The Besties Take Napa | All-In Special

e [Music] [Music] let's go [Music] Boys Everybody give it up for the dictator himself Jamal ptia the Rainman yeah definitely David Sachs and your sulan of science David Friedberg I love how it's freezing and there's one heat lamp one heat we're all [Laughter] just I mean these are literally like $80 for the night yeah they cost about 50 bucks a night to rent so I just thought 250 was enough yeah be fun no no I mean this is a super expensive place especially since this is what happens this is my life oh God I come in and they're like uh Jal I'm like yeah it's like chat's been here since 430 I'm like yeah that's fine that's great it's you

know he got here early and they're like he's been ordering one on your tab I'm like oh no so the event just flipped from being in the black to being in the red a lot of people had questions for us so we thought we would do like a little Q&A but I thought I would start with maybe asking the besties what has it been like I think having this podcast get so big and the scrutiny it's under but the excitement and just how it's affected your life and and maybe how you operate in the world I think I may have told the story on the Pod but um I I'll tell it again because I I do like the story so I think I was visiting

chamath in Milan I think it was either last summer or two two years years ago two years ago and we were literally just walking down the street in Milan and somebody comes up to chamath and stops him and it's like it's a tourist from Australia who's a fan of the Pod yeah and he wants to take selfies I mean he definitely you know jamath was definitely his favorite bestie and it was like this excited conversation and that all happened and then he you know moved on and chth turned to me and said oh by the way just some context here is that these two were were in like a big fight and there's some question about whether the Pod yeah whether the Pod would survive and I think we were just

talking about that as this guy came up to us in any event so he comes up takes the selfie and then leaves and jam turns to me and said these two idiots better figure things out because I like being famous I'd love to hear you guys uh talk more about the current state of gen and particular software companies I know chat you got 8090 going love to hear about the the lower cost of actually engineering software and building companies versus actually geni doing replacing human judgment replacing judgment self-driving the software itself and those two Dimensions feel like they're not exclusive to each other but they are two different axes love to

hear kind of current thoughts on the return Potential from investment standpoint I think that the entire software stack is going to get rebuilt and I think it's going to be a bunch of 10 and 20 and 30 person companies that do it and I think the core artifact of a new company today are two decisions the first decision is that you must demand that the people that join you use every available tool at their disposal and you measure them against a counterfactual where that counterfactual is what your productivity was at a traditional company and you need to be 100 to 200% more productive so if an

engineer is writing you know x amount of features or x amount of code they need to be at a 2 or 3x and if you do that in an existing company all I've seen is organ rejection so that's the first decision is so the people that join you you must expect that they do that which means that you also have to deprive them of any help along the way no administrative help no HR help no Finance help all of that stuff needs to be a workflow or a bot or some form of AI logic so that's one critical decision and I think the second is that the document that matters more than ever is that PRD that defines the v0 MVP of the product because I don't think you

should be writing much code I think what you really need to be doing is defining and excruciating detail what the Feature Feature set is what the parameters are what the guard rails of how features should behave in certain boundary conditions fed into an llm that then spits out the code that then compiles and then you have a working product and that is a 10 20 30% effort that can probably topple Giants it'll take a couple of years for us to get to that place but in that world there is no room for $500 million into a SAS company it doesn't make any sense and the reason is the 10 and 20 person company can price that thing at just a fraction of what

the incumbent charges because the incumbent has an Opex load that's not correlated to Features it's correlated to the fact that you have 50,000 people across 50 offices in all over the world with all this ridiculous infrastructure that all of of a sudden becomes obsoleted so I think there's two models one is more of the the lightweight approach so like saaks and jcal both seed a lot of stuff get it off the ground spin it up and then raise money like he just did with glue which is like I'm going to build something get it to a place where the rest of us can kind of pile on but the other version is much more distributed and I'll say a a dirty word here but I think it matters

like it's like this web 3 Model does actually apply here where there are some really interesting Early Adventures in crowdsourcing technical completion I would encourage you to look at a project that I'm starting to focus a little bit on called benser and I was like what is this thing and it's basically a thing where you go and solve technical problems and produce features that people require that need and you get paid in this underlying currency that is actually a distributed form of venture that actually makes sense like a bounty essentially yeah we're like you know 15 companies that need a replacement to Salesforce just say here's the Bounty and here's the

feature set and it's a A crowdsourced or a community sourced PRD and then some llm spits out the code like that is this crazy new world that we're going to so it's all about speed of execution I think s you have any thoughts on it and what you're seeing you know in the field right now yeah I mean I I I think in having conversations with Enterprises and businesses what they basically want is to be able to throw all of their data somehow into a llm and be able to ask you questions so they've seen chat GPT and they basically want to be able to do that but with their own Enterprise data and it sounds easy but it's actually like pretty hard to make that happen one

problem is that the llms don't have that big what's called a context window which is kind of like you could it's almost like active memory or something like that and we're in the early days of it's like in the early days of computers where the you know you had to worry about your Ram was like 8 megab 16 then 32 then 64 remember that get some we had and 3 and2 in disc or whatever and eventually just people stopped talking about Ram because it went away as a constraint yeah but we're still in the days of you have to be selective about what you feed into the model because it just can only absorb so much information so if you give it all of your Enterprise data how's it even

know where to look and so you've got to figure out how to optimize it so that you can give the the model the right chunks of data to give you the right answers and that's actually it's a complicated problem right now and and uh we're dealing with it at glue we're in we just invested in a company a startup called raggi which is basically rag as a service do retrieval augment and generation as a as a service it's basically helps solve this problem so I think that that's kind of the stage that we're at is everyone kind of knows where they want to get to and we're just dealing with some of the limitations so that the model can work you know

effectively and you know what you see right now are like glimpses of of you know genius or greatness like if you feed the exact right chunks into the model you'll get like answers that can blow you away but then sometimes you'll just get an answer that just kind of isn't that good and again the reason is because the model didn't really know where to look for the answer so you know right now it's like again glimpses of something amazing and we just have to kind of get to more predictability around that and there's a lot effort that's going into solving some of these sorts of issues it's not just llms it's also yeah although it is at the llm level it's also the the infrastructure

around it you know and to put the two thoughts together I think the people who Embrace this are becoming bionic at work I mean we had many challenges in podcast production around things like transcripts or doing show notes and learning um hey about this person who's a guest um they were on these three podcasts now we have producers at our company who will take those three podcast interviews download the MP3 put them into you know a chat GPT and say what are the key points in here what are the key timestamps and even what questions would you ask or what are relevant topics this person's talking about and these data sets are disparate and they're not connected so you can't

say well what's David saaks talking about if you're going to have them on your podcast on Twitter because there's no way to get that information um I could tell you what the topics are it's pretty anyway um and and those individuals are becoming so valuable in organizations and it's allowing people to do so much work so fast and then unlocking things that were just not possible and that to me is very obvious inside the startups we invest in because when they're resource constrained they look for the fastest cheapest way to do things and if you watch those startups they're the same ones who when other people were racking servers they were

using AWS they were using cloud computing and they figured it out first and then they built businesses that you may have heard of like Dropbox YouTube that whole wave was a group of people who just fundamentally said that the Paradigm of cloud computing is going to work even though it's not perfect right now even though it's slow or expensive or breaks whatever I'm just going to go all in on that and Dropbox made this critical error I don't know if you remember that Sachs where they stood up their own data centers instead of you know they were just scared to have their data at I guess AWS or whatever was and so it's going to be unbelievable how many businesses become viable with just

three four five employees and that's the that's what I'm seeing on the field freeberg any that's on AI right now uh I just I think that there's a chance that SAS gets kind of obviated I've shared this in the past I think that there's a chance that SAS looks like this kind of temporary phenomenon that occurred between the ubiquity of the internet and the prevalence of AI for writing software if if you've worked with any Enterprise non traditional Enterprise from a traditional industry meaning they didn't grow up in software and they're not software native they have it departments and those it departments are really good at procurement of software and that's really been their primary

function but they all try to hire software engineers and they generally suck and but they understand the needs of the business and I think that if they can have software written for them at a basically a cost of zero to improve their workplace productivity which was the original thing that was enabled software in the first place it starts to really change how folks are sourcing and using software that it can actually be written for them in real time by software and so I think that the the tooling and the capabilities to enable the Enterprise to write their own custom workplace productivity tools and their

own custom workplace software whether that's customer facing or internal facing really becomes kind of the standard maybe going forward and you know you see this what I think Doug Leone called the greatest business model in human history which is SAS getting kind of blown up in that new landscape so I think there's a chance that that happens non-zero chance and I've just seen this in in a bunch of settings where folks are having software written for them by the software and they kind of just really State clearly here's the layout here's what I wanted to do and with a couple of rounds of iteration they can get it working pretty well and they don't need to go pay some third

party of per seat license fee per year to use it I have heard about about uh your poker love uh through the podcast I've listening for a few years and it was really fun to experience it with you last night could you comment a little bit on like how you think about your utility function personally is it networking strategy training is it fun like could you comment a little bit on how you all think why we play poker there is networking that has occurred at it but I think also you know you made a good comment about it or maybe Bobby Balwin said it he never saw or was you know um a poker player like get old and lose their mental facilities right like they Bobby

Bobby Ballin ran the city center in Arya for a long time he plays in our game and he made this comment he's like have you ever seen a poker player get Alzheimer's or dementia right he was saying that about Doyle Brunson cuz Doyle when he died was super sharp sharp as attack his body failed before his mind filled yeah and it's true it's like it's one of these unique games where you can really stay mentally sharp as you get old yeah absolutely saaks you still love it yeah definitely yeah look I I like it for the same reason that that you guys like it there was a phase early on where like I would play in the World Series of

Poker I would like go to that and then I was just like you know I actually don't like sitting there for three days playing with strangers it's actually not that fun to do that and the thing that's fun is just playing with your friends so now I just play in friend games I first started playing poker when I did I ever tell you this I worked at a pool hall in Upstate New York I was uh 16 years old I got paid 425 an hour to work at this pool hall I like clean toilets and scrub down the tables and the guy sat at the pay phone all day was the bookie for Upstate New York and he would take all

his the bets on the pay phone and write him down and one day like after he got to know me for a couple months he's like come and play poker with us at our home game and they played limit hold him like one two 50 Cent $1 one two and these took all my money and I was 16 going to college like cold I had to walk through the snow I couldn't afford boots or a jacket it was like really shitty and they took all my money yeah and I had to call my mom and I lied to her and I'm like Mom I lost my jacket can you like loan me 150 bucks Western Union it so I can buy a jacket so that summer I bought all the books in the from the back of the poker magazines

to learn how to play poker strategy and it was all limit hold him at that time and then my freshman year of college at Cal I made 10 grand that summer playing limit Holden at the Oaks Card Club playing tournaments in 612 and after that I was and I learned so much about investing and life and like perseverance through ups and downs because you sit there you grind it out as long as you have a positive EV decision you know you made the right decision over time the money will come to you you don't need to like win every hand and to learn that at that age I think was really influential to me in entrepreneurship and investing and in decision- making later on in life it was very important

to me and so when I sold my company in 2013 I was introduced to Cham and invited to come to the pl in the home game and for me it was like a very kind of nostalgic because I hadn't played really much since 2001 2002 what's the most impactful advice you've been given and how's it shaped your careers early on I got two good pieces of advice one was from Mike Savino who's here somewhere speaking tomorrow there it is um and he said uh the piece of advice his dad gave him was look to the left and come in an hour before that guy and then look to the right and come in and an hour later than that guy just basically the hard work stuff and I had

gotten that from my mom as well who worked three or four jobs to put us through school and my dad who worked really hard and so the hard work ethic I think was the key to a lot of My Success because I just decided I'm just going to outwork everybody because I was coming not from Harvard or Stamford but from Bay Ridge Brooklyn uh and you know going to night school at forom so I I had to use hustle and there was no connections there was no network I just had to literally kill what I ate and then after I sold my first company I was at Ted at the Billionaire's dinner with my book agent John Brockman and uh I had still had a chip on my shoulder

but I had sold my company and he uh said hey schmock you you made it stop fighting with everybody and I was like okay I'll stop fighting with everybody uh I still you took that advice I took it sometimes I flip a coin when did you do that um not get that memo when did you get that advice last night or yeah I just got it you're just texting me right now um but it was actually because I had to fight for everything I think I just kept fighting to try to get the next you know level and you know at a certain point I decided I'd be like super magnanimous and just be helpful and Elder Statesman like um and it's I'm not perfect but you

know what well I mean when you don't see me working you don't see me working with startups you're you know like I am tireless in my ability with patience for them and supportive and I just and I try to do that with my friends as well is just you know what's the point of being successful if you can't support the people around you who you love and try to pay for it so those are just you are you are like the the most reliable wingman of all of us oh thank you you know it value your friends and your family is like just such critically important advice because at the end of the day all you have is your memories and you make them with your friends and

your family and so I am on a mission to make great memories uh with my friends and family as many as possible uh and and actually this is part of it like you all being here and just that's why I always tell you like make a couple of friends it's like it's hard to make friends especially as you get older uh and people kind of tighten up their circles like make a couple of new friends you know and go do things together anyway some philosophy I don't know advice that you got the the the best advice career advice I got was from Peter teal who advised me not to go to law school and unfortunately I didn't listen to him I went anyway and but it ended up not mattering

because I ended up joining PayPal uh after I graduated from law school so I wish I had a better story the best career advice I've actually heard for Silicon Valley was the advice that Eric Schmidt gave Cheryl Samberg when she joined Google which is when you get invited to take a seat on a rocket ship don't ask for see yeah just just get on board I actually think that is perennially great advice for anyone in Silicon Valley you know there aren't that many of these rocket ship so when you get a chance to be on one you should just take it and worry about the titles and all that kind of stuff later yeah the details later I think like the the biggest piece of advice that I still

struggle to take every day every time I have though it's had profound impact on my life is to focus um I think the bigger a portfolio you develop the less Alpha there is you try and minimize beta but you take all the alpha away if you do that in 2009 I focused my company on the agriculture Market which was crazy we were in like seven verticals and doing all sorts of stuff when I focused on EG and I went deep and I like went on a long hike in Iceland and I like came up with this crazy idea for the product for the ACT market and I came back we launched it and we did like 30 million in sales that year and that made a huge impact in my life and the trajectory of the business

changed and every time I focused and avoided distractions it's made a huge impact I think my decision to become a CEO again back in November was a really important one for me and I realized I was on lots of boards and doing lot L of investing and thinking about LS of things but now I can really dig deep and I I think that everyone assumes that there's this power law in the world that you are a passive participant in you're either going to catch one of the power law winners or you're going to lose it therefore you've got a portfolio your way to a power law to catch a power law I don't give a about that because I think my job in life is to make the

power law and to make that outcome and I feel like that has made a huge impact on how I think about life and it's really um every time I've tried to act on it it's it's actually paid back significantly so focus is the the biggest piece of advice I've gotten that I think matters so the the the version of that that I tell Founders all the time is always be all in on your best idea because Founders have a whole bunch of different ideas sometimes they're doing multiple startups sometimes they're thinking about pivoting but they're still hanging on to the old idea and I always give them permission to Pivot I'm like don't worry about what

you said you're going to do whatever two quarters ago and you rais this money justes whatever you think the best idea is right now like let's go all in on that do not hedge your bets I think that's just really important for Founders and it goes back to what you're saying it's just so hard to execute any idea that you can't be hedged as a Founder Seven Samurai yeah Akira kurasawa did such an amazing job representing this ethos I think like you strike and you strike perfectly and you strike with full force and with all your energy and everything you have your whole character everything and you can

accomplish incredible things you have to put one foot in front of the other every day and you have to focus on tangible progress and where that fails is when most people and I do it a lot and I've tried to get better as I've gotten older is when I get comparative and I compare myself to the other person the other company the other funding round there's so many reasons for you to feel like you're less than something else and the reality is that has nothing to do with you you're not in control of that but it's so hard and then if I don't take that medicine I become insecure and then I make mistakes that

are entirely avoidable so it's just tangible progress the things that I can control that's probably the most useful piece of advice that I try to remind myself of every day and then I kind of have these two jobs one is I'll incubate companies from time to time if I get intellectually curious enough but the other part is just as an investor and the best piece of advice I got as an investor is you are a big Wave Rider and the swells that become ginormous are not visible when you paddle into them and so you got to commit and you got to go and you are going to have less than 100% hit rate and you will get massively washed out

and you just got to get to the surface and swim back up and as an investor that's been helpful because I've had some huge wins but I've also had some huge losses and some total embarrassments and flameouts and it's the totality of that that allows me to swim back out so those are two different things but the entrepreneurial one and the life one is more valuable because so easy to get distracted and feel insecure because of what somebody else is doing and it always ends up screwing me up I think that's a good note to end on uh give it up for my besties and uh we're going to take a little walk over here um for a little

surprise if I could have my four besties follow me over [Music] here I'm going to walk over here because it's a very special day or a special time of the year it's the Sultan of science's birthday again so come on around and we got him a beautiful cake and then a tiny little vegan cake and we're all going to sing the sultan happy birthday 3 2 one happy Birthday to you happy Birthday to happy birthday dear D happy birthday to you we love you freir [Music] n [Music]