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hey everybody welcome to another episode of the all-in podcast your favorite podcast
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and a lot of a lot of topics on the docket including well we'll get to that in a minute uh
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tons of stuff to talk about not just politics but a lot of tech news you do sound really hungover today jkl you
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sound like an old man that's been smoking cigarettes for three weeks you sound wrecked how big was your night
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last night admitted i didn't go that big a scale of one to charlie cheat it was like a six there's like a martin sheen
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in his 30s what does that mean one to charlie we had a couple of beverages i'm sorry on a scale of one to charlie sheen
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i don't think i've ever been past the one in my life so what is a six a six is like you know
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paris hilton you know in her heyday or like lindsay lohan in hollywood in the 90s it's like
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you know like a good time but not crazy mm-hmm didn't they have to go to rehab let me tell you something charlie sheen
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cannot say it was just like lindsay lohan wait lindsay lohan the one who went to rehab like five times like what
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are you talking about yeah that's a 6. i don't want to know what seven is [Music]
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[Music] joining us of course the queen of quinoa is here the thriller from mamilla valley
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he puts the eye and anxiety he got his degree from his google pedigree the sultan of science david friedberg with
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us again all right next up of course the czar of arr he perfected the flywheel with his boy peter thiel lps don't be
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nervous because he's only investing in software as a service the world's biggest [ __ ]
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the rain man himself david sacks he's waiting that might stick i don't know i feel
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like this might be heading towards kind of like a high school talent show kind of uh episode but yeah go ahead and
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finally the king of spaxx himself the guru of growth he puts the dick in dictator he's going to upset her with
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his sweater mouth probably hopped here all right boys i kept letting the audience know i can't
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keep this up every week yes yes it's become a very anticipated new feature of the show
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it is it's a new feature we you know i forgot we had like wet our wet your beak and you know all this stuff and
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all these things and flows we come up with absolutely come up with new things um all right listen uh just a quick
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programming update all in summit sold out um basically it's going to be a great show we got about a dozen speakers
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lined up uh all kinds of great folks and uh three great parties i want to highlight
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monday a sunday night will be the poker tournament that's going to be our good fellas
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godfather kind of theme dressed to impress the family night number two monday night is going
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to be our havana white party where your best linens and whites and then closing night party on tuesday night
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is going to be our miami vice big 80s party neon and t-shirts under suits it's going to be a hell of a lot
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two million 999 700 people don't give a [ __ ] about what you're talking about right now
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there's like maybe 300 people that are gonna go to this party that you're throwing and
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700 tickets i think there's gonna be 700 tickets issued and there'll be probably
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400 people at the party so they'll be pretty good parties uh-huh we're in the party business here at the
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all-in pod well i mean the world needs some good parties in my opinion it's going to be three
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back-to-back grade parties and the theme of the conference is the problem i most
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want to solve in the world or the problem i most want to see solved in the world so we're asking every speaker to
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think about that and we're going to kind of talk about the world's biggest problems and then
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who actually wants to solve them the world needs more parties well that's that's what i'm doing that's
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my that's going to be my 10-minute talk my ted talk i've been i've been watching
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the wework show have you guys been watching it on fabulous tv plus yeah like elevating the world jared leto is
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so freaking good in that character by the way yeah it's incredible he gotta get it
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like elevating the world's consciousness as the mission and then just throw parties is the way to do it i feel like
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you're you really got that vibe like yeah it's aspirational you can motivate the
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world's consciousness with your with your summits i i told bill pocketing millions of dollars
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it's not gonna make a profit whatever profit it makes it's gonna go to chamot's star chamber 50-person
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conference he's doing with the all-in brand so everybody gets to leverage the brand
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yeah first you did it saks with your call in now i'm doing it with the summit chamat's gonna do with his thing tanking
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i'm not gonna do it coming soon from freedberg the all in munich special lose weight like your besties
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he's gonna the it's it's the all-in brand that allows you to lose weight in the following way he brings his best
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vegan chef to you oh yeah he spins up some [ __ ] tempeh garbage tempe and vegan shake your favorite
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chamato it's double [ __ ] yuck right yes you vomit after you eat it you're you're in a caloric deficit for the
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month that that person refuses to leave your house boom you lose everything's solved you lose weight they're like hey
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want some quinoa you're like no and then you lose weight no that's pretty good give me a cotton
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give me give me my olive infused beef please the olive infused beef no i'm sorry not all have infused
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these beef only ate olives guys right and then we murdered them okay and have a party let's go
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we need to get some morels and some chickens and make some yesterday we had morels shawn made morels
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wait a second for you so good so good the morel season has started everybody enjoy it
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lots of different news this week you guys appeal you guys appeal to the common man the morel season has started
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morals aren't that expensive tempeh is more expensive than both quinoa and morels
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100 that vegan [ __ ] is way more expensive than normal people listen we have to elevate the world's consumption
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of steak and meats um i think a good place to start is we've been talking by the way by the way have
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you guys ever looked on the back of any carton of oat milk how much chemical nonsense is in that stuff yeah
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that would really be can that really be good for you no you know what i want oh my god give me where's the oat milk
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that's just oats and water doesn't exist it doesn't exist it's like soy laxative xantham gum like is that
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stuff can't be good for you you know saks drinks and a 12-ounce glass of milk with every dinner they
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just drink something with the almond the almond milk at like the whole foods riddled with sugar and all this other
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nonsensical chemicals as well man i mean i mean people trash milk i get it but like uh and as if you're lactose
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intolerant i understand you're in a pinch but why go to an alternative milk that is
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just riddled with just all of this terrible terrible stuff you know saks used to love to eat brie
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cheese so much that whenever we'd have a party somebody would do whatever the breed walks with the [ __ ] with the wheel
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of brie he would literally eat an entire freewheel sugar no they would put the brown sugar
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on top they would melt it and sacks free brook saks has eaten an entire brick of
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bree in front of us what was the origin of your brie obsession sacks stanford i've been at
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stanford at some point the last guy i would think that would eat bread what's the matter you just
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don't have i mean what about cheddar what a great american cheese no you just prefer the french huh yeah yeah you
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still got that fetish for free i gotta go yeah we got [ __ ] to do is that fermented kombucha
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stop stop this is just plain iced tea sometimes it's just good to be normal unsweetened oh oh you're back on
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trying to catch up trying to catch up okay here we go listen we've been talking a little bit
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about the contraction in tech the growth stocks uh having their multiples um lowered and we knew this
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was coming but um it's been a horrible week uh for large companies uh starting the layoffs
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we knew this was coming we predicted it probably six months ago fast.com is a one-click checkout startup fast.co they
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announced they're shutting down on tuesday this after the company grew to 450 employees
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and generated reported 600 000 in revenue i think that their employees could have made more money if they did
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one doordash a day delivery at its peak fast was burning 10 million dollars a month according to
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reports i think the information got most of this information while only generating about 50k a month in revenue
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their 102 million dollar series b was led by stripe in january of 2021. company raised 124 million dollars in
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total also better.com which we talked about you remember they had their uh horrific cringeworthy founder lay off
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a bunch of employees over zoom um and they laid off 900 people december 1st 3 000 people on march 8th according to
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techcrunch for the 5 000 remaining employees on april 5th better.com offered corporate
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and product design and engineering employees the opportunity to voluntarily resign in exchange for 60 days paid
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severance and health insurance coverage better ceos vishal garg uh hopefully i'm practicing that correct
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noted the uncertain mortgage market conditions of the last couple of weeks have created an exceedingly challenging
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operating environment for many companies in our industry and then going to go puff
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which you know i had the founder on uh this week at startups and he's a pretty good um
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you know like pretty realistic about the margins in that business they're making
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a modest cut of three percent of their 15 000 staff seems like a reasonable thing to do
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given how the market is changed but again their valuation was absurd 1.5 billion at 40 at a 40 billion dollar
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valuation in december chamafi predicted a lot of this uh and that people would have to sharpen their
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pencils we had a discussion about this you know the the good times r.i.p what's your take is this the the
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beginning of the end this the middle where are we at in the cycle and what's the reasonable thing for founders to do
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here i think uh so you we probably should take the the macro and then boil it down to the
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startup so at the at the macro level i think that we're playing a very dangerous game of chicken with the fed
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and you can kind of summarize it in the following way which is that you know three or four months ago we
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only thought that there was going to be a handful of interest rate increases and increasingly what has happened the
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market has remained so resilient that the fed has sort of put out more and more data as the data has justified
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them being a lot more aggressive and it kind of crescendoed this past week where they basically said listen
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you know we're going to move by 50 basis point increments for the foreseeable two
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or three rate hikes and we're going to start quantitative tightening what does that mean that means that instead of
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basically printing money and coming in and buying securities from the market right so what happens when they enter
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the market with money that they literally do print and buy your bonds they're giving you
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cash in return and typically what that has led to is the inflation of all assets right equity
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assets have gone up bond assets have gone up because there's just nothing else to buy
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when quantitative tightening happens they reverse that and what they're going to do is about 95 billion dollars a
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month of the opposite action which means they're taking money out of the system right or in this case what they're going
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to do is uh they're going to let a bunch of maturities roll off and not rot not renew them okay so why is this
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important well it's important because you know we're still four percent from the highs
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so we have seven percent inflation we have all this crazy stuff happening we have a war you know going on we have uh
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massive price issues we have supply demand issues and the market keeps shaking it off
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so i think what the fed's going to do is get even more aggressive you're going to probably see you know a
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lot of 50s maybe even a 75 point hike you probably are going to see them you know even ratchet
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up quantitative tightening until there is a bit of a bloodletting in the equity market
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they need to see that the markets crack and so they literally need to see what percentage
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draw down or just to go sideways what do they need to see in order to look or is
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it inflation coming down a couple of points well the problem that we suffer from is that they're going to look at
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the highest level indexes right they're not looking at single stocks and so when
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they like when you and i think this market is down four percent we don't feel that because some of our companies
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are down 50 and 60 right but that's because we're all focused on high-tech growth but they
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look at the broad indices and the broad indices have held up really well and mostly
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it's because you know if you look inside the s p 500 40 of every dollar is you know apple amazon you know microsoft etc
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tesla so we're in a situation where i think until the feds see that there's a massive
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trading of liquidity which means like you see these indices crack big time 35 3600 in the s p they're just going to
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keep ratcheting things up as it comes all the way down to our companies in silicon valley and tech
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what that means is like you have to start planning for the worst and i think the worst means that
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there's an 18-month period where you cannot raise money on your terms you have to raise money on the market
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terms um and so if you're not a position to show good growth over these next two
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years i would encourage you to just get your balance sheet in order to wait it out saks nuclear winner is a possibility
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here markets for startups raising money again what saying could be on the terms of the capital allocators
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what what's your advice to founders what are you seeing in the boardrooms that you're on the board of and if you were
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running one of these high-growth companies for the past year what are the first two or three things you do i mean
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the first thing you got to do is look at your burn multiple i mean how much are you burning relative to how much
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incremental air are you generating you look at fast they raise 120 million what like a year ago
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they're out of money now so they burnt 10 million a month like you said here's the crazy thing if they just slammed on
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the brakes three or four months ago when we were talking on the spot about the coming downturn they could still have 30
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million dollars in the bank that's a lot of money the only reason it doesn't seem
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like a lot of money is because they've been burning 100 million over the past year but objectively 30 million dollars
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is a growth series b which is actually a lot of money for a company that only has
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a hundred thousand in revenue so they could have saved that company if they had slammed on the brakes three months
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ago and rationalized the cost structure and they didn't so they hit the wall at 100 miles an hour who's responsible when
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something like that happens david because you we've all seen it what is this suspension of disbelief
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that creates this kind of stupidity that i mean that's what it is i mean you've got
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you you've got people who are kind of drinking the kool-aid and there's nobody advising them to stop or if there is or
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not listening i mean look paypal had this situation back in uh 2000 the year 2000 right
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after the com crash we were burning 10 million a month like fast we had no revenue and no business model okay we
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had said the service would be always free we had four months basically of life and
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we pulled up on the throttle and what we did is we basically introduced paid accounts we started charging transaction
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fees and we caught the we cut the cost structure of the company and we made that last 40 million dollars last a lot
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longer than four months it lasted until we could then do another fundraise the following year and we were
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able to then raise with good numbers real revenue a business model et cetera so you know and that was because we were
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just paying attention to the changing environment the world had changed from sort of the pre-dot-com crash you know
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1999 your business model didn't matter your margins didn't matter revenue didn't matter none of that stuff
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mattered all that mattered was growth but by you know mid-2000 everything had changed so you have to be attuned to
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what the fundraising environment is looking like and if you're a high burn company right now that's not generating
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a lot of revenue to go along with it you better slam on the brakes and rationalize your cost structure before
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it's too late david tell me like what do you think is going on in this board meeting i mean like this is a group of
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incompetent incompetents i don't even know who's on the board because stripe led two rounds i think
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and so you've heard of it david that you you and listen we all love stripe it's a
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great company it's it's a legendary company but one of the reasons we don't like to have
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strategics is maybe they're not thinking the same as a proper capital allocator and for them this is peanuts right
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exactly no look the the reason why it's strategic investor sorry guys i think the reason why a
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strategic investor invests is because it's strategic for them i mean it was in stripes interest to try and back a
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winner in the whole e-commerce checkout line sort of payment space and so they did that and i don't even
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know if they had a board seat um and so no one was really but i don't i don't understand that strategic decision
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because i i suspect the rationale somewhere internally in stripe which is pretty flawed is hey
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we can't do it ourselves because if we did we would be competing with our customers
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but picking a winner and putting 120 million dollars is tantamount to the same thing
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so i don't understand i mean it doesn't make any sense right and stripe raised money at a what 9 500
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billion dollar evaluation so look it all flows down from you know the the frothiness at the peak no i'm saying i
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think i would have it would have been much more credible for stripe to say this is a critical piece of the
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infrastructure and value chain and payments that we want to own so we're just going to go and put some of our
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better engineers as like a you know side project and see if we can tack away at something that works i mean i i think a
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lot of people would have adopted it but i guess to okay that's interesting i mean those are
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some good investors um there's there's on the board index and who else according to crunchbase stripe was on
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the board a business development person from there index was on the board and dom the founder
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uh and uh looks like brian sugar uh who i know uh who's an angel investor and a founder now but who knows if that's
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outdated information encryption you guys remember when philip kaplan used to run
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a website called [ __ ] company absolutely a friend of mine yeah do you want to tell the [ __ ] company story take
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out for all the people that have no idea well i mean basically what happened was
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dot com the dot com world was imploding all the employees didn't have a voice there was no social media at the time
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there was no blogs at the time the only thing you could really publish on the in
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the world was like a geocities page you could put up a home page if you knew how
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to do html there's even pre myspace um and so a friend of mine phil kaplan who does a very successful company called
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digital kid now started [ __ ] company and it was a message board and what he basically let people do was
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he would write three headlines one sentence each kind of like before reddit existed where you just put a one-line
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hit and then there was comments underneath it might say this company we just got an email this
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company's laying off people and he would beat all the news stories to the layoffs
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because he would just run with any email that came in and then people would detail and savage the management of
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those companies underneath it for malfeasance and explain exactly how ridiculous the spending was in that era
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where people were burning money like drunken sellers i think this time around it's probably
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important for employees to understand a couple things one is like who doesn't know what they're doing right so like
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companies that are making layoffs those are those are happening they shouldn't get punished for that
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but you got to think like the fiduciaries that are ripping this money and i mean do you really want to be the
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person that goes to work at a company that's backed by these folks in round two i mean that's not a signal like like the
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opposite has always been a signal right meaning when mike moritz makes an investment we all pay attention
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because we all think wow there's a picker you know and he did that with stripe and with so
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many other you know great companies and so the likelihood of an employee wanting
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to work for a mike mort's backed company or mike morick's governed company is very high
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right same thing with gurley you know same thing with a lot of a lot of really really good investors john doerr
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but the opposite should also be true then because if it if you really want to work for a peter thiel back company you
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should probably not work for one of these companies where these folks who are just completely absent are also
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governing the board because that just means like nobody knows what's going on we haven't had proper governance for a
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long time in silicon valley so i mean i think that's what we crashed we crashed and the dropout were in some ways about
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incompetent boards both of those tv shows no i mean i definitely see this um you know i think you guys know the the
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incentive for a traditional venture capitalist that that that maybe isn't um you know motivated by
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improving their craft but they're motivated you know incentivized primarily by making money
00:21:15
is to to raise more capital and get more deals and as you guys know like every venture
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firm has maybe one or two superstars and then they fill out the ranks and hire a bunch of folks who are maybe not
00:21:26
superstars or they don't pay as much attention you know it used to be maybe a vc would sit
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on a handful of boards and now it's like you're the board representative for 12 companies
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and that's a you know you're not going to be able to provide quality time and service to and support to the ceo and
00:21:42
the company and more importantly as you guys point out like not provide good governance and governance isn't just
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about are you signing the docusigns as they come in to approve stuff but it's about actually critiquing the business
00:21:54
strategy with the ceo at the board discussion critiquing the spending reviewing the financial plan making sure
00:22:00
that everyone's aligned that this makes sense in this funding environment to continue to do this work and i don't see
00:22:06
that a lot i don't know about you guys but i see a lot of vcs either pandering to the ceo because we have founder
00:22:11
culture hysteria in silicon valley where it's true the best founders make the thousand
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x returns and that's it but that doesn't necessarily mean that the rest of the businesses
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um should be left to their own vices just because there are a few um ultra successful founders that there are a lot
00:22:28
of businesses that actually need governance in order to achieve outcomes and i see
00:22:32
that lacking heavily in silicon valley because the vcs are more incentivized to raise more money to make more
00:22:38
investments and then pay less attention and just go raise the next fund well i think i think you said the key thing
00:22:42
there are really very few star pickers in our business um it takes decades to really prove that out and and those
00:22:49
popular but those people that are real pickers i don't think put up with [ __ ] they're not just pickers like
00:22:54
so john doerr was deeply involved in google in the early days like you're right i'm i'm simplifying our job but
00:23:00
what i'm saying is our job okay at the end of the day is we're picking okay and then once you pick you got to do the
00:23:06
work if you pick poorly and you do the same amount of work it doesn't matter nobody's going to remember you yeah and
00:23:11
what ends what ends up happening is the vc flushes the deal because it's not going to be the 100 bagger they don't
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pay as much attention they let the thing right into the sunset and they're moving on to the next thing
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but there is still a duty and a responsibility i think to the shareholders and the employees of that
00:23:25
company to you know do what sacks mentioned which is can you reduce burn under these circumstances and can you
00:23:31
actively engage as a board member to encourage leadership to do that and that doesn't happen but you said the key
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thing there are few practitioners that really have the gravitas to actually enforce those decisions so you know
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there's a reason why in during the great financial crisis there was only one organization that even had the courage
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forget whether it was right or wrong at the time to even write the r.i.p good times deck right it was sequoia nobody
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else dared to even put that on page let alone give it to all of their companies knowing that it would leak lest they'd
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be wrong and the reason sequoia could do it is they're looking at a 40-year franchise
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and saying the integrity of our franchise is at stake we need to keep doing what we've done before
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and what it did i think in that case was pulled along a bunch of folks that were not as good
00:24:11
as the top few folks and it helped reorganize because if you see the three or four years after that
00:24:17
gfc deck sequoia flushed that whole business right there's an entire turnover of that team and so i think
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what it speaks to is and we talked about this in a few episodes ago if you're seeking out aum
00:24:28
you're going to hire a very different kind of person than if you're helping trying to help build companies and the
00:24:33
difference is that when you're trying to raise aum your customer is not the company the
00:24:38
customer is the lp and what the lp wants to do is be able to write their investment memo and not get fired and
00:24:46
the way that you do that is by pointing to the team and saying well this person worked at this company this person was a
00:24:51
vp of that company and it seems credible but between but being able to invest and being able to actually be a good
00:25:00
operator is so different look i'll also say one thing that's important you know i don't like this celebration or sorry
00:25:08
the the mockery and the entertainment that comes from failure i i thought [ __ ]
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company like i was young when it when it was out and you know i would read it and kind of
00:25:16
giggle at the stupid companies they got funding you know but to me it's not like the
00:25:21
kind of thing that could should kind of be funny or or laughed at or even to mock failed companies i mean
00:25:28
it's cynical i think the capital that's available in the markets today that wasn't that that's not what [ __ ]
00:25:36
company was i don't i don't think it was people taking pot shots as much as there
00:25:39
was a lot of that oh yeah there was a lot of that that and because yeah there was that time did you admit but would
00:25:44
you admit in fairness that there was a lot of people telling the truth oh yeah yeah totally no no but but but a lot of
00:25:48
it was like this mockery like can you believe this [ __ ] even existed yadda yadda and the cynicism i think you know
00:25:54
kind of um you know it's it stales out the opportunity for for capital to support you know new new ventures new
00:26:00
initiatives like this you know i also think that these businesses that today are looking to raise capital that are um
00:26:11
you know let's call them good businesses they have a good opportunity they're going to be challenged in a
00:26:17
marketplace where everyone is cynical um and i'll say like scarcity breeds success when there
00:26:24
wasn't a lot of venture money and um there were only a you know kind of a few investments that could be made each year
00:26:31
there was a decision-making process that says you know look how valuable could this be
00:26:36
versus this other opportunity that i could invest my capital into that says okay the best opportunity wins and gets
00:26:43
picked and gets capital in a world where everyone was raising a billion dollar second fund or a three billion dollar
00:26:50
fourth fund and you suddenly had an influx of 100 billion dollars of venture money in a year it's a lot like what we
00:26:56
saw in crypto markets which is an extraordinary explosion in highly speculative bubble assets and a lot of
00:27:02
these businesses maybe shouldn't have existed in the first place too much demand for the stock of private
00:27:07
companies uh and all the hedge funds that came into it all the mutual funds enough supply of great founders and
00:27:13
serious teams that are working hard on this i think with the case of fast i agree with your general sentiment about
00:27:19
dunking in the case of fast what you had was a founder who was on twitter every day
00:27:24
tweeting about how great the company wasn't giving startup advice while he was taking none of it and should not
00:27:30
have been giving any of it because they didn't even have product uh market fit lesson learned you know you know you
00:27:35
know who should be criticized the next person that backs that guy that's it yeah you know that guy
00:27:41
he's got a very interesting history actually as well i think if they've done any colleges they didn't do any
00:27:45
diligence on him apparently he had two companies that were kind of major red flags and i think the
00:27:51
diligence issue sacks is one maybe you are having a similar experience to me on the early stage we were seeing deals
00:27:58
last year close in a week um we normally have 30 days to vet a deal and maybe a week or two to get our diligence wrapped
00:28:04
up sometimes these things overlap but it's what was it you know historically a four to six week process and then it
00:28:10
went down to a four to six day process and then people were meeting with you one day and saying they're closed the
00:28:14
next were you did you feel like over the last couple years people were doing proper
00:28:19
diligence or not and what impact did diligence have on any of this you know certainly i can't speak to what our
00:28:26
competitors were doing i don't think our diligence process changed much we would
00:28:30
just have a mentality of when there was a deal that was urgent we would drop everything and focus on that deal and
00:28:36
get our work done and it can be done quickly although it's easier for sas companies
00:28:40
because the metrics that you're looking at are so standardized it's just a it's an easier process what's the most
00:28:46
important thing in diligence in your mind what is the like bullet that like people can't the silver bullet thing
00:28:52
people can't fake probably off sheet customer references so the first thing we do is focus on the on the metrics
00:28:59
right and the the financials the sas metrics all that kind of stuff but then you want to talk to customers and you
00:29:05
want to understand the value they're getting out of the product and ideally they're off sheet customers explain what
00:29:10
offers just means that you know you frequently ask a founder to give you customer references
00:29:15
those are on sheet references the off sheet references are the ones that you find yourself that they never gave you
00:29:21
so like the easiest off-shoe references to do are when your own portfolio companies are using some other like
00:29:28
piece of software and they tell you about it so no you know that it's a totally non-conflicted situation so that's what
00:29:37
you're looking for so one of your companies is using stripe they tell you how great stripe is they tell you what's
00:29:42
good about it what's bad about it but right references you're giving so it's sort of like back door references if
00:29:46
somebody tells you here's the references you can do the same thing on founders too you can have on sheet and off sheet
00:29:50
references for founders and you can do it for vcs yeah but but look i think um i think it's probably a little bit
00:29:57
unfair to blame the board of this company too much because the reality is that vcs don't have the leverage or the power
00:30:06
in this business i mean it's found this this whole construction of the industry is set up around founders and at the end
00:30:12
of the day it's up to the founder to run the company and they get to do what they
00:30:16
want unless they do something criminal otherwise they're gonna be able to do whatever they want and
00:30:21
hold on boards generally are very differential to founders and if the founder is not willing to listen to
00:30:26
advice what are you going to do about that well that though this is but this is the
00:30:29
point you're making i think is not right you think that if peter thiel gave some
00:30:34
advice to slow the company down that this guy uh would have not taken it of course he would have taken i don't know
00:30:39
i don't know about that and we would have to consider it if mike morris actually said it he would have had to
00:30:44
consider it i think what you're actually speaking to is in hold on in the rush to
00:30:47
put so much money to work we've elevated people who don't understand what the job
00:30:52
is to do the job and if they're not credible of course they're going to be ignored we all have ignored stupid board
00:30:57
members you've done it too david but even you know let's let's actually look at yammer as an example there were one
00:31:02
or two of us that you would talk to pretty consistently you didn't talk to all of them i would always seek out
00:31:07
advice look a good a great founder a good founder always seeks out advice no question about it
00:31:12
but look this idea that it's governance versus advice i mean the problem with it
00:31:16
being governance is all the institutional incentives for vcs are to be pro-founder so no one wants to jam a
00:31:21
founder by making them do something they don't want to do well i'm just saying that's that's the way it is no to
00:31:26
be clear that became a competitive tactic that emerged as more venture capital funds were raised and more
00:31:32
venture capital was raised from lps prior to that there was a scarcity of venture capital and vcs could be
00:31:39
could have good governance and not have to have this whole pro founder model that became the thing that founders fund
00:31:45
and andreessen and others kind of proclaimed as being core to their advantage and the reason to pick them
00:31:50
over some other vc who's going to meddle in your affairs and by the way both are
00:31:53
true there are most vcs as vinod has said publicly add negative value and i totally agree with him on this because
00:31:59
they many vcs particularly the ones who aren't you know valuable and don't really have
00:32:04
much to add try to add stuff try to say stuff and they just you know create negative value in the process but on the
00:32:11
other hand the whole pro founder model led to the the wework and ubers of the world that you know i think that's right
00:32:18
there's a trader there's a trade off i mean look i remember in the 1990s the default was that the founder just got
00:32:23
replaced right like as soon as the company's successful you hire a professional ceo that was just like
00:32:29
rules rick schmidt i mean even the mighty google did that yeah no i mean that wasn't that by the
00:32:34
way it was pretty much less than the point i was trying to make which was like so much of john doerr's influence
00:32:39
was in getting larry and sergey to take ericon as ceo and i really do think that
00:32:43
that was like you know a critical move that created probably the that created the most
00:32:48
valuable company uh in history uh right and you know it's it was an important imagine if you had
00:32:55
one of these founders fund and by the way you know as you guys know i'm very close to the guys at founders fund and
00:33:00
um but but imagine if you had a founder's fund type approach where you said look larry and sergey are the
00:33:04
founders they know what they're doing let them do it as opposed to the john doe nuance of let's make sure that we
00:33:09
think about the development of this company successfully over time and then convince larry and sergey through a
00:33:14
bunch of meetings and riding bikes and whatever else they did with eric you know to like and then and then what
00:33:19
about jim breyer didn't he bring cheryl over to facebook i mean like there's a lot of these stories of the really um
00:33:25
you know the vcs that really change the trajectory of the business through their
00:33:28
work right and but look all i'm saying is the the the good vcs can still have that influence but it's in the form of
00:33:34
advice rather than governance right look we just don't call the show no you're right you're right it's it is it
00:33:39
is advice but but for example governance as an example in in in every board that
00:33:43
i take the first thing that i say is here's a template i want i'm not going to ask you a bunch of stuff but i just
00:33:49
want some transparent reporting and the first page is always how much money at the beginning of the month how much
00:33:55
money did you burn you know how much equity did we give out how much is left in the pool simple basic checks and
00:34:01
balances right where you're not asking all kinds of crazy questions you're just like all
00:34:05
right how much money are we burning how much dilution did we take now tell me what we've done and those are simple
00:34:10
elements of governance way before you get into advanced level setting what's the speed of the plan
00:34:16
what's the elevation where are we at what's the altitude and when you ask people for this today
00:34:21
yeah i don't know anyone that doesn't do that i'll be honest like yeah anybody that doesn't do it honestly is being
00:34:27
that's not what we're talking about i don't know anyone that doesn't do that i mean i'm talking about i would love to
00:34:32
see i would deck and to see if that first page is that page the first page and by the way
00:34:40
you know where i learned that from from sequoia and kleiner perkins because back
00:34:44
in the day what i saw from founders was oh this is the first thing i have to report on i was taught by founders when
00:34:50
i was a when i was a principal at mayfield they're like this is how you do the job and i was like great thanks i
00:34:55
mean i was you know sitting beside these guys that were old hands at doing it and that's how i
00:35:00
learned this business through that apprenticeship but there was governance and advice and the governance is just
00:35:06
about being transparent about how much money are you burning and so you can't you know to david's point if you had
00:35:11
just seen that data even if you take those board decks by the way because you have these information rights i don't
00:35:16
know about you guys but we did it we did it as well you take the board deck you circulate it to your other partners
00:35:22
there's lots of times where i see board decks and companies where one of my partners are on the board and i send
00:35:27
them an email of like hey here's some bullet points of things to think about that i've seen before et cetera et
00:35:31
cetera you don't think nobody at stripe or index could have said uh you're burning 10 million dollars a month and
00:35:37
there's no revenue so the point is that data isn't there 30 or 40 million in the bank give me a
00:35:43
break guys so this was a whole a cataclysmic failure at the advice level and at the governance level and all i'm
00:35:50
saying is it's a good lesson for folks to learn absolutely yeah so let me point people's
00:35:55
attention to two articles i wrote that i think are relevant so first we actually
00:35:58
published an article on the sas board meeting deck that we would like people to use and obviously they're free to use
00:36:05
it or not to jamaa's point right up at the top as a contact center we need to know what's your monthly burn and how
00:36:11
much money is in the bank and that and then we just divide those things to create runway we don't like looking at
00:36:15
projections for runway totally we just look at how much you burned last month and how much money you got in the
00:36:20
bank they were down to 30 or 40 million dollars burning 10 million a month somebody should have like thrown up a
00:36:28
red flag and said better slam on the brakes right now because you're gonna be out of business in three or four months
00:36:32
so so that that's that's sort of piece number one the other piece was an arc i wrote a couple years ago called blitz
00:36:39
fail which is how not to go off the rails because a lot there's a lot of literature out there about blitz scaling
00:36:45
and a lot of startups think they need to scale as rapidly as humanly possible and
00:36:50
i wrote this piece about how fast-growing companies that raise lots of money at high valuations basically go
00:36:56
off the rails and they end up imploding and there's like 11 reasons why this happens
00:37:01
i sort of categorize them one of the biggest ones is founder psychology you have a founder who
00:37:06
believes that things are always going to be up and to the right it's they they it's funny they're always
00:37:11
described the same way described as visionary charismatic and the word crazy is often used but it's crazy good and
00:37:18
then when everything goes to [ __ ] all of a sudden the word crazy means something
00:37:22
pejorative and bad and you know the problem is that you know these characteristics of being highly
00:37:29
visionary and charismatic they also can be combined with an unwillingness to listen to advice and so
00:37:35
you know founders who have those qualities they can be a good thing but they have to seek out advice from people
00:37:42
who've had experience otherwise they're going to make a mistake and hit the wall
00:37:45
being delusional is you know what you need to start these companies like i'm going to beat these incumbents i'm going
00:37:50
to change the world a little bit of delusion is good but not when you're looking at how the runway
00:37:56
right like that's when you need to be pragmatic i think um you know there's a term of coachability
00:38:02
you know how how coachable is this person as a ceo as a leader and i do think that coachability goes
00:38:09
hand in hand with intellectual curiosity i mean if you look at the collisions patrick collison and how much
00:38:15
breadth he has and some of the topics he's interested in and the things he writes about it indicates to me a high
00:38:20
degree of intellectual curiosity and people who are intellectually curious generally are
00:38:25
very humble because they're constantly seeking things they don't know and they recognize that they don't know a lot of
00:38:30
things and in that same kind of mentality they are willing to recognize that other individuals can have good
00:38:35
points of view that can inform their perspective and they're willing to change their perspective and i think
00:38:40
that's a really key key thing that if you look across the the range of successful founder ceos
00:38:47
that scale to 100 billion plus valuations for their businesses that to me is one of the more common threads uh
00:38:53
is this kind of intellectual curiosity which translates into a coach ability which translates into an adaptability as
00:38:59
and and being willing to take advice and so your board is a tool not kind of a governance structure sitting over you we
00:39:04
think the less you are like that the more you are likely to feel like you're bored of the governance structure and
00:39:08
umbrella sitting over you telling you what you can't do i don't think that's what governments means by the way well
00:39:12
government's meant to it's meant to look out for the shareholders that's the job
00:39:16
right sure but but to act as a fiduciary doesn't mean to like tell the ceo what to do this is my point like yeah i'm
00:39:21
just saying it's it's not i think i think he's right about i think freeberg's right about how boards are
00:39:27
often perceived by founders i think there is an increasing uh let's call it a hollywood director a
00:39:33
hollywood auteur mentality towards vc jaycal on the all-in podcast right well it's basically it's basically look there
00:39:42
there are certain incubators out there and accelerators and whatever who teach these young founders that it's all about
00:39:49
their vision and anyone who stands in the way of it is basically interfering with them totally and they they are the
00:39:54
author like a hollywood director and you got to stay away from those suits the studio guys right ever that's the
00:40:00
mentality they're trying to they're teaching them an adversarial mentality an adversarial mentality and look there
00:40:06
are to chamas point there are plenty of vcs who don't know what they're doing they have no useful advice to offer but
00:40:11
the better mentality to teach a founder would be like look it the world is so complicated and building a company is so
00:40:18
complicated it's going to be 10 times more difficult if you don't seek out advice so go find board members who will
00:40:23
let you ultimately do what you want but will still give you the advice if something's going wrong and what was
00:40:29
true at one point in time when paul graham gave this advice and he set up y combinator you didn't want to say their
00:40:33
name but it is paul graham had a terrible experience in his company with venture capitalists so he set up that
00:40:39
wartime stance between founders and the investment community and you know founders fund became the
00:40:45
antithesis of the traditional venture funds and they were going to be founder focused so but that advice then might
00:40:50
have been true and now it's not now we've sung the pendulum too far the other way we did two things because we
00:40:55
saw this ten years ago when i started seed investing and then when i started building positions of over five percent
00:41:00
i just said to founders if we own over five or ten percent we should have an option of a board seat and we'll do
00:41:05
board seat we'll do board training with you we'll just teach you we'll take like
00:41:09
here's some decks that we've seen from other you know here's some decks that are available and we'll show you what a
00:41:13
board is like and then i would have three founders come two would sit on one's board meeting and i would do three
00:41:18
back-to-back board meetings bring your counsel bring your founders and sit in on the other two board meetings and
00:41:23
we'll have a little socratic discussion about what was good about each board meeting we did board meeting training as
00:41:28
a proxy for venture worthiness later on and when those companies did go out to the
00:41:33
adventure and they had an esop and they had board minute meetings they just looked more impressive to the venture
00:41:38
community so i know people say don't do a board it's not cool it actually turns out doing a one-hour board meeting four
00:41:43
times a year six times a year even as a seed stage company it does differentiate
00:41:48
you to the venture community i find all right moving on and speaking of boards elon bought a uh
00:41:55
chunk of twitter last week a nine percent stake and he's joining the board uh that makes him the largest individual
00:42:01
or the larger shareholder um individual or institutional uh he brought the shares in uh
00:42:06
march twitter ceo parag agarwal uh tweeted i'm excited to share we're appointing elon musk to our board uh and
00:42:14
then jack tweeted in support i'm really happy elon is joining the twitter board exclamation point just to give some
00:42:20
level setting here uh in q4 of 2021 twitter had 1.5 billion in revenue up 22 year-over-year they've really been
00:42:27
starting to ring the register over there uh daily active users are solid but modest 217
00:42:34
million uh daily active users 38 million of which in the us 179 million are international
00:42:41
and their stated goals uh for q4 of next year 2023 so in a year and a half they want to have 315 million and they want
00:42:48
revenue in 2023 to hit 7.5 billion again they're on a 6 billion run rate so i guess that would be an
00:42:54
increase of 25 percent uh just general thoughts on uh and elon obviously has been making uh some
00:43:02
twitter suggestions uh for the product saks you worked with elon at paypal thoughts on
00:43:09
what this does for that wasn't why you're laughing it's like such a funny transition sexy work
00:43:16
with elon and paypal worked for it i'm sure i'm sure he's gonna have some great product ideas but what this is really
00:43:22
about is free speech you know right before elon announces he is doing polling asking the twitter user base whether
00:43:29
twitter was succeeding or failing in his mission to be an open town square and open marketplace of ideas something like
00:43:35
70 said they were failing at it elon on many occasions has spoken up for free speech he believes that twitter's
00:43:41
historic mission is as an open town square and i think he's going to bring that emphasis to the board and it's a
00:43:48
great thing now i think the person who had the best take on the reaction to this was mike
00:43:53
solana and he had a few funny tweets about who does he work for is he a founder's fun guy i think yeah i think
00:43:59
he he works for peter or founder's fund but he's got a he also writes a great news sub stack newsletter kind of like a
00:44:05
blog post called uh pirate wires it's worth checking out is he's a pretty in addition to being a pretty sharp
00:44:11
analyst he's actually says a lot of funny things too he's iconoclastic and yeah yeah he he he'll he'll swing the
00:44:17
sword yeah so the way he put it is that you know elon joining the board has all the worst people on twitter furious they
00:44:24
think that this guy might actually say free speech and for authoritarians that is an existential threat
00:44:30
and then he added um i don't get what the problem is guys if you want censorship you can just go build a new
00:44:35
social media company and do censorship there it's a free market thereby turning on its head everything they've been
00:44:41
saying which is you know when the people who the authoritarian the authoritarian people who love
00:44:46
censorship whenever anyone complained about censorship they would always say well just go create your own social
00:44:51
network you know we're free to do whatever you want whatever exactly well this is this is
00:44:56
the free market acting in a way they don't like which is finally somebody who believes in free speech is one to stand
00:45:01
up by the largest stake in twitter join the board i mean this is fabulous i think it's really fabulous i think it's
00:45:08
pretty amazing yeah and the stock went up 30 percent what do you think yeah i texted you guys in the group chat i
00:45:14
think that if he is able to make free speech cool again he'll he'll actually do more
00:45:20
doing that than potentially through spacex and tesla and that's already saying a lot
00:45:26
because free speech really is this fundamental principle of democracy and it's been decaying we don't know
00:45:32
the implications of a large technology company keeping free speech as a principled
00:45:38
pillar of their reason to exist right because we have seen free speech kind of decay and we've seen sort of
00:45:46
you know random decision making that seems arbitrary by a lot of these technology companies and you know the
00:45:51
payments companies freebrook was mentioning visa and mastercard earlier in the group chat
00:45:56
but all of these things can change on a dime if elon makes free speech cool again and figures out a way to make that
00:46:00
a principle that everybody can embrace because then if you really believe in that then you go to the next logical
00:46:05
conclusion which is what david has said for forever which is the only solution to
00:46:10
you know speech you don't like is more speech and then that creates a surface area
00:46:14
that i think you can technically maneuver around so meaning what are the real problems in all of this speech
00:46:20
creates it creates a you know content moderation issue right it creates a a spam issue and it creates a sort of
00:46:27
wisdom of the crowd's ranking rating issues so misinformation comes to mind yeah but that's that's the wisdom of the
00:46:32
crowd's ranking rating issue in my bro so i guess the point is that you know if he can get the twitter employee base
00:46:39
fundamentally on side of this idea of free speech as a principle that i think is enormous because you
00:46:46
know that none of the other big tech companies will ever even do that and the capital structures of those companies
00:46:51
will never allow a single strong voice like his to enforce that idea so this is the only
00:46:58
company where that could happen and i think you know we want to see what this how this plays out i think it's a really
00:47:04
really big deal all right freeberg yeah i'll tell you what i think changes facebook
00:47:10
twitter even google all acquiesced to significant external pressure over the years i've said this in the past i
00:47:17
believe the founders of those companies are all philosophically fundamentally philosophically aligned
00:47:24
with the notion of free speech and absolute freedom of information you know enabling truth-finding over
00:47:31
time and the um the edge cases of those platforms ultimately um identify and uncover ways
00:47:40
that they can be used against what you know many would consider kind of the the betterment of
00:47:46
society and as a result they acquiesce to external pressure that drives some of these censorship decisions and drive
00:47:51
some of these these behavioral changes by management but i think that if you concentrate
00:47:59
the ownership of those businesses and rather than have kind of a distributed shareholder base meaning the public
00:48:05
markets were the largest single shareholder in twitter to date uh has been jack dorsey at 2.3 percent he
00:48:12
actually serves the shareholders and the shareholders ultimately want to see the
00:48:15
stock price go up and they ultimately want to see the business make more money and as a result they don't have the same
00:48:20
sort of you know the the stakeholders there have kind of a different set of alignments
00:48:25
over time you know they're not necessarily the same long term uh or focus meaning does the philosophy come
00:48:31
before the money and i think as you kind of concentrate ownership you have the opportunity and the option now
00:48:37
uh to you know make make those sorts of decisions that you can't make when you're broadly unstuck but facebook and
00:48:44
google are concentrated they have a different class structure yeah so what are you talking about the
00:48:48
issue chamoth is in those companies they're scared to death that they'll lose their employees and have chaos at
00:48:53
work government no the issue is government employees it's pressure from above and below it's
00:49:00
yeah it's shareholders it's shareholders and government regulators right and so in both cases
00:49:05
to the pressure and employees it's a good point yeah i understand but i'm not sure how twitter
00:49:11
changes any of that there it does i'll tell you why because if we look what's happened is
00:49:15
le sometime last year i think it happened around chappelle and i think it happened because of coinbase we saw a
00:49:21
group of folks say you know what enough's enough yeah we told you to bring your whole
00:49:24
self to work we told you we would do your laundry and then at some point netflix was like listen
00:49:29
you don't have to agree with every comedian on our platform there's a range of comedians
00:49:35
and if you disagree with this one you can do a walk out you can protest you can make your feelings hurt or you can
00:49:38
choose to not work here and then daniel kind of did the same thing he said listen at spotify we're gonna put labels
00:49:45
on it if you don't like joe rogan don't work here and then of course we know coinbase did it and
00:49:50
toby from shopify did it and now you have twitter doing it and when you apologize
00:49:55
and you start listening to this very vocal minority when they're upset and they want to cancel people or they want
00:50:02
to de-platform people what do they do they double down you've shown that you're going to listen to them they're
00:50:09
not doing it at coinbase anymore they're not going to do it at spotify anymore they're not doing it at netflix and
00:50:14
apple acquiesced right they're like we don't like you know antonio's book chaos monkeys and he said
00:50:19
these three things in an award-winning book that we find or we're gonna fire him i think at some point apple's to
00:50:25
have to say you know what leave your feelings at work and this is a company leave them at home thank you this is why
00:50:32
elon is so dangerous to to these people is because he won't be pushed around the
00:50:36
fact of the matter is that this whole woke mob thing it's a paper tiger they don't have the support of most the
00:50:41
population it's a handful of very noisy voices on twitter and social media who insist on having a monopoly on the right
00:50:51
to shape all of our narratives yeah they want a monopoly on moral outrage they want to monopoly moral
00:50:56
outrage they want a monopoly but they also want a monopoly on the ability to basically to to define
00:51:03
uh what is acceptable and and what what the narrative on any topic is going to be and all it takes is one strong person
00:51:10
to stand up to the mob as we saw brian armstrong do at coinbase and the mob dissipated he took you know brian had to
00:51:18
find another target they find another exactly so yeah elon doing this is a really big deal because again he cannot
00:51:25
be pushed around and he is showing leadership here and all it will take to end this woke censorship is for other
00:51:33
founders to stand tall the way that elon has and let's see let's go into the news
00:51:38
um employees kind of gripe about i don't think he'll care what regulators gripe about
00:51:44
and i don't think he'll care what other shareholders gripe about he'll talk about the long-term opportunity the
00:51:50
philosophical alignment with mission and and plow forward and i think that that level of leadership is what
00:51:56
separates some you know great businesses from others but this is a very listen there were moments of de-platforming
00:52:02
that were earned by people like alex jones who was saying that the you know families of sandy hook were
00:52:09
false flags and their children weren't murdered there are you know milo yiannopoulos and some of these alt-right
00:52:15
nazi sympathizing people throwing up swat stickers you know people promoting violence or brigading on these services
00:52:21
to attack people into docs people those people those were just cancellations d platformings from youtube in your
00:52:28
opinion well i mean anybody inciting violence i think we would all agree should be just platformed jason look at
00:52:33
how it's evolved we start with isolated cases like alex jones like a milo that nobody likes and nobody supports the
00:52:39
next thing you know the president united states is being de-platform but again that's supposedly based on him inciting
00:52:45
a crowd then what's happening today now we have entire categories of of opinion being banned it starts with code i agree
00:52:53
anyone's exactly my point anyone who is descending and now there's invalid anybody who has a single percentage
00:52:59
opinion on covet gets banned now anybody who has a dissenting opinion on climate
00:53:04
change can be banned there's a story this week on cnn where pinterest have all come look pinterest is a photo
00:53:09
sharing site i don't know no one's talking about climate change on pinterest and yet i was but then i got
00:53:15
you hardcore i mean it just shows this censorship now is on autopilot i mean even sites
00:53:23
where the conversation is not taking place are banning entire categories of thought and opinion
00:53:29
because it disagrees with you know what the experts agree and j cal you could point out your alex jones case to make
00:53:36
the case that deplatforming should be allowed the problem is as soon as you make that case it's only a slight other
00:53:42
people point to a slight degree away from the next case and then a slight degree away from the next case and then
00:53:48
fast forward three years and you're banning entire topics of conversation that ultimately may end up being proven
00:53:54
to be a topic of conversation we should have had and if you look back by the way
00:53:58
what great movie woody harrelson the people vs larry flint larry flint was a pornographer it was easy for everyone to
00:54:04
chastise him and for everyone to say you know what let's go ahead and de-platform
00:54:08
this guy back then and ban him and charge him by the government and at the end of the day he fought for his rights
00:54:13
for free speech now all that being said larry flint was publishing using his own
00:54:19
printers and selling on the street in a very legally compliant way there is a difference in having someone else's
00:54:25
platform be the mechanism that you use to promote your voice if they choose like pinterest and twitter and youtube
00:54:31
and facebook and google to change how their platform operates stacks i actually think that's a commercial
00:54:36
decision made by a private company they should have the right to do that but they're going to lose users over time
00:54:41
they're going to end up looking like idiots when they're wrong by banning certain topics that we should be having
00:54:45
conversations about over time and i do think that there are other mechanisms for us to use the free and open internet
00:54:51
this is why i think the free and open internet is more important than anything to have conversations using other
00:54:55
platforms i mean and i'm i'm i mean hold on i just want to respond to david since he did
00:55:00
you know counter my point i agree with you i think it went overboard and i think there are more reasonable
00:55:05
solutions i think a time-based a bam would have been better for somebody like trump
00:55:10
um and maybe waiting to see what happens with the january 6 commission putting that aside i know it's very
00:55:14
controversial um you know when you just look at what spotify did to our podcast i don't know if you've looked at us in
00:55:20
spotify every other episode says coven19 information here i think this is one of
00:55:25
the best things if people want to talk about ivermectin and it's an open science and freebird you know more about
00:55:28
it than any of us and people want to debate it why not link them to the questions credible sources i think
00:55:34
that's a great solution i have a question yeah is there an oat milk tag on spotify yes because the service oat
00:55:41
milk oat milk oat milk wait when you listen to all in pod on spotify there's a tag that says there's coven at 19.
00:55:48
yeah get covered 19 information here yeah to freeburg's argument about these companies should be free to do whatever
00:55:53
they want so i know that free bur i want to make two points about this first of all i know freeberg is sincere and
00:55:58
genuine in that belief however most of the people making that argument are completely disingenuous about it because
00:56:04
on the one hand they say that these companies should be free to limit speech when they like the outcome of that
00:56:10
censorship but meanwhile in congress they're pushing six bills forward to regulate these companies as monopolies
00:56:15
so they don't believe that they should be free to do whatever they want they believe that they're monopolies and
00:56:19
indeed many of them are monopolies and even the ones that aren't monopolies act the same as all the other ones they act
00:56:26
as a cartel to limit speech so that's point number one is that nobody believes this argument that these companies
00:56:33
should be free to do whatever they want the second point is that listen the founding document of our country the
00:56:40
is the declaration of independence it says that all of us have rights they're inalienable that means they cannot be
00:56:46
taken away okay and in the first couple hundred years of this country it meant that those rights
00:56:53
meant that the government couldn't take away your right to free speech but now today where does speech occur it it
00:57:00
occurs on these giant social networks that are privately owned they're owned by these large corporations and the fact
00:57:05
of the matter is if they take away your right to free speech on these platforms if they censor you if it's a great
00:57:11
you do not have a right to free speech in this country that right needs to be protected the founding fathers did not
00:57:17
anticipate that four people would be mitigating the majority of conversations online it's you know like if you're if
00:57:23
you're taking off if you look what happened to bilo and alex jones like they don't exist in the public sphere
00:57:27
anymore right like they've been literally when these big tech companies all get together as a cartel to deprive you of
00:57:33
your free speech rights you have been de-person you've been digitally de-personed and they're not just doing
00:57:38
it on speech they're also taking away your right to engage in payments in transactions to earn a living and unless
00:57:44
we stop this now it'll keep going we have to address the giant elephant in the room huge uh which is trump uh i
00:57:51
think a lot of this uh you know he hit its pinnacle when people were saying the the sitting president of the united
00:57:57
states could not be on twitter that was i think we all agree ridiculous and absurd that the president who was duly
00:58:03
elected couldn't have a twitter account but then with the january 6 and the inciting of the violence and you know
00:58:08
all the stuff that's coming out and obviously we'll we'll see where that all winds up i'm curious what everybody
00:58:13
thinks here about should trump or is trump being put back and reinstated on facebook or twitter
00:58:19
and it's supposed to be a lifetime ban on twitter but if corporate governance changes and people
00:58:23
lobby for that do we think that there is any kind of situation where trump has his twitter
00:58:30
handle or facebook accounts reinstated and should he have them reinstated i think jason what you
00:58:37
suggested is probably the most reasonable thing which was there was a time based penalty
00:58:42
you know we're we're getting through we're probably what a third or two thirds of the way through the january 6
00:58:48
stuff so that's going to come and go and i think all roads will probably lead to
00:58:53
a conclusion that after three years it's probably okay to let this guy back and be able to tweet i mean it's not this is
00:59:00
not you know controversial stuff at this point you know that the current thing is
00:59:05
moving on from ukraine when uh the topic all of a sudden is january 6 all over again and trump which it is on msnbc
00:59:11
it's all january 6 all the time again so listen i mean this is not a justification for the
00:59:16
widespread censorship that we've seen like i mentioned we've gone so far beyond isolated cases now it's entire
00:59:22
categories of thought and this has to be stopped well what you're feeling on trump should
00:59:28
he be reinstated if you were running twitter would you have done a time based if you don't like trump just don't
00:59:32
follow him i mean but but frankly it's it's um listen i don't miss the tweets at all
00:59:40
i don't miss the tweets at all i really don't um they were damaging your party that's how you felt my thoughts have
00:59:46
evolved before when he first got banned i was really supportive of it and there was part of me which was just
00:59:51
afraid that he would get reelected etc etc now come two years later and to see all
00:59:58
of the stuff and the escalation of d platforming i think the problem is exactly what you
01:00:03
guys have just talked about which is the person that does it today points to the
01:00:07
person that does it yesterday who points to the person that did it the day before
01:00:10
as the justification and so even though we don't want to draw a straight line between an alex jones and a trump and
01:00:17
climate change unfortunately there is this line and so in general now a much more free
01:00:23
speech because i think it's much more fragile than i thought it was before gosh your opinion has evolved and
01:00:28
intelligent people should respond to new data i appreciate that and i was a person that you know as david said was a
01:00:34
little disingenuous in the sense that i kind of was for free speech as long as it was stuff that i agreed with
01:00:40
but two years later a much more on david's original camp now which is we just need to establish this as a pillar
01:00:46
of society and not deviate and find credible voices on both sides and then algorithmically and through people power
01:00:56
meaning through crowd you know wisdom of the crowds type stuff help people figure out
01:01:02
what is truthful and how much truth there is because that's a tractable problem but the minute you start canceling stuff
01:01:08
today as i sit in 2022 what i would tell you is i think it's very very bad because it's going in a really bad place
01:01:14
free bro what are your thoughts on trump specifically because it does seem like that's a part of the undercurrent here
01:01:19
of you know he's going to be coming back possibly going to be running again and january 6 is concerned he's got the
01:01:25
truth social network download the app listen to what he's got to say it's rocking and rolling over there on the
01:01:31
the truth app i heard they took it down like it wasn't even working right the uh the new thing he built but what
01:01:36
is that what is that smack trading at was it at 20 billion or something still doing well um but look they had
01:01:44
you know obviously a reaction a market driven reaction to the fact that he was taken off twitter and he said i'm gonna
01:01:50
go make an alternative and that's you know certainly proving to be technically difficult but as we all know it's not
01:01:55
technically impossible you just got probably the wrong people working on it um but if they wanted to have an
01:02:00
alternative platform for hearing that voice you know have at it uh i don't know what else to say i mean
01:02:06
it's twitter's decision they're they're curating their audience all these guys want to be free speech advocates but at
01:02:11
the end of the day they're all editorializing and that's just the world we found
01:02:15
ourselves in i hope elon takes a slight jammer to that yeah i mean it's exactly what chamas said is they're all they all
01:02:21
believe in free speech and free markets when it produces the outcome they like but when the outcome is not what they
01:02:26
like all of a sudden they're like whoa these companies are monopolies well and here's another opportunity
01:02:31
if you're not libertarian and believe in like you know free speech and you know constitution like you could buy shares
01:02:39
you could lead a group start a dow start a hedge fund whatever build a block to buy a bunch of shares and then you could
01:02:45
get a board seat on twitter and you could have this debate on the board of twitter and if you're absolutely right
01:02:50
you are absolutely right and you can see by the way you know small hedge funds with small amounts of capital like
01:02:55
engine number one you know they were able to go up against it exxon and beat them so to your point jason for the
01:03:00
people that actually want to censor more if they can organize the capital they absolutely have the right to do that and
01:03:06
i and i think that they if they if they're able to do it they should win that's that's that's what mike solano
01:03:12
was kind of getting at it's like look if you don't like if you don't like the the
01:03:16
free speech that's happening on twitter go create your own social network because that's what they were saying
01:03:20
buy the shares and have influence that's how corporations work the shares are the
01:03:23
votes yeah freedberg update us on you know the ukraine is in month two now i'm sorry ukraine is in month two sorry
01:03:32
for putting the thumb before it's a tough habit to break freeberg tell us um you know the second
01:03:38
order third order effects of fertilizer and food at this point we've had this back and forth and now i think the world
01:03:44
is starting to realize hey freeberg was right these downstream effects are going
01:03:48
to be significant i ask you a question about these which is can the world not mobilize if these are
01:03:57
about one percent of the calories twenty or thirty percent of the calories are in
01:04:00
country could the world not mobilize to find other caloric sources rice fish soybeans whatever or is our
01:04:07
system so fragile that we can't rally around sending food to anywhere on the planet despite the fact that we can fly
01:04:13
anywhere and go on vacation for two weeks anywhere on the planet no the food system is complex and efficient
01:04:20
but it does not have strong redundancy or malleability uh so take for example you know how do you get
01:04:28
flour you get flour in um uh in your food from a food company that bought the flour from a miller there are mills
01:04:39
around the world that process flat wheat into flour you can't take that same mill and
01:04:45
process corn into flour there's different technology different equipment that's used same with soybeans and so on
01:04:50
so when you look at how the food supply chain is constructed you know there's a local point of consumption which is a
01:04:56
store then there's a food processor and you work your way kind of up the supply chain and there's a certain input that's
01:05:03
required to make the output that people consume and so calories while they might
01:05:07
be fungible practically speaking or philosophical or fundamentally speaking they're not necessarily fungible
01:05:14
practically speaking on the ground when you actually try and plug in let's say soybeans into the milling supply chain
01:05:20
to make the pasta or the bread that everyone consumes in tunisia it's not going to work and the same is true with
01:05:27
rice and then the the more important dynamic force that's underway is that these markets for food and commodities
01:05:34
globally are not controlled by government they're controlled by private businesses and there's a market for
01:05:40
these products and so what happens is as the food supply chain threat hit countries like china and others started
01:05:48
to stockpile they started to buy lots and lots of supply drive up their stocks and their reserves you know for fear of
01:05:55
the famine that's about to hit us in about nine months and when they did that there was now less food available
01:06:00
to tunisia to eritrea to egypt and so on and so we're starting to see the effects
01:06:05
of that dislocation driving dynamic market forces where certain buyers stock up and then the folks that can't afford
01:06:12
to step in not being able to acquire product and being left so not only do we have a local production differential
01:06:18
that makes it hard to have all calories be fungible we're also seeing this dynamic where there's a bifurcation
01:06:23
where the habs have more and the have-nots have less and that's going to really make this famine kind of hit home
01:06:29
you know in a really really sad way in the months to come we're already seeing as as i mentioned two weeks ago yeah i i
01:06:37
as i mentioned a few weeks ago the fertilizer problem driving acreage down so the usda farm report comes out
01:06:43
they survey farmers and figure out how much they're going to plant every year and they just downgraded the number of
01:06:48
corn acres they're going to get planted this year which is happening starting this month from 93 million acres to 89
01:06:53
million that doesn't sound like a lot but four million percent yeah four million acres coming out of production
01:06:58
of corn in the u.s is an incredible amount of calories that are not going to be planted to corn and so that has all
01:07:05
these downstream effects and again this this crop doesn't come to harvest till you know september october then it's
01:07:11
going to get processed and it turns into food so by the time the the effects of this decision making hit the marketplace
01:07:17
the availability of calories and the stockpiling that's going on it's like boom some countries are going to be you
01:07:22
know they're going to have a limited budget they're only going to be able to access so much food and they can't
01:07:26
access any and other countries are going to be fine the united states is going to
01:07:30
be fine western europe will be fine china will be fine sri lanka is going to be a mess
01:07:36
northern and eastern africa is going to be a mess i mean there's like places around the world that we are going to
01:07:40
have to scramble i i don't have a real easy answer there's no simple plug-and-play here it's going to be a
01:07:45
really complex set of problems that are going to need to be solved well sri lanka does grow a lot of its own food so
01:07:51
they may be okay because they're in that importer right i mean they're a pretty big net importer so they make a lot of
01:07:56
food but they they rely on imports a lot for for calories there so yeah i mean that's the case with a lot
01:08:02
of places around the world a lot of people think oh we have farmers but most countries
01:08:07
you know particularly in the developing world are net importers they they they rely on third-party
01:08:12
supplies of food so sure but but a lot of what you're talking about though are not um
01:08:16
they're they're processed foods that come into the country sacks anything to add here well i mean i think that the
01:08:22
ukraine war is kind of entering a chronic phase i mean the sort of entering a new phase the first phase
01:08:27
you'd have to say that ukrainians won the you know the russia wanted to topple zilinski's regime maybe take kiev they
01:08:36
obviously failed in that now we're in this uh phase where the fighting is over in the donbass it's basically the civil
01:08:44
war that's been going on there since 2014. and um and and really that's what it's
01:08:49
now about uh zielinski has acknowledged that ukraine will not be part of nato so
01:08:54
that issue is kind of off the table and so what they're really fighting over now
01:08:58
is the status of these disputed territories in eastern ukraine and i think it's going to go on for a
01:09:05
long time that's what you know general miley test fighting could go on for years i think it's going to become a
01:09:10
sort of permanent feature in the background of biden's presidency and um i mean i think the good news is
01:09:17
that hopefully the war three uh aspect is off the table it seems like the calls for us to impose a no-fly zone
01:09:24
or to put boots on the ground which you were hearing a lot of a few weeks ago seems like that's off the table so now
01:09:30
is this going to be a protracted i think civil war going on in the donbass uh with between ukraine and and uh
01:09:38
russia and their proxies which would mean uh sacks correct me if i'm wrong that putin will be hobbled forever
01:09:44
they're not gonna be a world power and his power is going to deprecate because he's going to be busy fighting
01:09:50
this non-winnable war for some period of time which is in a way saying biden did
01:09:56
it perfectly and checkmated him i'm saying that's going to be your assessment if this actually does go down
01:10:02
this way that there's like a civil war going on and and putin is crippled that would be checkmate or no i think i i
01:10:08
think that clearly the the state department's strategy here is to make putin bleed in eastern ukraine and to
01:10:14
protect this thing and make it go on as long as possible i think that's a risky strategy
01:10:20
because this thing could always spin out of control could it be effective is there a chance it could be effective
01:10:27
well i mean if the goal is to bleed putin yes it could be effective bleeding putin however i don't know that
01:10:33
that needed to be the key geostrategic objective of the united states right now i don't know i don't know because look
01:10:40
china is our main threat china is a pure competitor to the united states russia is not our economy is 15 times bigger
01:10:47
than russia's china's economy is about the same size as ours that is a real threat
01:10:51
so you know there are cost to us as well there are clearly cost of putin of this
01:10:55
but there are a huge cost to us as well uh freebird described the risk the supply chain we've had to now spend a
01:11:02
lot more money um building up the defense in europe we're going to be pinned down
01:11:07
in europe uh we should really be moving some of those resources from europe to east asia i
01:11:13
mean that's really where the pivot to asia is what we thought we were supposed to be doing until quite recently now
01:11:19
we're gonna be bogged down there and there's still risks of inflation and recession in the us and i think if we
01:11:25
are in a recession later this year i think a lot of people in the u.s will be asking what was this all for
01:11:30
and if you go read my article that just came out yesterday with those based on my speech
01:11:36
is published in the american conservative look this war was easily avoidable i mean the state department
01:11:40
could have avoided this war very easily i thought i listened to your speech i thought your points that you were very
01:11:46
clear on hey putin started this he is the aggressor it's his responsibility but you know we do need to think about
01:11:52
our foreign policy as a country and regime change is probably not a winning strategy for us although in this case
01:11:58
it might it seems like it's a possibility now so who knows uh i don't know i don't think
01:12:03
we're gonna regime change but if we do there's no reason to believe that we're gonna get something much better in every
01:12:08
case where we push for regime change we've actually gotten the same or worse um so
01:12:13
yeah i don't think that should be our objective um you know i look i think we have a bunch
01:12:18
of bad options now that the war's already started the best option would have been
01:12:22
to avoid this war in the first place and if this thing drags on for years and the
01:12:26
u.s economy tips into recession people will look back and say why didn't joe biden's state department in the year
01:12:33
2021 do a much more effective job preventing this war let me ask you let me ask this follow-up question as we
01:12:38
wrap here um chamoth uh i've been thinking about what it what should a strategic objective be for
01:12:44
america and the number one strategic objective i could think of was uh or one of the top ones would be to
01:12:51
build a strong relationship with india which obviously uh you know it has an adversarial
01:12:57
relationship with china already on the border of pakistan and then obviously you know has relations with russia
01:13:05
what would be on the top of each of your lists saks and chamoth chemical first on
01:13:10
priority here if we're thinking fresh looking at the world with china in retreat uh sort of disengaging from the
01:13:17
west with russia on their heels what could the united states and the west do as a preemptive measure to really
01:13:24
solidify democracy and you know the the world order a peaceful world order i'll answer it slightly differently which is
01:13:31
we need to put ourselves in a position to not be dependent on any country because then we can actually dictate
01:13:38
what we think the right approach and solution is from first principles and have the courage to stick it through to
01:13:43
get to the other side of it so there are really two things we need to do the first
01:13:48
which we've kind of perverted unnecessarily is energy independence and we've allowed
01:13:53
too many people to conflate and muddy the water on what energy independence means you know
01:13:58
nobody's nobody was ever advocating for coal but you know the amount of coal that we could have burned as a bridge
01:14:03
fuel to lng which could have been a bridge fuel to things like nuclear and wind and solar
01:14:08
that path was pretty clear but we got in our own way we have to get out of our own way okay so energy independence i
01:14:17
think beyond anything else strategic probably an order of magnet it is the most important thing
01:14:24
and then secondarily there are certain areas for the future of those future economies where we need
01:14:32
to have complete capability and know-how and the most important ones there are the specialty chemicals that we need
01:14:39
especially chemicals that we need to basically support climate change writ large to support
01:14:44
battery production writ large and then semiconductors get those two things completely under us control
01:14:51
on top of energy independence and honestly we would be a dominant world power for the next 200
01:14:58
years on our terms so the road to resiliency saks you're now the secretary of state what are your key
01:15:05
priorities the u.s grand strategy has always been to prevent the rise of a pure competitor who can dominate their
01:15:11
region and challenge us for global hegemony there's only one country in the world that can do that right now to us
01:15:16
which is china so the pivot to asia as obama said was fundamentally correct but we have not
01:15:22
followed through and executed it and now our attention is distracted and bogged down by what's happening in europe i
01:15:28
would seek a negotiated settlement to this war now that the zielinski government has
01:15:33
survived putin has been unable to take western ukraine and furthermore that zilinski has given up being part of nato
01:15:40
the only thing left okay is this is this fight in the dawn bass there's a there's
01:15:44
an agreement already on the table called the minsk accords that could allow us to
01:15:48
settle that meanwhile pivoting to asia yeah wrap it up meanwhile pivot to asia create a strong alliance
01:15:55
of countries in east asia who are threatened by china we already are friends with many of them you've got
01:16:02
japan south korea taiwan you've got vietnam create a balancing alliance of those countries to prevent
01:16:12
china from rising to the point where it can threaten us for global hegemony that
01:16:15
should be our main priority geopolitically great uh all right there you have it folks for the rain man david
01:16:21
sacks the dictator polly hoppetea and the sultan of science david freeman i'm your boy jacao and we will see you
01:16:30
all in miami may 15th 16th and 17th love you boys bye bye love you besties [Music]
01:17:00
besties [Music] it's like this like sexual tension that they just need to release somehow
01:17:18
[Music] we need to get mercy's [Music] i'm going on [Music]