00:00:00
Sach how are you doing with your Tucker
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Afterglow was an amazing episode the
00:00:04
feedback has been great it's the number
00:00:06
one episode of the year after vake I
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think and trending to be maybe a million
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views on YouTube so how's the Afterglow
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yeah I did notice there's one particular
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clip that's going viral where he calls
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you stupid yes there's that one do you
00:00:22
see that one I thought Tucker was
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incredible I found him so intellectually
00:00:26
interesting and it's not always the case
00:00:29
that great
00:00:30
moderators and interviewers make great
00:00:32
guests but he is so intellectually
00:00:35
curious and has unique points of view
00:00:38
that you want to hear them out and his
00:00:40
style of talking I find also like very
00:00:43
easy to listen to I thought he was
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really impressive really really
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impressive you don't have to agree with
00:00:48
everything he says quite honestly and
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some people probably won't but I found
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him really compelling I don't agree with
00:00:55
half of stuff he said or maybe a third
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but I too enjoyed it very much
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I thought he was great saxs I got you
00:01:02
know as the person people believe has
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Trump derangement syndrome thank you for
00:01:06
your Tweet you know or the person people
00:01:09
consider like the farle they're like why
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aren't you pushing back why aren't you
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pushing back and this has become a Maga
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takeover you had Jared kusher he didn't
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get pushed back you didn't get push back
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to Tucker you know one of the things
00:01:19
we're trying to do here I'm speaking for
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myself is to let people talk let them
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put out their position and if you do
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that and we did that with the
00:01:27
presidential candidates exceptionally I
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think then you can decide for yourself
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and yes we'll ask a hard question here
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or there or maybe you know push them a
00:01:35
little bit but we don't want to make it
00:01:37
uncomfortable to come here and make it
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like they come here and we take the 10
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worst things about the person or the 10
00:01:43
criticisms and run through them you can
00:01:45
get that on cable news you can get that
00:01:47
on either side of the aisle what I want
00:01:48
to do is let them talk and then actually
00:01:51
interesting things come up why do you
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always get this feedback because people
00:01:55
perceive me because you say I have Trump
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derangement syndrome as the token left
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guy that's all and I'm a moderate and I
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try to keep saying that but people keep
00:02:02
wanting to say I'm like far left I just
00:02:04
want folks to realize that we're going
00:02:05
to go and have more guests especially if
00:02:08
we can learn from those folks and
00:02:10
especially if hearing them out can
00:02:11
expand how we think about what's going
00:02:14
on in the world so get over it and it's
00:02:18
about learning and being curious hard
00:02:20
conversations will be the norm here on
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the Pod we're going to have any guests
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we damn well please and some people will
00:02:27
choose to not ask hard questions I will
00:02:28
choose to ask hard questions but I won't
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hijack the show and so please don't
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email me and tell me I didn't do my job
00:02:34
fighting for the left or whatever that's
00:02:36
not my job I'm going to ask a hard
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question when I want to on the show but
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I'm not going to hijack the show with 20
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of them Bravo to you I suspect you're
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getting a lot of pressure from the
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private Equity wives
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yes I mean what a great moment what a
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great moment people on ssris Jason are
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blowing up your
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inbox let your winners
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ride Rainman David
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S and instead we open sources to the
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fans and they've just gone crazy with
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[Music]
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it well the conversation that
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everybody's going wild with so let's
00:03:14
just get into it is these college
00:03:15
anti-Semitism hearings on Tuesday the
00:03:18
house education committee spoke with the
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presidents of Harvard pen
00:03:22
MIT uh and they faced a lot of tough
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questions many of the videos went viral
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and and I guess the the part that
00:03:31
specifically went most viral was the
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presidents of these organizations
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refusing to specify whether or not the
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cause for mass murder of a particular
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group
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genocide of students were or were not
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against the codes of conduct against
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bullying and harassment at places like
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Harvard Claud and gay specifically was
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asked over and over again whether chance
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of inata were violations of Harvard's
00:03:56
code of conduct she didn't give a great
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answer I'm just curious Sachs obviously
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you're Jewish you went to the IV League
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passionate about free
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speech and you've talked about Surplus
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politics he is what's your take here
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should students be allowed to March
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around
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campus chanting from The River To The
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Sea into F Etc because of free speech or
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you know did these code of conducts come
00:04:25
into play and what was your reaction
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when you saw their answers because
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obviously this a nuanced issue well look
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I mean I have a very high bar for free
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speech so I would allow you know almost
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everything the problem that these
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University presidents have is that's not
00:04:38
their position they're trying to wrap
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themselves in the cloak of freedom of
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speech and academic freedom but that has
00:04:43
not been their practice on campus for
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many years on a previous program we
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talked about that fire survey which
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pulled students about how free they feel
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to express opinions on campus the
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results were dismal for the IV League
00:04:58
the Ivy League scored way worse wor than
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State schools and in fact remember that
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Harvard got the blue tari a
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0.0 yes they were last place students
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there reported that speakers were
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shouted down they weren't even invited
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they weren't allowed to to continue and
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finish their speeches so Harvard has an
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abysmal record on freedom of speech so
00:05:21
it's hard to believe the president of
00:05:24
Harvard when she claims that she's to
00:05:26
standing up for freedom of speech and in
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fact if you were to apply that same
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standard to other groups do you really
00:05:33
believe I mean imagine if the
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representatives at that hearing had said
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to the president of
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Harvard you know are you allowed to
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advocate for genocide of black people or
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trans people I mean would the answer
00:05:48
have been the same I don't think so I
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agree I think absolutely not so the
00:05:53
question is why are Jews being treated
00:05:56
differently than these other groups and
00:05:58
I think this all goes back to kind of
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woke identity politics where in the woke
00:06:04
ideology there are certain groups that
00:06:06
are victim groups and there are certain
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groups that are oppressor groups and if
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you're in a victim group then you get
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special protections and if you're in an
00:06:16
oppressor group then it's just assumed
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that you can't really suffer
00:06:20
discrimination or you know Injustice in
00:06:23
that same way and I think
00:06:26
that Jews have basically been put in an
00:06:30
oppressor group they basically are being
00:06:32
put in the same group as as as all white
00:06:34
people and I think this has come as a
00:06:36
great surprise to a lot of donors to
00:06:39
these University campuses who I think
00:06:42
were okay with woke identity politics to
00:06:45
some degree when they
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believed that Jewish people were a
00:06:50
potential victim group and that
00:06:52
anti-Semitism was being treated as real
00:06:56
and lo and behold they have found out
00:06:57
that no they're an oppressor group and
00:07:00
they're not protected and even very
00:07:03
explicit cases of anti-Semitism are not
00:07:06
being recognized by these universities
00:07:07
because again it doesn't match up with
00:07:10
this woke ideology I think it would have
00:07:13
been a lot better for a lot of these
00:07:15
donors to realize that woke identity
00:07:18
politics was a culde saac it was
00:07:21
something that they should not have
00:07:22
wanted to participate in but I think
00:07:25
they're now waking up to the realization
00:07:29
that that in this again oppressor
00:07:32
oppressed dichotomy they're on the wrong
00:07:35
side of that I think you're exactly and
00:07:37
they don't like that realization exactly
00:07:39
correct identity politics rad to Nowhere
00:07:41
freeberg you gave a passionate speech
00:07:43
here about being forced to pick a side
00:07:46
when we're talking about the conflict in
00:07:48
the Middle East and I guess there's
00:07:50
underpinnings here of your
00:07:53
discussion anti-zionism
00:07:56
anti-Semitism and where's the line
00:07:58
between he just caring about humans and
00:08:01
children being killed versus maybe
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harassment Etc I'm curious when you saw
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these answers what was your reaction and
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yeah how do you feel about
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it I was surprised that
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the Congress people didn't ask the
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university presidents what would your
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reaction
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be if they started to burn crosses and
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say something
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about white
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supremacy black people don't belong in
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the US immigrants don't belong in the US
00:08:41
if you picked another ethnic
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group and made statements that have
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traditionally been deemed threatening
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and harassing would they have made a
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difference of judgment and if so what's
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the difference between what's gone on
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this week or in recent weeks weeks and
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what's gone
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on in other civil rights actions that
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have taken place in educational
00:09:08
institutions and I think that would have
00:09:10
been like a really kind of telling
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understanding of the discernment that's
00:09:15
that's being made on campus today versus
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in the
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past it is interesting to see that
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there's clearly a sense of being
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torn with respect to allowing the
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freedom of
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expression about groups that feel
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oppressed to be allowed to happen on
00:09:36
campus because that is probably a
00:09:38
majority opinion and that's why I think
00:09:42
this is particularly difficult for these
00:09:44
presidents to handle the situation and
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I'm not excusing their behavior or their
00:09:48
actions or their comments yesterday but
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there's clearly something underlying
00:09:54
this that I think we need to just
00:09:56
acknowledge which is that there is a
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large number number of people perhaps
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the majority of people that feel that
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there is some oppression going on and
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that that oppression has a right to be
00:10:07
spoken for and that this behavior is the
00:10:09
only way the Boston Tea Party did not
00:10:12
follow convention the Boston Tea Party
00:10:15
was a rebellion against an institution
00:10:17
that was oppressive and the Boston Tea
00:10:19
Party was the only action that was going
00:10:21
to make a change that could have driven
00:10:23
a change and
00:10:26
Rebellion against an institution or an
00:10:28
establish M that causes
00:10:32
oppression isn't supposed to have rules
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it isn't supposed to follow convention
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it isn't supposed to be a discourse and
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so I think that that sentiment is where
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a lot of
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this conflict is coming from for the
00:10:44
presidents in making these decisions
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that they see that the majority of
00:10:47
people truly believe that there's
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oppression that this is the course to
00:10:51
speak up for that oppression and that
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they can't step on that because if they
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did they would be causing more
00:10:57
disruption to more people than allowing
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it then it's a very difficult situation
00:11:01
that they find themselves in so I'm not
00:11:03
excusing it but I'm trying to frame up
00:11:05
why I
00:11:05
think yeah otherwise smart people might
00:11:08
be acting this way frankly I think it's
00:11:10
worth asking what would be the case if
00:11:12
this were
00:11:13
other ethnic groups or other people that
00:11:16
were being kind of you know told hey
00:11:19
we're going to have an inata against X
00:11:22
or Y or Z would the actions have been
00:11:24
the same chabat if they were asked that
00:11:26
same question is calling for the
00:11:28
genocide of black Americans
00:11:31
asian-americans
00:11:33
indian-americans trans
00:11:35
Americans harassment or
00:11:37
bullying what do you think their answers
00:11:39
would have been and then where do you
00:11:40
think this is going I don't know what
00:11:42
their answers would have been but
00:11:43
obviously it's morally unacceptable as
00:11:45
best as I can tell they were coached by
00:11:48
lawyers before they appeared in front of
00:11:52
Congress and they found some verbal
00:11:56
gymnastics maybe to try to defend their
00:11:59
point of
00:12:00
view and in it they lost all moral
00:12:03
Clarity because to your point Jason if
00:12:06
and to freedberg point if you just
00:12:07
replaced the Jewish people with any
00:12:11
other cohort of people maybe in this
00:12:14
moment it was harder to see but it's
00:12:16
like the these should not be debatable
00:12:18
difficult moral questions
00:12:21
so how did we get
00:12:23
here I think that over the last 40 years
00:12:28
and to be honest it started when the US
00:12:30
News and World Report started to rank
00:12:36
universities they
00:12:40
gamified the desire for these
00:12:42
universities to get at the top of a list
00:12:44
which allowed them to theoretically get
00:12:47
better recruits but really what it did
00:12:49
was allowed them to build massive asset
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management
00:12:53
businesses that ultimately consumed
00:12:55
these
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schools and now what you find is that
00:13:00
the learning process has gotten totally
00:13:03
perverted because it became a second
00:13:05
order priority to being able to raise
00:13:09
money and to manage assets I think
00:13:12
Harvard management company at one point
00:13:14
was one of the largest owners of
00:13:16
Forestry in America you know the other
00:13:18
large owner was John Malone a rapacious
00:13:22
capitalist so what this shows you is
00:13:25
that the mission of these universities
00:13:26
which is to actually celebrate free
00:13:29
speech and to teach kids to think
00:13:32
critically has been lost and I think
00:13:34
that this was a
00:13:36
very simple way of seeing it and it
00:13:39
should be disturbing to people that this
00:13:42
happened that the places where you send
00:13:45
our 18 and 19 and 20 year old
00:13:48
kids cannot at a very simple level teach
00:13:51
the moral Clarity to say teaching or
00:13:54
supporting even the concept of genocide
00:13:57
should is wrong
00:13:59
can you teach it in a historical context
00:14:01
obviously but that's not what they even
00:14:03
said there right so they got into a
00:14:05
level of verbal gymnastics which I think
00:14:07
is really it should be viewed by
00:14:09
everybody as pretty morally unacceptable
00:14:11
I think it's well said and it's clearly
00:14:13
bullying or harassment if you're going
00:14:15
to chase Jewish students around campus
00:14:18
and I think that's what we saw now if
00:14:20
you were to chamath or saxs or maybe
00:14:23
Sachs best since you're super have a
00:14:26
super high Benchmark for freedom of
00:14:27
speech if these were students in a
00:14:30
debate club or in a lecture hall giving
00:14:33
their position taking hard questions
00:14:35
people opting into it wouldn't feel like
00:14:37
bullying
00:14:38
harassment
00:14:40
yet the hypocrisy is so thick that they
00:14:43
you know they chase people like Ben
00:14:44
Shapiro off- campus Etc when they had
00:14:48
something controversial to say at many
00:14:49
of these
00:14:50
schools but I think we can all agree
00:14:53
chanting about genocide and chasing
00:14:55
students around campus and disrupting
00:14:57
the campus that feels like bullying or
00:14:59
harassment I don't know that and I agree
00:15:01
with you chamat this mental gymnastics
00:15:02
that they went through with these
00:15:04
statements it's just very easy to say
00:15:05
yes that's harassment yes that's
00:15:07
bullying now if you did it in a lecture
00:15:10
hall and you or you wrote a paper Sachs
00:15:13
maybe doesn't feel like bullying or
00:15:14
harassment feels like freedom of speech
00:15:16
yeah yeah look I mean we can you can
00:15:19
always debate the the hard cases and in
00:15:23
free speech and where the lines should
00:15:24
be and again I would draw the lines in a
00:15:27
way that make makes most speech
00:15:30
permissible but when you're talking
00:15:32
about chasing students around campus to
00:15:34
yell in their face that clearly is
00:15:35
bullying and harassment and there's no
00:15:38
reason to ever allow something like that
00:15:40
but again the point I would make is that
00:15:42
what you're going to see in the wake of
00:15:43
this is that a lot of Jewish people are
00:15:48
realizing that they don't have a home on
00:15:50
the left anymore and I expect that many
00:15:53
Jews are going to start shifting right
00:15:55
and enter the Republican party to a
00:15:58
place where I've been for a while and
00:16:00
and I think this goes back a long way so
00:16:02
if you go all the way back to the
00:16:03
original civil rights movement in the
00:16:05
1960s I think that many Jews were an
00:16:08
integral part of that movement and they
00:16:10
felt a great solidarity with the
00:16:12
original Civil Rights Movement civil
00:16:14
rights leaders because they felt like
00:16:16
they had a shared history of persecution
00:16:19
that blacks in America had suffered from
00:16:21
racism Jews around the world felt like
00:16:23
they had suffer from anti-Semitism and
00:16:26
they basically believe that all peals
00:16:27
should be treated equally that we should
00:16:29
have individual rights and and basically
00:16:31
they were advocating for a colorblind
00:16:34
standard right a colorblind treatment of
00:16:36
all people and so I think that Jews
00:16:38
historically have wanted to be on the
00:16:41
left for that reason but I think what's
00:16:43
happened over the last few decades is
00:16:45
that the civil rights movement in
00:16:47
particular and the left have moved to
00:16:49
this woke ideology where it's no longer
00:16:52
about colorblindness it's more about
00:16:55
identity groups and instead of trying to
00:16:58
get past racial differences it's been
00:17:01
about accentuating them and so we've had
00:17:04
this whole Equity agenda which is really
00:17:06
defined as redistribution from one
00:17:09
racial group to another racial group I
00:17:11
think that for whatever reason a lot of
00:17:13
Jews just hadn't confronted the reality
00:17:16
that the left had really changed in this
00:17:18
way and again I think it goes back to
00:17:20
the fact that they thought that oh well
00:17:22
if we're going to be defining identity
00:17:25
groups in this you know woke way you
00:17:27
know Jews obviously should be one of
00:17:29
these victim groups but they're waking
00:17:31
up to the fact that Jews are not you
00:17:33
know Jews are just in the in the minds
00:17:35
of kind of woke ideology Jews are just
00:17:37
white people okay successful white
00:17:40
people with too much powerful white
00:17:41
people with a Jewish background and as a
00:17:44
result they're part of an oppressor
00:17:46
class and I think that for a lot of
00:17:50
Jewish people who are waking up to this
00:17:51
they're realizing way to Second this is
00:17:53
actually a very destructive
00:17:55
ideology and it makes us the bad guys
00:17:58
and so I would expect that again a lot
00:18:01
of Jewish people are waking up to the
00:18:04
ways in which the left has changed and
00:18:07
they're realizing that that is not a
00:18:09
hospitable place in the political
00:18:11
Spectrum for them to be and I would
00:18:13
expect there to be kind of a a
00:18:16
pilgrimage now of more Jews in America
00:18:19
towards the right as opposed to
00:18:21
remaining on the left where they've
00:18:22
always been yeah the left needs to
00:18:25
remember people should be judged not by
00:18:28
the color of their skin or their
00:18:29
ethnicity but the content of their
00:18:33
character uh it's like quoting MLK could
00:18:35
get you cancelled right now I think to
00:18:38
actually say that people should be
00:18:39
judged by their character color
00:18:40
blindness is
00:18:42
considered you know a lot of people call
00:18:43
that racism now that's like that by the
00:18:45
way that that is the mainstream
00:18:47
conservative view on civil rights
00:18:50
related issues is that color blindness
00:18:52
should be the standard right you want to
00:18:53
treat everyone individuals yes exactly
00:18:57
but that it was the liberal point of
00:18:58
view this was the Civil Rights
00:18:59
movement's basic tenant yeah we've lost
00:19:02
it all by the way I think there is just
00:19:05
one other caveat we have to say about
00:19:06
this whole issue which is that it should
00:19:09
be possible to criticize the state of
00:19:12
Israel or netanyahu's government or the
00:19:14
bombing campaign they're conducting in
00:19:16
Gaza or the actions that led up to this
00:19:19
event there should be room to criticize
00:19:22
Israel without being called an
00:19:23
anti-semite I want to be like really
00:19:25
clear about that and there needs to be a
00:19:28
pretty wide latitude to have that
00:19:31
conversation and I do think that one of
00:19:34
the mistakes that's
00:19:36
happened for a while now is that Jewish
00:19:40
groups have been a little too quick on
00:19:41
the trigger to call people anti-semites
00:19:44
for
00:19:45
criticizing the policies of the Israeli
00:19:47
government and again I think there needs
00:19:49
to be wide latitude to do that however I
00:19:52
don't think that's the type of speech
00:19:54
that we're talking about here Jason I
00:19:55
think you framed it up pretty well this
00:19:57
is people who have veered off of
00:20:01
legitimate criticism whether you agree
00:20:04
with it or not the legitimate criticism
00:20:05
about the Israeli government's action
00:20:07
into this sort of genocidal rhetoric and
00:20:11
that's what we're talking about here
00:20:13
absolutely any final thoughts from the
00:20:15
rest of the panelists before we move on
00:20:16
to business topic you guys think that
00:20:18
they're going to get fired or what do
00:20:19
you think is the right consequence for
00:20:21
this I think they're getting fired I
00:20:23
think the money as you pointed out in
00:20:25
your Tweet storm is going to cause that
00:20:27
they're going to a lot of donations what
00:20:29
do you think free I'm not tied into
00:20:31
these like donor groups it's the donor
00:20:33
groups that are going to drive the
00:20:34
decision because they're going to call
00:20:35
the boards and so I think it's really
00:20:37
board dependent obviously Amman is a big
00:20:40
donor at Harvard and he's been very
00:20:41
vocal about what he wants to see
00:20:44
Harvard's board
00:20:46
do I think this is going to drive a big
00:20:50
change whether individuals get fired I
00:20:53
really don't know I think of the four if
00:20:56
I were to just have to make a bet I'd
00:20:57
say probably at least one of them's
00:20:58
getting fired I don't know it's like but
00:21:01
it's certainly going to change a lot Jam
00:21:03
you think they're G to get fired what do
00:21:04
you think as you WP final word Jam yeah
00:21:06
I think I think freeberg was right you
00:21:07
have to follow the money and I think the
00:21:09
money has been very clear that this
00:21:11
can't stand and I think that that's good
00:21:12
because I think the people who've been
00:21:15
donating have enough moral Clarity on
00:21:17
these kinds of topics to say this is
00:21:19
unacceptable so how long will it take to
00:21:21
filter through the decision- making I
00:21:23
don't know because I I also don't know
00:21:24
how this Machinery works but I think
00:21:26
what people have to decide immediately
00:21:29
right now
00:21:30
is all the kids that are applying for
00:21:32
Early Access and early decision do you
00:21:35
really want to go to these
00:21:37
schools and the parents do you want your
00:21:40
kids to be going to these schools so I
00:21:42
think that's that's a kind of a a
00:21:44
decision that can probably happen right
00:21:46
now or needs to happen right
00:21:48
now while all of this other kind of like
00:21:51
donation driven asset manager driven
00:21:53
decision- making takes shape all right
00:21:55
let's get into the state of the economy
00:21:58
there a really interesting story I sent
00:22:00
to the group chat from the financial
00:22:02
times about tribalism now impacting how
00:22:05
people view the economy it's called
00:22:08
expressive responding basically how you
00:22:10
feel about the economy is based on which
00:22:12
tribe you're in here's a a quick
00:22:15
snapshot of what's going on if you're a
00:22:17
Republican and you were doing really
00:22:20
well under Biden you're going to say
00:22:22
things are terrible in the economy
00:22:23
during Trump Dems were doing awesome
00:22:25
like everybody else but because they
00:22:27
hated Trump they said economy was trash
00:22:29
here's the chart that explains that and
00:22:33
then I'll give you a couple quick bullet
00:22:34
points of where the economy is but you
00:22:36
see the Divergent there in the charts
00:22:38
and based on the different
00:22:41
administrations being in power and if
00:22:42
you look at the second chart it's pretty
00:22:44
telling this isn't happening this
00:22:46
tribalism is not happening in other
00:22:48
countries you can see France Germany UK
00:22:50
people feel about the economy how the
00:22:53
economy is actually doing pretty wild
00:22:56
data and I'll let you respond to that in
00:22:58
just a second I'm just going to give you
00:23:00
eight quick hits on what's going on in
00:23:02
the economy credit card debt it's
00:23:03
reaching all-time highs we surpassed one
00:23:06
trillion back in July keeps Rising
00:23:08
people are taking money out of their
00:23:10
401ks hardship distributions increased
00:23:12
13% between Q2 and Q3 super spending
00:23:15
just claped in October growing only. 2%
00:23:18
last month versus 7% in September but
00:23:21
November year-over-year increases in
00:23:23
Black Friday and Cyber Monday spending
00:23:25
so maybe that's a head fake I don't know
00:23:27
maybe people bargain hunting hunting
00:23:29
consumer Prices rose just 3.2% year-over
00:23:32
year in October versus 99.1% in June of
00:23:36
20122 Home sell 13year low in October
00:23:40
most folks are betting interest rate
00:23:42
increases are over and summer betting
00:23:44
interest rate Cuts will start as early
00:23:46
as q1 ki's forecast say we should expect
00:23:49
to see and that's a prediction Market
00:23:51
two quarter point cuts by July Sachs
00:23:54
you've been bearish on consumers and all
00:23:57
this crazy debt
00:23:58
is this the beginning of the end is this
00:24:01
the end where are we at in the consumer
00:24:03
spending cycle it's hard to know because
00:24:06
there's so many mixed
00:24:08
signals kobay letter had a great tweet
00:24:11
on this there's a lot of mixed economic
00:24:13
data right now but I mean the economy
00:24:15
seems to be doing fairly well but the
00:24:18
electorate doesn't feel it and you're
00:24:20
seeing in recent weeks you're seeing a
00:24:23
lot of commentary by pundits trying to
00:24:27
convince the American people that the
00:24:29
economy is better than people evidently
00:24:32
feel that it is and I think that one of
00:24:35
the big reasons
00:24:37
for this Gap is that over the last few
00:24:41
years we've had a lot of
00:24:43
inflation
00:24:45
and the rise in price levels has not
00:24:47
been matched by the rise in people's
00:24:49
incomes so people simply feel worse off
00:24:52
because their spending Powers diminish
00:24:55
now it's true that the current inflation
00:24:57
rate is going down but all that means is
00:25:01
that the price level now is growing at
00:25:03
call it 3% is a year it's still growing
00:25:06
it's not like prices have come down
00:25:08
they're just rising at a slower rate so
00:25:11
you know last year we had a 9% in
00:25:14
inflation and inflation's been high the
00:25:17
last couple of years the rate of
00:25:19
increase is slowing down but people's
00:25:21
wages if you're workingclass have simply
00:25:24
not kept up with the price of goods and
00:25:27
services is and so I think people feel
00:25:30
worse off than they did a few years ago
00:25:33
and you can try to convince them till
00:25:36
you're blue in the face that actually
00:25:38
the economic data is great but if you're
00:25:40
somebody whose wages have not kept pace
00:25:43
with price levels you're not going to
00:25:44
feel better off chamach on your first
00:25:47
point I think that there
00:25:50
is this thing that we've grown
00:25:52
accustomed to which
00:25:55
is how you feel about what's happening
00:25:58
versus what the data may say and I think
00:26:01
that the press and
00:26:04
journalists in a pretty untrustworthy
00:26:08
way amplify this separation so we hear
00:26:12
about the economy doing well maybe it's
00:26:15
not doing well we hear how the economy
00:26:17
is not doing well and it actually is
00:26:19
doing well nobody wants to write about
00:26:21
the data people want to write about
00:26:23
their feelings and their feelings
00:26:25
largely are more defined by the people
00:26:27
around them and what they feel so simple
00:26:29
example Nick if you just want to throw
00:26:31
this up but there was a this is the
00:26:32
Federal Reserve data this is not anybody
00:26:34
else's data but you would think that the
00:26:36
wealth Gap is being exacerbated and you
00:26:39
would think that wealth gains are going
00:26:41
to a few and again without having an
00:26:43
opinion the data shows something truly
00:26:46
incredible which is that the American
00:26:48
dream is not hanging on by a Lifeline
00:26:51
but more and more American families are
00:26:54
achieving it you know 12% of American
00:26:57
families are now considered millionaire
00:26:59
households 8% are considered
00:27:01
multi-millionaire households that's
00:27:03
incredible but what's even more
00:27:04
impressive is that even as they do well
00:27:08
the cohort underneath them the folks
00:27:10
that make 150 to 250k a
00:27:13
year are the ones that are absolutely
00:27:15
crushing and they're making
00:27:17
more than the top 10% of all families so
00:27:21
I think Jason the the broader economic
00:27:24
takeaway I have is unless you're willing
00:27:26
to look at the raw data
00:27:29
the risk is high that you will be fed an
00:27:34
emotional perspective that amplifies
00:27:36
your
00:27:37
bias or causes you to reject that view
00:27:40
because it just seems so untrustworthy
00:27:41
and it doesn't map to what you're seeing
00:27:43
it's very very hard to tell the truth
00:27:45
that is Federal Reserve data that tells
00:27:47
the truth about the US economy and it
00:27:49
turns out that you know the economy is
00:27:51
pretty good and doing a lot for a lot of
00:27:54
people freeberg where you said you've
00:27:57
brought up
00:27:58
the issue of credit card debt as a
00:28:00
leading indicator it's continues to
00:28:02
Surge but there is some inkling that
00:28:05
consumers may be tapped Out I.E tapping
00:28:07
their
00:28:08
401ks so what's your take on the
00:28:11
consumer and this tribalism that we're
00:28:14
seeing in the interpretation of data and
00:28:16
how people feel about the economy no I
00:28:18
mean I think if people don't feel like
00:28:20
they're progressing on the order of 10%
00:28:22
a
00:28:23
year in terms of income adjusted for
00:28:27
purchasing
00:28:29
power they're generally going to be
00:28:31
unhappy and they're going to project
00:28:32
that as a general statement about quote
00:28:34
the
00:28:35
economy and so the more people that
00:28:37
that's the case the more you see that
00:28:39
happening and so while there may be you
00:28:41
know a minority of people that are
00:28:43
seeing great economic
00:28:46
Mobility if a large enough percentage of
00:28:48
people I don't see it roughly call it
00:28:50
10% increase in lifestyle ability year
00:28:55
toe that's going to you know catch up to
00:28:58
these overall scores of consumer
00:28:59
sentiment I think the way that
00:29:01
economists measure the economy is a lot
00:29:02
different than the average person
00:29:03
measures the economy which is really
00:29:05
their own you know purchasing power and
00:29:07
income sa sure that's look at the end of
00:29:09
the day the question that people ask
00:29:12
themselves which is the question that
00:29:13
Ronald Reagan asked voters in 1980 is
00:29:16
are you better off than you were four
00:29:17
years ago and I think that a lot of
00:29:19
people particularly workingclass people
00:29:21
don't feel better off because mainly
00:29:23
their wages have not kept pace with the
00:29:26
overall
00:29:27
inflation level not just measured on a
00:29:29
one-year basis but Over a four-year
00:29:32
basis and I do think this could explain
00:29:34
some of the tribalism Jason is that
00:29:36
we've talked about this before that the
00:29:38
biggest Gap in the electorate is between
00:29:40
professional class and working class if
00:29:43
you're a professional class meaning you
00:29:44
have a at least one college
00:29:46
degree by more than 30 points you're
00:29:49
likely to be a Democrat and if you're a
00:29:51
working class which just means you know
00:29:53
no college degree let's say High School
00:29:55
educated you're much more likely to be a
00:29:56
Republican the parties have sort of
00:29:58
flipped the Republican party is now a
00:29:59
working-class party I think a lot of
00:30:01
people find that very surprising it's
00:30:03
not the party of you know fatat Bankers
00:30:05
anymore and and you know the Fortune 500
00:30:08
it's so the parties have really flipped
00:30:10
and I do think that workingclass people
00:30:13
are most impacted by
00:30:15
inflation if you're kind of in lower to
00:30:18
Mid income and your wages the wages of
00:30:21
Labor have not gone up and prices have
00:30:24
then you're going to be worse off I do
00:30:26
think that is a big part of it
00:30:28
and I think the media is sort of working
00:30:29
on overdrive right now to convince
00:30:31
people that they should think that their
00:30:33
circumstances are better than they
00:30:35
actually are and um and may look maybe
00:30:38
the overall economic data right now is
00:30:41
mixed to positive I'll certainly concede
00:30:45
that but I think for the average person
00:30:47
what they care about is their pocketbook
00:30:48
and it's far from clear that they're
00:30:50
better off now than they were four years
00:30:51
ago Jason what do you think I think it's
00:30:53
a very important segment because your
00:30:55
correct sack in a very nuanced Point
00:30:58
multiple things through it once here
00:31:00
there is still sticker shock from
00:31:01
inflation I went to buy birthday cake it
00:31:04
was $47 for a cake I was shocked how
00:31:07
does birthday cake go $47 is it made of
00:31:09
cocaine well no no I just put the
00:31:11
cocaine all over the top but yeah that's
00:31:13
you know I think I got truffle shaved on
00:31:15
it I literally felt like it was a white
00:31:16
truffle cake and this was a small cake
00:31:18
it was nuts anyway there is sticker
00:31:21
shock the truth is though wages are very
00:31:24
strong right now and wages are slightly
00:31:26
out pacing inflation but that is a new
00:31:28
phenomenon correct Sachs that is a new
00:31:30
phenomenon so people are still feeling
00:31:33
the sticker shock but at the same time
00:31:35
unemployment and wages Drive how people
00:31:38
feel and people are feeling obviously
00:31:40
very confident as you see in the credit
00:31:42
card debt when you're confident to
00:31:44
chat's point about just follow the money
00:31:46
and look at the actual numbers people
00:31:47
would not be taking out credit card debt
00:31:49
they wouldn't tap the 401K if they felt
00:31:51
they've got great job prospects they
00:31:53
have options for jobs it's a 50-year low
00:31:56
in unemployment which is is unbelievable
00:31:58
that that's continued and wages are
00:32:00
increasing Uber drivers are now making
00:32:02
$34 $36 and listen I've been tracking
00:32:05
how much they make from the beginning it
00:32:07
was $15 then $20 and
00:32:09
$25 so wages are increasing massively
00:32:12
the GDP is 5% or something like that and
00:32:15
unemployment is low so the economy is
00:32:17
actually doing extraordinary that's just
00:32:19
the fact but the sticker shock is very
00:32:22
very real so I think we can wrap it
00:32:24
there unless anybody wants to add
00:32:25
anything by the way just
00:32:28
over the last month there's been a huge
00:32:29
rally in stocks especially gross stocks
00:32:31
Bitcoin has now rallied to
00:32:33
44,000 what yeah that's nuts a firm is
00:32:37
up like 20% today that's you know the
00:32:39
buy now pay later companyc on strong
00:32:43
Christmas spending like you're saying
00:32:44
all the stocks sacks that bottomed
00:32:47
because of interest rates have now just
00:32:49
started to massively rally massively so
00:32:52
all the secular this is all based on
00:32:55
expectations of rate Cuts coming sooner
00:32:56
than people thought and I think Bill
00:32:58
Amman has really LED this trade and he
00:33:01
timed it perfectly apparently
00:33:04
by basically going long the bomb market
00:33:07
like a month ago 10 years at 417 411
00:33:10
sorry I mean we're we're off like you
00:33:13
know 80 basis points in like a couple
00:33:15
months it's nuts right but all all this
00:33:17
Euphoria we've gone from Fear to Greed
00:33:19
and you know really in one or two months
00:33:22
it's all driven by rate expectations
00:33:24
that people are expecting a rate cut in
00:33:27
q1 and so far that's not really
00:33:29
justified by the fed's hawkish rhetoric
00:33:33
but people nevertheless seem to think
00:33:34
it's coming I think that this could be
00:33:37
oh do you want to put on my tinfoil e
00:33:40
conspiracy
00:33:42
conspiracy a
00:33:46
sound I I think I think there will be a
00:33:48
ray cut in q1 and I think this is the
00:33:50
Biden bailout let's go I think this is I
00:33:53
think this is a Biden bailout by the FED
00:33:56
because if they cut rates in q1 that's
00:33:58
going to make everyone feel really flush
00:34:00
it takes about six months to work its
00:34:01
way into the system but that's going to
00:34:03
give a big boost to the Biden campaign
00:34:05
if you see a quartero rate cut in
00:34:07
q1 a trillion of the 5.7 trillion in
00:34:11
money market accounts will rip into the
00:34:14
market oh wow that'll be nuts just
00:34:17
people knowing that they're on the way
00:34:19
down that they peaked and on the way
00:34:21
down is going to unlock a lot of capital
00:34:22
it's going to unlock a lot of capital
00:34:24
and to be clear it's a small group of
00:34:26
people who believe it's coming in the
00:34:27
first quarter Bill Amman and David Sachs
00:34:30
the majority according to prediction
00:34:32
markets think we'll have two of them you
00:34:33
know by the summer without debating
00:34:36
whether it happens in first quarter or
00:34:38
second quarter the more fundamental
00:34:40
thing is if you look two years out you
00:34:42
probably see rates around 2 and a half%
00:34:46
and
00:34:47
that's 160 basis points from here that's
00:34:50
the big big change that I think helps
00:34:53
all of us quite honestly yeah and let's
00:34:56
segue here here great segment by the way
00:34:59
gentlemen because in our backyard what
00:35:01
we do every day in terms of capital
00:35:03
allocation and building companies the
00:35:06
cleanup work continues it was a rager
00:35:08
folks people partied well into the next
00:35:11
day and we're still seeing seeing the
00:35:13
cleanup carda uh has some great data and
00:35:16
this is data amongst Carta users which
00:35:18
is a subset of users willing to pay an
00:35:21
expensive price to manage their cap
00:35:23
tables the number of companies that shut
00:35:25
down after raising 10 million which is a
00:35:27
very high Benchmark that's up
00:35:29
238% in 2023 from 47 companies last year
00:35:34
to 112 this year also VC firms and I'm
00:35:38
seeing this very quietly happening this
00:35:40
isn't reported on VC firms are very
00:35:42
opaque about laying people off or
00:35:44
reshuffling the deck but a firm called
00:35:46
open view out of Boston just abruptly
00:35:49
shut down they had 70 plus employees
00:35:51
they just raised about 600 million of an
00:35:54
$800 million Target for their fund
00:35:57
there were reports about grof not
00:35:59
hitting their target and reshuffling a
00:36:01
bit that might have been overstated to
00:36:02
be
00:36:03
honest but on the bright side we're
00:36:05
seeing some rebounding in ARR of the
00:36:08
public SAS companies that started to
00:36:10
Rebound in Q3 here's the chart from
00:36:12
altimer looks like we hit bottom in q1
00:36:16
of 2023 another bright spot public firms
00:36:19
that are continuing to downsize are
00:36:21
getting rewarded by the public market
00:36:22
Spotify just did a third layoff 177%
00:36:26
it's around 1,500 employees so I guess
00:36:29
Sachs everybody was thinking SAS was
00:36:32
over it was the end of days we talked
00:36:34
about not a a a recession in SAS but a
00:36:37
depression and I think that was accurate
00:36:39
how are you feeling about the private
00:36:41
company market and maybe stabilization
00:36:44
or the return of growth in in SAS
00:36:46
companies well what I've been saying for
00:36:49
the past year year and a half is that
00:36:51
we've been in a software recession the
00:36:53
overall economy may not have been in a
00:36:56
recession because the consumer has
00:36:58
stayed strong as you said consumer
00:37:00
spending has stayed strong so the B to C
00:37:02
part has held up the economy but I think
00:37:04
in B2B and particularly in software
00:37:07
there has absolutely been a recession it
00:37:09
started in the first half of 2022 with
00:37:12
rate hikes there was a huge revaluation
00:37:16
of grow stocks and you saw multiples
00:37:20
come down on SAS valuations from in the
00:37:23
public markets as high as 35 down to
00:37:26
seven or eight something like that in
00:37:29
private VC world we saw valuations go
00:37:33
from call it 100 times AR to something
00:37:35
more like 30 times AR so the first half
00:37:37
of 2022 we saw valuation correction but
00:37:40
then around mid 2022 what I started
00:37:43
seeing in all my board meetings was
00:37:44
every startup started missing its sales
00:37:47
forecast and they started reforecasting
00:37:49
down and that process really continued
00:37:51
for a year and we saw the exact same
00:37:53
thing in the public markets and public
00:37:56
SAS companies as well and it's really
00:37:58
remarkable how the data from the public
00:38:01
stocks that our friend jam and ball from
00:38:05
altimer has been
00:38:07
publishing you know regularly how that
00:38:10
has matched up with what I've seen kind
00:38:12
of anecdotally in board meetings and you
00:38:15
know in conversations that's super cor
00:38:19
that the the CEOs and the boards
00:38:22
understand hey these private Market
00:38:23
valuations have to in some way be
00:38:26
informed by public this is a very sure
00:38:28
because the public stocks are the exit
00:38:29
comps right so you know if the public
00:38:32
stocks are worth I don't know a third of
00:38:35
what they used to be then private
00:38:37
valuations have to reflect that but in
00:38:39
any event I want to go beyond just
00:38:40
talking about valuations here I want to
00:38:41
talk about the business results and
00:38:44
again for this time period from call it
00:38:47
mid 2022 to Mid
00:38:50
2023 there was a software recession
00:38:53
software companies were cutting jobs
00:38:55
they were reforecasting DT down they
00:38:57
were growing slower in many cases they
00:38:59
were actually shrinking I mean some
00:39:00
companies lost
00:39:03
ARR because of churn you know a lot of
00:39:06
their customers were shutting down or
00:39:08
sharpening their pencils they were
00:39:09
consolidating vendors the last year has
00:39:12
been a really really tough time in the
00:39:14
software space but I think now we've
00:39:16
turned a corner I started seeing in the
00:39:19
last couple of months I started seeing
00:39:20
green shoots in some of my board
00:39:22
meetings and now here we have this chart
00:39:24
from jam and can you just put this on
00:39:26
the screen again where we saw that
00:39:28
finally in
00:39:29
Q3 we went from four quarters of
00:39:32
negative growth in net new AR to finally
00:39:36
a quarter of Positive Growth now 2% is
00:39:39
not a great number but at least we are
00:39:41
finally positive as opposed to negative
00:39:44
which means that n new AR was shrinking
00:39:46
I think again the the software assession
00:39:48
I'm calling an end to the software
00:39:50
recession and officially is it an
00:39:52
official breaking breaking news saxs has
00:39:55
called an end so let let the party begin
00:39:58
I think software revenues are going to
00:40:00
rebound I think the open question that's
00:40:03
remaining then is Will valuations
00:40:05
rebound or will you have to grow into
00:40:08
the last valuation or some truncated
00:40:11
valuation and this is where you know
00:40:14
even if rates go to
00:40:15
2% are people going to be as excited
00:40:18
again to bring the public markets back
00:40:20
to 15 and 20 times for ARR and that's an
00:40:24
open question I think the market says no
00:40:27
which means that even as growth comes
00:40:29
back you still have a valuation reset
00:40:32
that may actually explain why startups
00:40:35
are shutting down why Venture firms that
00:40:38
you know if you looked at that firm in
00:40:40
in Boston that shut down they had some
00:40:42
seemingly very good companies in their
00:40:43
portfolio so there should be nothing
00:40:45
stopping them from continuing to raise
00:40:47
capital and invest but I just suspect
00:40:49
the the End Market that they operate in
00:40:52
is going to be value constrainted if
00:40:54
they pay top dollar for things that
00:40:57
are now just worth a lot less even if
00:40:59
they double Revenue I'll give you an
00:41:01
example we talk to the private Equity
00:41:03
guys a lot just because we try to
00:41:04
understand where they are buyers right
00:41:07
why is that important shath explain why
00:41:08
private Equity versus public markets and
00:41:10
how they think about businesses because
00:41:11
I think it's a very important point that
00:41:13
you've made to me privately I think that
00:41:15
when you look at the ecosystem the
00:41:18
ecosystem doesn't work if you never get
00:41:22
liquidity to your employees and to your
00:41:25
shareholders ERS so liquidity happens in
00:41:28
one of two
00:41:30
ways it can go in the public markets or
00:41:32
you can transact to private Equity why
00:41:34
because they have almost as much money
00:41:37
and frankly more in many cases to pay
00:41:40
than a public market can give you via a
00:41:43
traditional IPO so I think that they are
00:41:45
a pretty rational buyer and they do a
00:41:48
very good job because they are a
00:41:50
concentrated buyer of finding a very
00:41:53
fair price what is the real honest
00:41:55
market clearing price and so if you
00:41:57
don't want to look at the market through
00:41:59
rose-colored glasses and you want
00:42:01
sobriety ask a private Equity investor
00:42:04
what they would buy your position for
00:42:06
that's why I spend a lot of time talking
00:42:07
to them because I want to know what this
00:42:09
stuff is really worth and what I would
00:42:11
tell you is that even for companies that
00:42:13
are in the hundreds of millions of
00:42:16
ARR the premiums that they're willing to
00:42:19
pay are between three and five times ARR
00:42:22
at the highend and that a lot of deals
00:42:25
get transacted between one and three
00:42:26
times AR that may not be what people
00:42:28
want to hear but that's because when you
00:42:30
look at the underlying ability to
00:42:32
generate cash flow many of these
00:42:34
businesses haven't proved it
00:42:36
yet and so they want to buy things in a
00:42:39
margin of safety where they can come in
00:42:41
and cut certain expenses while still
00:42:45
helping to grow in certain markets all
00:42:48
of that used to be a 10x multiple in the
00:42:51
public markets so if private Equity is
00:42:52
buying for three to five times and
00:42:54
really one to three times
00:42:57
it's going to be hard for the public
00:42:59
market buyer to be paying a lot more
00:43:01
than that got it can I build on that
00:43:02
this is a chart that was published on
00:43:04
December 1st by Jamon at altimeter and I
00:43:08
do think it speaks to the valuation
00:43:11
question quite well you can see here
00:43:14
that there's this line at 7.8 times
00:43:19
which I think refers to 7.8 times next
00:43:21
12 months Revenue uh that is the
00:43:24
long-term pre-co average so that is
00:43:26
where the average SAS stock has traded
00:43:30
over a long period of time we're
00:43:32
currently as of December 1st we're at
00:43:34
5.8 I think it's probably a little
00:43:36
higher now because the Market's pretty
00:43:38
much rallied over the last five days but
00:43:41
you can see that we're still trading
00:43:43
below the long-term average in terms of
00:43:47
multiples and part of that is because
00:43:49
interest the 10- year is still at 4.3%
00:43:52
although it's come down quite a bit you
00:43:54
can see a peak there around 5%
00:43:56
now it's at 4.3 if you believe that the
00:44:01
10 years is going to go back down to I
00:44:03
don't know this 2 and a half 3% range
00:44:05
and if you believe that growth is
00:44:08
reaccelerating then I think there is
00:44:11
room you know for this number the 5.8
00:44:15
number to at least grow into the
00:44:19
long-term average which is
00:44:21
7.8 so there there is room there I think
00:44:24
that as the St are priced today it
00:44:28
doesn't feel like they're overpriced
00:44:30
let's put it that way and I never want
00:44:32
to tell anyone what to buy but you can
00:44:35
see here that we are still trending
00:44:36
below the long-term average he should
00:44:38
pull this number back to 2010 uh
00:44:40
interesting so at the start of the super
00:44:42
cycle yeah after the Great Recession
00:44:44
yeah yeah it's not a bad point and
00:44:46
probably pull it back frankly all the
00:44:47
way to 2005 2006 because you had enough
00:44:50
companies there that were public that
00:44:52
were sassy software companies including
00:44:54
Salesforce might be a six and set 7.8
00:44:56
and we might be at the 20-y year average
00:44:58
that's a really good point I'll ask BR
00:44:59
to do that freeberg switching to you you
00:45:02
have been a capital allocator and
00:45:04
Company
00:45:05
formation executive for the last well
00:45:08
close getting close to a decade and you
00:45:10
made big news this week instead of doing
00:45:13
more funds which I know you had a lot of
00:45:15
people interested in backing your funds
00:45:17
you decided you're going all in and that
00:45:20
you are choosing to take the highest
00:45:23
performer most promising company in your
00:45:24
portfolio and become CEO of that company
00:45:27
explain your decision because I think it
00:45:29
does relate exactly because you're got
00:45:31
skin in the game here the most skin
00:45:33
possible which is your time you've
00:45:35
decided to go the CEO out put all your
00:45:36
eggs in one basket explain your thinking
00:45:38
we started a business at the production
00:45:40
board which is my
00:45:42
firm four years ago with Jud Ward who's
00:45:46
the CTO and co-founder of this business
00:45:48
who came up with some pretty novel ideas
00:45:51
on how we could use Gene editing to make
00:45:55
incredible transfer an agriculture
00:45:57
reality the conversation originally
00:45:59
started from a paper I read in January
00:46:01
of 2019 I reached out to Jud and said
00:46:04
hey we should talk about this paper and
00:46:06
we started brainstorming and Jud came up
00:46:08
with this concept for this business and
00:46:10
it was really a you know call it a
00:46:14
moonshot that they undertook and we've
00:46:16
put tens of millions of dollars of
00:46:19
capital into this project over the last
00:46:20
four years and been operating it in
00:46:22
stealth and the team had some pretty
00:46:24
significant breakthroughs this year that
00:46:26
make the whole thing a reality now the
00:46:28
potential of the business is so
00:46:30
significant that I really don't have a
00:46:33
choice but to go all in on this it's a
00:46:36
no-brainer as I said in the tweet I put
00:46:38
out I could spend a bunch of my time as
00:46:40
you said like starting other businesses
00:46:42
or making Investments but at the end of
00:46:44
the
00:46:46
day you know investing a cruise to a a
00:46:50
power law where if you have something
00:46:52
that's going to be transformative it
00:46:54
could be many multiple
00:46:57
on all the other St you do and so it
00:46:59
only made sense for me to say look I've
00:47:01
got toate my time attention and energy
00:47:03
to making sure that this business
00:47:05
realizes its potential I'm going to go
00:47:07
in full-time as CEO so it's pretty
00:47:09
exciting you know Gene editing I'll talk
00:47:11
a little bit about it but I can't share
00:47:12
too many details Gene editing as you
00:47:15
guys know was discovered it's
00:47:17
controversial whether it was discovered
00:47:19
first by George church and the group at
00:47:21
the at the broad in Harvard or Jennifer
00:47:23
dowon and her group at Berkeley
00:47:26
but crisper cast 9 is the system that
00:47:30
allowed us for the first time ever to go
00:47:32
in and make specific edits to DNA uh
00:47:36
historically any work we've
00:47:37
done in the genome has been you know
00:47:40
very ad hoc halfhazard throwing large
00:47:43
amounts of DNA into a cell to try and
00:47:45
get that cell to do something but
00:47:47
crisper really unlocked this call it
00:47:49
search and replace function in DNA and
00:47:53
that capability has allowed researchers
00:47:56
to make novel Therapeutics to create
00:47:58
have new discoveries in biology and it's
00:48:01
really unlocked an entirely new era in
00:48:04
Biology one application of Gene editing
00:48:06
is in agriculture where we can look
00:48:08
specifically at the genes in plants and
00:48:10
what they do to the plant and if we can
00:48:13
make specific changes that you would
00:48:15
otherwise see in nature through
00:48:18
traditional plant breeding and mutations
00:48:20
happen over time through plant breeding
00:48:22
can you accelerate those changes and can
00:48:24
you make a set of changes rather than
00:48:26
spend Millennia breeding plantss can you
00:48:28
make a specific set of changes that will
00:48:30
cause the plant to do something very
00:48:31
novel and as a result get the plant to
00:48:34
be more successful and by editing the
00:48:36
DNA of the plant to make it more
00:48:38
successful its yield goes up it can
00:48:40
generate more food with less water more
00:48:42
food with less land more food with less
00:48:44
labor etc etc that's the general premise
00:48:47
on how we can use Gene editing to drive
00:48:50
productivity in agriculture amazing and
00:48:53
you could I assume make the straw
00:48:55
berries taste more delicious like those
00:48:57
ones from haido in Japan as opposed to
00:49:00
just making them giant flavorless
00:49:02
softballs the weight Gene editing has
00:49:04
been thought about in agriculture over
00:49:06
the last decade has been exactly what
00:49:08
you're saying which is to make a
00:49:10
specific trait edit which is one edit in
00:49:12
one gene that does one specific thing to
00:49:14
the plan and what Jud and the team came
00:49:17
up with was starting with the problem
00:49:19
rather than starting with this you know
00:49:21
kind of very specific thing that we
00:49:23
could do and they said how do we get
00:49:24
yield to go up significantly in plants
00:49:27
and they came up with this creative idea
00:49:30
which is doing a series of edits which
00:49:32
is called Multiplex editing multiple
00:49:33
edits across multiple genes that would
00:49:36
actually change the biology of a plant
00:49:38
in a fundamentally understandable way
00:49:41
but that would ultimately Drive such a
00:49:43
transformative increase in yield it
00:49:45
would open up entirely new opportunities
00:49:47
in agriculture and so that was the
00:49:49
moonshot was the series of edits that
00:49:51
could you know change how
00:49:53
plants you know do a specific set of
00:49:56
things that makes their yield go up
00:49:57
significantly and we weren't sure if it
00:49:59
would work first of all we weren't sure
00:50:00
if it was possible to do the
00:50:02
edits editing plants is very hard the
00:50:04
cell wall of plants has to be dissolved
00:50:07
then you have to get the editing
00:50:08
Machinery into the plant into the cell
00:50:10
and then you have to get that cell to
00:50:12
edit the right Gene and not have other
00:50:14
edits and then you have to get the cell
00:50:15
to grow back into a plant there's so
00:50:17
many complicated difficult steps you
00:50:19
have to get all of them to work and then
00:50:21
we weren't even sure if making all those
00:50:22
edits would cause the outcome that we
00:50:24
expected and it turns out
00:50:25
that it does and that happened as of a
00:50:27
few weeks ago this company and that's
00:50:29
why I decided to step in because
00:50:31
Suddenly It's like oh my gosh the
00:50:32
moonshot is working we put in a lot of
00:50:34
capital we spent years funding the
00:50:36
exercise it's real and now we're going
00:50:39
to take off um and that's why I'm going
00:50:40
all on on this I so I'm being a little
00:50:42
Cy with respect to the details as I
00:50:44
understand it's top secret stuff that's
00:50:46
fine I definitely want to talk more
00:50:48
specifically about what the team's done
00:50:49
and what we're going to do with the
00:50:51
business which I will happily do in a
00:50:53
few months when some some things become
00:50:55
public
00:50:56
but in the meantime I'm excited to do it
00:50:57
I got to tell you the last SE it's been
00:51:00
seven years since I've been an operating
00:51:02
CEO and you know to some degree there's
00:51:06
always been a piece missing for me in
00:51:08
what I do every day that I haven't felt
00:51:10
like I've had the ability to have the
00:51:11
influence and make the decisions that I
00:51:14
think need to be made you're advising
00:51:15
the CEO you're sitting in a board seat
00:51:17
kind of encouraging them to do certain
00:51:19
things but then sometimes they listen
00:51:21
and sometimes they don't so to actually
00:51:23
be in the seat feels to me the right
00:51:26
place it's the right place where I can
00:51:27
have the influence and drive the change
00:51:29
that I want to see and I haven't done
00:51:31
that in a very long time and so it's
00:51:33
also personally I think the right
00:51:35
decision for me to find you know
00:51:37
satisfaction in the work I'm doing not
00:51:38
to mention the excitement I get out of
00:51:39
the business and you and I have talked
00:51:41
about this privately you know the the
00:51:43
world has too much Capital there's just
00:51:45
tons of money there's too many problems
00:51:47
to be solved the real issue especially
00:51:50
when you're running an incubator or uh a
00:51:54
stu you know a startup Studio like some
00:51:55
of the startup Studios is who is going
00:51:58
to Pilot this very fast jet fighter and
00:52:03
the number of people who are ambitious
00:52:05
and technically know how to fly one of
00:52:08
these planes and do it at high speed and
00:52:10
you know want to take on that dangerous
00:52:12
cockpit is very low and so I think it's
00:52:15
very courageous of you to jump on and do
00:52:16
this so congratulations the point you're
00:52:18
making is a really good one worth
00:52:19
talking about just for a second there's
00:52:21
been this criticism in Silicon Valley
00:52:24
and I'd love your guys's point of view
00:52:26
on this too jamath and saaks but like
00:52:28
and Jal but like there's been this
00:52:30
criticism in Silicon Valley which is
00:52:31
that you know we do too much of the easy
00:52:34
stuff and to all the capital goes into
00:52:36
the apps and stuff the things that are
00:52:38
the path of least resistance to making
00:52:40
money not into the hard things that are
00:52:42
low probability require a lot of capital
00:52:44
it's not universally true but it's
00:52:45
generally true with respect to how
00:52:47
capital is allocated and you know I was
00:52:50
kind of talking with a bunch of people
00:52:51
last week about
00:52:53
this and I I kind of realize that like
00:52:56
there's only if you're going to do a
00:52:59
difficult project that requires a lot of
00:53:00
capital you're going to want to entrust
00:53:02
that Capital to someone that has proven
00:53:05
themselves someone who's proven
00:53:07
themselves is generally going to have
00:53:10
the choice of things they're going to
00:53:11
want to do with their life and if
00:53:13
they've proven themselves it usually
00:53:14
means they've had some exit event or
00:53:15
some liquidity event that discourages
00:53:18
them from doing a very difficult thing
00:53:20
and taking on a lot of risk and burning
00:53:21
themselves to death again when they've
00:53:23
already made it and the people that have
00:53:25
made it usually make it in software the
00:53:27
first time around because software
00:53:28
creates a path of least resistance to
00:53:31
generating returns and then the
00:53:34
challenging question for them is do you
00:53:36
do it again and you make easy money you
00:53:38
know how to do it or do you take a five%
00:53:41
shot or 2% shot of success 98% chance of
00:53:44
failure going after a very hard project
00:53:47
that takes a very long period of time so
00:53:48
I think that the challenge
00:53:50
with difficult technology being
00:53:53
developed in Silicon Valley is less
00:53:54
about
00:53:56
a dir of capital or a dir of ideas or a
00:53:58
dir of opportunities it's more about a
00:54:00
dir of talent that finding the right
00:54:02
folks who have the capabilities and have
00:54:05
done this before to want to step back
00:54:08
into the saddle and take on a very large
00:54:10
low probability
00:54:12
problem is really the challenge that I
00:54:14
see a lot of in getting a lot of these
00:54:16
things kind of going and funded hard to
00:54:18
get people to be in the arena yes Jam
00:54:20
you've seen this in your portfolio on a
00:54:22
hard problem is what I'm saying like a
00:54:24
2% chance of suc kind of problem like
00:54:26
why would I do that when I can go do
00:54:27
something that's I'm 60% likely to
00:54:29
succeed at and do really well doing
00:54:31
it I find that most companies are very
00:54:35
undermanaged and undere experienced and
00:54:39
it's surprising for me it it lacks a
00:54:41
level of sophistication that I just
00:54:44
assumed existed and I guess that's
00:54:46
because my last experience was when I
00:54:48
was helping to build a company that
00:54:50
frankly coming out of the great
00:54:52
financial crisis we were recruiting
00:54:54
people at Facebook from Google for the
00:54:56
most part and then building an entire
00:54:59
core of young people and grooming from
00:55:01
within it was we had a pretty good go of
00:55:05
it fast forward to 2023 and I must admit
00:55:09
that the companies that I interact with
00:55:11
when I get into the
00:55:14
weeds I think the real talent at freed
00:55:16
br's point is spread too thin across too
00:55:18
many businesses and so there are pockets
00:55:21
of greatness in every company but
00:55:22
there's no real gravitational pull for
00:55:26
any of them as a result of that this is
00:55:27
an excellent point as well when we had a
00:55:29
zurp environment so many companies got
00:55:31
funded that an amazing CMO CTO VP of Ops
00:55:37
started their own company and they were
00:55:40
just their natural position was the
00:55:41
sixth man on the bench you know on the
00:55:43
Knicks or The Warriors not the primary
00:55:45
scorer they weren't Steph Curry they
00:55:47
shouldn't be in that position they
00:55:48
should be coming off the bench and being
00:55:50
an amazing contributor this is I've
00:55:52
concluded the best time in the world to
00:55:53
start a new company I I
00:55:55
am uh absolutely Amazed by the companies
00:55:59
coming and applying for funding for us I
00:56:01
understand because that's your business
00:56:02
model but what about encouraging people
00:56:04
to actually join a good company and
00:56:05
learn how to be a good manager
00:56:07
absolutely these are two the two best
00:56:09
options I think if you have two of three
00:56:11
really great Builders you actually know
00:56:14
how to build in the two of three you
00:56:16
have a great idea and you want to do it
00:56:18
I encourage to start a startup if you
00:56:20
don't have a great idea you don't have
00:56:21
two or three co-founders you don't want
00:56:22
to lead the thing find somebody who's
00:56:25
just getting onto the Launchpad or just
00:56:26
getting a little escape velocity in
00:56:28
their rocket which would be defined as
00:56:30
10 to 30 employees maybe having raised
00:56:34
two to20 million that's an ideal time to
00:56:37
get on the rocket and just any seat you
00:56:40
can get as Cheryl Samberg said famously
00:56:43
any seat on the rocket ship is a seat on
00:56:45
the rocket ship you just want to get on
00:56:47
board yeah jaman I just agree with the
00:56:49
first part of what you said oh okay
00:56:51
explain
00:56:52
why I run into two and three person
00:56:55
teams every day that I think are
00:56:58
exceptionally talented who should be
00:56:59
inside of a company and instead they
00:57:01
found somebody to give them money and so
00:57:03
instead they're starting something and
00:57:04
they're just Meandering and the problem
00:57:06
with these two and three person teams is
00:57:08
that even now if you stick the right
00:57:11
label on it like AI you'll find five or
00:57:13
six or seven million doar of money it
00:57:17
won't be led by any single investor so
00:57:20
it's all done in a safe none of these
00:57:22
folks have boards and so they come in
00:57:24
check in with me time to time and I ask
00:57:26
them about their progress and it's a
00:57:28
mess and I'm shocked and I'm like why
00:57:31
are you guys wasting your time like you
00:57:32
should be at a startup that's winning
00:57:35
and part of it is that they think it's
00:57:36
the right thing to do and I don't think
00:57:38
there's any Valor in being a a Founder I
00:57:41
think there's a lot of Valor in building
00:57:43
something that's really valuable for
00:57:45
people and if that means being a
00:57:46
director of marketing go do that instead
00:57:49
it's a valid point I think your most
00:57:51
valid point in that is that there is not
00:57:54
governance and mentorship for during the
00:57:57
peak Zer era we created something called
00:57:59
founder University to kind of it's a
00:58:02
12we course where we teach people how to
00:58:03
do this stuff and then we wind up
00:58:04
investing in about 10% of those
00:58:06
companies and it's nuts how many people
00:58:09
are applying and we tell people when you
00:58:11
hit $2,500,000 in Revenue we'll start
00:58:15
doing quarterly board meetings with you
00:58:18
and they don't even have to be
00:58:19
officially board meetings they just
00:58:20
mentoring sessions for one hour where
00:58:21
you present as if it's a board and so I
00:58:25
largely the passing of the hat and doing
00:58:27
a party round and having no mentorship
00:58:30
is a weakness in the system in our firm
00:58:33
we fixed it with founder University yeah
00:58:34
but isn't Jam make a slightly different
00:58:36
point Jason with respect well I think
00:58:40
that when you have bubbly funding
00:58:42
conditions it leads to an over
00:58:44
fragmentation of talent sure I mean
00:58:46
isn't that the point yes I mean it takes
00:58:49
a certain concentration of outstanding
00:58:53
people not just Founders but also like
00:58:55
early employees to create a great
00:58:56
company and you know with PayPal right I
00:58:58
mean that was the greatest concentration
00:59:00
of talent in history stacked with Talent
00:59:02
right you have that and Google would be
00:59:03
the two best examples yeah yeah so one
00:59:06
of the reasons why you can end up with
00:59:09
again an over fragmentation is if there
00:59:11
is too much funding in the system and
00:59:13
everybody's getting funded for really
00:59:16
you know mid
00:59:17
ideas and it prevents a congealing of
00:59:21
great talent to come together at
00:59:24
companies where have a really big idea
00:59:26
if you believe that the startup
00:59:28
ecosystem was overfunded during the Zer
00:59:30
bubble which it clearly was I mean you
00:59:33
don't just get bubbly valuations you
00:59:35
also get bubbly funding conditions then
00:59:38
by definition there are companies at the
00:59:40
margins are getting funded that
00:59:41
shouldn't get funded and that leads to
00:59:44
an over fragmentation of talent here's
00:59:46
what's happening on the
00:59:47
ground we used to see a lot of solo
00:59:50
Founders Outsourcing their Tech what
00:59:52
we're seeing now is usually two three
00:59:53
four Founders get getting together to do
00:59:55
a company and one of the counter
00:59:59
prevailing forces here is what we saw
01:00:01
with Spotify just laying off 1,700
01:00:03
people Google laying off 20,000 Facebook
01:00:06
laying off I think 25 or 30,000
01:00:08
Microsoft Uber all these companies have
01:00:10
laid off so massively they're all on
01:00:12
hiring freezes so then what happens is
01:00:14
there's massive amounts of talent at
01:00:16
reasonable prices joining together after
01:00:18
having worked at those companies and so
01:00:21
I would say the companies we're funding
01:00:22
at this early stage we're never doing
01:00:25
solo Founders I mean unless it's a
01:00:27
Serial entrepreneur and we're seeing two
01:00:28
or three people who worked at Uber or
01:00:30
Google or
01:00:31
Airbnb you know who have like this
01:00:33
really great uh product velocity coming
01:00:35
together and they have to be Builders so
01:00:38
I think it's two things are true at once
01:00:39
that the number of companies being
01:00:40
funded has plummeted I think about 75%
01:00:43
sacks but the quality and the amount of
01:00:46
concentration of talent even in those
01:00:47
startup cohorts is really high and they
01:00:50
don't have four job offers from Big Tech
01:00:52
they're not having like a sales for for
01:00:54
$300,000 offer coming in or a Google
01:00:56
$400,000 offer coming in so I I think
01:00:59
this is going to be the best vintage
01:01:00
Adventure in our lifetimes that's my
01:01:02
personal belief I invested in 100
01:01:04
companies this
01:01:05
year but I could be wrong we should talk
01:01:08
about the Google Gemini launch Google
01:01:11
just dropped their chat GPT killer and
01:01:14
uh from my perspective it's a awesome
01:01:16
just two quick videos here it does have
01:01:19
very strong multimodal mode if you don't
01:01:21
know what that is just means you can use
01:01:23
images video text input and output in
01:01:27
this demo that you're seeing on the
01:01:28
screen if you're watching the show they
01:01:30
take a picture of a physics test that
01:01:32
somebody took in handwriting they find
01:01:35
which answers are wrong they explain it
01:01:37
lots of reasoning going on in here and
01:01:39
obviously the moti modal means you're
01:01:41
seeing an image and you're getting text
01:01:43
back second video they showed and they
01:01:46
and they they launched a lot of stuff
01:01:47
today with this Gemini
01:01:49
brand they're using the classic example
01:01:52
of doing a party uh planning a party
01:01:55
they Ed my likeness in the Google video
01:01:56
wait what's and here it is there's
01:01:58
there's chubby chamama oh sorry I can't
01:02:00
body sh people sorry about that folks
01:02:03
there's chubby chth I please strike that
01:02:05
oh my God I shouldn't have said that I
01:02:06
thought Vinnie lingam was fat chth
01:02:09
Vinnie Lingham has claimed fat sh I was
01:02:11
that's why I went for chubby I didn't
01:02:12
want to infringe on his
01:02:13
IP but any oh no I'm gonna get cancelled
01:02:18
so in this video the person asks to do a
01:02:20
kids party what's very unique here is
01:02:22
that it does the follow-up questions
01:02:23
which is you know really interesting it
01:02:25
understands reasoning and context but it
01:02:26
built a dynamic interface for this use
01:02:30
case and it did like a pin board and a
01:02:32
kind of um Google esque task list and
01:02:36
kpis and all this other nonsense but
01:02:38
behind all of this in the Gemini
01:02:41
exceptionalism I think is that they did
01:02:43
all these benchmarks against a bunch of
01:02:46
there's a bunch of tests and batteries
01:02:47
of tests that language models use to
01:02:50
prove how strong they are and Google
01:02:52
says Gemini beat gp4 the latest from
01:02:54
open AI in 30 out of 32 benchmarks this
01:02:57
is going to come in three flavors ultr
01:02:59
Pro and Nano that's basically cost and
01:03:02
strength and there's a lot more behind
01:03:04
this but based on what I'm seeing in my
01:03:06
opinion I've been looking at this stuff
01:03:08
every week with snd d and looking at all
01:03:12
of the latest and greatest this feels
01:03:15
like it is a Lea Frog by about 20 or 30%
01:03:19
if this is true but freeberg you looked
01:03:21
at the original papers what are your
01:03:23
thoughts on the underpinnings I talked
01:03:24
about the ux and some of the reasoning
01:03:26
what are you seeing and and we'll
01:03:27
consider this a a flash on thefly
01:03:30
science corner for all those freedberg
01:03:33
stands out there I haven't read the
01:03:36
whole 60 pages but I looked at the
01:03:39
performance charts and it's pretty damn
01:03:41
impressive I feel I use the the demo a
01:03:44
bit I feel like you're interacting with
01:03:46
data from Star Trek you guys ever
01:03:48
watched Star Trek next smile on your
01:03:50
face you are so happy your dream has
01:03:52
come true from your child was like this
01:03:54
lifelong dream I can finally have a chat
01:03:56
with data it's like conversational it's
01:03:59
um predictable in the sense that it kind
01:04:02
of predicts the the details that I might
01:04:04
ask or might otherwise forget to ask
01:04:06
fills them in there's some I think
01:04:09
really smart features of it and I think
01:04:12
it says a lot that
01:04:15
Google truly does have the muscle to
01:04:18
compete and now is showing the wos to do
01:04:22
so that they're actually putting this
01:04:24
out there that they're willing to
01:04:26
disrupt themselves cannibalize their own
01:04:28
search business
01:04:30
potentially in a way that everyone's
01:04:32
been worried they wouldn't be willing or
01:04:34
able to do they'll figure out a way to
01:04:37
monetize it later but they really are
01:04:38
showing that they're willing to try and
01:04:39
make the best product for users which
01:04:42
has always been a core mantra for Google
01:04:45
from you know the origins of the
01:04:47
business focus on the user and all else
01:04:49
will follow and they everyone's been
01:04:51
saying the last couple years they're too
01:04:52
focused on profit they're squeezing
01:04:54
every nickel and dime out of every click
01:04:57
and showing that they're willing to put
01:04:58
this out there says a lot about the
01:05:00
Strategic imperative of the board and
01:05:01
the leadership there so that that makes
01:05:03
a big difference the product seems
01:05:05
really good the scoring data seems
01:05:06
incredible uh against GPT 4 which is I
01:05:09
think the key Benchmark as we know open
01:05:11
AI has some new models that are coming
01:05:13
to Market um here let's pull up the
01:05:15
table of results but this shows Gemini's
01:05:17
performance against gp4 using a number
01:05:20
of well-known metrics I'll say that
01:05:23
there there is no business on Earth that
01:05:26
has more data than Google YouTube is the
01:05:29
richest data repository Digital Data
01:05:31
repository on Earth the YouTube data set
01:05:34
gives Google an extraordinary advantage
01:05:37
in training and clearly we're seeing
01:05:39
that in the results are getting on
01:05:40
Imaging and video here so you know big
01:05:43
big big announcement for Google I think
01:05:44
it's definitely worth saying that
01:05:46
they're in the game and it's going to be
01:05:48
pretty powerful to watch Pretty I think
01:05:50
pretty important to watch saxis freeberg
01:05:52
said the are on the table now
01:05:54
sindar has dropped the wos what's your
01:05:57
take I think it's pretty clear that
01:05:59
Google's be a major player in AI but the
01:06:02
question is are they going to be
01:06:03
dominant in Ai and I think one of the
01:06:05
points that our friend Brad gersner
01:06:07
makes that's well taken about Google's
01:06:09
market position is that if you look at
01:06:11
their position in search which is
01:06:13
gradually being replaced by AI they're
01:06:16
absolutely dominant in search so even if
01:06:19
they turn out to be good or great in AI
01:06:23
their AI franchises is never going to be
01:06:25
as dominant as their search Franchise
01:06:28
was in that market and so to the extent
01:06:30
that AI is replacing search and I think
01:06:34
we're seeing that more and more right if
01:06:36
you can get the AI just to give you the
01:06:37
answer instead of a list of 10 Blue
01:06:39
Links that's a better user experience so
01:06:42
I think as more and more searches get
01:06:44
replaced with AI it's just impossible
01:06:46
that they're going to maintain that same
01:06:48
dominant
01:06:49
share moreover it's really unclear how
01:06:52
you monetize those let's call them AI
01:06:55
searches where it just gives you the
01:06:56
answer because nobody wants to get three
01:07:00
ad links up at the top of their answer
01:07:02
no one's going to click on those so I
01:07:03
think look Google is going to be a
01:07:05
player in AI but as AI displaces search
01:07:09
it's going to be a real challenge for
01:07:10
them as a company I think I have the
01:07:12
opposite position I'll explain sax while
01:07:14
I do think you're right their dominance
01:07:17
won't be the same having used the Google
01:07:21
flights AI integration Google shopping
01:07:24
AI integration that's in bar right now
01:07:26
which is very like 1.0 or even 0.1 I
01:07:29
think the number of searches or the
01:07:31
number of interactions the number of
01:07:32
queries let's call them questions asked
01:07:34
is going to go like 10 20 50 100x I
01:07:37
think people are going to be talking to
01:07:39
their AIS all day long and where I think
01:07:41
you might be wrong is I think actually
01:07:43
the clicks are going to fit in certain
01:07:45
categories perfectly into the response
01:07:47
so in this birthday one if you had a
01:07:49
bunch of ideas of what you could click
01:07:52
on to purchase if it said hey great idea
01:07:54
for the birthday did you think about
01:07:55
these hats did you think about these
01:07:57
piñatas did you think about these places
01:07:58
to get cake and those were all paid and
01:08:01
AI informed them because you wanted to
01:08:02
do an animal based jungle party and it
01:08:05
showed you those it's going to make
01:08:08
unbelievable ad targeting that is right
01:08:11
into your planning hey get these hats
01:08:13
here get this get this flight here book
01:08:15
this restaurant I think it could be a
01:08:17
gold mine and I think the the the
01:08:20
clickstream and and the ad network is
01:08:22
going to fit perfectly into to it same
01:08:24
thing with those questions being asked
01:08:27
you know hey do you want to get a math
01:08:29
tutor do you want to buy this book Etc
01:08:31
so I'm going to take the other side of
01:08:33
it shath where do you land are you short
01:08:35
long or neutral Google based on this I
01:08:38
think that there's two important things
01:08:42
to notice about this the first is who is
01:08:45
in charge of this
01:08:47
project and this is I think after they
01:08:49
did that reorg the most important person
01:08:52
in all of this is Jeff Dean who if you
01:08:54
look back is the one of the most
01:08:58
preeminent technical lights frankly of
01:09:00
the internet but
01:09:02
within Google is just a giant right so
01:09:05
tensorflow map ruce big table spanner
01:09:08
the guy is just an absolute animal he's
01:09:11
proven an ability to not just
01:09:13
conceptualize big ideas but then get
01:09:15
them to Market in a way that can work at
01:09:17
scale right that's the first thing the
01:09:19
second thing is that this Gemini is a
01:09:21
collaboration between Deep Mind for the
01:09:23
first time and Google research and a
01:09:25
bunch of other people at Google so I
01:09:27
think freeberg mentioned this before the
01:09:29
test for Google is not their technical
01:09:31
capacity but their ability to organize
01:09:34
everybody and get them to row in the
01:09:35
same
01:09:36
direction so I think that
01:09:39
that's that's really important my
01:09:42
takeaway is what
01:09:44
I kind of put out on Twitter which is
01:09:47
that I think all of this is one more
01:09:51
brick in the wall on this theme of
01:09:54
commoditization so we have all of these
01:09:57
really interesting foundational models
01:09:59
if you just look back a little bit lat
01:10:01
2's advances have been pretty
01:10:04
amazing out of the UAE Abu
01:10:07
Dhabi the government there showed some
01:10:10
Falcon which showed some really
01:10:12
interesting
01:10:13
promise obviously open AI is doing some
01:10:16
great work with gp4 and GPT 5 now you
01:10:19
see Gemini and and the results that
01:10:22
they're generating
01:10:25
there's going to be a proliferation of
01:10:26
foundational models the cost of those
01:10:29
models will go to
01:10:31
zero and so why is why is that an
01:10:34
important thing well one it's good for
01:10:36
the
01:10:36
ecosystem two it's really good for
01:10:39
developers and three it allows us to
01:10:42
then figure out where the real value is
01:10:44
going to be made and I think the value
01:10:46
is in taking these models and wrapping
01:10:48
them with cheap abstracted Hardware
01:10:51
right you can't have an economy get
01:10:54
built in AI when you have year-long
01:10:56
waiting lists for h100s and A1 100s from
01:10:59
Nvidia that's not possible so that
01:11:02
entire layer as well will get
01:11:03
commoditized so the folks that are the
01:11:05
aws's the azures and the gcps of the
01:11:07
world or these next Generation entrance
01:11:11
who are building AI clouds those folks I
01:11:15
think will make money and then the apps
01:11:16
will make money so I think it's a very
01:11:19
good thing I think that you don't want a
01:11:21
lot of the lock in that Nvidia was
01:11:23
trying to create they were trying to
01:11:24
create essentially a wall Garden where
01:11:26
you had to use Cuda in order to
01:11:28
basically compile to these these miles
01:11:30
to their chips it's going to break all
01:11:32
of that so I'm generally quite
01:11:34
constructive I think that this is a
01:11:37
really good step in democratizing this
01:11:39
whole thing and letting the value
01:11:42
accrete To The Ends it's a barbell
01:11:45
infrastructure providers and app
01:11:47
Builders that's my best guess of where
01:11:48
money gets made here all right adobe's
01:11:51
$20 billion acquisition of figma is
01:11:53
installed right now UK's
01:11:56
CMA stands for competition and markets
01:11:58
Authority has effectively blocked this
01:12:01
acquisition for uh couple of obvious
01:12:04
reasons one reduces Innovation two it
01:12:07
eliminates competition between two top
01:12:09
competitors in product design and three
01:12:12
removes figma as a threat to adobe's
01:12:14
photoshop in illustrator products cmia
01:12:19
mentioned some potential remedies
01:12:20
divesting of overlapping operations in
01:12:23
Market where the deal could cause less
01:12:26
competition or just prohibiting the
01:12:29
merger entirely feels like that's what's
01:12:32
going to
01:12:33
happen and also a peak Zer right that
01:12:37
was a peak Zer deal I have to take issue
01:12:39
with you said that they are doing this
01:12:41
for obvious reasons I don't think these
01:12:44
reasons are obvious in the sense that I
01:12:46
don't think I don't think they speak for
01:12:47
themselves I think they have to be
01:12:49
defended and I I don't think these are
01:12:51
good reasons oh yeah no I the when I say
01:12:55
obvious reasons I'm not endorsing them
01:12:57
I'm just saying the the standard reasons
01:12:59
of lack of competition and consolidation
01:13:03
of competitors so but yeah expand on
01:13:06
your point and you think it should not
01:13:09
be stopped this merger well first of all
01:13:13
this merger was originally announced I
01:13:15
think back on September 15th of 2022
01:13:18
over a year ago what is that that's uh
01:13:22
almost 15 months ago
01:13:24
yeah so this is a ridiculous amount of
01:13:26
time for Regulators to take to figure
01:13:28
out whether they're going to improve the
01:13:29
deal that's no good for anybody I think
01:13:32
businesses whether you're Adobe whether
01:13:34
you're figma have a right to have these
01:13:36
questions answered much more quickly so
01:13:38
what are The Regulators is doing so
01:13:40
that's Point number one point number two
01:13:42
is that it's mostly the UK regulator
01:13:45
which is called the CMA or competition
01:13:47
of markets Authority they're the ones
01:13:50
who are dragging their feet and holding
01:13:52
this up so figman Adobe have to get the
01:13:55
approval of three different regulatory
01:13:58
bodies they have to get approval in the
01:13:59
United States from I think the doj they
01:14:02
have to get approval from the EU with
01:14:05
Brussels and now because of thanks to
01:14:07
brexit they also have to get approved by
01:14:10
the UK and to me it's a little crazy
01:14:14
that one country's you know competition
01:14:17
Authority the UK which is not in the
01:14:18
grand scheme of things that big a market
01:14:21
can hold up this entire deal you know it
01:14:24
should be faster of course right they
01:14:26
should I question whether like one
01:14:29
country the UK should be able to hold up
01:14:31
a deal if the US and the EU approve it
01:14:34
and one thing I would say to startups is
01:14:36
if the CMA is going to start holding up
01:14:39
deals for a bunch of Novel reasons
01:14:42
meaning you know reasons that haven't
01:14:44
previously been articulated before in an
01:14:46
antitrust law why in the world would you
01:14:48
want to create Nexus with the UK I think
01:14:51
this pertains to all the startup
01:14:52
ecosystem because look I remember when I
01:14:54
was doing Amber we decided to open an
01:14:56
office in Europe and we decided to
01:14:58
settle in London and we created a pretty
01:15:00
big office in London we thought that was
01:15:02
the best place for a starup to locate if
01:15:05
you had told me at the time that that
01:15:08
would subject our acquisition by
01:15:10
Microsoft to the CMA over there and that
01:15:13
they would take some novel
01:15:14
interpretation and go hold up my deal
01:15:16
there's no way I would have wanted to
01:15:18
open an office in the UK so let's be
01:15:21
clear about that now I want to move on
01:15:23
just quickly to the argument that the
01:15:25
CMA is making and I do think it's a
01:15:27
novel argument they're not saying that
01:15:30
adobi and figma are competitive today
01:15:33
and actually I think they are operating
01:15:35
in different markets figma is a product
01:15:38
for web designers and web developers and
01:15:42
the end state of a figma design is code
01:15:45
if you look at adobe's products like
01:15:47
Photoshop the end state is marketing
01:15:49
collateral it's it's a marketing design
01:15:52
product nobody uses figma to create
01:15:56
marketing collateral they use Photoshop
01:15:59
and nobody who's using Photoshop is
01:16:02
using that to uh build websites okay
01:16:05
these are in practice pretty distinct
01:16:07
markets and I think the CMA has conceded
01:16:11
that they're distinct and separate
01:16:13
markets but what the CMA is trying to
01:16:15
say is that at some point in the future
01:16:18
if we block this deal figma might
01:16:21
compete um might compete with Adobe they
01:16:25
might create a competitor to photoshop
01:16:28
and that is a bogus rationale for
01:16:30
blocking a deal because first of all I
01:16:32
think we all know that figma has no
01:16:34
interest in competing with Photoshop
01:16:36
they're not going to compete they
01:16:38
they're much more interested in AI
01:16:40
they're much more interested in doing
01:16:41
things like prompt to design to code
01:16:44
they're not interested in building you
01:16:46
know a Photoshop competitor and there's
01:16:49
no reason to believe that they would do
01:16:50
that moreover that is not an objective
01:16:52
standard think about it if you can block
01:16:54
a deal on the grounds that these two
01:16:57
companies don't compete today but might
01:16:59
one day compete in the future it gives
01:17:01
The Regulators a veto over any deal and
01:17:04
that is not the way antitrust is
01:17:05
supposed to work the way that antitrust
01:17:07
is historically worked is you define
01:17:10
what Market these companies are in and
01:17:13
you add their market share together if
01:17:15
they're both in the same Market to see
01:17:17
if it would create an undue Monopoly or
01:17:21
oligopoly something some dynamic like
01:17:23
that it was a market share test which is
01:17:25
an objective test this is not an
01:17:27
objective test this is a regulator
01:17:29
saying hm you know we know you don't
01:17:31
compete today but like one day in the
01:17:33
future you might that is bogus so if you
01:17:36
allow the CMA to block this deal on that
01:17:38
ground they can block any deal for any
01:17:39
reason and then on top of it they've
01:17:41
taken 15 months to come down with this
01:17:44
opinion I think this is going to have a
01:17:46
very chilling effect on m&a activity for
01:17:49
for not a good reason for not a good
01:17:51
reason and that is the last thing the
01:17:53
star ecosystem needs right
01:17:55
now I'm going to agree about the time
01:17:59
I'm going to
01:18:00
agree that we should let a little more
01:18:03
m&a happen I'll disagree Adobe has a
01:18:05
product XD competes directly with figma
01:18:08
and then I've gotten multiple designers
01:18:10
who have included me in figma designs
01:18:13
for things that are other than
01:18:14
interfaces they're using it for decks
01:18:16
they're using it for marketing
01:18:18
collateral and if you go look at figma's
01:18:21
templates offering they are all
01:18:23
Photoshop illustrator key function so in
01:18:26
the market even though the products were
01:18:27
not designed as competitors designers
01:18:29
are starting with figma for many design
01:18:31
projects in my direct experience and by
01:18:33
looking at the templates so I'll
01:18:35
disagree on that third Point jamaath
01:18:36
your take well hold on I got to do a
01:18:38
fact check on one thing you're right
01:18:40
that adobe had a competitive product to
01:18:42
figma called XD they shut it down they
01:18:45
shut it down yeah is it was a failure so
01:18:48
they are out of the market for a web
01:18:50
design tool they're out so that argument
01:18:53
no longer exists and I don't know if
01:18:55
they shut it down because of this deal
01:18:56
or because it was failing anyway but
01:18:58
they solved that problem now with
01:19:00
respect to these use cases where okay
01:19:03
yeah you're you're talking anecdotally
01:19:05
Jason about you've seen
01:19:07
some web designer no I'm talking go look
01:19:11
at the templates I just put the link in
01:19:12
there it's still anecdotal it's not
01:19:14
based on a market share test if you want
01:19:15
to make this argument that figma and
01:19:19
Photoshop are competitive products break
01:19:21
it down in terms of market share that's
01:19:23
my point add up figma's market share in
01:19:25
the market for marketing collateral and
01:19:27
see if that would create undue
01:19:29
concentration fair enough my objection
01:19:31
is that they're not basing this decision
01:19:34
if it can even be called a decision I
01:19:36
think it's more like just concerns and
01:19:38
dragging their feet but they are basing
01:19:41
their concerns on something that's
01:19:44
unquantifiable and I do think that anti
01:19:46
trust decisions should be quantifiable
01:19:49
the concerning thing here is that this
01:19:52
is on the heels of Activision in
01:19:53
Microsoft which was equally protracted
01:19:55
and drawn out I don't I think it's bad
01:19:58
for Capital markets when deals that are
01:20:01
offered up just linger for 15 18 months
01:20:05
I don't think that that's healthy it
01:20:08
causes a lot of
01:20:09
pause amongst investors and it probably
01:20:13
freezes both Adobe and figma from
01:20:16
investing the way that they would if
01:20:18
they knew that this thing was voted up
01:20:19
or down in three months or whatever so I
01:20:21
I think that I totally agree with you
01:20:24
that there needs to be an SLA around
01:20:26
these things and you can't take this
01:20:29
much time I breezed through the CMA
01:20:33
report my gosh it's 400 Pages which is
01:20:37
like that's insane a 400 page document
01:20:39
is like it's a little outlandish but I
01:20:41
wanted to call out two parts of that
01:20:43
document one is in support saxs of what
01:20:47
you said Nick you can just throw it up
01:20:49
here what they said was that in
01:20:50
assessing the competitive effects of the
01:20:52
merger we must decide whether there is
01:20:54
an expectation I.E more than 50% chance
01:20:57
that the merger will result in
01:20:59
diminished competition now that's like a
01:21:02
little nuts because David as you said
01:21:03
it's like we're going to take an
01:21:05
expected probability and a guess into
01:21:07
the future about what we think will
01:21:09
happen and I think that that's not a
01:21:12
fair way of doing business I think that
01:21:14
you have to look at what will happen
01:21:15
when this happens and judge on its face
01:21:19
you can't say well also by the way I
01:21:21
expect that you guys will be in
01:21:22
intelligent and really execute so
01:21:24
that'll just increase the odds that's
01:21:25
not right that's that's what business is
01:21:28
so if I had to steal man the pro figma
01:21:30
side I would say that that's
01:21:32
unreasonable the second side on the pro
01:21:34
figma side is there's this Long Point
01:21:36
here I think it's like number 27 or 28
01:21:38
in this document and this is what's
01:21:40
crazy it's it basically says like hey we
01:21:43
went through document Discovery we found
01:21:45
some emails that basically said by Adobe
01:21:49
that said we did Market analyses we
01:21:52
didn't think we were doing very well and
01:21:54
I think it's important to note for the
01:21:56
CMA that this is what a hundred years of
01:21:59
MBA classes have taught people to do I
01:22:02
mean you teach Executives that go work
01:22:04
at companies to do what's called the
01:22:07
SWAT analysis to figure out what are the
01:22:09
risks and opportunities for your
01:22:10
business and then to go and invest to
01:22:13
fix them that's capitalism and that's
01:22:16
business Theory and we've taught
01:22:18
Executives at every single company to do
01:22:21
this that can't be legal meaning to use
01:22:24
your brain inside of a business to
01:22:25
realize that what you did isn't working
01:22:27
so that would that's also I would say
01:22:29
sacks in support of what you're saying
01:22:31
which is it's taking too long it's
01:22:34
speculative and you're punishing people
01:22:36
for actually being good business people
01:22:38
and I don't think that makes sense
01:22:39
what's the number six months just to add
01:22:41
to that you know again you like an
01:22:44
important overlay here is that the CMA
01:22:47
is the UK's regulator and they're the
01:22:50
smallest Market the GDP of the UK is 3
01:22:53
trillion the GDP of the EU is 16
01:22:55
trillion the GDP of the US is I forget
01:22:58
it's in the 2025 trillion range so
01:23:01
you've got the toughest regulator who is
01:23:04
coming up with the most novel legal
01:23:06
Theory I think it's worth exploring that
01:23:08
these Regulators I think are working in
01:23:12
conjunction and those fingerprints
01:23:15
looked a little bit more obvious I'm not
01:23:16
playing conspiracy theorists but it
01:23:18
looks like the EU the FTC and the CMA
01:23:23
did work together I don't know how
01:23:25
officially or not in Microsoft
01:23:27
Activision it looked relatively
01:23:29
coordinated I suspect that it stands to
01:23:32
reason that they're in touch and they
01:23:33
talk about these deals and their
01:23:35
combined perspectives I don't know how
01:23:37
else you just generate a 400 page Report
01:23:39
with this kind of specificity unless
01:23:41
there's some amount of collaboration and
01:23:43
and sharing which by the way I think
01:23:44
does make sense I think it does make
01:23:46
sense to coordinate your point of
01:23:48
view but I think I agree with you David
01:23:51
the but we don't know that for sure sure
01:23:52
I mean like all I know is that in the
01:23:55
Press reports it's been about the CMA
01:23:57
it's possible that the EU or I don't
01:23:59
think us will do this because that would
01:24:01
just be like inventing holy new
01:24:03
antitrust law right where no I I
01:24:05
understand I I'm I'm just saying that my
01:24:07
my point of view is that as a business
01:24:09
owner my response to this would be to
01:24:11
gatekeep the app in these geographies so
01:24:15
that I don't create an Nexus if I ever
01:24:16
get bought Bingo that's my point that's
01:24:18
exactly my point is that the smallest
01:24:20
Market is creating the most problem for
01:24:22
this merger so assuming they're kind of
01:24:26
on their own in this and the EU doesn't
01:24:28
just copy it if if you're right if they
01:24:30
copy it then figman Adobe have a bigger
01:24:32
problem but I think that's what's going
01:24:34
to happen right then maybe the EU does
01:24:36
copy it but right now the CMA is way
01:24:38
ahead of any other regulator in terms of
01:24:41
a novel Theory so so what I'm saying is
01:24:43
if you're a company why would you
01:24:44
subject yourself to that when it's so
01:24:46
easy to avoid their Market no I think I
01:24:47
think it fundamentally hurts UK
01:24:50
productivity over the long run because I
01:24:52
don't see how companies if they can't a
01:24:55
get a reasonable SLA for a response and
01:24:58
then B get a reasonable document that's
01:25:01
not going to require $50 million of of
01:25:04
lawyers and Consultants to read to do
01:25:07
business in a country just goes down the
01:25:08
incentives to do a business so now if
01:25:11
you Steelman the other side I actually
01:25:15
think it's very difficult to Steelman
01:25:17
why this is bad for competition I think
01:25:19
the only Steelman is more from the
01:25:21
economic shareholder perspective of
01:25:22
adobe which is could they had paid a
01:25:24
different price what does that because I
01:25:26
think it's a mixture of cash and stock
01:25:27
so that's changed because adobe's
01:25:29
rallied a lot and is that price worth it
01:25:31
but that's again not a reason to use a
01:25:35
regulator to run a deal to the ground
01:25:38
right Adobe should just man up and talk
01:25:40
to Dylan and say Here's the new price
01:25:42
otherwise here's a billion dollars I
01:25:44
don't think adobe's driving it in that
01:25:45
way I mean by all accounts figma as a
01:25:48
business is still doing very well even
01:25:49
if they paid too high a price 15 months
01:25:52
ago they've grown they've partially
01:25:54
grown into that valuation already I
01:25:56
don't think Adobe is driving this I
01:25:57
really think that the CMA is driving
01:25:59
this I think there's a regulator who
01:26:01
wants to Pioneer a novel legal Theory
01:26:03
and in a weird way I mean it's not have
01:26:06
you ever seen like a pack of dogs where
01:26:08
you've got like a Great Dane and a
01:26:10
doberman and then a Chihuahua and the
01:26:12
Chihuahua is trying to lead the pack the
01:26:14
CMA is
01:26:15
like and it's like barking the loudest
01:26:18
and trying to shepher all the other
01:26:20
dogs you got a yappy
01:26:24
the issue that you bring up is a Great
01:26:26
Dane and the EU is a is a is a big dog
01:26:29
and yeah yeah but it is if the EU and
01:26:33
the United States follow suit it will
01:26:35
it's just Death By A Thousand Cuts
01:26:37
meaning it will require a Brad Smith
01:26:39
like
01:26:40
character inside of this company who can
01:26:43
go and work with Regulators to really
01:26:45
get it done and this is the Brilliance
01:26:48
of of him at Microsoft is if when you
01:26:52
look at the track record of his ability
01:26:55
post this consent decree to get deals
01:26:57
done inside of Microsoft it's truly
01:27:00
incredible there is nothing that they've
01:27:02
really tried to buy whether it's Nuance
01:27:05
or whether it's Mojang or whether it's
01:27:09
GitHub Activision they've Linked In
01:27:12
they've got they ran the table do we
01:27:15
really want to create an economic system
01:27:17
where whether a deal gets through is
01:27:19
completely arbitrary because there's no
01:27:21
longer a quantitative test and The
01:27:22
Regulators can just pause it that at
01:27:24
some point in the future these companies
01:27:25
may be competitive the and it takes and
01:27:28
furthermore in order to get past the
01:27:30
Regulators who have a completely
01:27:33
subjective standard you need like a
01:27:35
political Genius Like A Brad Smith I
01:27:37
mean that is like the definition of
01:27:40
crony capitalism right is that you get
01:27:42
your deal done if you got a Brad Smith
01:27:44
and you don't get it done if you're a
01:27:46
startup like figma that's not the system
01:27:48
we want to be in absolutely not three
01:27:51
important things one future competition
01:27:53
is a stupid test number two just put six
01:27:56
months on this it's not it's not even
01:27:57
future it's their assessment of the
01:27:59
probability of future competition which
01:28:01
is just dumb it's it's this is precogs
01:28:04
in Minority Report figma could sign an
01:28:06
affidavit today saying that we're not
01:28:11
illustrator we're not building it yeah
01:28:12
it's not our it's not our road map it's
01:28:14
not even an affidavit it's you could go
01:28:16
through you could conduct discovery on
01:28:19
the question of whether figma has ever
01:28:21
even and discuss internally whether they
01:28:24
should compete with Photoshop right
01:28:25
because you don't just launch a
01:28:26
Photoshop competitor out of the blue you
01:28:28
probably discuss it for a while so they
01:28:30
could conduct discovery on that question
01:28:33
I guarantee you figma does not have
01:28:35
robust conversations in Discovery about
01:28:38
competing with Photoshop that's not
01:28:39
where their interest is and then also
01:28:42
they should be just have a six they
01:28:44
should have a six-month clock to do this
01:28:45
and then if I'm Adobe and figma I would
01:28:49
say I would pull a Zuck when they came
01:28:52
at Zuck and said you have to pay for
01:28:53
news in Australia you have to pay for
01:28:55
news in Canada remember these two
01:28:57
government overreaches that you could
01:28:59
even put a link to a news story he's
01:29:01
like okay fine we're just going to not
01:29:02
include links to the New York Times and
01:29:04
feeds that's not allowed they should
01:29:06
just say anybody who's in the UK you can
01:29:09
no longer we're going to look at your IP
01:29:10
addresses we're going to look at your
01:29:11
address you can't buy figma you can't
01:29:13
buy Adobe we're going through with this
01:29:15
so if you don't want consumers to have
01:29:17
this product you don't have to have it
01:29:18
and then people have to get a VPN to use
01:29:20
these products like I would call their
01:29:21
BL on it it's kind of overreaching I
01:29:24
agree okay freeberg any last thoughts as
01:29:27
we wrap up here Jal in order to have a
01:29:29
healthy starup ecosystem we need exits
01:29:31
that's the bot line we do that's the big
01:29:33
picture yes when you put this kind of
01:29:35
chilling effect on m&a because think
01:29:37
about it if you're either an acquirer or
01:29:39
you're a Target you're thinking about
01:29:41
doing a deal and you know that it will
01:29:44
take you at least or it could take you
01:29:45
15 months to get you're not going to do
01:29:47
it's not worth it you chilled it and the
01:29:49
standard for whether it gets approved is
01:29:51
completely arbitrary
01:29:52
that's going to have a dampening or
01:29:54
chilling effect on m&a activity which
01:29:56
means fewer good exits for the ecosystem
01:29:58
which means that less risk Capital will
01:30:00
want to go into the ecosystem to begin
01:30:02
with and a fairer thing I I'll run this
01:30:04
up to flag pull see what you think Sach
01:30:06
why don't they say if they're really
01:30:07
concerned about the top 10 companies hey
01:30:09
the top 10 companies the trillion dollar
01:30:11
crowd right the Microsoft the Google Etc
01:30:14
Apple they have a different standard
01:30:16
than the mid-market so if you really
01:30:18
were concerned about consolidation in
01:30:20
the in the top 10 companies just say
01:30:22
they're not allowed to buy these
01:30:24
companies without going through the
01:30:25
scrutiny but anybody under $250 billion
01:30:28
they can merge they can buy each other
01:30:30
they can do whatever they want they're
01:30:32
exempt from this kind of review and just
01:30:34
let the free market decide because then
01:30:35
that would build up the midm market
01:30:37
right SX I'm concerned about the power
01:30:39
of big tech companies okay but I would
01:30:42
deal with that by targeting
01:30:44
anti-competitive tactics
01:30:46
interoperability yeah require
01:30:47
interoperability don't let them bundle
01:30:49
things like that don't invent some
01:30:52
wholly new arbitrary subjective tests
01:30:55
for whether a company can be acquired we
01:30:57
have a good standard around that which
01:30:59
has to do with market share hey shout
01:31:01
out Lena Khan come on the podt anytime
01:31:02
all right everybody this has been an and
01:31:06
sincerely Lena Khan come on the Pod
01:31:07
let's talk about it this has been
01:31:08
another amazing episode of the all-in
01:31:10
podcast for the dictator trath potia the
01:31:13
Rainman David Sachs and El Capitan the
01:31:18
pilot consultant of Science and CEO
01:31:21
David fre
01:31:22
I am the world's greatest moderator love
01:31:24
you besties we'll see you next time back
01:31:27
at you at
01:31:29
bye we let your winners
01:31:32
ride Rainman
01:31:36
David said we open source it to the fans
01:31:39
and they've just gone crazy with it love
01:31:42
queen
01:31:46
[Music]
01:31:49
of Besties are
01:31:53
that's my dog taking your driveway wait
01:31:57
man oh man myit meet we should all just
01:32:01
get a room and just have one big huge
01:32:03
orgy cuz they're all this useless it's
01:32:04
like this like sexual tension that they
01:32:06
just need to release
01:32:07
[Music]
01:32:13
somehow we need to get
01:32:20
mer
01:32:23
I'm going all
01:32:25
[Music]
01:32:27
in
