative estimate and you're doing it I'd call it 10 to 15 of the cost
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so this is a you know we can all do the math but we can envelope it um you know roughly a 50x huge change in this you
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know massively changes needed economics for starlink for sending anything into orbit
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and as Antonio said it's it's great for SpaceX it's great for America and it's great for uh for everyone we have the
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humanity is great for Humanity can you explain how that then translates into going to Mars so now we can get 100 tons
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into orbit for two million dollars what happens next in terms of like how that payload capacity and low cost enables
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you know full transport to Mars and you know I know that the timelines are tough but it would be super helpful to
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just to translate the orbit concept into the let's go to Mars concept it's important to know that like the size of
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this thing it gives a sense of scale is the Interior Space of it is the size of the International Space Station
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so it's a huge amount of time I just think about all that's going to take to get to Mars right you gotta you have to
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lift a payload into orbit you have to you know create a base either on the moon or or in
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um it's orb in the earth to actually refill ships and send them out into space and this same design will scale up
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to become the Mars Colonial transporter reverse similar design that's why it's important and look the
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timeline that I don't know I'm hoping that it will be um well I am still able to go that would be great if is it able
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to go but that's really why it's important think of this as a small version of the same vehicle we will
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actually use to go to Mars and then all the stuff you have to transport to orbit
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it becomes more economic because as Gavin just said we've had you know 50x kind of reduction in cost
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can I ask you another question sorry I don't mean to monopolize the questions but these are things that I think are
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like super important questions but that a lot of people often ask or I hear them asking but what happens
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with the space industry in the nearer term so there's this great long-term goal get tomorrow that's a that's a big
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project but it'll certainly be funding I'm sure to run that project but what other
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economies now emerge as this this cost down of 50x happens and what else do you think happens besides you know
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Communications and starlink obviously there's that's already a pretty scale business what other markets can develop
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here in the near term what other economies do you see happening as a result of this costume yeah I mean
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look having to jump in here too but the reality is once you can take that much Master orbit you can move anything
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around the planet very quickly you can kind of go out but or spin below even come down so Transportation generally
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changes you know if you want to fly to Tokyo from New York City it goes from being
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you know a day trip to a matter of hours it's extraordinary or a container chip in a couple hours kind of yeah
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everything that's rapid transport around the earth you run a package around there
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everything gets faster Kevin yeah there will be no more trans-pacific or transatlantic cargo flights I think in
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five six seven eight ten years you're gonna need a big Starship Fleet to accomplish that
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but I think the um transatlantic and trans-pacific Aerospace cargo routes go away
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so transmission Logistics I think is a fundamental change human transport fundamental change
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um and then there's all the knock-on effects of buildings kind of Technology look the space program the American
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space program that took us to the moon created the cell phones we use right I mean there's so much the chip designs
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all the technology came off of that the same kind of effects We Believe will happen here so it's hard to predict but
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it will be a lot of great stuff well that's kind of the point when you can get payload up there now entrepreneurs
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can think of a million different crazy ideas and affordably put something up there whether they want to mine an
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asteroid or they have a science project now a thousand flowers a million flowers
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can bloom and then entrepreneurs can start thinking about it and that's already happened to a certain extent
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with Falcon yes that people are able to come up with great ideas well I have to say and the inspiration it provides it
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does it's amazing to be here and feel the inspiration and the just the dream I think that's what I was going to ask you
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about if you know as we wrap here with YouTube if you could if you could take people
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inside mission control which were privileged enough to be in the sense of history and the feeling in
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that room if you could describe it for the audience what those Engineers were feeling
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and what you in fact felt at that moment Antonio so I would start by juxtaposing with
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Monday so we were here Monday we're here Monday and Monday I think there was a real sense of
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concern you know the the countdown stopped around 10 minutes the vehicle we had a valve failure and without got
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stuck open basically and uh we had to stop and and kind of regroup and by the way from my perspective that's like a
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solid success because the vehicle did not get destroyed in the pad yeah which is like the number one thing to have
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happen here the second and so that was kind of Monday and I think Monday was um yeah caution and intensity it was it
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was a very intense very intensity can this will this will this ever happen when will it happen yeah today
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what I felt in that room was a sense of um there was a high sense of intensity a
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high sense of focus and also a sense of people were excited there was an excitement about it it felt different
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today it felt more electric today they were super focused but you could feel the exam in the room they believed
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it was going to happen they thought it was highly probable and that it was going to work and when it did work
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I would say it was a sense of elation and joy and just you know this is this is 20 plus years of work and you know
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Elon was in the room with the engineers and it just sing him light up seeing the
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joy that he felt seeing the joy the engineers felt together for me and I haven't been a board member here
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in investor for a long time and sort of been a bit along this company and scene develop it it brought a real sense of of
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Hope yeah for what's going to happen to this country and what's happening to humanity and and it's such a joy to my
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heart yeah Gavin do you have any emotional feelings there when you watch it you want to add
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yeah well I think it's also just what I had what always strikes me when I'm here
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is this is a Sandy spit of land there was no power no electricity no potable water you know no sewage no utilities
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nothing and out of this you know Sandy spit of desert you know on the Gulf of Mexico
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a extremely talented group of Engineers the last five years have lived in you know these these airstreams
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you know a long way from a major city and it is it is just an amazing place to visit and you know the sense of
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commitment and when you talk to anyone at SpaceX anyone here at Starbase you know what are you trying to accomplish
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make Humanity multi-planetary species yeah get to Mars so just the experience of visiting star
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base is amazing second I'll just say launches are very visceral it's shocking if you have not experienced one
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the ground shaking yeah feeling your chest you feel it in your feel the yeah yeah you feel your body shaking like an
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earthquake yeah but it doesn't stop and it's incredibly dramatic you know the rocket it's going so slow at first and
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then it accelerates and then you hear this enormous crackling noise that's you know louder
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than any concert louder than any you know Sports Stadium you then a blast of hot air hits you you feel it
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and I would I would say a lot of people at launches cry it's a very emotional experience often for people who are who
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are not yeah it's hard not to get emotional yeah I think just the human beings can accomplish something like
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this is amazing and then what I would just say is you know there was the rocket flew for
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four minutes it went through Max Q it went to 39 kilometers the Soviet N1 which was comparable rocket only reached
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12 kilometers like the team was ecstatic yeah um The Joy on their faces to be cheering I've
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never seen anything like it yeah it was awesome it was very inspirational and I felt very uh very grateful to be there
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yeah um incredible yeah okay with one thought of what I'm thinking right now yeah the after effect the after effect
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after glow it's just it destroys into gratitude I mean there has been so much sacrifice
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here and we have witnessed it over 20 years from from Elon of course and the amount of just you know unbelievable
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worth going from him and the entire team at SpaceX is Engineers everyone works here yeah it's been extraordinary and it
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just really I'm just deeply grateful incredible and grateful to you all for having us on thank you uh incredible
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it's great to hear that perspective because you would not have gotten it from off the Twitter feed
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you know from the mainstream media David if you'd come here with us you could have gotten yeah David you were invited
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you were invited you almost we almost shame everything from Miami so it's a new term called as opposed to Shanghai
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we're going to Shanghai and Starship you we're gonna Starship you next time yeah
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I'm bummed I couldn't be there but I'm excited to see how excited you guys are and just the point I was making is
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that when I was reading the mainstream media coverage of this it was almost like ghoulish it was like a type of Glee
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it was almost like I said that the rocket blew up but they didn't they didn't really mention any of the things
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you're mentioning I mean from the point of view of the people who are there it was a Triumph and it was exciting
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because of the data that was collected and the fact that this rocket even got off the Earth
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for four minutes but the media never really conveyed that so thank you for giving us perspective that you just
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would not have gotten today from The New York Times or other mainstream media and
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just to add that just a little bit of context you know this is an inner design process with rapid Improvement this
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Starship had 31 engines that were made over the course of one year had different tolerances behaved
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unpredictable unpredictably you know this was far from the best Starship the one that's going to launch
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in three months or two months or four months or five months or whatever it is they've already made over a thousand
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discrete improvements to it and that was before they got all the data for today and then there's a Starship after that
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and after that so I think it's it really is a the with the mainstream media just failed to
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understand is the process under which a new rocket platform is deployed and how revolutionary this is they they are
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iterating at a speed here I don't think people can comprehend I mean honestly that's important
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they don't care and it was a way to paint somebody who they dislike and they are threatened by it a negative light
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the front page of the Wall Street Journal says spacex's Starship explodes shortly after launching uncrewed test
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flight if you take Antonio gracias's explanation which was articulate and transparent and fair and this
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headline you could not be more further apart on the spectrum of the truth Antonio just said that this is a date
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this is for the audience of which there are millions of people now Antonio said this is the day that you
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look back on when we are multi-planetary as this Cambrian moment if you will this
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incredible point of innovation and human Ingenuity and teamwork and sacrifice you know Gavin said it as well just
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giving up five years of your life to move in the middle of nowhere live in an Airstream trailer
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and then the Wall Street Journal was basically perspectives I mean it was just fireworks it was just
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a fireworks display right I said no to my own team sure he just said I said ignore please ignore the news media yeah
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it's total BS this is a huge success it's a huge success and you know we should just step back for a second and
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enjoy a success because part of the problem with the news media is this is a moment that should Galvanize our country
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I think they can't see that it galvanizes potentially galvanizes support for a human being that they feel
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deeply threatened by and that's what it all comes down to ultimately and that's what you see in the headlines that's why
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what's so interesting about this is that the behavior of the mainstream media did
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not paint this as something unsuccessful or a joke or rocket goes boom or fireworks when you look back on
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something as meaningful as this it'll just make them even less credible that's what that's unfortunately what they're
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doing to themselves is shooting themselves in the foot it's pretty sad yeah Wall Street Journal this is CNN New
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York Times everybody just painted it as a failure and it's like oh here's a collection headlines well done producer
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Nick I mean literally you would think if you read the mainstream media that SpaceX failed and it really the when I
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was talking to Elon months ago about this you know he said listen 50 50 we get off the launch pad yeah if we can
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get off the launch pad and we don't blow up the launch pad that's a huge success
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the fact that this thing got as far as it is in four minutes and they got all that data and they've got when you see
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the scale of this factor and I hope you all get to come down here and and all Americans get to see this because
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for me you know and being friends with Elon for as long as I have and to watch him go from the idea of this and he
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showed me I went with Elon to see the the horthon factory when he was considering renting it and from that
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moment to now to see the suffering that he went through personally to do this and the team the amount of suffering to
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get to this point has been so tremendous but when you go to the gigafactory in Texas
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when you see what's happening here at Starbase it should let you know that this is still the greatest country in
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the world with the greatest entrepreneurs and and he is truly the greatest entrepreneur of our lifetime
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and I'm not just saying that because he's my bestie I'm saying it because it's objectively true and when you see
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headlines in the Press look at what has been accomplished look at the Teslas on the road look at what happened with this
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rocket ship and and judge The Man by what has been produced to date and understanding he's going to keep going
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and the team he has inspired is Relentless I spoke I sat there on the deck an hour or two after all this went
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down and I just ate some chips and salsa with a half dozen of the people who are
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in Mission Control they love the podcast they listen to every episode of all in I
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I kid you not and they said will you talk about this on all and I said well we talk about someone thank
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you for what you've done for Humanity this is the most inspiring thing I've experienced in my life we love you guys
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we love you guys SpaceX charge ahead be relentless as you've been and know that despite these
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absolutely insignificant headlines what you're doing is so meaningful to every American and every human on this planet
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don't stop go faster go harder be more Relentless we're all cheering and we're in awe of you this is one topic we can
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all agree on this is something that can Galvanize America we are leading the world again yes we're
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leading the world in the space race again we're going to be on the moon we're going to be on Mars what about
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Uranus [Music] that was great I'm surprised I beat your mouth to the punch there yeah oh no we
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were all cute was having a moment he was like daydreaming about the future and not thinking about the line I was taking
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the number of shares of SpaceX I know and multiplying it by a billion trillion a million trillion dollars per share wow
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yeah the rest of us are thinking about Humanity America inspiring people and shabbat's got his like little calculator
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out I'm gonna have like a Babushka of planes a plane the moment make it about you oh my God
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[Music] we open source it to the fans and they've just gone crazy [Music] I did have a business question about how
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the Starship impacts starlink very simple there's a graphic online you can find on the SpaceX
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YouTube channel and they show the starship and it literally looks like a goddamn
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Pez dispenser shooting out the next version of starlink and these are you know without I don't want to speak about
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any specifics but you can you can watch it spit them out you can put out more and they're
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obviously going to be more powerful and if you have seen the size of the satellite I have starlink at both houses
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the ski house and my main house is a backup it's getting scary how good it is and
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if you look at the size of them and again I don't want to speak about any future products it's not my place but if
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you see the size getting smaller there's one or two things that we all know about technology
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cheaper faster better smaller and just so I would just say if you're if you're a fan of starlink just keep those words
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in mind yeah it's going to be pretty amazing what starlink's going to be able to do yeah I thought that maybe I read
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this somewhere that Starship can carry 600 plus satellites whereas the previous top of the line rocket the Falcon 9
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could only carry was it like 50 or something or yeah maybe a little less yeah there's like 30 40. so so you're
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talking about 20 times the number of satellites can go up and at a lower expense yeah and I guess SpaceX has
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gotten permission from the FCC to put up about twelve thousand Starling satellites so you could do that you know
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with I guess just 20. you know 20 missions the big disruption is going to happen by the end of 2026
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because this next Generation set of licenses uh spectral licenses that the FCC sold
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came with a condition that you had to launch satellite capacity by the end of 2026 I think otherwise you lose it or
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you have to do your first launch I think by the end of 20. any the point is that
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the only company that actually has the capability to build and to launch is SpaceX so they have a complete Monopoly
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and because they're advantaging their own solution it puts everybody else behind the eight
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ball so not only will they probably offer the best global internet connectivity at every single natural
00:24:51
point in the world that you could be which is going to be a really big leap they're going to do it Jason as you said
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at a throughput that's going to surprise people and it's also going to render every
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other existing provider in a really difficult situation who's like you know what is their alternative you can't
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launch with Ula because they're inconsistent you can't launch with blue origin because they're inconsistent
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you can't log to the Europeans in general because they're inconsistent SpaceX is the only solution but then
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SpaceX is just going to Advantage themselves and there's nothing illegal about that
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so you're going to be left with a bunch of these existing telecommunications companies in a really difficult spot in
00:25:29
the next couple years so it's going to be really Dynamic space I think very much worth paying attention two-line
00:25:34
sentences regards to the all-in community stay in a nap man has not slept in the
00:25:39
last couple days uh he's taking a well-deserved nap right now so hopefully we'll have a mind in a future episode
00:25:46
very quickly where are you taping from jcal just curious where are you taping from there I'm at Starbase and uh there
00:25:54
are little tiny homes and anyone um lent us one to to stay in here and yeah it's
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because it's just inspiring to be here it's been it's been a great experience and I've been this is I've been here a
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couple times and it the the the scale of the factory the ships and just over the
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last like they said the list I've been here a couple times maybe three or four years ago um it really is growing
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exponentially and the other really positive thing is people are driving again back to the enthusiasm in the
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public and what you don't see mirrored in the Press which I think was really astute
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Point sax I met a guy who gave me a ride in his golf cart I was I was late to a meeting
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guy says hey are you going somewhere and I said yeah because I was literally running down the street trying to get
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catch a flight and uh the guy drives me in his golf court and I say hey he says hey are you here for the launch I said
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yeah I'm here for the lunch he says so am I say can I ask you um do you work for SpaceX he says no I'm just a fan of
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elon's I'm a fan of SpaceX and I said can I ask who you drove for me so I drove 19 hours through somewhere in
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Texas Houston or something he drove 19 hours to come here to spend the week to see the launch
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and the crowds here have gotten bigger and bigger and there's hundreds of people uh it's I think I call San Padre
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Island over here uh there's a little Beach Community kind of like a like a Las Vegas on the beach or a Reno or New
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Orleans and um and they're just lined up there with cameras these are Americans just Americans in RVs in cars
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setting up cameras to see history happen and it's it really is truly inspiring these are just softly Earth normal folk
00:27:35
this isn't the media this isn't like affluent people or necessarily they're just Americans who who are inspired and
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that's I think what all entrepreneurs who hear these stories about what's going on down here you'll overestimate
00:27:49
what you can do in a year you're going to underestimate what you can do in 10. and I think that's you know we all know
00:27:54
Elon pretty well here and have watched this journey they're cooking with oil they're moving fast and the iteration
00:28:00
process is extraordinary and they're making everything here and it's Americans making everything that
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the tiles I remember being here three years ago and Elon and I have two in the morning we're walking through the
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factory while where they were working 24 hours a day trying to figure out the tiles
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on Starship to get it back in and they were making the tiles themselves and and just trying to figure out that formula
00:28:22
that's the level of detail that's occurring here and as Gavin said there's a thousand different things changing on
00:28:29
each iteration of this so more great stuff to come I I believe yeah has been another episode of Phil helm
00:28:37
youth mentions his relationship with Elon thanks everybody for tuning in yeah exactly
00:28:41
no I mean what am I supposed to do you know like I'm sorry that my friend you know started a rocket ship company and I
00:28:48
don't apologize for it you guys doing great stuff in the world as well so do we want to talk about AI
00:28:54
do I want to go to this uh tiger marking down their book where would you like to
00:28:57
go gentlemen we can talk about the fox settlement with Dominion that was something you and I
00:29:03
talked about last week sax I'd love to get your opinion on that they paid 787 million dollars in this settlement uh
00:29:10
for defamation it didn't go to trial uh you were hoping it would go to trial how
00:29:14
do you feel I mean and this is an extraordinarily large settlement so yeah but what are you what are your
00:29:21
thoughts on this you wanted to see this go to the mat and go to the Supreme Court and maybe see the laws in the
00:29:24
United States change eventually um catch us up on your reaction to this ginormous
00:29:29
find yeah yeah there's a big speeding ticket yeah yeah well it's funny you you call it a
00:29:34
speeding ticket because when I saw this it reminded me of a scene at the beginning of Apocalypse Now where Martin
00:29:40
Sheen says that charging a man with murder in this place is like handing out speeding tickets at the Indianapolis
00:29:45
500. I mean the analogy here is that the media is so dishonest whether at CNN or
00:29:52
MSNBC or the New York Times I mean they're constantly inaccurate or whatever and yeah so still defending Fox
00:30:00
so for this one network to get a fine of like 800 million it's like pretty pretty incredible
00:30:06
um I mean they should be handing out a lot more of these in my in my view not just to Fox but yeah look I would like
00:30:11
to see to that end I would like to see the standard in New York Times versus Sullivan revised by the Supreme Court
00:30:17
the standard is actual malice so you have to prove not just that the Press told a lie but that there was malice
00:30:25
behind it and that's what this trial would have been about and um which should have changed too
00:30:31
yeah I think we want to change too what would be a better standard in your mind I think that if the media makes a
00:30:40
mistake they should have to correct it and I would say the correction needs to be at the same level that they publicize
00:30:45
the original story so if they make a mistake if it's untruthful and it damages someone's
00:30:51
reputation and they refuse to post a correction then I think they should be liable
00:30:57
that seems fair to me if you were to put something on page A1 if you were to give
00:31:02
it five minutes at the start of a show on whether it's Rachel Maddow or Tucker or whoever makes the mistake it could be
00:31:08
anybody if they made the mistake in the first five minutes top of the show they don't
00:31:12
get to buried on the website they don't get to buried on page seven they gotta say it up front Hey listen we made a
00:31:17
mistake correct here's the mistake correct yeah I think it's reasonable correction she got the same level but
00:31:22
let's see as the original story and by the way if they correct it that would be like a safe harbor but if they
00:31:27
refuse and they publish a lie and it damages somebody then they should be liable for that I think there should
00:31:33
also be something that's what I think but yeah I'm in agreement with that because they there is the trick in
00:31:37
journalism to bury the correction and and there's another trick that I think needs to be looked at and it's a
00:31:44
little more nuanced which is somebody makes a mistake or an accusation in a in a publication and
00:31:52
then the next publication says oh the New York Times Fox News CNN said this but they don't check it themselves so
00:32:00
they're using another publication as like a proxy to kind of give them some level of protection I think they should
00:32:06
have to on a firsthand basis right no that's the game they play you're right so they start with a super Shady Source
00:32:12
yeah that you know it just attributes it to some sort of anonymous source then the second most Shady publication quotes
00:32:21
that one and the third most shitty quotes that and then it just goes through the whole food chain yeah so
00:32:26
you're right reposting something in the Echo chamber because other Publications are doing it you're right that should
00:32:31
not be protected they have to do their own sourcing basically yeah or just some base level of fact checking if you and
00:32:37
now if if you called it Fox opinion that's slightly different than calling it Fox News so maybe the part of this is
00:32:43
branding a chamoth or Freeburg Germany thoughts on this just in general Fox I think has only
00:32:49
four billion of cash so they just spent 20 some odd percent of it paying this off and if I were a shareholder the
00:32:55
question I would ask is did we actually make enough money to justify having to pay almost 800 million dollars of our
00:33:00
cash balance the answer is probably no and this is the first of a bunch of lawsuits that they have
00:33:07
the next one which is I think is like smartomatic which is another voting machine company that's an even bigger
00:33:14
lawsuit actually that's a two and a half billion dollar lawsuit and so it's could it be the same outcome and another
00:33:21
settlement and so now all of a sudden you would deplete half their cash all for a lie to do what at some point
00:33:29
some smart business governance needs to kick in over at Fox and they need to realize that
00:33:34
this stuff just doesn't make economic sense maybe they thought it made political and ratings sense but you
00:33:41
can't justify that when it costs two billion dollars there's a concept here I think sax that is particularly
00:33:47
interesting in Finland when you get a speeding ticket speaking of speeding tickets your speeding ticket
00:33:52
is proportional to your net worth and so these NHL players who like to speed and
00:33:58
a Nokia executive it was given the equivalent and this is a bit excessive of a hundred and three thousand dollar
00:34:03
fine for going 45 into 30 Zone on this motorcycle and an NHL player got a 39 000 fine two years earlier I I think
00:34:11
that this is part of the problem and sometimes fines don't match the crime and or the they're not proportional
00:34:18
enough for the person to feel them and so then we kind of can Joe that they're speeding tickets one very rich person
00:34:24
said to me you know when they would they I'd watch them parking you know incredibly
00:34:28
illegally in a small town and I said uh you know you're gonna get a pretty serious ticket that's in it's a
00:34:35
pretty gnarly spot to be parking and they said Oh you mean the VIP parking charge and I was like yeah that kind of
00:34:41
sucks but okay so there might be some concept here of um a proportional fine and I think the EU is starting to work
00:34:50
on that as well because you know big tack was ignoring this is going to embossing a lot of people to take
00:34:58
matters into their own hands and Sue some of these media companies if the LIE is egregious enough
00:35:03
and it negatively impacts them enough I think it would embolden a lot of folks so Saks is right that up until now most
00:35:09
folks haven't done anything about this but if you feel like the media has really
00:35:14
wronged you in a meaningful way there's probably also now a lot of private Equity organizations that would
00:35:23
do the lawsuit Finance or hedge funds that would do the lawsuit Finance um and so now Peter did yeah like you're free
00:35:29
rolling it right so you you get one of these folks to pay it they get 50 of the gains you get 25 the lawyers get 25 and
00:35:36
you go and you litigate I'm sure that you'll see more not less because this fine is it's really big and
00:35:43
again we don't know the end of all of these 2020 election hoax Shenanigans because this is the first not the last
00:35:49
of these I do think it's a really big number I mean I did I did want the the case to go to all these courts so they
00:35:57
could revise New York Times versus Sullivan but I I do wonder about the size of this settlement here it's just
00:36:02
it seems extraordinary they paid it it was a interesting it's a settlement yeah they they voluntarily agreed to do it
00:36:08
yeah absolutely so so in any event look I I hope your math is right that this actually incentivizes
00:36:14
more actions against media companies because I think their feet need to be held to the fire and they need to do a
00:36:20
better job publishing the truth there was an interesting thread by a Twitter poster called kanakoa do
00:36:28
you I don't know if you guys saw this where he posted an hour of footage by democrats and
00:36:37
uh Democratic groups and more democrat-leaning political science experts questioning whether voting
00:36:44
machines could be hacked basically this this idea that voting machines could be hacked is not
00:36:51
it's not an allegation that is unique to Fox so apparently there's evidence that
00:36:57
Fox News was bogus so they definitely should not have run with it but I do Wonder Hey why why shouldn't other
00:37:04
people be liable for this too well I mean the the question is I think those internal text messages between the host
00:37:10
who knowingly knew it was false and then we're doing it I think that's why they took that
00:37:15
settlement because 800 million or whatever or so is a lot less than 1.4 or 1.5 and so there's speculation that
00:37:21
maybe clearly they got some bad Discovery they got some Discovery problems yeah these allegations about electronic
00:37:28
voting machines being hackable or rigged this seems like an allegation that's been made well it's actually interesting
00:37:35
not just in 2020 but it's been made multiple times by whichever side loses yeah and so I would wonder why more
00:37:42
parties aren't liable for this by the way I never I never bought into I never bought into those allegations I said so
00:37:48
at the time I thought they were bogus I thought the whole Sydney Powell thing you know the release the Kraken or
00:37:54
whatever was ridiculous so I don't feel too bad for Fox or anything like that but it seems to me like I'm saying
00:38:01
they're they're not the only ones speeding here there's a lot of people who need to get speeding tickets yeah
00:38:05
there is a road map for the press to learn from this and to get better right like to maybe take to heart that that
00:38:12
maybe the public now is looking at them and assuming that the Trust in Media has
00:38:17
is at an all-time low Alex John find a billion dollars right it's a judgment judgment judgment the fox
00:38:24
thing's a settlement right he got a judgment of over a billion from multiple courts yeah so he said a bunch of stuff
00:38:30
that you know was in court provable to be false and then he kind of restated it and he got you know this massive fine I
00:38:39
think there's an interesting question here on how far this goes with respected you know maybe it invites the lawsuits
00:38:47
like you guys say where there's things that are more on the on the line and then we really start to have kind of
00:38:53
a tough set of conversations that it maybe there are things that are factually debatable arguable opinionated
00:38:59
or they were true at a certain point and then you didn't really have evidence to
00:39:03
disprove it what are you allowed to say are you only allowed to say things that you've proven or things that haven't
00:39:08
been disproven and that becomes a pretty tough set of conversations and what I think might be interesting from here if
00:39:13
so much of media over time gets replaced by chat and AI aggregating lots of different information synthesizing that
00:39:21
and making representations back to us and that becomes our primary source of call it news or quote media in the
00:39:27
future what happens when those models or the synthesis of data or the source of the
00:39:33
data leads to a statement that has a similar sort of descent around whether or not it's true or not
00:39:39
and that you really end up kind of ending up in a pretty cloudy environment you know by started starting this
00:39:45
process I think it's a very insightful moment we'll get to in a minute I just coming as a coming from a journalism
00:39:51
background myself and then becoming a commentator there really needs to be three or four very
00:39:57
simple things that the media needs to do number one more fact checking and number
00:40:01
two less Anonymous sources it's they were like too much on Anonymous sources and then there needs to be very clear
00:40:07
delineation between what is a fact and what is an opinion and the public is trying to sort this out is it Fox News
00:40:14
is an opinion and what you're saying is this an opinion or is this a fact did you do journalism or did you just have
00:40:19
an opinion is Rachel Maddow an opinion or did she actually have a journalist check these facts and I think this is
00:40:25
where self-policing and maybe rebuilding their rebuilding trust is on the media it is now the news and the media's job
00:40:32
to rebuild Trust and if not they're going to get more fines but let's get into I think some of
00:40:38
the stuff we're seeing with AI we had talked on this show before many times about the Corpus of data
00:40:44
under which these models are being built well Reddit announced plans to start charging companies that use its data to
00:40:51
train AI models the co-founder Steve Huffman who came back after contacting us Nast had bought Reddit and then sold
00:40:59
it back to the founders and paradoxically I believe Sam Altman has a major investment in Reddit he said more
00:41:04
than any other place on the internet Reddit is a home for authentic conversations there's a lot of stuff on
00:41:09
the site that you'd only ever say in therapy AAA or never at all a lot of people use pseudonyms obviously and the
00:41:15
Reddit Corpus of data is incredibly valuable but we don't need to give all that value to some of
00:41:22
the largest companies in the world for free crawling Reddit generating revenue and not returning any of the value to
00:41:28
our users or something we have a problem with it's a good time for us to tighten
00:41:31
things up your thoughts shamoth on what we talked about two different episodes maybe we'll play drop a clip in here
00:41:38
Nick if you want to in post it's going to be the large data sets quora Yelp the App Store reviews Amazon's reviews so
00:41:45
there are large corpuses of data that you would need like Craigslist has famously never allowed anybody to scrape
00:41:51
Craigslist the amount of data inside Craigslist as but one example of a data set would be extraordinary to build
00:41:57
chatgpt on chatgpt is not allowed to because as you brought up robots.txt last week There's going to need to be an
00:42:04
ai.txt are you allowed to use my data set in Ai and under and how will I be compensated for it will the rights to
00:42:12
the data will will Google just data quora hey we'll give you a billion dollars a year for this data set you
00:42:20
those were our previous discussions that we just played what do you think it's so
00:42:25
incredible we are witnessing such an important moment for Silicon Valley but frankly how the world
00:42:33
works and it's just everything is changing that's what I'm just in awe about that you know
00:42:39
we talked about this and we were basically spitballing something two or three months ago
00:42:45
and not but 60 or 90 days later these things come to pass right we talk about something in one
00:42:52
week and then you know 14 days later it's completely upended like how impressed Saks was about plugins and
00:43:00
then plug-ins were rendered useless and somewhat impotent Two Weeks Later by Auto gpts
00:43:07
it's just so profound I think what's going on so Google today announced that they're going to merge two organizations
00:43:13
that I thought were so orthogonal to each other disparate brain and Deep Mind the cultures just seem so totally
00:43:23
different but now they're merging those two things together something that I thought would never happen they did it
00:43:28
so all these competitive pressures are so real I was in LA for the Breakthrough prize I
00:43:35
was flying home with somebody on Saturday I won't say who it is but they are right at the bleeding edge of a lot
00:43:41
of this AI stuff and they let go a third of their company replaced it with an agent
00:43:48
Within six weeks of training it so how is this not going to affect everybody else I guess is maybe the
00:43:58
bigger question and then I go back to what I said last week which is that we've talked about a lot of the positive
00:44:04
things and I think it's important to make sure that people understand that there are a bunch of non-trivial
00:44:09
negative things and I think I shared one on Twitter which was around this company
00:44:12
that used an AI model to build a library of 40 000 toxic compounds that could kill all kinds of numbers of humans so
00:44:20
there's all kinds of really really tough things going on right now that I think to me means it's the moment where
00:44:26
I have the least sense of how to do my job and so I've tried to kind of like put a
00:44:32
pin in everything and just go back to learning mode it's a bit humbling is what you're saying like it's incredibly
00:44:37
humbling the entire rule book even for us as capital allocators company formation it has you it has YouTube even
00:44:44
as I do this as a CEO I'm like should I be using models to do parts of the workflow inside of my business
00:44:53
inside the portfolio companies that were invested in am I supposed to go into the
00:44:58
board meeting now on Monday and say hey XYZ person just did one two and three and cut Opex by a third
00:45:06
do I demand the CEO do that do I force change if they don't do it do I say so I don't I don't I don't exactly know
00:45:14
what to do the carousel is spinning increasingly faster and we're alone I'll just say a
00:45:21
general point which I kind of made at this event today it feels like the pace of change is so
00:45:29
high that you're kind of in a dust storm you don't really know where you're going
00:45:32
to end up so it's very hard to sit as an investor right now and say I'm going to
00:45:36
pick these things because you know two weeks later you just don't know whether that path even exists anymore
00:45:42
because the dust storm washes it away or you know blows it away and I think that
00:45:49
there will as a result there will be a lot of money lost by investors by companies building in
00:45:55
this space net net the index for investing in like.com companies the majority a large amount of money was
00:46:06
lost during that era but from that era also emerged a handful of winners and those winners ended up
00:46:15
creating extraordinary value I think we're at a point in time right now where we could see 10 times the value
00:46:19
generated in this phase of Technology advancement than we saw during the internet
00:46:25
and the advancement of the internet and if if that is true I think you'll end up seeing certainly the same thing
00:46:31
happen which is the index will lose money but the few winners will accrue such extraordinary gains the problem is you
00:46:38
can't deterministically pick those winners today totally because of the dust storm problem you just don't know
00:46:43
the path totally so if you were to meet Jeff Bezos versus some CEO of some.com selling pet stuff back
00:46:52
in 1995 to 97. 94 to 97 would you have recognized Jeff Bezos was going to stand out would you have recognized Larry and
00:46:59
Sergey were going to stand out would you have recognized Bill Gates was going to
00:47:01
stand out or Zuck at the end of the day this is harder than it has ever been in terms of predicting a technology cycle
00:47:09
but what we still know to be true is that the capital will be allocated within a company the operations will be
00:47:15
run managed and driven and led by an individual or a set of individuals and that's effectively what I think a lot of
00:47:22
investing in the cycle is going to come down to we're all going to sit here and pontificate and intellectually
00:47:26
masturbate ourselves to some you know genius you know path that we think is going to evolve and at the end of the
00:47:32
day most of it won't turn out to be true and that path won't be real because this
00:47:35
is such a dynamical system right now there are so many feedback loops one thing makes one step change and it
00:47:40
changes every other step but but what we still know is that great leaders can lead
00:47:46
you know and especially coming out of this this Elon discussion and seeing the extraordinary achievements he he's
00:47:52
delivered particularly today I think that's maybe what a lot of early stage Venture is going to shift to an AI
00:47:58
it's really you know finding great people and and I'll tell you one thing for sure and I was kind of commenting on
00:48:04
this earlier today was I really think a lot of series C in later companies and I
00:48:09
know we're going to talk about this implosion discussion later so many of those companies have a valuation that's
00:48:15
less than their preference stack and as a result those Founders that work there and those employees that are there are
00:48:22
getting their Equity wiped out they'll have to get restructure can you just explain what that means technically to
00:48:27
the audience when you when you raise money into a startup the investors that give you that money that invest that
00:48:34
money it's effectively a loan you owe them that money back first before your shares get paid out in the in the future
00:48:42
so if the company ends up being worth less than the money that they've invested they get the money first
00:48:48
and ultimately if the company goes public or gets sold they can convert their what are called preferred shares
00:48:54
into common shares and participate so even though you only quote sold 20 of your company for let's say 200 million
00:49:01
dollars that 200 million dollars actually has to get paid first so now you've raised this 200 million dollars
00:49:07
the investors the company is now repriced because the market has come down by 80 and investors are saying hey
00:49:14
your company's now worth 175 million your company is now worth less than what you owe the pre the pro the preferred
00:49:21
investors and if it's worth less than what you owe which I think is the case for over 70 or 80 percent of series C
00:49:27
and later companies you know we can kind of yeah and and this but this number comes from what I
00:49:33
shared a few months ago which is that 70 of publicly traded companies that went public in the last three years are
00:49:39
trading below the cash that they've raised so if you translate that on a one-to-one basis to the private Market
00:49:45
you know and these by the way were the best companies actually got public so in the private Market you've got to assume
00:49:50
that something in that late stage Market is on the order of 70 80 is worth less than their preference stack so a lot of
00:49:56
those employees are going to run those Founders don't want to go work for the VCS when they get recapped and get
00:50:01
offered a four percent because it looks like they're going to start AI companies
00:50:05
and I think that's fantastic and I think that's what's really shifting it right now that's kind of a big Dynamic is a
00:50:12
lot of these I'm calling them zombie corns are going to see this kind of mass Exodus of talent and a lot of the
00:50:18
investors that don't know how to price stuff and don't want to deal with Recaps in the late stage or diverting their
00:50:23
attention to seed and a and early stuff and so there's both A Rush of talent and
00:50:27
a rush of capital to this kind of very early stage and so we'll create this massively bubalific you know index of AI
00:50:35
stuff but some number of these things with some great leaders will emerge in World crew extraordinary value across
00:50:41
many Industries I really agree with a lot of what you're saying the thing to keep in mind is that the problem with
00:50:48
the use of Auto gpts as an example is that the order of magnitude of capital that you need has now just gone down
00:50:54
yeah yeah instead of a 10 million dollar series a so we used to be you know people in the height
00:51:00
we're doing 30 and 40 million dollar series A's into crazy very bubblish ideas in nfts and
00:51:07
all this other stuff that's idiotic today because a two or three person company can now do the work of 20 to 30 people
00:51:17
and the amount of capital that they need is really their salaries plus the cost of renting
00:51:24
some gpus on your favorite pick your cloud and so all of a sudden you can get huge amounts of progress in weeks and
00:51:33
months with hundreds of thousands or low millions of dollars so if you've raised
00:51:38
all of a sudden a five billion dollar fund because you were trying to do late stage deals
00:51:44
and now all of a sudden said well wait we'll just pivot to early stage but what are you going to do find the
00:51:49
next 30 person company that's not going to work because you have to know how to write 500 000 to million dollar checks
00:51:55
with two or three people and a lot of really and really help them and really understand their technical ability to
00:52:02
execute right yeah but then it also quickly becomes a thing where maybe you're better off just doing 500 of
00:52:10
these two and three person teams we tried this experiment seven years ago this thing called Capital as a service
00:52:17
where we were doing this automated investing I don't know if you guys remember this but it was like some
00:52:21
machine learning that we did on all of our portfolio companies and all somebody had to do was fill out a
00:52:27
form and send us some metrics and we would have a machined decision right so humans would not be allowed to make the
00:52:33
investment decision the problem that we ran into was there was a lot of great companies all around
00:52:37
the world but the administrative burden of supporting 500 companies was unbelievably large and complicated oh
00:52:46
you have a company in Indonesia well there's another company in South Korea and here's a company and you know
00:52:52
they're raising a new round they have to get board approval they got to do this and signatures I mean it's hard to scale
00:52:57
yeah so so that the VC which is a software light people heavy artisanal business all of a sudden becomes
00:53:04
misfactured right so you actually need to be highly automated and use software yourself in order to put 500
00:53:11
three-person teams on the field so this is what I mean by it's really I think Freebirds
00:53:19
use of the term dust storm is a really good one it's extremely extremely confusing what to do and if you have
00:53:26
large amounts of money that may actually now what used to be a real differentiator
00:53:32
and a key to success may actually become an impediment because you yeah you you are forced to
00:53:39
do business in a classical way that has changed frankly in the last 90 days what do you think sax
00:53:46
what's the question because we're touching a lot of different things here do you feel like this is a dust storm
00:53:51
and it's murky and it's just hard to place bets as a capital allocator because something comes out the next day
00:53:59
or 48 hours later or the next week that takes the previous idea and wipes it out
00:54:04
and then and how do you scale and be Capital efficient well we're at the early stages of a huge new wave and
00:54:11
I think that creates a lot of opportunity so yeah you've gotta basically separate what's really
00:54:16
interesting from the Fool's Gold there's definitely going to be a lot of that but at least there's a reason now to
00:54:24
believe that say dozens of unicorns could be created in the next couple of years
00:54:29
so before we were getting kind of long in the tooth on some of these Tech Cycles I mean Cloud Social Mobile I mean
00:54:35
there was a reason to believe that those earlier waves that sort of played out that the big Winners already been
00:54:40
determined and maybe there wouldn't be too many more big winners in those spaces but now we have a whole new
00:54:46
Catalyst for Founders to do all sorts of new things and so I tend to think that's super
00:54:52
exciting you know we're in the early stages and I do think there will be dozens of new unicorns minted in various
00:55:00
aspects of AI it could be in AI infrastructure you know whether you're seeing now there's a lot of funding
00:55:07
that's gone into Vector databases or platforms for creating agents or it could be in AI co-pilots basically
00:55:16
that tackle various professional categories and create a copilot for coders or co-pilot for doctors or
00:55:23
lawyers or Architects I think there's going to be potentially multiple unicorns created in in those categories
00:55:30
I think there's going to be SAS software products that were just good before but
00:55:36
now will actually be great because the incorporation of apis from you know AI Foundation models we're
00:55:43
we'll just Turbo Charge the capabilities and so there's a whole bunch of SAS products that I think become newly
00:55:51
interesting and and better they go from being vitamins to painkillers so you know we're looking in all those
00:55:57
categories and I think we'll end up making some batch but there's also going to be a lot of companies there are
00:56:03
flashes in the pan or get undermined you know there'll be SAS companies that actually become less attractive because
00:56:10
of disruption from AI but look I think all of this this Maelstrom is great for an investor I mean if you're going to
00:56:17
spray and pray it's not good you've got to be selective about where you take your shots but I think this is the most
00:56:24
exciting environment we've been in in a number of years I mean it makes me want to go to
00:56:30
work every day and see it's so funny you say that sex because I literally am looking for an office space in San Mateo
00:56:37
to start like doing the incubator in person again and on Monday I'm having 60 companies come to San Francisco we'll be
00:56:44
at my attorney's office and we're having like a Foundry University with just all
00:56:48
these new startups that we invested in to just hang out for a day the enthusiasm right now is amazing and
00:56:54
what's really unique is the developers who had three out of seven companies they
00:57:01
interviewed with offer them 150 or 250k packages rsus whatever now there's no offer from Facebook
00:57:08
there's no apple there's no Twitter there's no Google or Microsoft offer coming in to be the backstop against
00:57:15
starting a company so what are they doing they're saying you know what I got two
00:57:19
friends who got laid off I got one friend who's halfway at the door let's just start something let's just start
00:57:24
something who can give me 100k who can give me 500k and it's uh it's it's so invigorating to see the talented people
00:57:33
not people who've learned how to you know hack a pitch deck together and tell a story but people were actually
00:57:39
coding and making MVPs it's it's truly exhilarating right now the amount of two and three person startups I'm seeing
00:57:47
yeah and so while you'll have this and it's and it's an incredible I've never seen this amount of Destruction and
00:57:53
creation occurring simultaneously I love this zombie concept you have one half of your portfolio
00:57:59
coming apart at the seams layoffs reducing their targets while people are coming in the door with products that
00:58:07
are absolutely awe-inspiring I just give one example I I had a company come out of our founder University I gave them
00:58:13
twenty five thousand dollars to incorporate a developer and his brother who's a screenplay writer they're taking
00:58:17
screenplay writing software Sac so you'll appreciate this having produced two amazing movies thank you for smoking
00:58:22
and the dolly film is called Dolly land dollyland yeah two months coming on two months congratulations to
00:58:30
uh Emmy award-winning oscar-winning producer he's gonna win an Oscar this time he's
00:58:36
you know the screenplay writing tools that have existed they're like what word processors with formatting what they're
00:58:42
doing is they're saying hey write some dialogue and then you can have dialogue and say hey make it a little snappier
00:58:49
make it a little tarantino-ish make it a little more you know sorkinish and then
00:58:53
make a storyboard with you know uh stable diffusion and I was like well this is the genius
00:59:00
idea I mean it's unbelievable of course I'll give you 25 000 for your incorporation and then they're coming to
00:59:05
the Excel I'm gonna give another 100K and and every single piece of software will that company and success Ever
00:59:11
Raised 25 or 30 million dollars do you think no I think there'll be 12 people I think it'll be 12 people I'll I'll give
00:59:17
them 2500k and then a million our industry raises 100 billion dollars a year on the
00:59:23
premise that each company before they become a unicorn will absorb between 500 and a billion dollars
00:59:29
yeah no I'm gonna own 20 10 to 20 of the company for low millions and and we'll see mid-journey is 12 people and no it's
00:59:38
totally bootstrap like I guess what I'm saying is because in the world of AI so much work is done for you for free
00:59:46
this is why I'm asking maybe we will have to change how we do business on the Hollywood example there's about to be a
00:59:52
writer's Guild strike and they may want to think twice about that because this is not the time where you want to be
00:59:59
encouraging the industry to find alternatives to writers okay you want to get back in the office and you want to
01:00:04
say hey can I could is there any other work I can do this weekend boss did you see the news about BuzzFeed today they
01:00:10
had won a Pulitzer they just shut down BuzzFeed news the entire news division gone another 15 gone the layoffs and
01:00:18
then there was a report this week that Zuckerberg's doing his third round of layoffs another 4 000 people that puts
01:00:23
him at 24 000. yeah with a hiring freeze so the way I described the current funding
01:00:29
environment is It's A Tale of Two Cities it's the best of times it's the worst of
01:00:33
times if you're a hot AI startup that's able to tap into the Zeitgeist that's doing something that's perceived as
01:00:42
Cutting Edge or relevant there's a strong why now and you're early you know your early stage you're able to raise
01:00:48
money for that the spigot is turned back on there's a lot of funding for those types of early State startups but if
01:00:54
you're a series sea Sage start you're a late stage startup with a it's called a pre-ai model the spigot is just turned
01:01:02
off completely I mean let's look at that chart from French base where the amount of serious
01:01:09
C funding has gone from something like 10 billion a quarter last year or to like zero I mean this is hardly I
01:01:18
thought this was an error in the chart look at this chart everybody it's seriously funding to U.S companies by
01:01:24
quarter there is just no growth stage funding it's just completely dried up I mean look at that
01:01:29
I mean it got cut in a half and then it got cut in half again and then it just flatlined and so when you see this is
01:01:38
your thesis let me ask you this actually sure thesis here that people aren't trying to raise money and they're just
01:01:42
busy cutting their companies down to a smaller team size and they'll come back out in the second half of the year or
01:01:48
that anybody with that amount of dry powder is out of the game now yeah I think that we're in this awkward stage
01:01:55
where the the companies who raise money and call it 2020 and 2021 all those valuations are obsolete and you've had a
01:02:05
lot of late stage players leave the game or they're in the Penalty Box they're in
01:02:09
timeout I mean look at Tiger for example the single most active funder at late stage is trying to figure out how much
01:02:15
to mark down his portfolio so I just think that a lot of the funding has dried up there this idea that there's
01:02:20
tons of dry powdersing out there I think is a myth or maybe it's there but there's no willingness to deploy it the
01:02:26
valuations are all out of whack and VCS generally would rather lead around in a new startup with a fresh cap table than
01:02:36
in a cap table they got to restructure because no one would want to talk about a year ago that's what we talked about a
01:02:41
year ago I asked you point blank would you if they cut the valuation and you know they redid everything and said Hey
01:02:48
listen we understand this is reality would you get involved and cut a check and you're like I don't want to deal
01:02:53
with that kind of amount you know that kind of hard bucket too hard too hard bucket for you yeah and so now once
01:02:59
again a year six months or a year after we talk about this it has now manifested
01:03:03
this is metastasized into no it hasn't even started I think we are going to get started okay I think I think we're still
01:03:10
being really prescient like the tiger thing was very important because they are in many ways at the front of the
01:03:16
line in terms of the number of companies they've touched the amount of capital they've written and because they're in
01:03:22
the middle of a very large fundraise their need to Mark the market quite accurately so that their existing LPS
01:03:28
know what they're signing up for in this next fund so they're the ones that have
01:03:33
the most incentive to move the marks but it still leaves an entire industry of folks that don't
01:03:39
necessarily need to do that because they have whether it's dry powder that dry powder is real or not the point is that
01:03:46
there's a lot of money that hasn't been deployed and so again I've asked this question before what is their incentive
01:03:52
to really mark their book down 50 percent they don't have an incentive why would they do that they would rather let
01:03:58
it decay down naturally I'll give you an example of this or do you converts that
01:04:02
keep it alive that basically allow them to delay yeah but even the convert Market
01:04:07
Freebird that was hot for about six months and then it just yeah no nobody's doing that stuff either but I'll give
01:04:12
you one example there's a very good company that we are investors in along with every kind of Big Blue Chip tier one
01:04:20
marketing muck organization we did the A and they stacked on afterwards and when
01:04:25
we thought about what our valuation should be we did something we got to a number
01:04:31
which was a third of what the Mark was and we're like well if we think the price is two-thirds off we should
01:04:38
probably just sell it now and we actually went and got some term sheets from some private Equity firms to
01:04:45
validate it and what they it was incredible they both independently got to that same number
01:04:50
and so while the deal was closing we went through the end of quarter we moved the markdown and we pointed to that
01:04:56
valuation and we said look this is what these two other very well known firms have said this is what we've said so
01:05:02
this is what our new valuation is and you know we're trying to sell it and we ended up selling it but every other
01:05:07
organization didn't touch their their valuation that valuation folks maybe you could explain to the audience why the
01:05:14
private Equity folks are such a good backstop in terms of valuation versus say Venture capitalists well I think
01:05:20
that Venture capitalists we tend to be glass half full and we are conditioned especially if you do your job well to be
01:05:31
smart buyers of deep out of the money options what does that mean it's like when you meet an entrepreneur and you
01:05:36
give them three or four million bucks or five hundred thousand dollars or whatever at some nominal valuation
01:05:42
you're not trying to get your money back you're trying to figure out whether he is a zoc or an Elon or Larry Page and
01:05:48
all of a sudden you get a thousand X on your money back right so we are buying these deep out of the money options most
01:05:54
of them don't hit but when they do they can just have these crazy statistical outlier outcomes
01:06:00
yum yum so we're trying to buy the future and we tend to be Believers of what can go right
01:06:07
private Equity has refined a very powerful toolkit of putting two or three orders of magnitude of the
01:06:16
money we put into companies to work on the premise that the glasses actually half empty and what can go wrong and how
01:06:22
do we mitigate that risk and so they tend to be much more sober I think in my experience dealing with them in what is
01:06:30
the true valuation of a business what are the upsides of a business what are the warts on a business they they really
01:06:36
kind of see the truth the ground truth much better than VCS do in general because they're closer to public markets
01:06:42
and they're they flip these things two or three years their margins are much thinner they're they're trying to make
01:06:47
1.5 1.6 X their money 2x is a huge outcome for them yes so they they have a much more sober version of reality
01:06:57
a bunch of this tiger stuff yeah got released and I mean their funds underwater just like masi yoshi-san's
01:07:04
fund is underwater and uh it's gonna be years of pain and suffering to get out from under this and so again I think sax
01:07:11
nailed it with tal of Two Cities anybody else want to chime on this before we talk a little bit about well for us our
01:07:17
friend of the Pod Brian Armstrong I've been I've been investing off balance sheet since 2018 and six months ago we
01:07:24
started to explore whether we should raise a fund and I think it was like two weeks ago we brought the senior Partners
01:07:30
In Me and the five other guys that run our business and we said we're not going to raise a fund
01:07:37
and the biggest reason is this Dynamic which is that you know we have dollars of private assets
01:07:44
I don't actually know what they're really worth but I have a responsibility to try to
01:07:49
get as much of that Capital out and so I thought the best thing to do is just to
01:07:53
take our time and try to figure it out because I I have way more questions and answers
01:07:59
right now and that's really the first time since I've moved to Silicon Valley where I've had that sensation is a
01:08:04
sensation humility I think it's like I mean I'm joking but it is it is for somebody like you who has done extremely
01:08:13
well placing bets deeply I mean I I say this a joke but I mean it as like a point of self-awareness for you because
01:08:20
listen you've placed some amazing bets whether it's the Warriors or Facebook or Bitcoin or whatever or slack or
01:08:26
whatever I don't know whether I should be writing 200 million dollar checks or 200 000 checks and I don't know whether
01:08:32
I should be doing that sort of as an incubator actually as an accelerator that's what I'm doing
01:08:38
or actually just as a series a detached investor so I don't know I'm trying to take the time to figure it out and my
01:08:45
thought was if I raise a fund right now I could barely stand the idea of me putting money to work right now of my
01:08:51
own Capital without any answers but then the idea of like having a bunch of sovereign wealth funds and folks that
01:08:57
were ready to work with us I don't know I just I just about the right time just to tell you my
01:09:02
fundraising story I um I'm publicly raising launch fund 4. I get over 50 million dollars in just you know High
01:09:10
net worth individuals uh you know and family offices who are interested immediately close uh I don't know 26 27
01:09:16
28 of it and then I'm gonna go out on the road to meet with LPS and Silicon Valley Bank blows up nobody's can take a
01:09:22
meeting that month right and so now thank the Lord I said I'm going to have a one-year window to raise the fund and
01:09:29
I talked to some old school VCS Fred Wilson Bill Gurley these people would take a year to raise a fund it used to
01:09:36
be or I'm sorry in the height of this uh bubble you tell me a sacks the the quickest you closed one of the the
01:09:42
crafts funds but I was hearing people saying they're closing funds within two or three months I think we're back to
01:09:47
it's a year on the road to close a fund what's your experience accent listen you're an All-Star so
01:09:53
yeah I think it's just depends on your situation to be honest but but I I think the important thing for Founders to know
01:10:03
is just that the way that late stage financing is dried up is very real I'll give you like two data points just this
01:10:09
week so I got my first notification from a portfolio company this is a company I
01:10:14
invested in before craft it's not a craft investment but my personal Investments and they're doing a pay to
01:10:20
play round you know what that is explain what that is that means pain yeah Yeah so basically the way it works is
01:10:27
they say they're going to raise 20 million dollars well by the way they said they went out to raise growth
01:10:31
funding weren't able to get a term sheet from anybody and no takers and this is a good product
01:10:38
I mean a lot of startups use this product I think they're ARS in the 20 something
01:10:44
million maybe 30 something million it's not like doubling over years growing like let's call it 50 year over year
01:10:50
this is a company that should have been able to raise money I don't understand why they weren't maybe because they're
01:10:55
burning too much money so instead of cutting costs the way they should they're doing like a 20 million pay to
01:11:00
play around and what that means is that everybody is an investor in the company you either have to do your prorated
01:11:07
share of the 20 million or you get diluted ten to one if you had 10 percent of the company you have to put in two
01:11:12
million dollars for your 10 of the company is now one percent no it'd be it'd be more because
01:11:18
you would look at let's say 50 of the companies owned by the investors and the other 50 is common just to take round
01:11:26
numbers okay if you own 10 of the company that would actually be twenty percent of the preferred yes yeah the
01:11:31
employees are not buying shares in this 20 of the of the of the 24 million so it's four minutes yeah exactly so
01:11:38
basically you have to own one percent right right so basically it's almost like a capital call
01:11:44
where you just have to Pony up more money in order to preserve your ownership in the company
01:11:50
if it makes you feel alternative but yeah I had one of those just happen to me as well and I was just like we'll put
01:11:57
in the bare minimum because like the thing that it puts you in it paints you in a corner where you're like well I've
01:12:01
been with this thing for eight or nine years is this the moment to basically lose all of that
01:12:09
compounding or value or work that you've put in or seen their team do and it's just a really tough position right yeah
01:12:17
so look I'm not on the board so I don't know what reasoning went into this but what they should be sending out to all
01:12:23
the shareholders is look here are all of our metrics here's our burn you know here's the steps we took to reduce our
01:12:29
burn I don't really like the idea of having to do essentially a capital call from your existing investors when you
01:12:35
haven't reduced your own burn I mean why can't the company operate at break even
01:12:39
if you're at 30 something million of ARR you should be able to operate you may not want to operate at break even but
01:12:45
you but they should be able to but sax this is what I mean I'll tell you after we stop taping who it was that
01:12:50
that told me this about their company but they were basically able to let go a third of their Workforce by moving a
01:12:57
bunch of work to models and let me guess the founders get to keep their shares or
01:13:02
they get re-upped in this whole mashugana no no but wait hold on can we can I just finish this yeah
01:13:07
so so the point is like if you can cut off X by a third by using all of these new AI you know models and gpts and auto
01:13:15
gpts what are you as a board member or shareholder supposed to do and also as a Founder
01:13:22
don't you have to go there first before you start to ask people for more money and why aren't people doing that first
01:13:29
much more aggressively and so this is what doesn't make any sense to me that's exactly my point is what steps were
01:13:34
taken to cut costs before you just went to the investors to Pony up more money that's what I want to know if they
01:13:40
actually did that work and this is like the last money they need okay then you know I'll Pony up my share and by the
01:13:46
way we need investors no we don't and we need investors to be much more aggressive in holding
01:13:52
folks accountable because these examples need to be better discussed well if XYZ
01:13:58
company was able to do it why aren't you able to do it and if it's because we're not technically
01:14:04
capable mad that's maybe a plausible answer but even that reason will go away in a few months I suspect but if it's
01:14:10
that we just have such institutional rot we're incapable of doing it well then you might as well just not write the
01:14:16
check because that company is going to get undercut by some new white sheet version of that business that doesn't
01:14:21
have any of these impediments that yeah in a way to mop and sacks management has
01:14:26
told you they're incapable of running this business this concern in a in a thoughtful way I had this happen to us
01:14:33
as well and the the question I have used access in these situations where this pay to play happens
01:14:38
you basically everybody gets wiped out except those who who play but the founders and the management team always
01:14:45
seem to get re-up and they're whole because the new investor doesn't want the management team not incentivized so
01:14:51
in these kind of situations it's kind of like the management team gets to reboot
01:14:55
the cap table and they don't get penis no I I actually I don't I don't have those details yet yeah
01:15:01
remember I didn't lead around I was just uh angel investor in the company so I checked with one of the VC firms that
01:15:07
led around and I'm like are you gonna do this and they said probably not you know
01:15:11
and so like the round might fail I mean they can make it as punitive as they want but if the shareholders don't
01:15:19
believe that the company has fixed its problems they're not gonna Pony up the money let's get free bargain yeah I
01:15:25
think one of the problems that a lot of folks are facing is it becomes less about the fundamental
01:15:33
value of a business in a lot of these conversations as you guys know and it's becoming a lot more about who will fund
01:15:40
the next round if the company is still burning money and so you're making a social Market bet not a bet on the team
01:15:47
or the business or the value it's that there's someone else that's going to lead the next round and this is
01:15:54
fundamentally why he's called the greater fool that's called the greater pool Theory look I mean it's
01:15:59
historically we wouldn't call him a fool if it's just about progress towards profitability but right now there's so
01:16:05
much trepidation it's almost like a self-fulfilling prophecy that there's so much trepidation in doing late stage
01:16:10
rounds that no one wants to be the last guy in because you're not sure if the next guy is going to be there to fund
01:16:15
the last round to get to profitability and that's why half of biotechs that are public are trading below cash because
01:16:22
historically the way biotech companies which is a really good pointed example of this
01:16:26
they make progress to hit milestones and then the next round of capital comes in
01:16:30
they make progress hit Milestones next round of capital comes in and then eventually you get you know phase three
01:16:34
approvals and you go sell the company or or whatever you get profitable and they
01:16:38
almost always get Acquired and in the case of other technology companies if the business has to do three or four
01:16:45
things it's got three or four Milestones it has to hit in your case tax it might
01:16:49
be that they got to get to 50 million ARR and they got to get you know the certain cost function down in the
01:16:54
business and if they can do those two things then the business profitable but it's going to take us around a 20 and
01:16:58
we'll get the first chunk down and then another round of 30 to get the last chunk done and no one knows if the next
01:17:03
30 is going to be there and that's really where a lot of these market dynamics are falling apart that there's
01:17:08
historically been a model in the market of hit Milestones next round shows up hit Milestones next round shows up and
01:17:15
now no one knows if the next round will show up so no one wants to fund this round
01:17:20
particularly where there's High burn it requires a lot of capital to make that bed so the social you know the
01:17:25
self-fulfilling problem the social Market bed right now is you know it it's self-fulfills and and we're um
01:17:31
you know we're sitting here kind of spinning our thumbs wondering if the next guy's gonna find it do you think
01:17:37
that only 10 or 15 percent of companies have now properly reset value like you said 70 of
01:17:45
these unicorns are actually zombie corns yeah that's why I think the number from
01:17:48
I I don't I don't know Tiger's book at all but when I hear numbers like 20 for a for a fully invested mature book that
01:17:56
invested during the peak of the cycle it doesn't sound right that it's 20 percent
01:18:01
it sounds like it should be a lot lower like I think that 20 by the way you know
01:18:06
comes after like two other smaller write Downs so they might be cumulative I don't want to talk about tiger I think
01:18:13
like sure the statistic of 70 of these public companies trading below their cash the cash that they've burnt that
01:18:19
they've raised in their lifetime and again just to for anyone that's Analyst at home trying to figure out how
01:18:25
we get to that number you look at the um retained earnings on the balance sheet and so the cumulative retained earnings
01:18:32
tells you if it's negative tells you how much money they've burnt over their lifetime and that tells you effectively
01:18:36
how much money has been invested so when you look at the Enterprise Value which is the market cap minus the cash they
01:18:41
have today you get their Enterprise Value if their Enterprise Value is less than their cumulative retained earnings
01:18:46
it means that they're currently worth less than the money they've spent and that's a statistic that is a fact
01:18:52
right now in public markets in technology gone public in the last three years and then you compare that to
01:18:57
private markets and I don't think we've seen a 70 write down yet or you know 70 of these things being
01:19:02
worth less than the cash so it's um you know it's still yeah I think you're right Jamaica is probably a
01:19:09
another Hammer to drop multiple hammers multiple times before we move on to a different topic so I think one of the
01:19:16
interesting differences in opinion in Silicon Valley is the way that Founders in VCC see the nature of the
01:19:23
relationship and I've been on both sides of this I've been on the side of being a
01:19:27
founder and I've been on the side being a VC and what you'll see is that VCS always talk about it as a partnership
01:19:33
but a lot of Founders will talk about it as if the money is just a commodity and
01:19:38
frankly when everything is up and to the right and everything's going great and you're in a bull market and you can just
01:19:42
keep raising money and definitely because there's always someone willing to lead the next round then the money is
01:19:48
a commodity but when you're in a in a down market and all of a sudden there is no market like you can't raise your next
01:19:55
round all of a sudden it is a partnership because you've got to go to your investors and ask them to do
01:20:00
something that they may not otherwise want to do is this was purely a transactional decision as opposed to a
01:20:07
relationship they might not want to to fund your next round and you're asking them to say no actually believe in our
01:20:13
long-term relationship and I think that you know this is the type of environment
01:20:18
which you find out it is more of a partnership and it should have always been it should
01:20:22
have always been it should have been but it but it wasn't and look I don't know what happened with that other company
01:20:27
and all of a sudden I get a notification out of the blue well I want to understand the thinking that went into
01:20:31
that before you know I'm just gonna this is where trust comes in right and like I think in a zero interest rate
01:20:39
environment you know there's no need for trust you just this cash splashing around just
01:20:44
grab whoever the latest person in town is who wants to drop a couple of bags you just take one of their bags the most
01:20:50
important thing to me like what make it a partnership is for me to know that the
01:20:53
founders have done everything in their power to reduce costs and put the company on the right trajectory before
01:20:59
going out and basically issuing Capital calls to the investors I want to know they've done that work all right listen
01:21:04
Freeburg I know you got to go take care of something of science I'll just wrap up with the other boys here with uh one
01:21:10
piece of breaking news stack Overflow says they will join the parade of data providers like Reddit and Twitter that
01:21:17
will require permission and payment to use their data sets and stack Overflow has a lot of answers to a lot of
01:21:22
developers questions in there I was just curious to get your thoughts SEC obviously sent to Wells notice we talked
01:21:29
about this before to Brian Armstrong of coinbase he said he's thinking about uh or
01:21:34
considering relocating out of the U.S if the regulatory Clarity does not improve
01:21:39
crypto's dead in America it is done in America crypto's dead in America I mean now you have you had
01:21:46
ganster even blaming the banking crisis on crypto so they've the the United States authorities have firmly pointed
01:21:54
their guns at crypto is it a scapegoat or was it a around find out moment for crypto in your mind or a little bit
01:22:03
of both I I don't know I just think that they were probably the ones that were the most threatening to The
01:22:10
Establishment okay and they were the ones that In fairness to The Regulators did push the boundaries more than any
01:22:16
other sector of the startup economy and yeah so now they're paying the price for the the bill has come due for them
01:22:24
Saks is it a around find out moment is it uh protecting the American dollar somewhere in between
01:22:31
or incompetence on Regulators part the more I think about it the more I think it's probably not a coincidence that
01:22:37
you're seeing all these concerns about dedolarization at the same time they're cracking down on crypto
01:22:42
so look there were a bunch of crypto companies that might have done shitty things but I think we all agree that
01:22:47
coinbase was not one of them coinbase was the gold standard in terms of doing everything right and they've just agreed
01:22:52
asked over and over again for a regulatory framework they're just like tell us how to operate and we'll do it
01:22:58
so I think jamatha is right that they're effectively Banning crypto in the United
01:23:02
States they're going to drive all these companies overseas which is terrible for
01:23:06
American innovation I don't know exactly where blockchain and crypto are going to
01:23:10
go from here but I think that we should find that out in America you know we don't want that Innovation going
01:23:16
offshore you bring up a really good point too it's just like coinbase played by the rules stood in
01:23:23
line tried to do the right things it seems that every step along the way right everything from board composition
01:23:30
to Executive composition to how they try to interact with the Regulators yet they were probably the
01:23:37
furthest away from getting a license the one that came the closest was the one that was the most fraudulent which is
01:23:41
FDX fascinating how is that even possible I mean because he had skills in gaming
01:23:49
the system yeah he's splashy cashy splashy cashy well he he ponied up large amounts of money because it wasn't his
01:23:56
money so it was easy for him to make huge donations but he knew how to play the game
01:24:01
to quote SPF he said this is the dumb game we woke westerners play we say the right Chevrolet so Everyone likes us
01:24:07
that's the game he was playing which is my my whole concern about if we jump the
01:24:12
gun on regulating AI too quickly it'll turn into another you know woke game that everyone's gonna play so here's uh
01:24:20
here's how the world Works regulate yourself behave yourself act in the interest of consumers
01:24:26
or get regulated or smashed and I think we've we've gone over this we talked about it in fact last week whether the
01:24:32
movie industry crypto AI regulate yourself behave properly don't push the boundaries too far you can bend the
01:24:39
rules but you don't want to break them I think they regulate yourself that you use the MPAA I don't think that's the
01:24:45
right example I think if you're going to regulate yourself look at the tobacco industry they tried
01:24:51
to regulate themselves but what they did was just lie to maximize profit in an area that was much less benign than
01:24:58
movies and content maybe you could have some lascivious content in a movie or a video game or an album but that was a
01:25:06
lot less harmful than smoking which not just impacted the smoker but it turned out the secondhand smoker as well or the
01:25:13
secondhand smoke so it touched everybody right you could be in a restaurant not smoke and yet have years of your life
01:25:19
taken so I think that the self-regulation for areas that impact everybody independent of whether you
01:25:26
participate in the system or not is where you have to look for good examples Jason and I'm not sure there are many
01:25:31
good examples of separate allegations those kinds of systems I mean I like your workshopping it here I mean some
01:25:37
restaurants would have a smoking section in a non-smoking section before there was regulation right and I think if
01:25:42
crypto had just thought had been more thoughtful about hey which tokens nft projects were going to support which
01:25:48
ones we're not going to that maybe they would have avoided a little bit of this I'm not sure you know
01:25:53
it's it's hindsight's 2020 here but a little more regulation I don't think those smoking non-smoking sections work
01:25:59
too well the smoke went all over the place can you woke up then you'd have to you'd have to take a
01:26:09
shower when you went to a bar or a restaurant or a club you would have to come home take a shower because your
01:26:14
hair and your clothes the smell of smoke you couldn't sleep in a bed then your bed had to get to change your sheets
01:26:20
disgusting remember when you went on a space on a commercial flight they had a smoking section
01:26:26
yeah it's a tube the Smoke Gets fine when they have the welded shut ash trays they used to have an ashtray in
01:26:38
every seat in between in the armrest was a friend a friend of mine this is like such a throwback but a friend of mine
01:26:45
well-known guy that you know I'll say the name you can bleep it out very important we don't want to he's a
01:26:54
notorious smoker and so I've flown with him oh that's the worst and we get in there on his plane and then we he shuts
01:27:01
the door and I'm like smells a little odd in here smells a little clovy stuff seven hours I'm gonna have to be in this
01:27:10
job do the pilots get Hazard pay I mean how do you compensate I mean this is not a
01:27:17
turbo prop he's on he can't crack the window no uh it's Global the huge Global it was it was at least it has three
01:27:25
cabins you could go to the back cabin felt so sick I mean it's the worst it's just smoking's the worst worst smoking
01:27:33
is the worst all right well we didn't uh so long to the uh Sultan of Silence as a
01:27:38
science rather there polling update here sucks I don't mean to poke the bear I know it was a rough
01:27:43
week with the Fox News News bring it up bring it up no go for it quick polling update between putting her on I'm sorry
01:27:53
DeSantis and Trump not gonna happen the santis is not happening in late March news of Trump's indictment
01:27:59
boosted him over to Santa's by 26 percentage points among Republicans and Republican Independence but earlier this
01:28:07
week the same poll showed that Trump's lead shrunk by 10 points in the last two weeks to just a 16 point Advantage which
01:28:14
is still significant but there's more University of New Hampshire Survey Center poll I don't
01:28:20
know if any of these polls are reasonable or not it seems like call people on the phone I don't know who's
01:28:24
got a landline released Wednesday showed a 20-point DeSantis this deficit what's going on here sex did your boy uh
01:28:33
Peak too early no I don't think so if you if you look at the Republican primary field DeSantis
01:28:40
is the only person who's got a shot other than Trump you look at Nikki Haley she's polling in
01:28:45
the three four five percent range all the others are one or two percent there's not a candidate other than
01:28:51
DeSantis that has over five percent so in my view this is a trump DeSantis race now what you saw is that when Alvin
01:28:59
Bragg pressed charges and indicted trump it created a lot of sympathy for Trump among Republicans effectively what
01:29:06
happened is Republicans registered their displeasure with Alvin Bragg by indicating support for Trump let's go
01:29:13
and that's that's what you'd expect to happen and a lot of people speculated that might be the purpose of Brax
01:29:19
prosecution is to make Trump the candidate so we knew that was happening but I think this this new poll that you
01:29:26
just mentioned is really interesting because it shows that that Sugar High of Trump's poll ratings was a temporary
01:29:34
bounce and it's coming down somewhat and so you know what you saw actually is that this huge uh pole bounce that Trump
01:29:41
got is somewhat normalizing now there's no question that DeSantis is running behind Trump and he's got his work cut
01:29:49
out for him if he's going to upset Trump as the nominee but this thing is just getting started I mean DeSantis isn't
01:29:55
even formally announced yet and remember we're still very very early in this race
01:29:59
the primary battle that this most reminds me of would be Obama versus Hillary in 2007 and at this time in 2007
01:30:10
Hillary had a huge advantage over Obama she was considered the favorite she was considered the the one who couldn't lose
01:30:17
and it was Obama that pulled off a huge upset and he did it by out fundraising her out hustling her especially in
01:30:24
building organization and some of those early primary States and then he eventually created a narrative that it
01:30:31
was time to turn the page but he didn't do that until much later in the year much closer to the the primary
01:30:37
the first Republican primary is not till February so there's plenty of time here
01:30:41
and I you know we'll see what happens I think Nikki Haley is going to win the Republican nomination
01:30:48
the more people here here's the things the number of people that have told me the most impressive moment with DeSantis
01:30:58
was before they met him the second most impressive moment was their first meeting and then it just falls off a
01:31:05
cliff where he becomes more and more unimpressive the more and more time to spend with this guy hey Nikki Haley come
01:31:11
on the pond Nick Haley is the opposite Nikki Haley announced that in all of q1 in all of q1 she raised five million
01:31:18
dollars extremely unimpressive you're probably 20 of that shamoth and Nikki Haley come on the Pod we'll
01:31:23
double it how much should Nike at least five million was was you listen zero I can say definitively you said q1
01:31:32
zero yeah okay here we go zero but let me ask a question here because I I'm not informed on it but you you are a master
01:31:41
strategist here uh 1600 rated chess player sax that's not that good well I mean it's
01:31:49
double 800 but where I'm at you you're killing me in 27 moves on average DeSantis is fighting with Disney over
01:31:56
and over again he's getting a little involved in the lgbtq everything and he just seems to be getting involved in the
01:32:03
culture wars is that like a primary strategy and then he moves to the center when he comes to the general or and do
01:32:11
you agree with this General fighting with Disney and the culture War stuff I was talking strategically not your
01:32:19
personal opinion on these issues I know that you're a very tolerant person yeah so I think this is an issue that works
01:32:24
for him certainly in the Republican primary but I also think it's going to work for him in the general and you have
01:32:29
to remember that this bill that they're fighting over was a parental rights bill
01:32:33
that basically it gave parents the right to know what their kids were being taught in schools and it basically
01:32:40
prohibited the teaching of this sort of gender ideology in in schools and I think most parents are on board with
01:32:48
that now yeah he didn't go yeah he didn't go looking to pick a fight with Disney Disney then got involved and took
01:32:55
the side they're calling this a don't say gay bill which I think just factually is not true the bill doesn't
01:33:00
mention you know gay or homosexuality or anything like that it was really about this trans issue and Disney got involved
01:33:09
and this is Bob chapac and Bob chapek lost his job and Iger came in and Iger has said that he he had basically
01:33:16
lectured the Disney employees saying that we need to stay out of politics and we need to respect our audience's views
01:33:22
so I think that it was Disney who kind of interfered I think this is overall played to desensis benefit and and look
01:33:28
the problem for Disney they may win the battle over this or that tax benefit that they're fighting over but they've
01:33:35
lost the war over this issue because parents used to be able to trust that they could just
01:33:41
pop their kid down in front of a Disney movie or a Disney show like Disney was like the babysitter and they just 100
01:33:47
absolutely trusted all Disney content and if you look at polling now Disney's brand it used to have like a NPS of like
01:33:55
in the 50s is now in the single digits because let's call it half the country's parents the more Republican ones don't
01:34:02
fully trust Disney's content and programming anymore implicitly well could they ever do that subjection
01:34:11
line I've never seen anything objectionable a lot of parents are questioning what content Disney might be
01:34:17
putting in their their recent programming obviously we're not talking about the stuff that we grew up on so
01:34:22
look whether you believe that is a problem or not what I'm saying is this has been a Brand disaster for Disney
01:34:29
getting involved with DeSantis this way they should really I think just try to patch this thing up I don't understand
01:34:34
the benefits it's a bad look for both it's a bad look for both people yeah well I I think I understand the benefit
01:34:41
for DeSantis I don't understand the benefit for Disney if I were them I'd be trying to patch this up
01:34:46
I think there's a really valid discussion to be had about representation in movies and all that
01:34:52
stuff and I'm very Pro that the the thing I think all parents agree is we should just at least know what's
01:34:58
being taught to our kids and we can have a thoughtful discussion about it there seems to be some small group of people
01:35:04
that thinks we should hide from parents what they're actually getting what's being taught and I find that's
01:35:11
very strange um I think just a little bit of like transparency and what's being taught in schools is
01:35:17
and obviously that nobody should be disagreeing on it to Sax's point I think it was Pew that put out a study recently
01:35:24
it is the most polarizing issue amongst Americans where Democrats and Republicans are literally on opposite
01:35:31
sides of the spectrum well this is going to be a big issue on the whole trans issue now despite the polarization in
01:35:37
terms of the quantity of the number of people it's actually an important issue for a small percentage of both sides so
01:35:44
it's a highly complicated political dynamic in America very so this is where DeSantis clearly
01:35:51
has taken the approach that not only is this important to the base to win the nomination but it's going to scale into
01:35:56
the general and it could very well be but it's a very divisive issue yeah I wish people were given a little bit more
01:36:02
uh consideration and maybe they could have I feel like maybe we're covering this
01:36:11
issue too much I you know I've heard some other folks in the community said like maybe people could be given a
01:36:16
little bit of their privacy and to handle these things I think you're right Jake how in this sense I think this
01:36:20
issue has become a lightning rod and um and whenever you have a lightning rod issue the amount of attention paid to it
01:36:26
it seems disproportionate to the attention on that issue however I would say that this is a lightning rod for a
01:36:34
larger issue which is the quality of Education in this country which I think is shockingly bad and it's bad because
01:36:42
of the decline of Standards uh they're getting rid of advanced math they're getting rid of greens chest taking
01:36:48
competition and and the schools are run by these unions who are managing it for their own benefit not for the benefit of
01:36:55
the students and look there is a significant ideological component that's crept into these schools as well so look
01:37:00
I think that overall I think that when you get into the general you have to uplevel the issue and talk
01:37:07
about it in broader terms that every kid in our country deserves a high quality non-ideological education I think if you
01:37:14
can do that you will get 70 80 percent of the public on your site on this issue yeah I feel like yeah it's I think
01:37:22
that's right yeah I think we can all agree on that Democrats Republicans everybody in between if you're a parent
01:37:25
you're not looking for an ideological battle at school you're looking for math science technology history creativity
01:37:33
you know there's a whole bunch of other things that we should be really focused on all right listen it's been another
01:37:38
amazing episode of the online podcast to people going to the episode 125 meetups
01:37:42
you can type in all in meetups our team over there we have super fans are doing it in over 50 cities uh the
01:37:50
day this comes out so you may miss it but you can sign up for the next one I'll be uh phoning in and zooming into
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them so for the fans you crazy lunatics getting together have a great time have a great time and tweet it and mention us
01:38:02
on Twitter for the Sultan of science the Rain Man the dictator I am the world's greatest
01:38:09
moderator and we'll see you next time bye-bye we'll let your winners ride Rain Man David's house
01:38:20
we open source it to the fans and they've just gone crazy [Music] we need to get Mercies
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