00:00:00
hey everybody welcome back to the all
in podcast besties i have reunited it's
00:00:05
been a bestie summer chamoth how are
you doing you're back in america yes
00:00:08
i am back in america back in america uh
feels great uh good summer yes i had uh
00:00:16
seven weeks in italy it was really incredible what
is the vibe in italy post-pandemic obviously they
00:00:22
had the the roughest of any nation i think
except for china and wuhan um with cover 19.
00:00:29
how's the psyche there no it's incredible because
they're i mean they're so resilient they basically
00:00:34
decided that they don't ever want to go through
it again so everybody wore a mask and um people
00:00:40
socially distanced there's lots of dinners outside
no restaurants were really seating people indoors
00:00:45
you'd walk into a store and you'd have to put some
you know purell on your hands and wear a mask and
00:00:53
there was like you know 40 50 cases a day
and then i keep looking at the news when i
00:00:58
was there 60 000 a day here i was it's it was
just really it was sad and then on top of that
00:01:03
to see the riots the fires i mean there's a
you know it's been a disturbing summer here
00:01:11
uh how are you doing david sachs you're
back in san francisco and uh you got to
00:01:15
spend a little bit of time in an undisclosed
location as we we know from the last couple
00:01:19
episodes of the podcast how is san francisco
right now how has your bestie summer been
00:01:25
uh it's been great um yeah i was i guess i can
now disclose that my disclosed location was uh
00:01:33
was mexico specifically cabo and that was it was
a great place to be for a couple of nobody cares
00:01:39
yeah exactly um but actually um it it it was great
it was a great place to be in the early stages
00:01:45
of the pandemic because everyone was wearing
masks you know they did take it really seriously
00:01:50
and there were very few cases and seemed like it
was under control at least in the area i was and
00:01:55
then um you know we came back to san francisco
for for school for for the kids school which
00:02:01
um you know i'm not sure we have to be here but um
but that's that's yeah that's school actually open
00:02:08
are they going to school or they keep pushing it
out two weeks like my kids are yeah it's we don't
00:02:12
they're not going in person yet but i think they
keep trying to figure out when they're gonna be
00:02:16
able to start doing that so it's all zoom based
right now yeah which means no learning right i
00:02:21
mean do you think these kids are actually
learning on zoom or do you think it's just
00:02:25
glorious a little bit i mean a little
bit i think it's it's it's difficult
00:02:30
yeah we gave up on it and free burger are you
there i'm here barry yeah how's your bestie
00:02:37
summer been uh during this crazy time i've
been in the bay area i've been um crossing
00:02:44
all seven layers of uh dante's inferno here in
california moving from the outer layer of covid
00:02:51
to the middle layer of california's proposed
wealth tax to the uh inner layers of extreme heat
00:02:59
smoke and the absolute central layer of pain more
recently my three-year-old daughter decided 34
00:03:05
nights ago to not sleep anymore so um yeah we've
been living living the life it's been glorious
00:03:11
and um you know i wear a mask now for kovid and
then i wear another mask on top of that mask for
00:03:17
the smoke so we're just living the california
dream what my parents immigrated here for
00:03:22
you know paradise well i guess that's a good place
to start and um just if anybody cares i spent uh
00:03:40
you know i've been lonely and i tweeted i'm lonely
and i got about 50 phone calls from people who
00:03:45
are like i can't imagine j-cal being sad but i
actually had a talk with my wife and i said what
00:03:52
are the symptoms of depression because i i think
i might have depression and i went through and i
00:03:57
was like i don't have depression i'm just i have
great empathy for all the people suffering and
00:04:02
you know i just being isolated you guys know me
very well better than anybody like i like to talk
00:04:08
to people and it's been really difficult for me
to be totally candid to be isolated like this and
00:04:13
the podcast is is great and doing this podcast is
great but man i miss people i just missed what are
00:04:18
the what are the symptoms of your depression just
before you were self-diagnosing i'm just curious
00:04:24
i was i i was feeling like um just sad about
watching the riots and watch people shoot each
00:04:31
other and then watching you know the the the
wildfires watching people die unnecessarily
00:04:37
and then watching the madness for the election
it was just all becoming like i wouldn't say
00:04:42
overwhelming but it just made me very sad that you
know so many people can't go back to work and then
00:04:48
the stock market's ripping and it's a very i don't
know how you guys feel but it feels very surreal
00:04:53
right because in our world and i don't know how
your portfolios and investments are doing you
00:04:58
know a lot of the companies we've invested in as
angel investors um are doing just wonderfully and
00:05:03
we're investing more than ever but then you turn
on the television it's like the doom scrolling
00:05:08
is crazy so i had to just stop doom scrolling
i think that was the key thing chamoth was just
00:05:11
looking at twitter is that the trending topics is
so depressing and just so overwhelming at times
00:05:19
that i took three days off this weekend and went
camping and i literally didn't pull up twitter and
00:05:24
i felt much better so i think it's really twitter
related like just opening up the trending topics
00:05:28
i don't know if you did that on your holiday
in italy but it really is a quick way to get
00:05:33
depressed the best thing is that i was using it
in a different time zone and so i was basically
00:05:38
out of the flow and it makes a huge difference
because then you're not in the emotional turmoil
00:05:48
of people's immediate reaction and so you can
just kind of uh move on and then also i just had a
00:05:55
really fun summer because i really tried to detach
and not use my phone i had a you know i kept my
00:06:01
meetings to a few hours a day and then otherwise
i was doing things yeah you you want to know you
00:06:06
want to want to know my phone call to jaycal it's
like hey jake al i i saw on twitter that you're
00:06:12
you're sad and lonely it's like yeah yeah it's
like are you suicidal it's like no okay goodbye
00:06:25
but i do i do want to thank you david
for having me down to cabo and we got
00:06:29
to have some good times to watch some good
movies uh gladiator extended cut was great
00:06:34
uh some other movies that we watched could
get us cancelled so we won't admit that we
00:06:38
watched history of the world or any other mel
brooks movies but we had a good time played a
00:06:41
couple rounds of golf and that was good times uh
but let's talk about california because i think
00:06:46
you know we're all residents
currently of california
00:06:49
but let me just put it out there how many people
on the call are considering uh leaving california
00:06:57
anybody is that going through anybody's mind right
now because it's going through um for well it's
00:07:03
not for me um but uh i think that california is
sort of emblematic of what could happen if you
00:07:11
actually have um you know the legislative bodies
plus you know the the top sort of political leader
00:07:20
up and down on one ticket i mean you know you
you basically have like massive rife incompetence
00:07:27
and it's been compounded you never i mean
you know if people who are democrats would
00:07:32
have said oh the best thing that can happen for
democrats is if you have you know local cities
00:07:36
plus an assembly plus the state senate plus the
governor as a democrat republicans would have said
00:07:43
the same thing for republicans but as it turns
out uh it basically creates the worst outcomes
00:07:49
and so instead what you need is a little
diversity of ideas and a little push and pull
00:07:54
um but california is like a bunch of clowns in a
clown car right now it's a joke but i'm not going
00:08:00
to move now part of it i'm not going to move is
i i've you know my taxes i've set up in such a
00:08:06
way where california can't get access to most of
my assets anyway so you know they can pounce in
00:08:13
definitely yeah david how are you uh sax how are
you feeling about california right now um and just
00:08:23
the craziness in san francisco the homelessness
problem in san francisco has become acute during
00:08:27
this it's it's really well it's it says on top
of it and it's it's a disaster it's a disaster
00:08:34
um i mean i'm not uh i'm not leaving or anything
but it's certainly a topic of conversation that's
00:08:39
come up a lot and i do know people who have
left um i know a couple of people who you know
00:08:44
prominent people in the venture community who've
recently moved to austin and it's a horrible time
00:08:51
for the the city and state be proposing all these
new taxes as just take one example because people
00:08:59
are already realizing that because of covet
and and this new sort of work from home and
00:09:05
zoom uh business culture where you can kind of
work from anywhere that people are realizing they
00:09:10
don't need to be in san francisco or in silicon
valley anymore to be you know in the technology
00:09:14
industry and so at precisely the time that
people were reevaluating where they wanted to be
00:09:20
realizing that that could be anywhere california
is now you know proposing to massively increase
00:09:25
the cost of being here um so it's it's horrible
timing and then you know you do have this uh sort
00:09:32
of seemingly chronic uh issue in san francisco
particularly with with the sort of homeless
00:09:38
problem uh just seems to keep getting worse um and
there's there's sort of this um weird hostility
00:09:45
to technology and tech workers um here that i
think it somehow uses a scapegoat to prevent
00:09:52
the city from dealing with its real problems and
what do you perceive those real problems to be in
00:09:57
in the city um i mean you use the term homeless
i think most people looking at the problem
00:10:03
as one person candidly told me you know what we
have is not and i wouldn't say who said this but
00:10:07
it's a prominent person they said this you know
jason the issue here is this isn't a homeless
00:10:11
problem this is a junkie problem and the use
specifically is that i'm using that term because
00:10:15
that's the term to refer to people who are
addicted to opioids methamphetamine fentanyl
00:10:20
and that if you were to actually unpack what
we're calling a homeless crisis it's actually
00:10:24
a crisis of drug addiction and specifically
fentanyl and i don't know if you guys saw
00:10:29
we're gonna hit something like 500 overdose deaths
this year we're like going to double last year and
00:10:32
it's all fentanyl which is a particularly you know
deadly drug so i mean how much do you think that
00:10:39
is the problem david huge i mean it's it's you're
right that homelessness is not the the cause of
00:10:46
the issue that homelessness is the consequence of
long-term drug addiction and mental illness i mean
00:10:53
this is the it's the end state and uh you're
right the city is it's not really tackling the
00:10:59
underlying issues in fact it's kind of eating and
abetting them i mean how many millions of needles
00:11:05
does the city give away every year and that it
only collects a small fraction of them with the
00:11:09
remainder ending up on the streets um it's just
it's bonkers and i think part of the problem is
00:11:15
that we keep saying that until we uh it
is that we can't demand any uh improvement
00:11:25
in the situation in terms of homeless people
you know we have this like poop squad in
00:11:29
in san francisco that's literally cleaning poop
off the sidewalks because um homeless people
00:11:35
are using our sidewalks as as like a latrine
basically as a bathroom and and what you keep
00:11:41
hearing is that well we can't do anything about
that problem until we solve the homeless problem
00:11:46
and that's a and certainly we should try to
solve that problem but it's a very long term
00:11:50
you know difficult and tractable problem
in the meantime we can certainly do things
00:11:55
like demand that homeless people not do that yeah
and the policing seemed to there seems to be a
00:12:02
distinct issue with policing right now i watched
the san francisco tenderloin twitter account
00:12:07
david freeburg and they've arrested something like
260 meth meth and fentanyl dealers but we have a
00:12:14
uh d.a chessa i believe his name is who doesn't
believe in prosecuting any of those crimes uh
00:12:21
related to drugs or petty crime freeberg what is
the city turned into for you as somebody who's
00:12:26
been a long-term investor in the bay area um well
i moved here after i graduated college in 2001 and
00:12:34
i loved san francisco it was it was a quieter
city in a quainter city i honestly um over the
00:12:41
years have found uh the traffic and the congestion
and the buildup of the city to be frustrating i'm
00:12:46
a little bit of a anomaly in this sense because i
think a lot of people you know think that the city
00:12:51
should continue to grow and progress and build
housing and so on those are all uh you know fine
00:12:56
objectives but i think the quality of life
has degraded for some time in the city as as
00:13:00
infrastructure hasn't kept up with the uh the
changing pace of uh companies growing here and
00:13:07
as a result we've kind of got this ballooning
inflating budget that's been poorly managed
00:13:11
you've got um i forgot the statistic but there's
um some number of thousand people plus that are
00:13:17
city government employees in san francisco earning
over 300 000 a year um and so there there's a
00:13:23
there's a chronic kind of bureaucratic issue um
that is the cancer that has caused uh you know a
00:13:29
lot of the follow-on crises that i think we're now
experiencing acutely here in the city now in terms
00:13:34
of leaving to your earlier question i you know
um i was really like i've just been like everyone
00:13:41
you know like that i caught kind of talk
about the dante inferno layers it's also like
00:13:46
for me growing up it's like a seven layer burrito
it's like one layer of [ __ ] after another um
00:13:51
start with the beans and in the middle you got the
sour cream and um you know this city's just gotten
00:13:57
um kind of and the state has gotten more and more
difficult to live in and i and i was certainly
00:14:01
thinking and talking to my wife like we gotta
leave her family's here so we're not gonna leave
00:14:04
the state but then i did a call last week that uh
that i think 18 of us were on with governor newsom
00:14:11
and um you know he made a couple of really
interesting points that really did honestly reset
00:14:15
my perspective you know i've tried to take a step
back and think a little bit more broadly about
00:14:19
the long-term opportunity in california the way
this state operates uh right now it's the fifth
00:14:26
largest economy in the world they ran a surplus
their refinance their debt they've done a great
00:14:30
job kind of managing kind of the fiscal gap that
that's that's being created by the copic crisis
00:14:35
um and you know governor newsome made a point
like we have had the california exodus story
00:14:40
that's percolated and cycled really for decades uh
he pointed out an article which i've not been able
00:14:46
to find but i've been looking forward from time
magazine from 1959 that were like declared this
00:14:51
is the year everyone's going to exit us out of the
state and we hear it every couple years there's
00:14:55
some crisis that precipitates the mass exodus and
it hasn't happened because it is a great place
00:15:00
to work it's diversified industrial base it's not
just tech tech is a lot of the growth but there's
00:15:05
a lot of industry here largest ag producer largest
um large military aerospace industry and on and on
00:15:13
and on uh this is a it's a great um diversified
economy it's a great diversified cultural
00:15:18
base it's by the oceans it's by the mountains
it's an incredible place to live and work and
00:15:22
i don't think any of us want to give that up
and uh and the the media has done a great job
00:15:29
kind of um magnifying these these small stories
that aren't really a story governor and eusa
00:15:34
made the case that this wealth tax proposal
you know was one assembly member it didn't
00:15:38
even get into committee it wasn't even really
being considered but it kind of created this
00:15:42
this press flourish and everyone got involved and
everyone i know kind of freaked out about it and
00:15:47
it became this kind of another catalyzing event
but it wasn't really real so if we kind of broaden
00:15:51
our perspective a little bit both in terms of
space and time i think we get a little more
00:15:56
kind of comfortable with like of all the places to
live and all the places to work this is the best
00:16:00
and you can go see some taxes and move to austin
but i mean then you got to go live in austin you
00:16:04
know whatever well it's it's it's the best it's
the best you're right that is the best in terms
00:16:09
of climate geography natural beauty uh resources
and the industries that have developed here and
00:16:18
have you know strong network effects but it's not
the best politically i mean it's among the worst
00:16:24
politically and it seems like the politicians are
doing everything they can to mess it up i mean i
00:16:28
almost wonder if there's like a resource curse
issue particularly with san francisco where you
00:16:32
know there's this thing in and um i mean this
this observable thing with governments that
00:16:38
um that sometimes you get a resource curse
where if there's like a lot of oil in the
00:16:42
country or something uh you end up with with a
government that's not very good because people
00:16:45
just spend all their time going to war to try
and capture it and i kind of wonder if you
00:16:49
know san francisco has been the beneficiary of
being proximate to silicon valley this enormous
00:16:54
like wealth creation prosperity job creation um
ecosystem that had nothing to do with creating
00:17:01
and i would say two things to build on what you're
saying um the first is i think that when the
00:17:08
economies in an environment are really really good
all the really really smart people want to go into
00:17:14
those economies and that leaves generally
dumber people to do things like politics
00:17:19
so uh and that's less true in places that have
shittier economies uh yeah faster and and i
00:17:26
actually think that that's that's practically
true we may not want to think it and it may not
00:17:30
may sound a little harsh but it's true and
you know the the way that you reverse it is
00:17:34
what singapore does which is you make the civil
servants the highest paid people in the economy
00:17:40
right and you treat them like knowledge workers
and you say wow look i'm going to pay this person
00:17:44
250 300 000 a year you're shocked at the quality
of the person you get that's the the first comment
00:17:49
i want to make the second one though is is that
unlike all these other times where i think people
00:17:54
have been um you know sort of uh prognosticating
the doom and gloom of california the the thing
00:18:02
that's different now is that because it is such a
dominant political environment for the democrats
00:18:09
it's much easier to judge if they actually know
what they're doing and if they are going to do
00:18:15
things that are aligned with the sort of like the
moral code of the party that elected them and so
00:18:22
like let's just talk for example about the fact
that uh we are not going to have police reform
00:18:28
of any kind in california which is where
you'd think would be the first state where
00:18:34
people got their act together and said okay if
we really believe that we need to reform police
00:18:41
we can do it in our own backyards but that
legislation is going to get blocked because uh
00:18:45
californians have decided that they care
more about the alignment to police unions
00:18:50
than they do to the right of law into social
justice for minorities and blacks that's crazy
00:18:56
we should be the most progressive
is your point on this chamath and
00:19:00
the point is to say it explicitly is the
politicians are in the pocket of the unions
00:19:05
and because they're in the pocket of the police
unions and the education unions we cannot make
00:19:09
forward progress even though we're supposed to
be the most liberal of all locations correct
00:19:13
that's in summary yeah exactly the we we actually
if we believe that we have you know up and down
00:19:20
the ticket the ability to implement justice right
at least justice in the vein of the democratic
00:19:26
party and what that platform represents or for
example all of the people that were out protesting
00:19:32
okay uh during black lives matter during that
entire movement i suspect the overwhelming
00:19:37
majority are democrats slash progressives or you
know let's just say the majority or at a minimum
00:19:44
plurality okay but then the idea that then you
have a state the most populous and the richest
00:19:52
filled up and down the ticket with people who are
theoretically aligned with those political values
00:19:57
but then when push comes to shove and the
legislation hits the floor it basically
00:20:01
gets mothballed to me is inexcusable
and disgusting yeah i mean look at the
00:20:06
housing issue we just had a bill that was
an incredibly simple bill i think it was 11
00:20:13
yeah sb 11 20. i know if you followed this one
but i've been following it on the twitter and
00:20:18
it was a very simple piece of legislation any
single family home lot could have a duplex on
00:20:23
it so you could have two homes on a single lot
and they couldn't even pass that in a city where
00:20:28
you know a firefighter a teacher etc cannot
live within 90 minutes of where they work
00:20:34
and they couldn't even pass that um well also
there's there's also ab5 right i mean jason as
00:20:40
uber's third or fourth investor yeah sure
you got something to say about that right
00:20:48
i think third or fourth but uh here we go
to the vc bragg's controversy can we just
00:20:53
yeah could we just can we just pin down exactly
which one it is so you could just say you're
00:20:57
the fourth investor or something like that it's so
much better to say third or fourth and that was my
00:21:01
obviously but um you know ab5 is another one look
at all the careers in which you can be david sacks
00:21:08
a freelancer and the high the more money you
make the more you get to dictate your schedule
00:21:13
but if you are poor and if you are in an
entry-level job the california government
00:21:18
will not let you even though 70 of drivers
for these services want to be freelancers
00:21:24
and the services themselves said they will put
into a fund for healthcare like they literally
00:21:28
uber you know dar is like hey we're going to put
money into this lift is going to put money into it
00:21:32
they still will not let people decide for
themselves what shift they want it makes no sense
00:21:38
i mean and and it trickled into like journalists
too i mean there's they said now journalists
00:21:44
can write if you if you write 30 articles a year
for a single outlet you're technically considered
00:21:50
an employee even though you're writing the
articles on your own time with your own research
00:21:54
and you're getting paid for successful art for
good articles that are accepted and then there
00:21:58
was this follow-on controversy about translators
it's like well translators takes five minutes to
00:22:03
translate an article so why would 30 articles
apply to a translator and obviously when you
00:22:08
have that degree of confusion and complexity
something's off right yeah and it's such a it
00:22:12
feels like virtue signaling yeah yeah well i think
well i mean the reason why av5 happened is it was
00:22:19
at the behest of the teamsters right they're
trying to unionize the uber and lyft drivers
00:22:24
and they can't do it unless they're employees
and so you know the the author of the the bill
00:22:30
lorena gonzalez who's sort of in their back pocket
um you know that's why she put forward the bill
00:22:35
and then the absurdity of it was that you know
they realized after introducing it that it would
00:22:41
ensnare all these other occupations like the
writers and journalists and photographers and
00:22:46
translators and yeah even like people like
manicurists and so on right and so what they've
00:22:51
been doing is they've been now modifying the
legislation to exclude all of these categories and
00:22:57
in the process they're kind of laying bare what's
really happening here which is this is all about
00:23:03
either basically shutting down or forcing
uh uber and lift to comply with um with the
00:23:09
will of the teamsters and it seems like the
legislation blinked when uber and lyft said
00:23:15
well we'll just shut the service down so what
your thoughts on when that happens saks dude
00:23:18
what do you think will happen who who
will win this ab5 shutdown a showdown
00:23:22
well that whatever they yeah they threatened
to basically stop service and they got a stay
00:23:28
i think from a judge uh yes so so 85 doesn't go
into effect until november when and there's a
00:23:34
ballot initiative that they're sponsoring
to get 85 overturned so i think you know
00:23:40
i don't i don't try to predict whether it's
going to win or not but that to me is like
00:23:44
whether if ab5 were defeated by a ballot
initiative in november that'd be a really positive
00:23:49
sign for the state of california i'll say there
was um on this call with governor newsom last
00:23:54
week he did point out that ab5 was more of kind of
a law of inevitability as a result of that whole
00:24:02
dynamics uh state supreme court decision where
the uh you know the supreme court basically said
00:24:09
look here's the criteria that defines an employee
versus an independent contractor um you know they
00:24:14
get to decide what work they do or what hours or
whatever and there's like some set of criteria
00:24:18
and they said look uber drivers and all these
other kind of technically independent contractors
00:24:21
don't meet those criteria fully therefore they
are employees and as a result california assembly
00:24:28
tried to and had to effectively codify what it
means to be an employee versus an independent
00:24:32
contractor and i'm not arguing for the case i'm
just saying what was conveyed by the governor
00:24:36
last week on why this ended up coming to bear now
if they strike it down there's going to be some
00:24:41
other law that's going to pop up because this of
the state supreme the dynamics decision and that's
00:24:45
kind of you know something's going to have to get
written down so sax don't you think it ultimately
00:24:49
ends up just being some sort of negotiated point
between all of these industry leaders and you
00:24:55
know the state to kind of figure out okay what's
everyone going to compromise on to get something
00:24:59
written down that's law i mean possibly i mean
dynamex is not like constitutional it's not a
00:25:05
constitutional decision so the legislature can do
whatever it wants here you know and so if you were
00:25:11
going to respond to dynamics you don't have to
kind of enshrine it um so and i guess there there
00:25:18
was certainly some question whether dynamex would
apply to uber and lyft in in this way you know
00:25:27
they could have made they could have made
their arguments um in front of a court right
00:25:31
okay look the problem is now and whatever applies
to california applies to every state legislature
00:25:38
how are these people supposed to figure
this out i'm sorry but like you know who
00:25:43
are we entrusting here to go and then all of a
sudden understand the nuances of lift and uber
00:25:48
and really understand the job that they do versus
the translators versus the this person versus the
00:25:54
that person versus the dynamex decision again i
think 20 years ago i kind of would have believed
00:26:00
that politicians were generally some of the
smartest people um you know frankly amongst us um
00:26:07
and it really did attract a certain level of
intellectual person who cared about legislating
00:26:13
but you know now basically you just have like
you know jerry falwell juniors running around
00:26:18
i mean these these are they're all just running
around until they get caught on instagram and
00:26:23
get fired i mean they're just uh they're not the
smartest people that we're dealing with and so
00:26:28
what was what was gavin newsom's answer to
that that's really what i would you know
00:26:32
the jerry falwell junior point didn't
come up tomorrow but we can follow
00:26:39
it does seem to me that if if they do become
full-time this would be a tragedy for the people
00:26:46
who are trying to just do 10 to 20 to 30 hours of
gig work like what happens to those poor people
00:26:53
who wanted to fill in between when they dropped
their kids off of school and picked them up and
00:26:57
just grabbed a couple hours here there as a
second gig like if this actually does pass in
00:27:03
their full time honestly guys honestly you guys
are such you you're you're you're honestly look
00:27:11
it won't affect them it'll affect the
long-term profitability in the margins
00:27:14
of the companies that have to hire them as
full-time employees and they'll have to like
00:27:18
you know make a bunch of rules and blah blah
blah but it has huge operational implications
00:27:22
and it has really terrible op-ex implications
for a company but for the person that wants to
00:27:28
work 10 hours json they'll still be able to work
10 hours so i think i think the point is that on
00:27:32
a specific shift like they're gonna have to
come in at a certain shift time i think the
00:27:36
point is like the entire public markets who all
of a sudden think that a business looks one way
00:27:42
has to figure out that it's really a cost plus
business and what it really means is you if you
00:27:47
were comfortable with uh a 60 or 70 reduction
in the market cap of some of these companies
00:27:53
you'd be okay with ab5 and i think that's where
the tension is where the people that made the law
00:27:57
don't care about the market cap because they
don't own the stock anyways and the people
00:28:01
that are reacting to ab5 are the ones that own the
stock and are really thinking about the market cap
00:28:07
well but the drivers the drivers are mostly on
the stock and they're against it the driver's own
00:28:12
eight shares david i mean come on no no that's
what i'm saying is they're not shareholders
00:28:16
for the most part but this really does reduce
their flexibility to contract for their labor
00:28:23
no but i think what you're saying will
happen which is that they will create
00:28:27
a you know ab5 prime which is a modification
that's neither this nor what it was
00:28:34
uh but it seems that the tailwinds are pretty
clear which is that we're moving to a place where
00:28:40
these companies have to get built in a very
clever way and even if they are super clever
00:28:46
in capturing consumer demand the unit
economics are going to be pretty shitty
00:28:51
and i just think we have to own that and and
probably what it means more than anything else is
00:28:55
it's not a real venture kind of business and so
you may be deficit financing it or building it
00:28:59
in a very different way than we used to right
but it doesn't have to be that way what you're
00:29:03
saying is is i think that this law will have
very adverse consequences for their business
00:29:09
okay i mean i grant you that um but it's it's
what why is the the state interfering in the
00:29:16
relationship between uber and its drivers in
this way when everyone's happy with it no but
00:29:19
it's not i think what actually is happening is the
state is effectively capturing the excess return
00:29:25
of uber and lyft meaning i think if you just
take a pure unemotional economic view at this
00:29:31
it's like any other market if there's a huge
amount of margin available and there are not
00:29:35
many competitors what happens is somebody comes
in to take the excess margin so you think that's
00:29:41
the government that wants to take it and the
unions want to take it absolutely yeah absolutely
00:29:47
should we let them then dictate what hours people
work the thought exercise that i would ask guys
00:29:52
if there was in a market 90 different
competitors for transportation would ab5
00:30:00
have been written past adopted and my answer
to you would be that it would not have been
00:30:06
so uber and lifts and doordash's success is what
leads to people wanting to get cut and get a slice
00:30:12
the oligopolist model of success where not
enough other companies are pulled through
00:30:17
got it well that gives us a good segue
into by the way sorry last point on this
00:30:21
yeah and the funny thing is the people who
created the problem are the ones that hate
00:30:24
it the most which are the investors because they
pile in the incremental dollars into the winners
00:30:29
trying to king make a winner through capital and
now what's happening is their rate of returns are
00:30:34
basically getting taken away and i think that
in in in a weird way that's also kind of fair
00:30:41
well i i i would just disagree
slightly in the sense that just because
00:30:47
this has big distributional consequences like
basically who who makes the the surplus uh doesn't
00:30:54
mean it also doesn't have a huge deadweight loss
associated with it and whenever you prohibit
00:30:58
people from engaging in the type of economic
contracts relationship that they want to engage in
00:31:04
you're reducing um surplus and so i so i hear what
you're saying but and i think there is i think
00:31:11
this is all about regulatory capture right this
is the teamsters trying to capture a big piece
00:31:16
of the value of uber through their politicians
the legislature so you're right about that but
00:31:21
i also think that we should care about it not
just as uber shareholders but as consumers of
00:31:26
the product because it's going to get worse well
and also the products going to go away in certain
00:31:31
jurisdictions i mean if freeburg wants to get
an uber north of the golden gate bridge or in
00:31:37
the east bay somewhere they're just not going to
have the economics for some communities yeah to
00:31:43
even operate the service so just like ubereats and
postmates stopped delivering to treasure island
00:31:48
a lot of the drivers were in their local
communities at home with uber turned on
00:31:53
and when they or doordash and when they
got a call they would leave their house
00:31:56
and that was part of the magic of it is you
could just be sitting there you know netflixing
00:32:00
or hanging out with your kids and then a good call
comes in and then you leave your house that's why
00:32:03
you would have that like one minute pause if you
ever saw it you know in an uber ride where it's
00:32:07
like why isn't the car moving it's because that
person's at home and they were capturing the one
00:32:11
ride every hour in their local you know suburban
area but if you force them to be hourly uber's
00:32:18
gonna say you know what it's not worth having an
eight-hour shift in you know whatever suburb and
00:32:23
and the service will go away and then guess who's
gonna not have service and transportation i think
00:32:29
sorry i was saying it was like sax's point like
you know from a consumer perspective or chamat's
00:32:33
point if you end up with 90 of these service
providers and um i'm a consumer i'm less likely
00:32:40
to order a cab or order a ride share service
or i'm less likely to order food for delivery
00:32:45
i don't want to deal with 50 [ __ ] apps i don't
want to have to like go find the one app that has
00:32:49
the contract with the one restaurant then the
natural market dynamics the the way that the
00:32:54
market naturally evolves is i want simplicity as
a consumer i want efficiency that's what makes me
00:33:00
want to use it more and when you take that away
because you're interfering from a regulatory
00:33:04
perspective and how that market operates the
product sucks for me and yeah the shareholders
00:33:09
ultimately suffer i i think to your point the
way that that would probably get solved is you
00:33:13
have people that are higher order in the consumer
behavior that own these relationships that enforce
00:33:19
basically uh a user experience for example
facebook and google and apple essentially say
00:33:27
we're abstracting all these services because
there's 90 of you google says i'm going to put
00:33:32
all of you guys on the map view um you know yelp
says the same thing and essentially what opens
00:33:37
what happens is there's some like open way where
essentially a service provider can turn themselves
00:33:43
on and broadcast into a network that says i'm
available to do a for b and it all gets fixed now
00:33:51
that's a future state which was the original
idea of uber by the way was to make a marketplace
00:33:56
like that and now uber is talking about doing a
franchise exactly what you're saying chamath is
00:34:00
let some franchisee take the east bay and
then provide their inventory network i think
00:34:05
franchising is a really really smart business idea
and i think that particularly in transportation
00:34:11
um and a lot of these services that have this
natural dynamic to be local um where there are
00:34:18
an infinite sum of many local markets i think it's
it's like a burger king it's like a mcdonald's and
00:34:25
the the company that moves to a franchising model
and then figures it out i think will be a huge
00:34:30
winner um and that will be in that will be a very
asset light really operationally uh sophisticated
00:34:38
very well run highly profitable business i think
let's talk about the public markets um wait jason
00:34:45
can we just talk about the police brutality thing
in california i just want to get your choices
00:34:49
it really it really bothers me that california
like i bet you there's going to be states that
00:34:55
are um diverse in its democratic and republican
composition and some republican states uh that
00:35:03
passed comprehensive police reform and
california will be one of the laggards
00:35:09
what do you think if you could wave a magic wand
chamoth what are the one two and three things
00:35:13
take a minute to think it through and everybody in
the call can what are the one two and three things
00:35:18
you would do to change policing in the united
states i have my own list but i'm curious what
00:35:23
you guys think and i actually put a tweetstorm
out about my number one thing um what are the
00:35:29
specific tactical things let's get tactical
first uh i mean the first one that i've always
00:35:33
been a big fan of as i've studied it at least
from 10 000 feet is ending qualified immunity
00:35:38
explain why and what that is you know qualified
immunity is essentially that they're there there
00:35:43
is this immunity that uh certain individuals
have and that they uh that they're not subject
00:35:48
to prosecution and so um you know they essentially
have a carp launch to behave in ways that can be
00:35:55
good in some cases very very bad in other cases
gray in other cases yet there's no adjudication
00:36:01
of their behavior and so you have to allow people
with solid dispassionate detached judgment to be
00:36:08
able to enter and say hey listen you are way out
of line here and there are consequences for it
00:36:13
and people coming in doing those jobs need to
understand those consequences versus you have a
00:36:20
carte blanche to basically do whatever you want
and i think let's talk specifically about the
00:36:24
mer well the shooting involving i won't say murder
right now um because i think all the facts are not
00:36:29
in but jacob blake was shot in the back um he was
obviously not listening to the police the police
00:36:36
then followed him to his car there's a discussion
of if there was a knife on the floorboard
00:36:41
and point blank they shot him in the back
multiple times and i've heard both sides of
00:36:46
this you know this person is not listening to
the police this person is going into the car
00:36:50
they're reaching potentially for a weapon and the
cops had no choice it seemed to me that you know
00:36:56
the training of a police officer might
actually be that that was a legitimate tuning
00:37:00
um but that means maybe they have to rethink
policing because you could have easily taken
00:37:06
that person down with it even the most modest
of a chokehold or a tackle and when we see
00:37:10
that it feels like that's the raw shock test
right there of like how you look at shootings
00:37:14
um in police when you saw that shooting i take
it chamoth of j blake and i i saw it and i i just
00:37:21
like i i i can't see these anymore they they send
me off the rails for days uh but yeah i did see it
00:37:28
yeah and so i mean when you look at something like
that that's clearly training has to change because
00:37:33
i i believe that based on police training and
qualified immunity this is going to be considered
00:37:40
even though it's shocking to see it
i think it's going to be considered
00:37:44
um you know an allowed shooting or yeah and
there's not going to the person person's not gonna
00:37:49
be prosecuted because the person was clearly not
listening and there was a knife on the floor and
00:37:52
he was going for it and you know it seems to me
like we really need to change the actual training
00:37:57
the average is six months of training so i think
that's one of the top things that has to change is
00:38:01
these these police officers have to be trained
not to fire first but to to use other tactics
00:38:08
so so for me the first one is that the second one
for me which i'm a really big fan of is that there
00:38:14
needs to be a new way to actually intercept 9-1-1
calls and instead of um deploying police officers
00:38:22
we have a separate branch of people that we you
know massively pay and train that are effectively
00:38:28
you know social workers plus plus and negotiators
yeah and and they should be deployed in all kinds
00:38:33
of situations um where i think that what
what people want is a de-escalation and i
00:38:41
think that sometimes the words de-escalation
and police don't really sync up and in most a
00:38:47
lot of people's minds they think of escalation so
people who are trained to de-escalate i think uh
00:38:54
and so for example like you know all of the mental
health checks all of the mental health issues
00:39:00
could probably be domestic like this domestic
disturbances would probably go into that category
00:39:05
the the third one is i would very much rationalize
uh drug use um just because i think the amount
00:39:12
of low level offenses and arrests around drug use
is antiquated for people's general views on drugs
00:39:19
and i think that it needs to sort of
correlate to how society views it and then
00:39:23
um you know the the last two that i would give
you is that there's a concept of no knock warrants
00:39:28
that's how brianna taylor was killed insane it's
kind of really scary the idea that we could all
00:39:34
be sitting in our houses right now as we are
and literally the police can just charge in
00:39:40
i mean totally unnecessarily i mean she was being
for some like low-level drug idea they're going to
00:39:45
knock the doors in and of course the person's
going to try to protect themselves that's
00:39:50
their house sacks they knocked the doors in and
they were plain clothes wearing police officers
00:39:57
so people are coming and they did it at like
midnight when she was asleep so yeah people
00:40:02
busting into her house at midnight screaming
making noise and not dressed as cops that's
00:40:08
that's crazy yeah and then the last one i
would give you is militarization of police
00:40:13
um a lot of these ideas by the way are justin
amash's ideas i i've retweeted and i followed
00:40:18
but he was the one that put me onto these
things um but you know like you have all this
00:40:22
excess military equipment in the army that gets
basically passed through and now directly sold
00:40:26
into police departments especially post 911 we
we basically militarized that so those are facts
00:40:31
what are what are your ideas around policing
and how we should change it you've heard shamans
00:40:35
i i don't have more detailed ideas than than
chamoth i think he's given some good ones um
00:40:40
for sure i mean i think we definitely need better
training and i think better oversight over the use
00:40:46
of force um the the body cam idea jason you you
tweet about i think that's pretty interesting too
00:40:52
um i think you're right explain that for a
minute the body cam idea i had was i asked
00:40:57
does anybody know and you know does black live
matter or another organization track which police
00:41:02
departments because we could get a list of every
police department that exists in some database
00:41:06
somewhere do we actually know what percentage
actually have body cams and what model they use
00:41:10
and what percentage are working because one of the
things that i think has happened this year is you
00:41:16
know the live streaming and the live video and the
number of smartphones out there has resulted in
00:41:22
us being able to see what black and brown
people have been telling us for decades which is
00:41:27
they're murdered by cops and now we get to see
it and you know when you see george floyd get
00:41:32
murdered it's fairly obvious that's what happened
we don't have a video they have the video of
00:41:36
rhianna taylor getting murdered so that's from a
cop webcam i'm sorry body cam so i was thinking
00:41:41
we should just start with that as a basic which
is every single cop car should have a 360 camera
00:41:46
in every cop it should be a federal mandate and
i don't exactly know how federal mandates were
00:41:50
at sacks but don't you think there should be a
federal mandate for just cameras and car cameras
00:41:56
i think i think it's a good idea i think the
use of cameras is a good idea um i mean maybe
00:42:00
not recording the police officers when they're
sitting in their car but every time there's like a
00:42:05
clue you know like yeah they pull somebody
over sort of you know like fourth amendment
00:42:10
type search and caesar seizure type situation
yeah i think it would make sense to have that
00:42:14
on video why not yeah i mean you've got to think
every police will behave better go ahead freeburg
00:42:20
um there was a case the other day uh a young
um guy i think he was 19 years old was shot in
00:42:26
dc named dion k i don't know if any of you guys
watch the body cam footage um and so he was a 19
00:42:33
year old black man he was shot he died um but in
the body cam footage you can see that he pulls out
00:42:38
this gun and throws it and when he pulls out the
gun and flings his hand around he's got the gun
00:42:42
in his hand that's when the cop shot him and so
there was about a hundred protesters that showed
00:42:46
up but it's largely become a non-story as a result
of the facts associated with the body cam footage
00:42:52
but i just want to propose something
else that's a little bit more radical
00:42:56
maybe my libertarian ideals kind of cross with my
socialist ideals and forming this this concept but
00:43:02
perhaps um you're a socialist no yeah i don't
know i've never been accused of that but um if we
00:43:09
uh if we trace back you know the uh these systems
are really chaotic everything you're talking about
00:43:15
is layers and layers of bureaucracy and ideas
and [ __ ] we should do to manage the problem
00:43:19
but there is kind of one common you know butterfly
effect butterflies at the source of all of a lot
00:43:25
of what we're talking about which is guns if
there weren't any guns in the united states
00:43:30
i would not feel threatened as a police officer
i would never have any reason to feel threatened
00:43:34
and i would never have any reason to pull a
gun the reason i always make to pull a gun
00:43:38
as a police officer is my life is threatened
and in the absence of firearms i have no right
00:43:44
to pull a gun and that's the case in like the
uk for example where there are like no police
00:43:48
officer shootings of civilians because they're
never under threat of being killed by a gun
00:43:54
so there's a simple answer which is get rid of
the guns but you know a little too controversial
00:43:58
and um obviously many layers to that argument um
especially from kind of both sides but i would
00:44:06
say um you know much much of what's going to go on
now and in the future it's just chaos theory it's
00:44:12
going to be building more layers of complexity
it's more entropy it's more kind of associated
00:44:16
complexity to try and resolve the underlying
problem of all of this which is that we've got
00:44:20
guns on the streets we've got guns in people's
hands and therefore you know there's always this
00:44:25
threat against every individual that their life
might be taken by another well let me make a
00:44:30
prediction right now there's not going to be any
new gun control legislation for a generation um
00:44:35
because of the the looting and writing that's
going on uh gun sales are an all-time high i
00:44:41
mean every single gun store that ammunition gets
sold out you can't you can't get guns you can't
00:44:45
get ammo and there are more first-time gun buyers
in the united states the last several months than
00:44:50
there's ever been um i mean the the ranks of the
nra must just be swelling right now um and so so
00:44:56
this idea that you're going to get gun reform i
don't think it's going to happen people aren't
00:45:01
going to support it and you know i think you know
use the word i think idealistic i mean i i think
00:45:08
it's like a little bit naive um to assume that
you're going to be able to get rid of all the guns
00:45:14
in the hands of bad actors there are a lot of
people in this country who feel the need to
00:45:18
have a gun to protect themselves um and you know
the cops can't always get there quickly enough um
00:45:25
and a lot of people feel the need to to have that
for self-defense i also think the minimum amount
00:45:30
of training for a police officer should not be
six months i think they have to re i mean if we
00:45:34
really want to have the society move forward and
you know to solve our issue of race which is you
00:45:41
know like the original sydney of america we're
gonna really need to start thinking about making
00:45:47
you know police go back to school for 18 months
12 months and rethink how we how we address
00:45:51
this situation because it's just tragically
unfair that one group of people's children
00:45:57
has to worry when they're driving in a car and
you know other people on this call don't have
00:46:01
to worry right and you know uh that is just
crazy let's um take a hard uh shift to the
00:46:09
economy and then we'll go into um the election
what do you think trump you've been talking a
00:46:14
little bit about the economy and the stock market
ripping again and we seem to have hit a pause uh
00:46:20
but we did have like a massive rip with tesla and
amazon tesla and apple i guess doing a stock split
00:46:26
and we hit all-time records why are
we hitting all-time records jimoth
00:46:30
we have the most important thing that's happened
i think in economics in the last 10 years
00:46:36
um the federal reserve jerome powell gave this
landmark speech and he basically said we are
00:46:41
going to keep rates at zero for the next half
decade uh basically and five years at zero yeah
00:46:48
i mean quite honestly it could be a decade
but they're gonna let inflation run before
00:46:54
they basically match it with rates there's no path
to any near-term inflation of any kind whatsoever
00:47:01
um and so jason my honest perspective is you
know you're basically going to get paid to be
00:47:09
long equities because uh your risk-free rate is
zero and will soon be negative and what are you
00:47:16
supposed to do if you're an asset manager what
are you supposed to do with you know your take
00:47:21
california back to using california let's just say
your calpers you're the california pension system
00:47:26
and you have hundreds of billions of dollars then
you need to generate five or six percent a year
00:47:33
to make sure that your pension isn't insolvent
and the government is paying you zero
00:47:39
okay so that eliminates that option no
treasuries for you you're long equities
00:47:44
um and when everybody is in that situation
you're overwhelmingly long equities
00:47:49
and you know the you cannot
fight the fed and so you cannot
00:47:54
wait them out it's not like you can say oh
don't worry they're going to change their mind
00:47:57
uh they will change their mind but in reaction to
market conditions that are out of your control so
00:48:02
uh all of these opportunities in my opinion
are generally buying opportunities and uh
00:48:08
i'm generally bullish i'm more bullish now than
i was before so you can't put your money into
00:48:14
treasuries you can't put it into a savings account
obviously you can't put it you you it doesn't seem
00:48:18
like real estate or commercial real estate is
a great bat right now uh so your options are
00:48:25
private companies or public companies correct jama
um i think it really is just public companies and
00:48:31
i don't even think it's private companies
so meaning wherever capital is constrained
00:48:37
the returns um again these excess returns are
getting eaten up um and so the the most unimpeded
00:48:44
market for gains right now is the public
markets i mean like no offense but i think
00:48:48
that if you're a very good stock picker in the
public markets you're generating better returns
00:48:52
then uh sequoia benchmark name your best venture
fund you know i see all these people spouting
00:48:57
off uh on twitter about how good they are
in the early stage markets it's all kind of
00:49:02
small dollars and not that meaningful
you know i'm on the call right
00:49:09
i'm on the call i mean you're literally talking
to the guys spouting off about hitting home runs
00:49:14
saks what are your thoughts on this like private
markets obviously is the op where we operate both
00:49:19
david's free berg and sachs um and you're seeing
great deals i think i i've invested in twice as
00:49:25
many companies during the pandemic as i did before
in the same six-month period what are you seeing
00:49:28
in the private markets and what do you think what
is your take on best cc's public markets exactly
00:49:33
you know we saw some of the best deals that we've
seen uh during covid and um you know i'm i'm very
00:49:40
bullish about the state of entrepreneurship in
the u.s i mean just the the number of interesting
00:49:45
companies doing interesting things and the the
infrastructure that makes it so easy for founders
00:49:51
to get started and create new companies it's so
much easier now to create a to create a company
00:49:56
that it was 10 years or 20 years ago and of course
it's easy to point all the ones that don't work or
00:50:01
that don't seem like good ideas but uh but there's
so many more experiments that are happening and i
00:50:06
think it's gonna i'm you know i'm very bullish
about that part of the the american economy
00:50:11
and freeberg what are your thoughts on private
markets and obviously you're building private
00:50:15
companies you have unlimited capital to build
them i take it given your track record i spend
00:50:21
most of my time accepting rejections from
my very close investor friends in my various
00:50:26
projects so i wouldn't say that that ever
becomes true i'll tell you the truth uh um
00:50:31
still selling every day dialing for dollars but um
no there are certainly more investors more capital
00:50:38
more risk risk-taking um more kind of valuation
extending than i think as um it was the case
00:50:44
uh pre-covered i think jamaat's point is right
though uh there is uh so so much more liquidity
00:50:52
available through access to retail and
international market um participants um in in a
00:50:58
public setting than there is in a private setting
and it is because of this liquidity premium and
00:51:02
the easy access to putting capital in um it's
just extraordinary how much as i've watched
00:51:08
close friends and companies and companies i've
invested in i'm sure you guys have done the same
00:51:12
transition from private to public uh
the valuation jump is extraordinary
00:51:16
like on on a metrics basis right so whatever
the metric might be you get public there is this
00:51:22
flurry of of market participation as a result
it drives up there's a multiplication you're be
00:51:28
sorry can i just say something that's such a
such an important smart thing that friedberg
00:51:32
said so jason for example like all of us we're all
still in the private markets and i'm not trying to
00:51:38
take away from the private markets but what david
said is so important if you used to look at a sas
00:51:42
deal you'd price that sas deal 10 times ar right
then there's a little bit of inflation you know uh
00:51:49
the rates go up um the prices that people pay
go up now all of a sudden we're paying 12 times
00:51:54
15 times now it's 20 times if you're growing a
hundred percent rate every year so what's happened
00:51:58
the market has become more efficient and the
excess return is getting eaten up and so you're
00:52:03
like okay well that's still really good and you
wait four five six years and you think you're
00:52:07
going to get paid the crazy thing is like once
that company transitions to the public markets
00:52:13
i mean all of a sudden if you actually turn the
investor base over and you actually create a float
00:52:18
so that public market guys can buy it they'll pay
30 times that's right 35 times 40 times so there's
00:52:25
a massive multiple expansion so companies should
be going public sooner if you think about this
00:52:30
like if i'm trying to raise money for one of
my companies i'm going to call on my 10 20 30
00:52:35
friends that i know that are investors in private
markets and say hey guys do you want to look at
00:52:39
this company and maybe i'll get two or three
interested parties and maybe we'll kind of agree
00:52:43
on what a fair valuation would be if i could take
that same company and instantly make it available
00:52:48
to a million investors and all i need to do by the
way is raise 10 million dollars all i need is some
00:52:53
small number of them to write a couple hundred
dollar check and i'm able to fill that that round
00:52:58
out the valuation as a result of the liquidity
available in that market is so much higher
00:53:03
because there everyone's gonna there's
gonna be much more participation in bidding
00:53:06
and so you know what i think chamath has tapped
into with the spat vehicle and um what robinhood
00:53:12
is realizing and and i don't think that we all
talk about this enough but there's this massive
00:53:17
massive massive market of international investors
of small of international retail investors who are
00:53:23
now rushing into u.s equities freeburg didn't
we see that in the ico craze as well where
00:53:29
you you i think if we took anything from the ico
craze it was and the global appetite for risk
00:53:34
and the dot-com boom before that and i think
we have to give best ec a lot of credit here
00:53:38
for leading the spak movement i mean what's your
take on everybody copying you down this backpack
00:53:43
champ at this point i had desktop metal as
an early angel investment that just spacked
00:53:47
um i co-led the place thank you yeah and they told
me that thank you for the markup um and i've been
00:53:53
hearing like i'm get if i'm getting inbound as an
angel investor from i literally got a cold email
00:53:59
from some high profile people they're like hey can
you do you have anything for us to spack i mean
00:54:03
this is like the third or fourth time people are
coming down to my [ __ ] level of angel investing
00:54:07
saying can you introduce us to the com guys
can you choose something to rob in it i'm like
00:54:10
i think you can go direct to them but what is your
take on how many spacks have been created since
00:54:16
you like literally single-handedly restarted
the smack movement i think because i don't
00:54:21
think you've ever got a record about this uh i'm
really proud of what we did when we created this
00:54:26
thing two years ago i said i want to basically
create a new way of doing ipos i called it ipo
00:54:31
2.0 i reserved ipo a through z on the nyse i i
hope um uh to fulfill that um and i think i will
00:54:40
um but taking a step back for a second in the year
2000 there were 8 000 public companies in america
00:54:47
on the american stock exchanges and in the year
2020 there are 4 000. so we've shrunk in half the
00:54:56
number of public companies while at the same
time we've you know 10x the amount of comp uh
00:55:01
the amount of capital and the number of people
so we don't have a large enough surface area
00:55:07
in the public markets that's why companies
are better off going public because they're
00:55:11
going to have a much more receptive audience of
people that are dying to own growth of any kind
00:55:17
what's the earliest and the media and that people
should go public well so here's the thing so like
00:55:22
if you're like one of 30 companies in a venture
portfolio that's growing at 50 plus percent
00:55:29
you're one of 30. but when you go public you're
one of one you know when you're growing 50 60
00:55:35
percent you you become very unique all of a sudden
you're a sort of a one percent kind of a company
00:55:40
you're an outlier and so you get treated you
know incredibly well so that's the backdrop
00:55:47
i think a company should be going public around
year five year six um what revenue footprint uh
00:55:53
about 50 million you know at 50 million and when
they're doubling i think that they should be going
00:55:57
up and you know it allows them to build capital
slowly it allows them to basically contain control
00:56:03
it minimizes dilution um i think it's a really
powerful model and then on on the number of
00:56:08
spacks what i would say is i think it's really
good that the market is getting diversified i
00:56:13
think what's going to happen is like the the thing
with smacks is it's going to be no different than
00:56:18
in some ways the banks that preceded us which
is that there's going to be a distribution you
00:56:23
can go to goldman sachs and that'll mean some
one thing you can go to merrill lynch or b of a
00:56:29
or ubs or jeffries it'll mean other things you
can go to allen and company it'll mean yet another
00:56:34
different set of things and i'm sure there's
going to be a you know an organization that
00:56:40
is all about cost some is going to be all about
relationships um so i just think that's going to
00:56:46
be the distribution my personal perspective it's
probably us and maybe one or two other people who
00:56:51
really dominate the space and i'll tell you
the only reason why i say that i think it's
00:56:56
going to be really important when these people
try to get these facts done what they're going
00:57:00
to realize is it's really hard and it's hard for
a couple reasons number one is you have to marry
00:57:05
operational insight and public market
sophistication and the founder will
00:57:11
get really smart about being able to figure out
whether this person is just a financial arbitrager
00:57:16
or if the person has enough operational experience
to deeply understand the business why you have to
00:57:21
translate it to the public markets well that's
one huge thing that i think that people will
00:57:27
um will start to will start to hone in on
um anyways there's a bunch of other things
00:57:32
but um are you now competing with what i want to
sacrifice agree with the 50 million yeah yeah sure
00:57:39
um i'm i'm cool with that you know i invest
well before that so i'd be i'd be happy for you
00:57:44
probably have a bigger portfolio 50 million dollar
investment yeah it is it's great for for for me
00:57:49
and jason and i you know i i think jamal deserves
a ton of credit on this soul spac thing it is i
00:57:54
don't know if all the listeners um are aware of
this but this back thing's become a huge wave
00:57:59
um there's a ton of people creating them kevin
hart says a new one reed hoffman has a new one
00:58:04
they're you know the east coast hedge fund guys
pincus and um and then the east coast hedge funds
00:58:09
like bill ackman whatever they're all creating
them so tremoth has really started a wave here
00:58:13
and i think the appeal of a spac to a founder
i'll put in a plug of why i think it's a good
00:58:18
idea for a founder to consider this is because
you essentially what what founders are used to
00:58:24
is doing you know private rounds right you agree
on a on an amount raise an evaluation and it's a
00:58:30
percent dilution and you're done that's it
and it's simple right and and when you ipo
00:58:36
and need to raise money it's not like that you
have to then work with an investment bank they'll
00:58:40
put together a book you do like a road show you
do this whole dog and pony thing you don't know
00:58:45
how much money you're gonna get at the end of
that process or what the valuation is gonna be
00:58:48
and then on top of that we know statistically
bill gurley's published all the stats
00:58:53
the investor banks are going to rip you off so you
know so that what a spac does is it prices like a
00:58:59
late stage private round you just agree with the
spec promoter on a valuation and an amount raised
00:59:06
and then on top of it you get kind of a direct
listing along with it all of a sudden you start
00:59:10
trading as a public company and so a spac is like
a combination direct listing plus private round
00:59:17
and i think that's going to be appealing to a
lot of founders as they start to discover this
00:59:21
more and more sax in a way you're saying it's
going to feel more like doing a series d than
00:59:25
it does at roadshow and yeah i think that comfort
level for somebody like robin hood or com or data
00:59:32
stacks or thumbtack or any of these companies that
you and i are every company in your portfolio i'm
00:59:37
just saying listen i got two ipos and i've got two
ipos in two years this is i think this is going to
00:59:43
be the new thing for an early stage investors is
we're not going to count unicorns anymore we're
00:59:47
going to count specs we're going to count public
listings right and and i think that's the other
00:59:51
thing by the way the other the other thing that
i'll say to founders is one is i think you need to
00:59:57
you need to think about do these people have the
combination of operational and financial acumen in
01:00:04
the public markets um and investing experience in
the public markets and the operational credibility
01:00:12
to describe the business and i think you can trade
off one for the other if one is so deep meaning if
01:00:17
warren buffett was doing us back you'd say well he
has no operational experience but he's so credible
01:00:22
in the public markets then you know that's all
that matters but you need to be super super deep
01:00:28
in one or have a really brilliant and thoughtful
level of credibility in the publics meaning an
01:00:33
early stage investor who isn't married to somebody
who can basically say i know how hedge funds work
01:00:38
i've made them money and i'm gonna make them more
money and mutual funds etc is troublesome the
01:00:43
second thing is for founders you have to really
make sure you understand what is in it for the
01:00:49
person that's doing this back i mean in every deal
i write a minimum of a hundred million dollars
01:00:54
personally and that's a lot and so i skipped in
the game i feel very much at risk and so i take
01:01:00
a lot of time to make sure these things go well
and then the third is that for the spa person
01:01:06
what i'll tell them is they're gonna find that
there's a bunch of landmines um and i'm not gonna
01:01:12
you know say it up front because i think it'll be
fun for them to find out themselves along the way
01:01:18
but these things are hard the first one took
me two and a half years uh they're hard yeah
01:01:22
they're hard they're hard hey let's uh swing to
the election now um and uh talk a little bit about
01:01:29
the flip-flopping we're all doing because we've
gone from trump's a lock to trump's not a lock
01:01:34
uh you know and we've had many different theories
but here we are uh are we 60 days out now how many
01:01:40
days till the election is it exactly 60 and then
the first debate is september 29th yeah yeah so
01:01:45
we're we're at the 55 of 56 days mark the taping
of this and the first debate i think is september
01:01:51
30th so we're we're about three weeks away from
joe biden and trump going at it what's everybody's
01:01:58
handicapping now the mark the markets seem to be
saying even money or a slight edge to joe biden uh
01:02:05
what what are our thoughts i uh i think that uh
i think biden's looked the crispest he's looked
01:02:14
okay and so um is that actually encouraging or not
encouraging i think it really is because i think
01:02:20
he's a really good like i said he doesn't have
to uh be better than donald trump he just has to
01:02:26
not be donald trump for a lot of people and so you
know he becomes a very good do no harm alternative
01:02:33
because you know to support donald trump you
have to have a view to support joe biden you can
01:02:39
have no view um and i think that that in general
that's a that's a demand maximizing thing to do so
01:02:47
i think he's relatively well positioned it's the
crispest i've ever seen him on television there's
01:02:52
less stuttering there's less not stuttering but
like less like mental gaps yeah you know the
01:02:59
what do you think of the vp choice kamala i think
safe so i i agree with tremoth that that was kind
01:03:05
of the the take or theory on biden like a
month or two ago is that he could just run
01:03:10
as a protest vote against trump um and um and
and that's why the basement strategy appeared
01:03:16
to make sense is that he would say nothing do
nothing go nowhere and just and just try to run
01:03:22
as a protest vote against trump and i think that
was working a couple of months ago when you know
01:03:28
a covet seemed a lot worse uh b the economy seemed
a lot worse we're now down to about eight percent
01:03:34
unemployment we were at 13 or 14 um and uh c
you know trump had seemed to kind of mishandle
01:03:43
the the reaction to to floyd he seemed
to be inciting it but now we have this
01:03:48
this issue of the the looting and violence and
predominantly democrat-run cities and i think you
01:03:53
know trump has sort of found his sales pitch now
um in opposing um the basically the the radical
01:04:01
left um and these these mobs and and protests that
seem to be uh you know causing uh tremendous uh
01:04:09
unrest and uh looting and violence in our
cities and i think it's i think it's a in
01:04:15
combination with the improving conditions of the
economy and covet i think it's a winning pitch
01:04:20
for him unless biden finds a more compelling
way of responding which he has not to date
01:04:26
um i think you know somebody like bill clinton
would know exactly how to respond i think he would
01:04:31
you know just better instincts yeah well i think
you know he would pull a sister soldier to use a
01:04:36
term from the the you know political dictionary
where you know maybe he would take this crazy
01:04:40
new book in defense of looting and figure out you
know and give a speech denouncing that i mean he
01:04:45
would find somebody to his left who represents you
know a fringe of the the left that he presumably
01:04:51
doesn't support and find a way to distance
themselves or denounce them like yeah maybe
01:04:57
like antifa like you know the the anyone you
know any of the leftovers in portland looting
01:05:02
in portland i think there's a lot of targets
nobody wants nobody wants to support that and
01:05:06
so biden comes out and says hey we don't support
that and it gives him that law and order vote
01:05:11
but and he hasn't done he hasn't really done
that i mean so two of my favorite political
01:05:14
pundits right now are andrew sullivan and matt
uh taibi who are you know very uh they're strong
01:05:22
supporters of biden they're very anti-trump
but they think he's failing on sort of this
01:05:27
these issues uh because he's not he's not figuring
out the right way to uh to denounce what's
01:05:33
happening i think a lot of this has to do with
when kids go back to school and the death rate
01:05:38
uh of kovid and as i was tweeting and i got i got
a lot of people angry at me um about tweeting this
01:05:46
but i said i think this is a setup for trump to
go into the first debate with you know well under
01:05:51
you know six seven hundred deaths a day
and then the next debate in october with
01:05:55
you know call it three or four hundred that's a
day and basically declare that he did solve kovid
01:06:00
because we've been trending down for five
weeks now and he started wearing a mask
01:06:05
six weeks ago seven weeks ago july 11 was the
first day he wore a mask a cynic would say
01:06:09
he almost timed mask wearing which is
obviously what we talked about in the first
01:06:14
episode or two of all in podcasts was our
discussion about why is wearing a mess so
01:06:18
difficult for him and it seems like he slowplayed
it he's you know he set his he slow played he hit
01:06:25
a set on the turn and here he is like he wore the
mask on july 11 he wore it four months late but
01:06:30
guess what as chamath was saying everybody wears
a mask and every and these things go down in italy
01:06:36
we're going to come into the first debate what if
it's 400 deaths a day and then the second debate
01:06:40
it's 200 that's the day and then our kids are
back in school in october which seems to be the
01:06:45
case right all the schools are saying you know be
ready for october to open and what if he actually
01:06:49
does have a vaccine that has so much credibility
or any of these high-speed testing machines come
01:06:54
on i mean this could be a setup of all setups
for him to just you know drop the microphone
01:06:59
hey look the economy has had an all-time
high and kova debts are at an all-time low
01:07:04
well i mean yeah i think democrats are on fire
that to me seems like the the trajectory i mean
01:07:09
um we spent a long time on this pod talking about
what a disaster uh san francisco and california
01:07:16
are those are one-party states and cities and i
think you know we're not just electing a person
01:07:21
as president we're also electing a party and a
movement and a governing philosophy and however
01:07:27
much uh trump is um you know disliked by a lot
of people i think a lot of people are looking at
01:07:33
you know i i think they they may like joe biden
personally and and think that he personally is
01:07:38
safe but they don't like the movement and the
party and the governing philosophy that is now
01:07:43
associated with biden so if you had to put your
entire net worth on it chamath biden or trump
01:07:51
uh biden i think sacks entire net worth i
i i would uh i predict trump at this moment
01:07:59
wait you predict but you but you wouldn't put your
entire net worth on if you had to i could see your
01:08:04
hesitation you want trump trump to win oh sure
but you would you wouldn't put you wouldn't put
01:08:08
your entire net worth on him but yeah of course
not you would put it this is this is about a 55
01:08:14
sort of thing so biden has a 55 chance of
winning so even though you're voting for trump
01:08:19
you are not going you would not put your fortune
on fighting you you asked me who i predict right
01:08:25
now i'm predicting trump you'll remember on the
last part i predicted biden so it moves depending
01:08:30
on what i see yeah i mean yeah and i'm going to
go with yeah but it just knows jason i think i
01:08:35
think a better way to get a better answer is not
to force somebody to put their entire net worth
01:08:39
on the line it's just okay who do you think is
going to win who do you think is going to win sex
01:08:45
how many times have to answer this question
you think trump's going to win you actually
01:08:49
yes yes i do actually really that's fascinating
and it's free remember that i remember it's the
01:08:55
first time i've seen it i think it's i think it's
the same as it was last time for me and has been
01:09:00
most of this process it's a coin
flip and it still is a coin flip
01:09:05
and uh there's a lot of noise between here and 60
days from here all right well then if we if we do
01:09:10
think it's a coin flip freeberg what happens if
trump is elected again some people think this is
01:09:15
all institutions are broken forever america
is broken forever hyperbolic that that's the
01:09:20
perception on both sides right so the perception
and the motivation on both sides is democracy is
01:09:25
crumbling and the resultant action is to elect the
the person you think will restore democracy the
01:09:32
reality is both candidates to some degree might
move us a little bit further away from democracy
01:09:37
and um some might argue that trump makes us feel
a little bit more like an autocratic dictatorial
01:09:43
regime and some might say that biden makes us
feel a little bit more like an aoc socialist
01:09:48
regime it's not all the way as if we had bernie in
the seat but um you know the the reaction uh isn't
01:09:54
necessarily let's go back to the middle let's
become a centrist government let's uh let's have
01:09:58
good political debate and a good by the way the
one show i've been watching a lot of lately just
01:10:02
to nostalgia to chamoth's tweet earlier today make
me feel better about life is west wing where you
01:10:08
know jed bartlett is the president and he wants
a great national debate we all want to have this
01:10:13
intellectual exercise of coming to the truth
and coming to the best decision for the nation
01:10:17
and i don't think anyone feels like that's the
case today nor will that be the case tomorrow
01:10:22
with either of these guys in the seat and i
think the the point then becomes well who's gonna
01:10:26
better align with my values and you know um it is
really a crumbling democracy kind of motivation i
01:10:32
would guess if you were to survey people as
to how they're making their choice if trump
01:10:36
is elected freeberg do you feel it is an acute you
know existential crisis for america as a democracy
01:10:42
you personally i don't i don't think democracies
end um with a bang i think they end with a whimper
01:10:48
and i think that's been the case historically
and you know no democracy has uh has lasted
01:10:55
our our democracy in the u.s has has lasted longer
uh than many um but democracies i'll just tell you
01:11:03
my point of view on this democracies ultimately
enable uh freedom of operation and free markets
01:11:08
that um that result in greater progress than any
other governing system the problem with progress
01:11:14
is that progress is asymmetric you have some
people who progress at a much greater rate um than
01:11:20
than most and and it is that delta that
motivates the end of that system ultimately
01:11:26
while everyone in the united states or the average
and even the bottom quartile of the population in
01:11:31
the us is better off than they were 50 years ago
in terms of income and health care and shelter and
01:11:35
access to food and access to all these things
they're the top one percent of the us is further
01:11:40
ahead than the median and it is that delta
that motivates the end of democracy and it
01:11:44
is that is which is then perceived to be unfair
about this governing system and that ultimately
01:11:48
results in fascism or socialism and then fascism
results socialism ultimately restricts anyone
01:11:54
from progression and that's why fascism and
socialism ultimately end up in in some sort of
01:11:59
you know democratic outcome and it
is a cycle and you know we're kind of
01:12:03
in this you know awkward phase of trying to
figure out what the hell we're going to be next
01:12:07
and i don't think that awkward phase is realized
in the next presidential term but it is going to
01:12:11
be realized in our lifetime i think that that's
a really good point i completely agree with that
01:12:18
go biden go please win uh okay wrapping up here uh
media selections uh of your bestie summer bestie
01:12:25
book bestie tv show bestie binge what do you got
you got a bestie book recommendation saks you got
01:12:31
a bestie uh yeah my my recommendations will be
a little different you know i've been i've been
01:12:36
subscribing to a lot of newsletters on sub stack
yeah and i found that to be pretty interesting and
01:12:42
like i mentioned two of my favorite writers
especially around um you know politics and
01:12:46
election time andrew sullivan and matt taibi so
check it out windows open enough to get to those
01:12:55
two who are super polarizing they actually kicked
andrew sullivan out of new york magazine for
01:13:00
making other writers at new york magazine feel
unsafe with his words all my favorite writers
01:13:05
seem to have been cancelled at some previous
publication and now they've set themselves up on
01:13:09
sub stack so it is amazing how the overton window
has closed uh besties do you have a bestie binge
01:13:15
a bestie book or a bestie newsletter or a bestie
podcast you want to share with the besties i would
01:13:20
give a shout out to a book uh called americana
which is about uh it's a history of american
01:13:27
capitalism told in chapters for every call it like
you know five to seven or ten year decade period
01:13:34
it's really interesting for people into business
it's written by a guy named boo srinivasan
01:13:40
okay bestie freeberg what do you got best a queen
of quinoa i took a week off and hung out at the
01:13:46
beach and i've been to watched uh godfather one
two and three as i've done several times in my
01:13:52
past i also watched uh one of my favorite top
five films of all time there will be blood by um
01:14:02
it's just such a beautiful film it got me down
yeah it got me down this research path on the
01:14:08
standard oil company and i ended up first off
i ended up reading all mario pouta's godfather
01:14:14
uh which is very graphic and interesting but
if you've seen the movie i don't think you get
01:14:17
much more from the book um but then um i started
reading ron chernow's um biography of uh oh yes
01:14:24
rockefeller yeah and so i don't know if anyone's
made it through that 727 page two i got about
01:14:29
500 pages in it is detailed it's detailed so it's
not you know it's not probably um you won't gain
01:14:36
as much from it as perhaps reading a wikipedia
article but uh the standard oil the the era if
01:14:42
you think about what technology is what we call
technology in the us today in our world and and
01:14:47
it's mostly software and now in increasingly
biotech um you know there have been different
01:14:53
eras of technology and different areas of monopoly
uh and and just hearing the story of the railroads
01:14:58
and standard oil and what took place in this
country it's incredible and it's so analogous
01:15:04
to what's gone on and and um the outrage and the
dissent and the fake news that goes on about these
01:15:09
people as they've been successful um you know
it really is uh history teaches us everything
01:15:14
and it's uh so i just you know um i just in
the era of standard oil just learning about
01:15:19
um the stories of that time and the people of
that time this is one vote that's that's been um
01:15:24
you know an interesting part of the tale besties i
gotta go i love you guys love you too i'll see you
01:15:29
jason and fried burgers i'll see you on thursday
yeah stake it up let's go outside uh i'll just
01:15:34
give my closing the fish that ate the whale a
book about sam zumari who was the banana king
01:15:41
and uh another uh interesting book you might like
i love capitalism by ken langone who um you know
01:15:47
built uh he built uh home depot and it's a pretty
great story about both stories of capitalism
01:15:54
and i think you all like them freeburg if you
like the um yeah the books you were talking
01:15:58
about yeah all right everybody we'll see you next
time and uh don't forget to rate and subscribe
01:16:03
and uh we'll be taping another episode
in another five six seven or eight weeks
01:16:08
hopefully earlier than that uh take
care sacks take care free burger take
01:16:11
care of chim off and we'll see you
all next time on the all in pakist
