00:00:00
look at John Quincy Adams here yeah hey
00:00:02
hey Quincy how you doing
00:00:04
that hair look look at that hair John
00:00:07
Quincy Adams needed a wig to achieve
00:00:09
this look he did he did I did it all
00:00:11
natural I mean it's a lot it's a it's a
00:00:13
look you're like some movie star from
00:00:15
the 1970s you're still working do me a
00:00:18
favor pull up a picture of Grayden
00:00:19
Carter for a second and then put that
00:00:21
side by side with sax let's see just say
00:00:23
I zoom in on that facts this is where
00:00:25
you're headed by the way you're headed
00:00:27
to Crazy Town
00:00:29
this is where you're headed you can just
00:00:30
poof it out on the sides and you get a
00:00:32
little woof swoop on the top
00:00:35
this is where you're headed eccentric
00:00:37
Stacks pull up a picture of Steve
00:00:40
bannon's hair he's a wise Statesman I
00:00:42
think this is what happens when you get
00:00:44
too close to power you get more
00:00:46
eccentric with your hair so like too
00:00:47
much power equals crazy hair now look
00:00:49
this is my theory great and Carter too
00:00:51
much power Vanity Fair he went hair
00:00:53
crazy now you look at Bannon you get me
00:00:56
a Bannon photo here you start to see
00:00:58
they go longer they go wafty they just
00:01:02
they get volume and they're just like
00:01:04
[ __ ] it I'm just I'm not gonna cut it
00:01:06
I'm gonna let it go wild and of course
00:01:08
the the old I mean he's the penultimate
00:01:10
but you look at Trump's hair this is
00:01:11
where it gets truly crazy this is where
00:01:13
you're headed sax
00:01:15
you keep getting this close to power
00:01:17
this is where your hair is headed I'm so
00:01:20
glad this podcast never broke up because
00:01:22
where would we get this amazing Insight
00:01:24
from jaycal if not for keeping this all
00:01:26
together this makes it all worth it it's
00:01:28
very true it is true you get like
00:01:30
eccentric and you get crazy hair this is
00:01:32
men get too close to power
00:01:34
and the hair gets wild unchecked Power
00:01:36
unchecked hair we had a good meeting
00:01:38
last night we had an all-in-summit
00:01:40
meeting let's see Freeburg give me a
00:01:42
call let's catch up on this stuff he's
00:01:43
like oh I'm in the bath right now with
00:01:45
my candles and I'm like yeah okay
00:01:47
whatever that's cool he's like no no and
00:01:49
he presses the video button and then I'm
00:01:52
exposed
00:01:53
I kid you not to the most bubbles I've
00:01:56
ever seen in a bubble bath I like
00:01:58
bubbles and he is peeking his head out
00:02:01
from Over the bubbles and he's like look
00:02:03
which exactly and then he flips he flips
00:02:06
the camera around and I got his toes
00:02:09
pointing out and I kid you not there's
00:02:11
six candles around the bathtub I'm like
00:02:14
this is like the prince of panic attacks
00:02:16
he had to come down for his phone call
00:02:17
with me so now when he has a phone call
00:02:20
with me it's so intense and everything's
00:02:21
getting so intense with the summit that
00:02:23
he has to do self-care yeah that could
00:02:25
be emotional emotionally ready he's
00:02:27
self-caring your wife wasn't anywhere to
00:02:29
be found in the bathtub with the candles
00:02:32
I take a bath every night who are you
00:02:34
Romancing yourself or what yeah I think
00:02:36
he was romantic the spreadsheet with the
00:02:38
prophet life of all in Summit I have
00:02:40
about 18 minutes of self-care every day
00:02:42
18 seconds a minute all right let's get
00:02:44
the show started in three two
00:02:48
let your winners
00:02:51
[Music]
00:02:55
we open source it to the fans and
00:02:58
they've just gone crazy
00:02:59
[Music]
00:03:03
hey everybody Welcome to episode
00:03:06
130 maybe of the all in podcast we're
00:03:10
still here cooking with oil with me of
00:03:13
course the dictator himself chamath Pali
00:03:15
hopatia Prince of panic attack Sultan of
00:03:18
science the queen of quinoa David
00:03:20
Friedberg and the power broker himself
00:03:25
the emperor
00:03:28
the Emperor of his new Republic
00:03:31
anybody have any interest anything going
00:03:33
on interesting this week any interesting
00:03:35
moments for people on the national stage
00:03:38
no okay well let's get right into the
00:03:41
docket first around the docket Ron
00:03:44
DeSantis Governor Ron DeSantis announced
00:03:46
his bid on the internet yeah on
00:03:48
something called Twitter spaces and
00:03:51
it looks like almost 10 million viewers
00:03:54
have seen it so far across all the
00:03:56
different spaces and
00:03:58
Donald Trump wasn't too pleased he said
00:04:01
Rob my big red button is bigger better
00:04:03
stronger and it's working truth because
00:04:06
when Elon fired up the Twitter spaces it
00:04:09
went to 650 000 viewers in under five
00:04:13
minutes and then blew up everybody's
00:04:15
phones my phone was melting I could have
00:04:17
cooked an egg on the back of it the
00:04:19
Twitter app crashed so many times but
00:04:21
then sax with his meager following of a
00:04:23
half million people or something
00:04:25
then restarted the stream and so 15
00:04:29
minutes of technical snafus
00:04:31
were relieved and then there was a
00:04:33
announcement
00:04:35
and I'll let you take it from their sex
00:04:37
you want me to take you behind the
00:04:39
scenes
00:04:41
I guess behind the scenes how did it
00:04:43
come together sex
00:04:45
oh yeah even better yeah the way it came
00:04:47
together is I think the DeSantis team
00:04:49
were interested in potentially you know
00:04:52
doing something different for their
00:04:53
announcement he also did an appearance
00:04:56
on Fox News afterwards and I think he
00:04:57
did a town hall but I think they saw an
00:04:59
opportunity to break new ground here in
00:05:01
terms of presidential announcements by
00:05:03
doing it on Twitter spaces and so the
00:05:07
DeSantis campaign connected with Twitter
00:05:08
and Elon and I agreed to kind of co-host
00:05:12
the space and with him and he did his
00:05:15
announcement now you're right we had
00:05:17
about 15 minutes of technical
00:05:18
difficulties because the interest was so
00:05:21
intense at the time the the room crashed
00:05:24
it had over 700 000 people in it and
00:05:26
there were it crashed because so many
00:05:27
people were trying to get in it I think
00:05:28
there was well over a million people
00:05:30
trying to get in it so you normally
00:05:32
don't have this kind of Interest I think
00:05:34
this is by far the biggest Twitter space
00:05:37
the engineers there told me that the
00:05:39
previous order of magnitude was more
00:05:41
like a hundred thousand not a million
00:05:42
and then you combine that with the fact
00:05:44
that elon's account has over 100 million
00:05:47
followers and that basically led to a
00:05:49
new level of scale and you guys
00:05:50
understand that when you get to a new
00:05:52
level of scale as a platform there's
00:05:54
always going to be some yeah some
00:05:56
challenges so hey event the engineers
00:05:58
were there trying to figure out how do
00:06:00
we you know solve this and we realized
00:06:02
the simplest thing to do would be to
00:06:03
restart the room on my account instead
00:06:05
of elon's and then Elon joins the
00:06:08
co-host and we brought to Santa sin and
00:06:10
it all worked perfectly at that point
00:06:11
the audio was pressed we had over 300
00:06:14
000 people in the room there was also
00:06:16
another room that had been set up by
00:06:18
Mario nawal who's like a big Twitter
00:06:21
spaces host and he had hundreds of
00:06:24
thousands of people on there and then he
00:06:25
had live commentary from people he
00:06:28
invited and so this ability to Fork
00:06:30
Twitter spaces into many different rooms
00:06:33
and each room gets to decide who they
00:06:35
want to be their hosts and their
00:06:36
speakers allows you to do live
00:06:38
commentary and in a way that you could
00:06:40
never have done before so it was really
00:06:42
Innovative I think super Innovative and
00:06:45
for people who don't know Twitter spaces
00:06:46
was really a rushed job at Twitter they
00:06:49
did that in reaction to clubhouse they
00:06:51
it's it's still basically a beta product
00:06:53
that predates Elon being there
00:06:56
and it doesn't have yet the
00:06:59
infrastructure or scale of the code base
00:07:00
I don't think like YouTube and twitch do
00:07:02
which you know have been working on this
00:07:04
problem for I don't know 15 years maybe
00:07:07
the live products observations yeah go
00:07:09
ahead
00:07:11
the first is I thought DeSantis did a
00:07:13
really good job just rolling with the
00:07:15
punches
00:07:16
okay
00:07:17
because I think whether he wins
00:07:20
you're not going to look back on this
00:07:22
moment as the defining moment of the
00:07:24
campaign nor whether he loses will you
00:07:26
say that this was
00:07:28
where it was it all the beginning of the
00:07:30
end instead what this was was a really
00:07:33
seminal moment I think in
00:07:35
further divorcing
00:07:38
ourselves away from the mainstream media
00:07:42
and you know that it was that important
00:07:44
because Biden tried to troll
00:07:47
the whole thing Nick you can show this
00:07:49
link
00:07:50
this link works and I actually think
00:07:53
this is a really terrible idea by the
00:07:56
Biden team because never this basically
00:07:58
acknowledges how important the moment
00:08:01
was and the fact that even the president
00:08:03
of the United States was grinding the
00:08:06
link
00:08:06
and couldn't get in because there was so
00:08:09
much interest
00:08:10
is really important and I think what it
00:08:13
speaks to is the fact that we are now
00:08:16
showing credibly that you don't need to
00:08:19
listen to four channels to shape your
00:08:21
Consciousness and you can just go
00:08:24
straight to the source and what Zach
00:08:26
said is right if you now have
00:08:28
a moderated forum
00:08:31
that then gets put out to 50 or 60
00:08:34
different Twitter spaces all at the same
00:08:37
time Framing and reframing it gives
00:08:40
people a chance to come to their own
00:08:41
conclusion in a totally
00:08:43
unique way so I think it was
00:08:46
really really an important moment for
00:08:51
citizen journalism and podcasting and
00:08:55
audio formats and all of the things that
00:08:57
I think we've been a small part of but I
00:08:59
think that
00:09:00
it's really must have tilted the
00:09:03
mainstream media and it tilted The
00:09:05
Establishment and you can see that in
00:09:07
Biden's tweet yeah I'm going direct yeah
00:09:09
so that was the first thing second thing
00:09:10
I think DeSantis did a really decent job
00:09:14
enrolling with the whole thing and being
00:09:16
super cool and just being committed to
00:09:18
the process and I think that says a lot
00:09:20
about him as well which was again it's a
00:09:22
question mark and I've said this before
00:09:24
the Big Money guys
00:09:26
got close and then took a step back so
00:09:29
this could be a very good moment for
00:09:31
them to reevaluate because I thought he
00:09:33
did a very good job so I agree so you
00:09:35
know I was there I was live I was seeing
00:09:36
what was happening behind the scenes
00:09:37
when DeSantis came on after we you know
00:09:40
had 15 minutes of technical difficulties
00:09:41
there wasn't a hint of anger there
00:09:44
wasn't a trace of irritation there
00:09:46
wasn't any freaking out that we were
00:09:49
potentially ruining his presidential
00:09:51
announcement the guy was completely calm
00:09:53
and more than that he was in good
00:09:55
spirits I mean if you listen to the
00:09:57
recording
00:09:59
you know he's happy he's tone was great
00:10:01
his tone was really good I mean and then
00:10:03
of course it was very substantive he
00:10:05
spoke in a very articulate way about all
00:10:07
the issues uh when Congressman Thomas
00:10:09
Massey came on to make a a commenter
00:10:12
question he was telling a kind of
00:10:13
amusing anecdote about when they were in
00:10:15
Congress together and Massey was one of
00:10:18
the only members of Congress who uh had
00:10:20
a Tesla but he comes from Kentucky so I
00:10:24
think his license plate said Kentucky
00:10:25
coal on it KY Cole so anyway you know
00:10:28
the guy was in good spirits and so I
00:10:30
think it does say a lot about what he
00:10:32
would be like as a president cool Under
00:10:34
Fire doesn't get thrown off his game you
00:10:37
know again not an angry guy you know
00:10:39
which I think will be a real contrast
00:10:40
with let's say some of the other people
00:10:42
in the race you know Trump was sort of
00:10:45
angrily truthing during the whole thing
00:10:47
you know so I think it was a pretty
00:10:49
strong improving the act of posting to
00:10:51
truth social exactly so the contrast
00:10:53
between the personalities could not have
00:10:56
been stronger now to the other point the
00:10:58
charmath about the traditional media
00:11:00
you're right about what they're saying
00:11:03
if you look at that the headlines this
00:11:05
morning from traditional media Outlets
00:11:07
that really started within minutes of
00:11:10
the the technical difficulties the New
00:11:12
York Times called the announcement of
00:11:14
fiasco NBC News called it a meltdown
00:11:17
Politico called it horrendous and you
00:11:20
know why I mean if you you know what I
00:11:22
call that winning
00:11:24
I mean if they are losing their cool
00:11:27
that's clearly they feel threatened by
00:11:30
the fact that a major presidential
00:11:32
candidate chose to go directly journal
00:11:35
the Wall Street Journal headline is
00:11:36
DeSantis looks to rebound after botch
00:11:39
Twitter announcement but again what they
00:11:40
failed to acknowledge is and I'm not a
00:11:42
DeSantis supporter per se I'm
00:11:43
open-minded to him but I haven't decided
00:11:45
one way or the other but this is a guy
00:11:47
that managed to get millions of people
00:11:49
in a nanosecond to be activated to hear
00:11:52
what he had to say that is different
00:11:54
than basically giving talking points and
00:11:56
having surrogates blather through fox or
00:11:59
CNBC or CNN to hundreds of thousands of
00:12:03
people this is a really important moment
00:12:05
I think what happened okay we got all
00:12:07
the positive just to finish that point
00:12:08
so if this was a political rally a
00:12:10
traditional political rally that had
00:12:12
started 20 minutes late
00:12:13
would anybody have said that was a
00:12:15
disaster that happens all the time no it
00:12:17
was the crashing that made people be
00:12:19
like oh my phone crashed you know I was
00:12:21
using the app I got crashed out of the
00:12:22
app but I my phone did not crash so no
00:12:25
yeah that's what I'm saying the app
00:12:26
crashed a couple of times because yeah
00:12:27
your phone did not crash yeah but anyway
00:12:29
look this was at the end of the day this
00:12:32
was a an event that started 20 minutes
00:12:34
late once we started it on my Twitter
00:12:36
account in my Twitter space it worked
00:12:38
perfectly there was no problem and
00:12:39
that's the recording that you can go on
00:12:41
Twitter now and listen to we had about
00:12:43
300 000 people contemporaneously in my
00:12:46
Twitter space I think Mario had a couple
00:12:48
hundred thousand but if you look at the
00:12:49
numbers today there's already 10 million
00:12:52
views for this thing
00:12:55
three to ten million on the replay and
00:12:58
that's what you have to look is replay
00:12:59
because the world has moved to
00:13:01
asynchronous like this was three o'clock
00:13:03
in the afternoon in
00:13:05
Silicon Valley and six o'clock in the
00:13:08
afternoon in the afternoon so you have a
00:13:11
Hysterical overreaction by the
00:13:13
traditional media simply don't like a
00:13:15
that Elon is disremediating them by
00:13:18
letting the politicians go direct and
00:13:19
then B he's restored the platform being
00:13:21
a free speech platform so they jumped on
00:13:23
this the first second they could to try
00:13:25
and portray as a disaster but you know
00:13:27
there was an article in political this
00:13:29
this morning and they were asking voters
00:13:31
in Iowa what they think about it and
00:13:32
they're like huh what you know it's not
00:13:35
it's an elite thing that's not yeah it's
00:13:37
not even on the radar Freeburg we heard
00:13:39
all the positive here any the
00:13:40
constructive feedback on it or thoughts
00:13:42
on it generally
00:13:44
now look I mean
00:13:46
I would love to see all the political
00:13:48
candidates engage in long-form
00:13:51
discussion like this
00:13:53
so that an audience can really get a
00:13:55
sense of who they are and what they
00:13:57
think in a direct way and uninterrupted
00:13:59
way
00:14:01
and in a deeper way sort of like the
00:14:03
conversation we all had with RFK last
00:14:05
week and Zach did with DeSantis
00:14:06
yesterday and I would love for
00:14:09
the voters
00:14:10
who engage in that content to better
00:14:13
understand the candidates rather than
00:14:15
key off of short talking points and
00:14:17
short ads I think one of the saddest
00:14:20
commentaries on Modern democracy is that
00:14:23
you can spend a dollar to buy a vote
00:14:25
that all of these campaigns functionally
00:14:27
try and raise Capital to go and do
00:14:30
advertising and that the advertising
00:14:33
creates these little 30-second sound
00:14:35
bites that actually change people's
00:14:36
opinions
00:14:37
and it's a really sad it will they
00:14:40
otherwise they wouldn't spend the money
00:14:41
and I think it's a really sad State of
00:14:43
Affairs that
00:14:45
we spend money to change people's
00:14:47
opinions by shortening everything to a
00:14:50
sound bite instead of doing what maybe
00:14:52
would have happened a long time ago you
00:14:54
know we often talk about
00:14:55
the Town Square if you lived in a
00:14:57
village with 60 people and someone was
00:14:59
going to run for the mayor of that
00:15:00
Village you'd all go to the Town Square
00:15:02
you'd hear that person have a debate
00:15:03
have a discussion you talk with them and
00:15:05
that dialogue would inform your decision
00:15:07
about who you're going to vote for but
00:15:09
you know with 300 million people in this
00:15:11
country and you know short attention
00:15:13
spans and jumping around from one thing
00:15:15
to another there aren't a lot of great
00:15:17
forums for any of us to really engage
00:15:19
with candidates particularly on the
00:15:21
national level and make a better
00:15:22
informed decision hearing from that
00:15:24
person directly instead everything is
00:15:26
about driving narrative and chopping
00:15:28
things up and getting the sound bite and
00:15:30
driving the emotional reaction and I
00:15:32
think one of the the greatest things
00:15:33
that's happening right now that you know
00:15:36
could be a great benefit for this modern
00:15:37
democracy is the sort of stuff that
00:15:39
we've been doing on our podcast and RFK
00:15:41
coming on board
00:15:42
like last week and what sax did with
00:15:44
Twitter and I really hope that more
00:15:46
politicians do that and that more people
00:15:47
engage and consume that sort of content
00:15:49
to make their decision and ignore the
00:15:51
idiotic sound bites and the stupid
00:15:53
30-second ads and the nonsense that you
00:15:56
know third parties use to try and drive
00:15:57
narrative
00:15:59
so yeah look I mean I think that's
00:16:01
generally the positive trend that that I
00:16:03
took away from it Jacob what do you
00:16:04
think I have some notes for sacks I'm
00:16:06
always you know careful not to be too
00:16:08
critical you know in the moment because
00:16:11
I don't people will weaponize them as oh
00:16:13
Jason said this because you know it's
00:16:15
Elon and he's team Elon or he's friends
00:16:17
with sax
00:16:18
but I think
00:16:20
everything said so far just tweak the
00:16:22
media a great start the thing that I
00:16:25
think was there were probably one or two
00:16:27
misses here that I think you can build
00:16:28
on sax since you were very involved in
00:16:30
the campaign with DeSantis
00:16:33
I think it wasn't the free-for-all that
00:16:36
Elon had said it would have been right
00:16:39
so he pitched it as like hey this is
00:16:40
going to be uncensored and everybody's
00:16:43
gonna get to ask hard questions and that
00:16:45
didn't happen and you know I think that
00:16:47
is in stark contrast to what Trump did
00:16:50
because I was doing the media analysis
00:16:52
of this and so I think the follow-up
00:16:54
needs to be where he actually takes
00:16:56
questions not from fans not from people
00:16:58
who are already voting for him but
00:17:00
really you know a little bit more of the
00:17:02
cantankerous people
00:17:03
the people who maybe are voting for
00:17:05
Trump the people who are maybe in the
00:17:07
Biden camp and that's what was the
00:17:10
master stroke of Trump's CNN Town Hall
00:17:12
he went into the you know the Lions Den
00:17:15
or what most people perceived was going
00:17:17
to be the Lions then and he took on all
00:17:19
comers he fought hard and that one was I
00:17:23
think a bigger win I don't think
00:17:24
DeSantis that was not a presidential
00:17:26
announcement so just to be clear yes
00:17:28
this was a launch event declaring that
00:17:30
he's running so in that context yeah so
00:17:33
you want to compare it to what these
00:17:35
things usually are which is a guy
00:17:36
standing at a Podium yes in front of his
00:17:39
supporters compared to that this was
00:17:41
much more interesting Dynamic and
00:17:43
engaging I agree with you that at some
00:17:45
point he's going to step into the lion's
00:17:46
den do a town hall on a place like CNN
00:17:48
and I think he probably will in fact I
00:17:50
think he did yeah I think he did a town
00:17:52
hall we're here I think he actually did
00:17:53
a town all in Florida later that night
00:17:56
so yeah I agree with you it just wasn't
00:17:58
that kind of event now to the point
00:17:59
about involving more people you know one
00:18:02
of the things I learned hosting this
00:18:04
thing is there were literally thousands
00:18:05
of people raising their hands yes you
00:18:07
can't store I was scrolling through this
00:18:09
in real time in the app I wanted to call
00:18:12
them more people but it was just there
00:18:15
was no way to do it this is something at
00:18:16
scale they need to add to the interface
00:18:18
which is maybe pre-populating a list
00:18:20
sorting it by the number of followers
00:18:22
whatever and this is my second point
00:18:24
about this so I agree with you as an
00:18:25
announcement this was Lightspeed ahead
00:18:27
as like a full court you know like sharp
00:18:30
elbow thing it didn't hit that note but
00:18:31
it can that's what I think the follow-up
00:18:33
you know having if DeSantis wants to
00:18:35
come here and have like a two-hour
00:18:36
discussion we kind of get into it a
00:18:37
little more that would be I think really
00:18:39
good for him because I think he's got
00:18:41
the potential to win over moderates and
00:18:43
I don't think this one over moderates
00:18:44
didn't win over anybody who was in you
00:18:47
know the left or in the you know
00:18:49
moderate left and that was one of the
00:18:50
things I noticed is my second point
00:18:52
about it is what a great group of
00:18:55
listeners if you look at who showed up
00:18:57
to listen
00:18:59
Bill Ackman
00:19:00
Michael Dell
00:19:03
no you Source by your followers so but I
00:19:06
think it sorted by the number of uh
00:19:08
followers they have it's certainly by
00:19:09
your followers who then have the most
00:19:10
followers so you're gonna see it's a bit
00:19:12
of a echo chamber that way okay okay
00:19:16
sure but they were still very prominent
00:19:18
people in them because prominent people
00:19:21
follow you
00:19:22
okay but they weren't coming to follow
00:19:24
me they were coming to listen to this my
00:19:25
point is still the same Bill Ackman were
00:19:28
coming so but that's why you saw them
00:19:29
because they're your followers I we all
00:19:31
understand that they still showed up for
00:19:33
this in the middle of the day I think
00:19:34
that is really interesting and that yeah
00:19:36
yeah yeah that's yeah that's what my
00:19:38
point is it's really interesting that
00:19:39
powerful people showed up for it full
00:19:41
stop sucks I have a question for you
00:19:42
sorry Jason whenever you're done oh yeah
00:19:44
and then I just had a couple of other
00:19:45
ones
00:19:46
Elon was a bit underutilized in this
00:19:48
format
00:19:49
and that's you know a challenge when you
00:19:51
have Elon in the room because people
00:19:52
want to ask Elon questions so this is
00:19:55
something I think he's going to have to
00:19:56
you know contend with people wanted to
00:19:58
hear Elon asked questions than the
00:20:00
people who are were asking the questions
00:20:02
wanted to ask you a long question so you
00:20:04
do get like a little bit of
00:20:06
how to utilize Elon in this format I
00:20:08
heard a lot of back channel from
00:20:10
important people like I wanted to Elon
00:20:12
ask a question or maybe the two of them
00:20:13
get into it so for a follow-up one
00:20:15
getting some people you know who maybe
00:20:18
don't traditionally get to ask questions
00:20:20
because let's face it in traditional
00:20:22
media the only people get to ask
00:20:23
questions are these anchors on news
00:20:25
channels I want to hear Michael Dowell
00:20:27
or Bill Ackman ask a question that's the
00:20:28
opportunity in Twitter spaces maybe
00:20:30
letting Elon ask a tough question then a
00:20:32
follow-up or you know like we did here
00:20:33
with RFK I would have been totally open
00:20:35
to that I just couldn't manage it there
00:20:37
was just so many people in the room I
00:20:38
didn't see Ackman actually I mean I
00:20:40
totally believe he was there but I
00:20:41
didn't see it the only criticism people
00:20:42
had of use access you're a major donor
00:20:44
and you stack the deck was the most
00:20:46
cynical version of it with like five
00:20:48
people who were just super effusive but
00:20:50
this is his launch party so I think in
00:20:52
that context
00:20:53
I would have called on Bill Ackman if
00:20:55
I'd known he wanted to speak but I
00:20:57
couldn't see whether he raised his hand
00:20:58
or not no I didn't see him in the room
00:21:00
so what am I supposed to do call on Bill
00:21:01
Ackman and he's like uh guys I don't
00:21:02
want to talk I don't want to put him in
00:21:04
that spot can we get him on this pod so
00:21:06
we can Grill them about fortune and
00:21:07
fiscal policy
00:21:09
who Bill Ackman I don't know look I
00:21:11
don't speak for the campaign but I can
00:21:12
put in the requests
00:21:14
you put 150 dimes in get them on hold on
00:21:17
can you can you tell us the actual Tick
00:21:19
Tock of how this whole thing came to be
00:21:20
the campaign within the last week or two
00:21:23
had the idea of should we explore doing
00:21:26
it on Twitter spaces and I think they
00:21:28
were open to doing it and
00:21:31
sax didn't know about it when I put it
00:21:33
in our group chat Zach was like he is
00:21:34
yeah you found out about it
00:21:36
okay all right I thought you didn't good
00:21:39
no sometimes Elon will just tweet
00:21:40
something without telling anybody or to
00:21:42
just go directly no I mean I I help look
00:21:44
the the census people reached out to
00:21:46
Elon and Twitter they also reached out
00:21:48
to me about it and we discussed it and
00:21:50
they were excited breaking the ground
00:21:52
he's something different and I think
00:21:53
they deserve credit for that can I ask a
00:21:55
follow-up question just on the DeSantis
00:21:57
thing himself because you've seen him up
00:21:58
close
00:21:59
do you know
00:22:01
why Schwartzman Griffin Peter fry
00:22:04
stepped in took a half step back and do
00:22:06
you know what it's going to take for
00:22:07
them to just lean in and just make this
00:22:09
effect to complete so that he's really
00:22:11
well financed to be Trump I don't know
00:22:13
what their issues are but I did see I I
00:22:15
don't know this what's his name Peter
00:22:17
fry or whatever yeah yeah I don't I
00:22:18
don't know him but I did see a press
00:22:20
article and he was referencing
00:22:22
book Bannings so that to me just showed
00:22:25
that he was buying into some you know
00:22:27
crazy left-wing kind of narrative that
00:22:29
was the best part of that I asked this
00:22:31
answer about that so by the way for
00:22:33
people by the way that was the one thing
00:22:34
that was new news uh for a lot of people
00:22:36
was the book Banning can you explain the
00:22:39
issue and the spin and the clarification
00:22:42
on book Banning in Florida it's very
00:22:44
simple they haven't banned any books in
00:22:46
Florida but the question is what books
00:22:49
are taught in the curriculum and what's
00:22:51
in the school library and some of these
00:22:53
books were positively pornographic I
00:22:56
mean they had someone DeSantis have an
00:22:58
event where somebody was actually
00:22:59
reading what was in these books and the
00:23:03
mere reading of what was in the books
00:23:05
actually got labeled on social media by
00:23:07
the algorithms so there was a lot of
00:23:09
stuff that's just not appropriate for
00:23:11
kids no one is restricting your ability
00:23:13
to buy or read whatever books you want
00:23:15
in the State of Florida is ridiculous
00:23:17
there's a legitimate question about
00:23:19
what's in the curriculum by the way I
00:23:22
remember when we had debates on campus
00:23:24
about this is back a long time ago like
00:23:27
the late 80s early 90s when they were
00:23:28
throwing dead white males out of the
00:23:30
curriculum you know Plato Aristotle
00:23:32
Shakespeare people like that the people
00:23:34
on the right who were opposing that
00:23:36
never made the argument that this was
00:23:38
censorship everybody understands that
00:23:40
when you're dealing with a curriculum
00:23:42
you have to make choices you can't teach
00:23:44
everything so the question is what are
00:23:46
you going to limit it to God I think
00:23:48
that when people actually dug into some
00:23:50
of these books they realized that
00:23:52
they're not appropriate so any of that
00:23:54
his answer was along those lines that
00:23:56
you know you should go listen to it for
00:23:58
yourself but I think that he did address
00:24:00
that issue I think he's kind of exposed
00:24:03
it as a you know left-wing media
00:24:06
narrative and I think he deconstructed
00:24:09
it and I think that was helpful because
00:24:10
I think there are a lot of centrists who
00:24:12
all they've heard about DeSantis is that
00:24:14
he's Banning books or you know or the
00:24:17
Disney issue which we also asked them
00:24:19
about and you recovered that I think so
00:24:22
um yeah the yeah we talked about some of
00:24:24
these controversies the issue here just
00:24:26
to summarize it is the left is framing
00:24:30
the
00:24:31
Banning quote unquote but just the not
00:24:34
inclusion of certain books which are
00:24:36
graphic that have sex in them from
00:24:39
certain age groups in schools as part of
00:24:41
a curriculum so they're saying these
00:24:43
books are banned in Florida the more
00:24:45
accurate way to say it is these books
00:24:47
are not being used in curriculum
00:24:50
you know for these age groups parents if
00:24:52
they want to buy them can buy them and
00:24:55
then can read them so this is where this
00:24:56
conversation is kind of breaking down
00:24:58
and I think is a complete waste of time
00:25:00
all parents want control over at what
00:25:03
age or what stuff their kids are exposed
00:25:05
to and so there is a thoughtful
00:25:07
discussion to be had there and maybe the
00:25:08
discussion is this is something your
00:25:10
parents should decide right well yeah of
00:25:12
course but it's not even a conversation
00:25:13
it's a hoax it's a it's a fake media
00:25:15
narrative they're trying to pin on him
00:25:17
and DeSantis has been the the subject
00:25:19
and victim of these types of fake median
00:25:22
narratives which are deliberate the
00:25:23
media's not trying to have a
00:25:24
conversation they're trying to
00:25:25
disqualify the guy and they did this
00:25:27
this goes all the way back to covid when
00:25:29
he opposed lockdowns and kept schools
00:25:32
open and they called him death santis so
00:25:35
the media has had it in it for this guy
00:25:36
since the beginning because he refuses
00:25:39
to go along with their narratives on
00:25:41
things this is the same reason that he
00:25:43
hate Elon is Elon is defying their
00:25:45
narrative control so you put you put
00:25:47
these two guys together okay hold on
00:25:49
even before the technical difficult
00:25:50
let's be clear the media's heads were
00:25:53
exploding that DeSantis and Elon were
00:25:55
going to be in the room together look at
00:25:57
the Vanity Fair article the headline was
00:25:59
DeSantis announcing with Elon because
00:26:01
David Duke wasn't available okay the
00:26:03
Atlantic was saying that this whole uh
00:26:05
Twitter space was a hate group I mean
00:26:07
literally so these people were losing
00:26:09
their minds before
00:26:12
we even got into the technical
00:26:13
difficulties and then they pounced on
00:26:15
that that there was a 20-minute delay
00:26:17
they pounced on that as some sort of
00:26:19
fiasco which it wasn't will DeSantis
00:26:22
cut spending and cut our taxes
00:26:25
well we cut spending we didn't get into
00:26:27
that so have you ever had a conversation
00:26:29
with him about balancing the budget and
00:26:31
federal debt do you know his position on
00:26:33
cutting like uh long-term capital gains
00:26:35
and taxes
00:26:37
let me give you the elevator pitch I
00:26:40
mean the nutshell for DeSantis is he
00:26:41
calls it the Florida blueprint he's
00:26:43
saying look at what we've done in
00:26:44
Florida look at what we've achieved at
00:26:46
Florida let's take Florida Nationwide
00:26:48
Florida has had a great economy Florida
00:26:50
Tax budget zero time because I don't
00:26:54
that's a state that's because if you
00:26:56
have zero talks you have my book oh
00:27:00
the dictator has spoken if people want
00:27:02
to look up this issue there's a book
00:27:04
called genderqueer and there's a story
00:27:06
about it in the New York Times and it's
00:27:08
um you know it's a graphic novel about
00:27:10
coming of age for a non-binary person
00:27:12
which is fine
00:27:13
great but it's it's very graphic it's a
00:27:16
graphic graphic novel it has explicit
00:27:18
scenes
00:27:19
and these kind of books most parents
00:27:21
would say I would like to wait on
00:27:24
cutting my taxes to zero okay there you
00:27:26
go it's called uh just to write it come
00:27:30
on guys overall great job and yeah get
00:27:33
him on the Pod here and we'll have a
00:27:35
great discussion with him yes great job
00:27:37
great job please invite him to to our
00:27:40
paw to I think you know we each have our
00:27:42
own issues or else we're just gonna go
00:27:44
with the other Republican candidates
00:27:46
Nikki history and I'm proud of you we're
00:27:48
also voting for yes I don't know I mean
00:27:50
all right well thanks guys
00:27:52
I think it'd be great to get Nikki Haley
00:27:54
that's a no that's a no just say no no
00:27:56
no
00:27:56
I'm going to put in the ass to this
00:27:58
answers for sure all right well that's
00:28:00
great yeah it would be great people want
00:28:01
to hear for more folks
00:28:04
so a lot of other news going on I think
00:28:07
a good place for us to go to next maybe
00:28:10
do we want to do the debt ceiling
00:28:12
defense spending or in videos let's go
00:28:15
together in my opinion okay great we'll
00:28:17
go with the Sultan of science U.S debt
00:28:19
ceiling
00:28:20
is at 31.4 trillion currently uh
00:28:24
Treasury Department recently won the
00:28:25
federal government could be unable to
00:28:27
pay its bills as soon as June 1st Fitch
00:28:30
put the US credit rating which is the
00:28:32
highest rank of Triple A on negative
00:28:34
watch so negative watch means it's
00:28:38
trending towards bad and that it's
00:28:40
imminent that they might lower it due to
00:28:42
this debt limit deadline it seems like
00:28:45
we're not making much progress every
00:28:46
couple of days we seem to swing one way
00:28:49
or the other the stock market has kind
00:28:52
of shrugged it off and the last time the
00:28:55
U.S credit was downgraded was in 2011
00:28:57
but we avoided that
00:28:59
chamoth what's going on here what do you
00:29:00
think the eventual outcome in is there a
00:29:03
chance that these Knuckleheads who
00:29:06
represent us are going to default and
00:29:08
cause chaos or do you think this is all
00:29:11
Kabuki theater and we're going to wind
00:29:13
up in the same place which is they raise
00:29:14
it and make some modest concessions
00:29:16
August 5th 2011.
00:29:19
the s p downgraded the United States
00:29:23
from AAA to double A plus you know what
00:29:26
happened
00:29:27
absolutely [ __ ] nothing okay
00:29:30
so I do think that this is another
00:29:33
opportunity for
00:29:35
the Little Red Riding hoods to get their
00:29:37
panties in a bunch
00:29:39
but these downgrades don't mean much
00:29:42
difference
00:29:49
talking about
00:29:51
I think that these third-party credit
00:29:53
rating agencies are not particularly
00:29:55
that
00:29:56
accurate and sophisticated they don't
00:29:59
know anything that you don't know
00:30:01
they're not getting access to Moody's
00:30:03
gave svbn a rating the week before it
00:30:05
went into receivership this is my exact
00:30:07
point well done
00:30:10
none of these because you know what
00:30:11
they're doing these companies are in the
00:30:13
business of putting a letter
00:30:14
on a document and then selling access to
00:30:18
that document so if you're going to
00:30:20
trust these guys to know what they're
00:30:22
saying either right or wrong independent
00:30:25
of what side you are Outsourcing your
00:30:27
decision making to the wrong body so
00:30:30
whether it's s p Fitch or Moody's I
00:30:32
would tell you to ignore it
00:30:34
and come to your own conclusion I think
00:30:37
that this budget ceiling thing is
00:30:40
happening now every couple of years
00:30:43
and it seems like the real thing we
00:30:45
should be talking about is whether
00:30:46
Biden's going to use the 14th Amendment
00:30:47
and just Ram a budget through
00:30:49
and I think that that's yeah so under
00:30:52
under the 14th Amendment the president
00:30:53
of the United States has in their
00:30:56
discretion the ability to make sure that
00:30:58
the United States can pay their debts
00:31:00
and that wasn't necessarily thought of
00:31:02
as a way to work around the debt ceiling
00:31:04
impasse
00:31:06
but because Congress refuses to pass any
00:31:08
structural laws that allow
00:31:10
the budget to ebb and flow with tax
00:31:12
receipts we get in caught in this
00:31:15
situation again roughly every handful of
00:31:18
years so what Biden could do is he could
00:31:20
say the 14th Amendment
00:31:22
gives me the right I'm going to pass a
00:31:24
budget via executive order
00:31:26
from a game theory perspective what that
00:31:29
does is it forces Republicans to sue
00:31:31
Biden take him to the Supreme Court and
00:31:33
say this is unconstitutional
00:31:36
the problem with that is that that
00:31:37
probably really does tank the economy in
00:31:40
the way that it creates enough
00:31:42
uncertainty where Capital markets freeze
00:31:44
up and liquidity just absolutely goes
00:31:47
away and again liquidity has been
00:31:48
shrinking for the last 18 months anyways
00:31:50
so it'd get even worse so I think the
00:31:53
brinksmanship right now between McCarthy
00:31:55
and Biden is basically that Veiled
00:31:57
Threat if Biden effectively isn't going
00:31:59
to get something done I think he's going
00:32:01
to test the 14th Amendment now
00:32:03
if the 14th Amendment turns out to be a
00:32:05
reasonable way in order to pass a budget
00:32:07
the good news is
00:32:08
not just for Biden but for any future
00:32:10
president including Republican
00:32:12
presidents will not have to be held
00:32:14
hostage by Congress
00:32:16
they will in the 11th Hour be able to
00:32:18
pass a budget that works the
00:32:20
implications of that though is that now
00:32:21
you will not get consensus
00:32:23
and whatever's happening in that moment
00:32:26
you'll see more of so if you have
00:32:28
a spending president they'll just
00:32:30
continue to spend and if you have an
00:32:32
austerity president they'll continue to
00:32:33
cut and that'll have implications on
00:32:35
either side you think this is over
00:32:38
issues the 14th Amendment or do you
00:32:40
think
00:32:41
it's a valid use of it no I it's not
00:32:43
going to fly I mean it's true that the
00:32:45
14th amendment has some language about
00:32:48
the full faith and credit the U.S shall
00:32:50
not be compromised uh however it's never
00:32:52
been tested or tried so no one exactly
00:32:55
knows what it means progressives are now
00:32:57
saying that the language means that
00:32:59
Biden could just keep spending without
00:33:00
the debt limit being raised but find
00:33:03
himself through cold water on this he
00:33:05
said that he didn't think he had that
00:33:07
Authority and even Lawrence O'Donnell
00:33:09
the other night who's a big Progressive
00:33:11
on the media he was saying that the Dems
00:33:13
were going to take this tack they needed
00:33:15
to do it months ago before they started
00:33:16
negotiating on a debt limit increase so
00:33:18
it's too late now in other words if
00:33:21
you're going to take that position why
00:33:22
would you have negotiated that you're
00:33:24
you the president are effectively
00:33:25
conceding you don't have that Authority
00:33:27
when you start negotiating so I think
00:33:29
it's too late to invoke the 14th
00:33:31
Amendment
00:33:32
they're going to have to raise the debt
00:33:33
ceiling that being said I think they're
00:33:34
going to be able to Reuters had a report
00:33:36
this morning that they're only 70 72
00:33:38
billion apart now in their positions
00:33:41
which is a relatively small amount so my
00:33:43
guess is they're gonna they're gonna
00:33:45
work this out
00:33:46
now what should the fate of the debt
00:33:48
limit be moving forward I mean the thing
00:33:51
that's so stupid about our budget
00:33:52
process is we spend the money and then
00:33:54
argue about whether we're going to pay
00:33:55
the credit card bill the way that the
00:33:57
debt limit should work is you raise the
00:34:00
debt before you spend it
00:34:02
Congress should have to vote first on
00:34:05
whether they want a deficit or debt
00:34:06
spend then you decide how much you're
00:34:09
going to spend so this thing this vote
00:34:11
needs to be moved up before they spend
00:34:12
it and I think if you did that it'd be a
00:34:14
lot harder for the politicians to spend
00:34:16
money because
00:34:17
you know if you had an up or down vote
00:34:19
very early on saying should we even be
00:34:21
in deficit I think a lot of people would
00:34:23
say no we're not we're not in a war so
00:34:26
why why would you deficit spend if we
00:34:28
bring any thoughts in the debt ceiling
00:34:29
if not we'll go on to
00:34:31
the government accountability vis-a-vis
00:34:33
the defense spending I mean look we're
00:34:35
running a two trillion dollar a year
00:34:37
deficit and it's forecast to continue to
00:34:40
be at that level for several years and
00:34:43
it's going to take pretty
00:34:46
radical changes in how we tax and spend
00:34:50
to make up that Gap so you know this is
00:34:54
a problem that is going to continue and
00:34:57
repeat
00:34:58
and it does beg the question you know
00:35:01
would you want to buy bonds from an
00:35:03
entity that's
00:35:05
generating 4 trillion in revenue and
00:35:07
spending Six Trillion and has a plan to
00:35:10
do that for the foreseeable future and
00:35:11
it's only you know seeing its economy or
00:35:14
its underlying Revenue base grow by two
00:35:16
percent a year
00:35:18
it seems like you know that would be a
00:35:20
very hard startup to fund
00:35:22
and it would be a very difficult growth
00:35:24
investment to make particularly in an
00:35:26
environment like this so I'm just
00:35:28
pointing out that this is a becoming a
00:35:30
more kind of
00:35:32
systemically risky situation for the U.S
00:35:35
that you know we spend the way we do and
00:35:38
we have to keep coming back to having
00:35:40
these debates about it's appropriate or
00:35:41
not and now they've narrowed down
00:35:43
the way that the Republicans seem to be
00:35:45
kind of going about getting this done
00:35:47
this deal done is they're only focusing
00:35:48
on the you know roughly 15 percent of
00:35:51
the overall federal budget and they're
00:35:53
saying we'll kind of make some tweaks in
00:35:54
in that in that little range there and
00:35:56
save some save some pennies save some
00:35:58
nickels but uh we've got a much more
00:36:01
fundamental problem to deal with which
00:36:02
is how do we stop running these deficits
00:36:04
and running the data but I mean yeah I'm
00:36:08
gonna sound like a friggin no I think
00:36:10
you're right at some point yeah the
00:36:13
inflation is here and the crowding out
00:36:15
of private investment and private
00:36:18
borrowing is now occurring because the
00:36:19
government borrowing is so big I mean
00:36:21
our our treasury our government debt of
00:36:23
what 32 trillion that has to be financed
00:36:25
somehow and all that money is going to
00:36:27
finance government instead of being put
00:36:29
to other uses so I think that the
00:36:31
downside's already here you can't run
00:36:33
two trillion dollar deficits every year
00:36:34
that's unsustainable now I think that
00:36:38
you guys referenced what happened in
00:36:39
2011. that's worth this discussing for a
00:36:42
second because I actually think that
00:36:43
what was agreed to in 2011 was excellent
00:36:46
Obama and the republicans in Congress
00:36:48
agreed to a thing called the sequester
00:36:50
where they agreed that they would freeze
00:36:54
both defense and non-defense
00:36:56
discretionary spending until they could
00:36:58
get their act together and agree on what
00:37:00
the budget should look like and so the
00:37:02
theory was the Republicans agreed to the
00:37:04
pain of freezing defense Democrats agree
00:37:07
to the pain of freezing non-entitlement
00:37:10
social spending and that's how the deal
00:37:12
was cut I actually think that made a lot
00:37:14
of sense and I think we should have kept
00:37:16
operating under the sequester until we
00:37:18
got to a balanced budget but the reason
00:37:20
that broke quite frankly is because of
00:37:23
the lobbying power of the military
00:37:24
industrial complex is so great in both
00:37:26
the Republican and Democratic parties
00:37:28
that they basically wanted the sequester
00:37:31
overseas keep raising the defense budget
00:37:33
I think it's just that there's never
00:37:34
been a degree of accountability for the
00:37:36
spending that's being done because of
00:37:37
this assumption that we'll always be
00:37:39
able to pay our debt and we'll always be
00:37:41
able to take on more debt and I think
00:37:43
that you see
00:37:45
the other conversation the other topic
00:37:47
that we were going to talk about was
00:37:49
this
00:37:50
lack of accountability and defense
00:37:52
spending that you know we should play
00:37:54
the Jon Stewart clip
00:37:55
you know where I think who does he
00:37:57
interview the under Secretary of Defense
00:37:59
or something what is her title deputy
00:38:01
secretary of defense Kathleen Hicks was
00:38:04
discussing in the defense budget when I
00:38:06
see a state department get a certain
00:38:09
amount of money and a military budget be
00:38:10
10 times that and I see a struggle
00:38:13
within government to get people like
00:38:15
more basic Services I mean we got out of
00:38:17
20 years of war and the Pentagon got a
00:38:19
50 billion dollar raise like that's
00:38:22
shocking to me now I may not understand
00:38:24
exactly the ins and outs and and the
00:38:27
incredible magic of an audit but I'm a
00:38:30
human being who lives on the earth and
00:38:33
can't figure out how 850 billion dollars
00:38:36
to a department means that the rank and
00:38:39
file still have to be on food stamps
00:38:41
like to me that's [ __ ] corruption I'm
00:38:44
sorry
00:38:45
and then there was a story that came out
00:38:48
this week according to Bloomberg the
00:38:50
government accountability office
00:38:51
disclosed that the Pentagon is currently
00:38:53
unable to account for hundreds of
00:38:54
thousands of spare parts for for the
00:38:56
F-35 Jets the pentagon's never passed
00:38:58
pentagon's never passed an audit and
00:39:00
it's accepted and it's acceptable in the
00:39:03
same way that it's acceptable to never
00:39:07
balance the budget to always spend and
00:39:10
give everyone what they want and to find
00:39:12
ourselves in you know this kind of late
00:39:14
stage problem where we've gotten away
00:39:16
with it for so long that both of those
00:39:19
factors whether it's the the
00:39:21
downgrade on the rating whether it's the
00:39:23
fact that we end up in these battles
00:39:25
over whether to raise the debt ceiling
00:39:27
every couple of years
00:39:29
or whether we can't pass an audit all of
00:39:31
these factors are symptoms of the same
00:39:33
underlying problem which is that there
00:39:35
is no accountability for you know how we
00:39:38
operate the
00:39:40
you know the kind of fiscal condition of
00:39:42
the the federal government you know the
00:39:43
other thing it leads to is all these
00:39:44
optional Wars so let me give you an
00:39:47
example so all of these wars are always
00:39:49
they're all free yeah they're all off
00:39:50
book so take Ukraine we've appropriated
00:39:53
what 130 billion that's not part of the
00:39:55
defense budget we have it or a billion
00:39:57
in the defense budget but then we just
00:39:59
stacked the 100 billion or so for
00:40:00
Ukraine on top of that and it's off book
00:40:02
now if we said the reason we're funding
00:40:05
Ukraine is because it improves the
00:40:07
National Defense of the United States
00:40:08
why wouldn't that just come out of the
00:40:09
defense budget if you force people to
00:40:12
make actual choices actual decisions and
00:40:15
they could say okay we could spend 100
00:40:16
billion on Ukraine or we could spend 100
00:40:18
billion on stockpiling tanks or f-35s or
00:40:22
whatever for the United States now you
00:40:24
actually Force some prioritization
00:40:26
decisions but because the wars are
00:40:28
always off book
00:40:29
they're just additive you just tack them
00:40:31
on and we did that within Afghanistan we
00:40:33
did that in Iraq but we spent something
00:40:35
like eight trillion dollars and that was
00:40:37
just added to the national debt
00:40:39
yeah we can't afford these anymore it's
00:40:41
becoming clear to everybody that there
00:40:42
has to be some accountability and
00:40:44
chamoth I guess is it seems like there's
00:40:47
a couple of unpopular stances to take
00:40:49
when you're running for office one of
00:40:50
them is social security retirement age
00:40:53
as we saw it in other countries like
00:40:54
France where people are arguing over 62
00:40:57
64 years old whatever it is yeah and so
00:41:00
these entitlements
00:41:01
job requirements if you want to get
00:41:03
unemployment and then of course defense
00:41:05
spending you seem Un-American if you
00:41:07
don't want to take care of old people
00:41:08
you seem un-American and you know
00:41:12
week if you don't want to support the
00:41:14
government is there a path towards
00:41:16
celebrating
00:41:18
an administrator as CEO an executive who
00:41:22
tells honest truth to the American
00:41:23
people which is hey we we've been on a
00:41:26
binge we've been going on vacation
00:41:28
nobody's looking at their the bills and
00:41:30
we need to have a staycation we need to
00:41:33
cut costs we need some austerity here is
00:41:34
there a path for somebody Ron DeSantis
00:41:38
Chris Christie RFK whoever it is to win
00:41:41
over the American public to win over
00:41:43
moderates with an austerity
00:41:45
and they balance the budget message or
00:41:48
is it just too unpopular to even bring
00:41:49
that up I just think that you guys don't
00:41:53
psychologically understand how to get
00:41:55
what you want
00:41:56
I think the best way to get what you
00:41:59
want which I would want too which is a
00:42:01
healthy economy where there's
00:42:03
accountability for spending
00:42:06
is to not look at expenses
00:42:09
and all of this talk is always about
00:42:11
expenses but to look at revenue and
00:42:13
limit Revenue more drastically and I
00:42:17
think the best way to limit Revenue
00:42:19
dramatically at the federal and state
00:42:21
level is to just minimize taxation as
00:42:24
much as possible
00:42:25
and I think that is something that
00:42:27
Democrats and Republicans have a hard
00:42:29
time fighting nobody wants to raise
00:42:31
their hand and say I want new taxes
00:42:33
nobody says that
00:42:35
right and I think that if you attach
00:42:37
that to some sort of spending guidelines
00:42:40
like what David says with a sensible
00:42:42
foreign policy you just end up spending
00:42:44
a lot less you want to fight a foreign
00:42:46
war okay great well you know what it's
00:42:48
part of the existing budget let's go
00:42:49
figure out why we want to do it we want
00:42:51
to have more accountability in defense
00:42:53
spending okay well look the defense
00:42:55
budget is a half of what it used to be
00:42:56
because we just have half the revenue I
00:42:59
think that if you start to go and talk
00:43:01
about austerity and cutting Social
00:43:02
Security and health care benefits it's
00:43:04
literally a non-starter people close
00:43:07
their eyes they plug their ears and you
00:43:09
get nowhere
00:43:10
now separately I think the step even
00:43:13
before you look at taxation so
00:43:15
minimizing government revenue is to
00:43:17
figure out how to refinance so if you're
00:43:20
a homeowner and you got a mortgage in
00:43:22
the 80s you were paying 12 14 15 16 if
00:43:27
when rates kept going down you or the
00:43:30
people around you didn't have the common
00:43:31
sense to refinance that that was
00:43:34
negligence
00:43:36
similarly we're in a position today to
00:43:39
refinance our debt wall and push out
00:43:42
these maturities past 100 plus years we
00:43:44
are the only country that has a viable
00:43:47
stable economy that looks like it can
00:43:49
still continue to thrive at scale take
00:43:52
advantage of that you lose Nothing by
00:43:54
giving us the optionality generating
00:43:57
some Hundred Year debt refinancing a
00:43:59
bunch of this short-term stuff and then
00:44:00
second inflation helps us
00:44:04
and it helps us because it allows us to
00:44:06
inflate the value of these dollars that
00:44:08
allows us to pay off our short-term
00:44:09
maturity so
00:44:11
these are two practical simple things
00:44:14
that are uncontroversial that should
00:44:16
happen today
00:44:17
and then separately I think you need to
00:44:19
look at minimizing Revenue
00:44:22
and then you can cut expenses but if you
00:44:24
flip them around I'm just telling you
00:44:26
it's not like I want any of this to
00:44:28
happen but I'm telling you nothing will
00:44:30
change and you guys will still be crying
00:44:32
wolf in five years it'll still be the
00:44:34
same it'll just be a different debt to
00:44:35
GDP number that gives you anxiety
00:44:37
speaking of anxiety free break your
00:44:38
response I don't agree I think we need
00:44:40
to balance the budget and I think that
00:44:43
if we don't we what can you agree with
00:44:45
financing pushing out hundred years no
00:44:47
no reducing Revenue solves the problem I
00:44:50
think that and by the way one of the
00:44:52
problems with
00:44:53
a democracy Chapman is that
00:44:56
you speak about it as if everyone
00:44:59
benefits from a tax cut
00:45:01
generally there's some disproportionate
00:45:03
benefit to a tax cut and that's why it's
00:45:06
less likely to happen because the
00:45:08
majority will benefit by keeping taxes
00:45:10
high for a minority whether that's some
00:45:13
corporate minority or whether it's um
00:45:16
wealthy individual minority and that's
00:45:19
why I think the opposite is more likely
00:45:21
to happen which is we're more likely to
00:45:22
see taxes go up in order to bridge the
00:45:25
gap to continue to fund programs that
00:45:26
everyone wants to everyone wants an and
00:45:28
they don't want an or
00:45:29
and as a result they'll kind of continue
00:45:31
to seek Revenue because there are other
00:45:32
places to get Revenue that don't affect
00:45:34
me meaning it doesn't affect the
00:45:36
majority and I don't mean me personally
00:45:38
I'm just speaking about a voter and a
00:45:40
voter would say if there's a way to tax
00:45:41
other people for me to get the things I
00:45:44
want they will vote Yes for that and
00:45:46
that's ultimately what the system ends
00:45:47
up finding and I think that's what's
00:45:49
more likely to end up happening that's
00:45:51
awesome
00:45:53
yeah look I mean I agree with part of
00:45:55
both of what you're saying which is
00:45:57
I agree with Schubert that we need to
00:45:59
balance the budget there's no excuse for
00:46:00
running peacetime deficits this large
00:46:02
we're really going to regret this one
00:46:04
day on the other hand I agree with Jamal
00:46:06
that if you just try to solve the
00:46:07
problem by raising taxes the politicians
00:46:10
will just keep spending I mean you have
00:46:12
to starve the Beast I think in order to
00:46:14
control it at least that's been a view I
00:46:17
think for a long time you agree with
00:46:18
your mouth on that point here's the
00:46:20
thing you cannot solve this problem by
00:46:23
raising up to 70 tax rates like we had
00:46:26
in the 1970s and I can prove it pull up
00:46:28
this chart France is a good example of
00:46:30
this too so what you see in this chart
00:46:31
here is this is federal assistance
00:46:33
percentage of GDP
00:46:35
what I see when I eyeball this is if you
00:46:37
were to put a regression line on that
00:46:39
it'd be around 17 and with a plus or
00:46:41
minus of two percent
00:46:42
and the times when you get up to 19
00:46:44
percent
00:46:45
are a little bit close to 20 or when we
00:46:48
have great economic conditions or money
00:46:50
printing so the Clinton era from was it
00:46:53
92 to 2000 was an economic boom and we
00:46:56
got up to almost 20 percent but we've
00:46:58
never ever been able to get more than 20
00:47:01
percent of GDP and federal tax receipts
00:47:04
even during the 1970s when the top
00:47:06
marginal rate was 70 percent
00:47:12
doing economic activity no it curtails
00:47:14
investment in economic activity this is
00:47:16
yeah that was recommended for hundreds
00:47:18
of years taxation doesn't solve this
00:47:21
problem I don't disagree they shouldn't
00:47:23
disagree I just you can only get so much
00:47:24
blood from a stone and the reality is is
00:47:27
that when you try to tax rich people in
00:47:29
a confiscatory way they spend a lot more
00:47:31
on lawyers and accountants to figure out
00:47:36
where they tap out you know like if
00:47:39
you're paying 50 60 taxes like what's
00:47:41
the incentive to go to work and if
00:47:43
you're sitting on a big nut you can just
00:47:45
be like no you know what I'll just I'll
00:47:46
just enjoy my life a little bit more
00:47:47
because each incremental dollar 50 60 is
00:47:50
going to taxes and then I have to pay my
00:47:52
team and you just sort of yeah I asked a
00:47:55
question on Twitter you know because we
00:47:57
all talked in our group chat about the
00:47:59
the concept of passing a balanced budget
00:48:01
amendment which would be an amendment to
00:48:02
the U.S Constitution that says you know
00:48:04
Congress has an obligation and the the
00:48:06
executive branch has an obligation
00:48:09
to generate a budget surplus
00:48:12
you know every uh every year
00:48:15
and you could have a balanced budget
00:48:16
amendment that provides certain
00:48:18
exemptions to this like in in a year of
00:48:20
of War
00:48:22
for example where Congress declares an
00:48:25
emergency or declares a war and in those
00:48:27
cases theoretically like if there's some
00:48:29
sort of emergency that we have to
00:48:30
address and and over fund you can kind
00:48:33
of resolve to this but man I so might
00:48:36
you know we've been we've been at War
00:48:38
for something like two out of every
00:48:40
three years since the Cold War ended how
00:48:42
many of those Wars sacks were voted on
00:48:44
by Congress is the other issue you know
00:48:46
well what happened is we did the the
00:48:49
authorization for the use of force I
00:48:50
think goes all the way back to was it
00:48:53
like 2001 whereas basically we declare a
00:48:55
war on terrorism in response to 9 11 and
00:48:58
they use that authorization to go into
00:49:01
Afghanistan which I think was
00:49:02
understandable then they use that same
00:49:04
one to go into Iraq then they use it to
00:49:06
go into Syria and only recently only a
00:49:09
few months ago did they actually repeal
00:49:11
that use of force as a way to keep
00:49:13
authorizing new Wars so they really
00:49:15
should go back to Congress for every new
00:49:17
war but the problem is you know Freeburg
00:49:20
I agree with you that we need to have a
00:49:21
balanced budget amendment but it's going
00:49:23
to contain a caveat or exception for war
00:49:25
and we're just in at War all the time
00:49:28
now sure but I think that there's ways
00:49:29
to create some mechanism that forces
00:49:31
that issue to actually come front and
00:49:33
center as opposed to being what you're
00:49:34
arguing which is hey it's always on the
00:49:36
back road therefore it's always bubbling
00:49:38
over and maybe you draft it in that way
00:49:39
but what was surprising to me was just
00:49:41
the incredible negative sentiment I got
00:49:43
from so many people who were so deeply
00:49:45
have this deeply held belief that the
00:49:47
only way to support growth in our
00:49:49
economies through federal spending and
00:49:50
that that has become the driver that has
00:49:53
become the handicap of our country it
00:49:55
has become the handicap of our economy
00:49:57
it has become the handicap of our people
00:49:59
and as a result is it a handicap because
00:50:01
it means that we now have this instead
00:50:04
of having an incentive to drive
00:50:05
productivity through private commercial
00:50:07
and economic activity through Innovation
00:50:09
through productivity gains through
00:50:11
business building it's now dependent on
00:50:13
what we have now identified as a highly
00:50:15
unaccountable system of spending and
00:50:18
that unaccountable system of spending
00:50:19
ends up putting a lot of dollars into
00:50:20
the pockets of cronies and the the
00:50:23
pockets of folks that aren't actually
00:50:24
driving job growth or aren't driving
00:50:26
productivity there are certainly
00:50:28
programs that work but overall there's
00:50:30
no level or degree of accountability
00:50:31
that asks the question did that program
00:50:33
work did we spend a dollar and get more
00:50:36
more than a dollar back for what we
00:50:38
spent there's no assessment of that
00:50:39
whether it's a war or whether it's
00:50:41
defense spending there's always some
00:50:43
kind of intellectual argument that's
00:50:45
true I don't think that's true I think
00:50:46
the OMB releases report after reports
00:50:48
saying that all of this stuff sucks and
00:50:50
doesn't do anything
00:50:51
just nobody actions no one cares right
00:50:53
yeah you're right you're right I don't
00:50:55
care I think what you're saying is
00:50:56
inaccurate this is my point I think it's
00:50:57
important to get the facts right what
00:50:59
you are saying is not true they do do an
00:51:01
accounting that accounting sucks it
00:51:02
shows that there's tons of ways nothing
00:51:04
changes so now what do you want to do
00:51:06
David it's the real question what do you
00:51:08
want to do knowing that we shouldn't
00:51:10
spend on things that don't have a
00:51:11
positive return this is my point that's
00:51:13
why we're now in this very difficult
00:51:14
situation that's not happening now what
00:51:16
would you like to do well the reason it
00:51:18
doesn't happen is because the way that
00:51:21
politics decides things has nothing to
00:51:23
do with the merits of it it has to do
00:51:24
with special interests debating that I
00:51:26
agree I'm just saying
00:51:32
betrayed the country because we just
00:51:34
keep teaching people that somehow the
00:51:36
government's going to solve all these
00:51:36
problems when really it's just a product
00:51:38
of special interest lobbying for things
00:51:41
and that's why we perpetuate these
00:51:42
programs that don't work I think the
00:51:43
best way to think about government
00:51:44
spending is that in every dollar there's
00:51:46
probably
00:51:47
15 or 20 cents that actually does some
00:51:50
good
00:51:51
there's probably 15 to 20 cents that's
00:51:53
like on the margins break even
00:51:55
and then the rest of it which is half of
00:51:57
it is wasted that's probably roughly
00:52:00
accurate right you get things like tarp
00:52:02
which turned out to be a pretty decent
00:52:04
program there were things like the doe
00:52:06
loans that you know got things like
00:52:07
Tesla into the marketplace right there's
00:52:10
things like the IRA today that'll
00:52:13
delever ourselves and create a peace
00:52:15
dividend because we won't need to fight
00:52:17
over resources and oil from other
00:52:18
countries
00:52:19
but the problem is that that represents
00:52:21
a minority of the dollars okay now that
00:52:24
we know that that's true and we've known
00:52:26
that that's true for decades I guess
00:52:27
again I'm just asking a practical
00:52:29
question what do you guys want to do now
00:52:30
play the ball where it lies what do we
00:52:33
do today there's a couple things you can
00:52:34
do first of all one of the points I'd
00:52:35
make is I think you you're probably
00:52:37
right in your assessment that 50 cents
00:52:39
that's what you're calling wasted that
00:52:41
money does end up somewhere it ends up
00:52:43
in someone's Pockets probably the
00:52:44
pockets of the shareholders of some
00:52:46
contractor or the daughters of
00:52:49
individuals or employees well there's
00:52:51
also there's also individuals that that
00:52:53
benefit but functionally what's going on
00:52:55
is it's a system of wealth transfer and
00:52:57
that's not necessarily bad the question
00:52:59
is is the transfer of wealth happening
00:53:01
to the right groups that we intend to
00:53:04
support with these social programs or is
00:53:07
it not and I think Sax's point which I
00:53:09
think we could all probably align on is
00:53:10
it's not and I think that's probably a
00:53:12
set of standards for accountability that
00:53:13
we should probably try and create but
00:53:16
where where does that where does that
00:53:18
money end up it ends up buying homes
00:53:19
feeding people they're going to
00:53:21
restaurants you're buying cars not like
00:53:22
there's like a fleet of Mega yachts in
00:53:25
America well I I guess what I'm asking
00:53:27
is where where even that leakage of 50
00:53:29
doesn't that just end up in the normal
00:53:30
economy yeah it ends up supporting
00:53:32
individuals and maybe yeah so why is
00:53:35
that so bad here is what I'll say well
00:53:37
that's what I'm saying it is a wealth
00:53:38
transfer it is a system of wealth where
00:53:40
it ends up in people's pockets and that
00:53:42
that system ultimately benefits a lot of
00:53:44
people in need and a lot of people that
00:53:45
we as a society intend to support here
00:53:48
in the U.S I don't think it just goes to
00:53:50
poor people yes
00:53:55
there's so much corporate welfare I mean
00:53:57
come on it's not all just going to needy
00:53:59
people it's giving to your special
00:54:01
interests on some level we can accept
00:54:03
the inefficiency of government
00:54:06
I like your idea of constraining how
00:54:08
much of a canvas they have to paint with
00:54:10
and how many how how much revenue they
00:54:12
bring in and I think what we have to
00:54:14
accept is that the reason this country
00:54:16
gets bailed out is because we have
00:54:18
tremendous entrepreneurs
00:54:20
an amazing Capital allocation system a
00:54:23
very fluid market for building corporate
00:54:26
corporations and capitalism is so
00:54:28
vibrant here that no matter what happens
00:54:31
we always seem to make the next Google
00:54:33
Uber Nvidia whatever it is Airbnb and I
00:54:37
can tell you you know I'm spending a lot
00:54:39
of time traveling meeting with people in
00:54:41
Japan in UAE Etc they're all looking at
00:54:45
the massive entrepreneurial drive that
00:54:47
we have in the United States to build
00:54:49
global companies and how we do it over
00:54:51
and over and over again and the only
00:54:52
countries that seem to be able to do
00:54:55
this at scale you know maybe Sweden and
00:54:58
some of the nordics obviously China but
00:55:00
other countries have not figured out how
00:55:02
to build Global corporations and and
00:55:04
that is what bails us out every time is
00:55:06
entrepreneurs check how the deficit's
00:55:09
getting so big that we can't bail out
00:55:11
that way think about it we have 2
00:55:12
trillion in deficit every year that is
00:55:15
two Googles yeah it's an apple
00:55:17
everywhere there's money in apple every
00:55:19
year we have to we have to address it
00:55:21
but the point is that's
00:55:23
bailed ourselves out historically is
00:55:25
massive capital education and
00:55:27
Entrepreneurship I want to remind you
00:55:28
guys what happened at the end of the 70s
00:55:31
we had all these inflationary problems
00:55:33
we had all of these taxation problems
00:55:35
where people thought all of a sudden 70
00:55:36
tax rates were going to solve the
00:55:38
problem what you guys talked about and
00:55:40
instead the exact opposite thing
00:55:42
happened which was the guy that got
00:55:43
elected
00:55:44
Ronald Reagan I just want to remind you
00:55:46
what the Electoral College was between
00:55:48
him and Jimmy Carter
00:55:50
489-49 like a bigger just shellacking I
00:55:55
don't think we've seen in modern U.S
00:55:56
politics to the guy that basically said
00:55:59
enough with this we're going to tone it
00:56:01
all down and we're going to cut revenues
00:56:03
so I do think that people have an
00:56:05
appetite for them and I think that
00:56:07
people you know the debt to GDP in 1980
00:56:09
was only 30 percent so we just have a
00:56:11
lot less driving lots of work to do we
00:56:13
got a lot of work to do but let me say
00:56:14
this look I actually agree with what
00:56:17
you're saying in this sense okay if you
00:56:18
look at my simple chart of federal tax
00:56:21
receipts as percent of GDP okay the
00:56:23
highest it's ever been in the history of
00:56:26
the United States is 19.75 in 2000 we
00:56:30
had the.com bubble okay that's the
00:56:31
highest ever been and we had periods of
00:56:34
high tax rates and low tax rates it
00:56:36
never went above 20 so the simple math
00:56:38
here is you do a forecast of what do you
00:56:42
think GDP is going to be over the next
00:56:43
year you get independent economists to
00:56:44
do it and you say the federal government
00:56:46
can't spend more than 20 percent of GDP
00:56:48
because we've never extracted that we've
00:56:51
never figured out a way to accept it's
00:56:52
perfect
00:56:53
your logic is perfect out of the economy
00:56:56
the logic is perfect there your
00:56:57
aggression is so it's it's very
00:56:58
important because what your aggression
00:57:00
says is we're actually spending a lot of
00:57:02
energy fighting over two to three
00:57:03
hundred basis points at any given time
00:57:05
right yeah and what we should be
00:57:07
focusing on is more important why are we
00:57:09
doing that why are we spending so much
00:57:11
time getting our pennies in a bunch over
00:57:12
two to three hundred basis points and we
00:57:14
need to stop Wars increase our education
00:57:16
system stop the wars by the way and
00:57:19
inspire people to start companies and
00:57:20
make it easy to start companies the bil
00:57:23
the IRA and the chips act all three the
00:57:25
biggest components in all three bills
00:57:27
this is Biden's signature legislation is
00:57:30
creating energy Independence for America
00:57:32
which will have an enormous peace
00:57:34
dividend you will not fight these stupid
00:57:36
endless Wars every single one of them
00:57:39
goes back to oil right like with the
00:57:41
exception of it's always about resources
00:57:43
yeah what has it never been about
00:57:45
resources in modern history well and now
00:57:47
it's going to be chips is the modern
00:57:48
resource Nvidia shares jumped as much as
00:57:50
30 percent after reporting huge Revenue
00:57:52
guidance due to AI demand q1 Revenue
00:57:56
7.2 Bill up 19 quarter over quarter not
00:58:00
year over year quarter of a quarter
00:58:03
Revenue beat annual assessments by more
00:58:05
than 600 million for people who don't
00:58:07
know Nvidia is working on gpus as
00:58:10
opposed to CPUs the graphic processing
00:58:13
units that are being leveraged in Ai and
00:58:17
there is a massive cycle going on
00:58:19
there's a line out the door to buy these
00:58:21
when you see Twitter going into AI
00:58:23
Facebook Google and obviously Microsoft
00:58:26
all the cloud infrastructure is moving
00:58:28
from CPU to GPU yes uh Freeburg
00:58:32
well I mean I was talking with the CEO
00:58:35
and CFO of a major data center wreath
00:58:38
and they shared with me
00:58:40
that they're seeing more demand in the
00:58:42
last couple of months than they've seen
00:58:45
in the prior 10 years almost all of that
00:58:48
data center build out demand so they'll
00:58:51
build data centers for software
00:58:53
companies for internet companies
00:58:54
it's coming from
00:58:56
you know GPU racks and these GPU racks
00:58:59
are much more energy intensive much more
00:59:01
costly but it's a pretty uh kind of
00:59:03
significant shift underway that
00:59:05
businesses that historically didn't even
00:59:06
operate their own
00:59:08
data centers are now building out their
00:59:10
own data centers have their own Training
00:59:11
Systems to have their own infrastructure
00:59:13
to be able to run AI applications
00:59:18
and tools so it's uh it's a pretty
00:59:20
significant shift underway all of the
00:59:22
growth that Nvidia is projecting and
00:59:25
highlighted in this earnings report
00:59:27
yesterday is coming from their their
00:59:29
data center line of products and it's a
00:59:32
pretty significant I mean I don't know
00:59:33
people have said they've never seen a
00:59:34
beat like this or never seen enough
00:59:36
a guidance update like this of the scale
00:59:39
where I think the the street was looking
00:59:41
for maybe a seven billion dollar guide
00:59:43
and on revenue for this and they
00:59:45
basically came out and said they're
00:59:46
going to guide to 11 billion next
00:59:47
quarter which is just an insane bump
00:59:50
for a 90-day Outlook I was told from one
00:59:52
of their major customers that they had
00:59:54
to beg uh like get on their knees and
00:59:57
bag for thousands of gpus and like the
01:00:00
lobbying effort he said there's a line
01:00:02
around the corner to buy these and you
01:00:04
you need only use chat GPT or any uh
01:00:07
stable diffusion Etc and you see how
01:00:09
long it takes to do uh generative AI to
01:00:13
use these products it's like we're back
01:00:15
to dial-up modems act we're literally
01:00:18
we're waiting for a computer to give us
01:00:20
an answer when's the last time that
01:00:22
happened that we had to sit there and
01:00:23
wait for it to do its job and I think
01:00:26
this is the great renewal for America
01:00:28
another amazing American company it's
01:00:30
only three decades old it's it's best
01:00:32
years it's best decades are in front of
01:00:34
it obviously this is going to be a
01:00:36
massive Boon for yeah not only Nvidia
01:00:38
but for America or as I say America yeah
01:00:42
Nvidia has basically joined the trillion
01:00:43
dollar club now in terms of market cap
01:00:45
companies it's really amazing I mean I'm
01:00:47
kind of kicking myself because this was
01:00:48
the easiest buy ever
01:00:50
launched on November 30th we all saw
01:00:52
that that immediately ushered in a whole
01:00:54
new era in Silicon Valley there's a ton
01:00:56
of VC funding that's poured into AI
01:00:59
startups they all need to train models
01:01:01
and those models need to use gpus so we
01:01:05
all saw this coming and
01:01:07
yeah I'm kind of annoyed with myself let
01:01:09
me ask you let me ask you a question so
01:01:11
you say that you kick yourself obviously
01:01:12
the general statement that you know AI
01:01:15
is coming and Nvidia is going to be a
01:01:16
beneficiary or nvidia's product you're
01:01:18
going to see a boon make sense but when
01:01:20
you look at the valuation of the
01:01:21
business they are currently trading at
01:01:24
70 times the next 12 months ebitda
01:01:28
so how do you think about valuation even
01:01:31
at a trillion dollar market cap at a
01:01:33
trillion dollar market cap they're
01:01:34
trading at 70 times next 12 months even
01:01:35
uh
01:01:36
you know this seems like they're
01:01:38
doubling Revenue every six months though
01:01:40
dude they're doubling Revenue
01:01:42
here how high does it go because at a
01:01:45
trillion dollars what's the right ebitda
01:01:47
level for a business to be worth a
01:01:48
trillion dollars is it a hundreds right
01:01:51
is it 100 but I mean what's the number
01:01:52
and then the question is if it's 100
01:01:54
billion how many years does it take them
01:01:55
to grow into that and you know are you
01:01:57
really paying the right price are you
01:01:59
paying a premium to get you know it's a
01:02:01
momentum establishment and we'll be
01:02:03
determined if they have competition so
01:02:05
is is there a competition for this
01:02:06
company chamac you'd think there's a
01:02:08
competitor that will emerge that you
01:02:10
know I mean it's important to understand
01:02:12
what a GPU is maybe so sure Intel had
01:02:14
the run of the place for the first 40
01:02:16
Years of compute
01:02:18
because it turned out that most of the
01:02:20
things that we used it for Excel
01:02:22
Microsoft Word a browser
01:02:25
operated well on a CPU which essentially
01:02:29
think about it as like a factory that
01:02:31
takes in the first order and then puts
01:02:32
it up first and first up and the great
01:02:34
thing about gpus is that it can take
01:02:36
multiple streams of work at the same
01:02:38
time and work on them at the same time
01:02:39
right so it's very parallel and has this
01:02:41
level of parallelism
01:02:44
that makes it very well suited for AI
01:02:47
applications
01:02:48
I think the thing to keep in mind is
01:02:51
that it is a byproduct of a GPU that
01:02:55
tries to also do other things and so as
01:02:57
a result of that you're now seeing
01:03:00
a lot of companies building their own
01:03:02
silicon and most importantly all the big
01:03:05
tech companies now have some pretty
01:03:07
well-evolved efforts underway so a lot
01:03:09
of these companies have figured out how
01:03:11
to do custom Asics that can do this
01:03:13
massively parallel processing and what
01:03:15
you're now seeing is chips that are
01:03:17
designed against specific models that
01:03:19
are optimized for them the other thing
01:03:21
that you're also seeing is that some
01:03:23
people are saying well you know what
01:03:25
for these massive models actually you
01:03:27
should just run it all in memory and so
01:03:29
you're having folks that are doing it in
01:03:30
in massive arrays of fpgas that was
01:03:33
Microsoft's first attempt at all of this
01:03:35
so what is the point of me telling you
01:03:37
this I think that again we talked about
01:03:39
this last week
01:03:41
the biggest cheerleaders of this first
01:03:44
point of value creation has really been
01:03:46
Wall Street and family offices that
01:03:49
wanted to front run
01:03:50
where the value creation was going to
01:03:52
initially go and they've been right
01:03:54
which is around chips but there was a
01:03:56
tweet and Nick I posted maybe you can
01:03:57
throw it up here that shows that if you
01:03:59
compare this to the mobile internet
01:04:01
there's always this phased approach in
01:04:04
terms of value creation where let's just
01:04:06
say initially in a New Market Mobile a
01:04:09
decade ago in AI today
01:04:11
the first dollar of profits tends to go
01:04:14
to the chip companies that makes a lot
01:04:15
of sense right because they're the ones
01:04:17
that are in the bowels of making the
01:04:20
elemental capabilities possible
01:04:23
and then you transition that value and
01:04:25
what freebrook says is people realize
01:04:26
hey hold on the profit dollars are not
01:04:28
going to accrue there because again this
01:04:30
beautiful principle of capitalism is
01:04:32
that you can only over earn for a
01:04:36
certain amount of time because then
01:04:37
competitors emerge and say hold on I
01:04:40
want to steal those profit dollars from
01:04:42
you and take them for myself so margins
01:04:44
compress right so
01:04:45
in the end nvidia's gains today will be
01:04:48
then spread across Nvidia Facebook will
01:04:51
have their own chip Amazon will have
01:04:53
their own chip Google already does
01:04:55
papa will have their own chip all the
01:04:58
memory companies will be in this space
01:04:59
right so then the profits get smeared
01:05:01
there multiples compress then where does
01:05:04
the value grow to the device companies
01:05:05
in the mobile internet here I think we
01:05:08
still have to debate what is a device
01:05:09
company in the world of AI
01:05:12
but the most important thing I think to
01:05:13
remember is that where the real value
01:05:15
gets accrued is
01:05:18
five six seven years later when the
01:05:20
software and services companies show up
01:05:22
and create a huge moat and those in the
01:05:25
Googles and the Facebooks and the apples
01:05:26
of the world and so it's a really
01:05:28
Dynamic moment I think it's wonderful
01:05:31
for NVIDIA it's an amazing story for
01:05:32
Jensen who's been really at this game
01:05:35
for a very long time by the way there's
01:05:37
a Jensen has a law of his own that is a
01:05:41
sort of companion to Moore's Law called
01:05:42
Wang's law named after himself which you
01:05:44
can read about
01:05:45
which just talks about the variability
01:05:47
of the compute capabilities of gpus
01:05:50
versus CPUs so if you want to know that
01:05:52
he should get some credit for that
01:05:54
but I think it's great I think we're in
01:05:55
the another one apple is also making
01:05:58
their own gpus that's what when you hear
01:06:00
the M2 that has gpus in it so yeah
01:06:02
you're absolutely correct anyone so
01:06:04
we're gonna purchase a few years we're
01:06:06
gonna have a few quarters for sure of
01:06:07
this hype and then the smart money will
01:06:10
probably figure out where the next the
01:06:12
lily pad is
01:06:13
and then they'll go to the next
01:06:15
beautifully said beautifully said
01:06:18
any other thoughts uh free burgers we
01:06:19
wrap up on that I wanted to show this AI
01:06:21
demo from Adobe Photoshop you know every
01:06:23
week or so we see something that's this
01:06:26
is incredible and this one was we shared
01:06:28
in the group chat but for those guys put
01:06:30
this out shout out to belski yeah so
01:06:33
what we see here if you're listening is
01:06:35
uh you know taking
01:06:37
a Photoshop creating an area and then
01:06:39
instead of like cutting in Paces pasting
01:06:42
it or refining it you're putting in a
01:06:44
text prompt and saying oh put um
01:06:47
expand the and make this wide screen or
01:06:50
let me grab this deer out of a forest
01:06:53
and then put it on a wet alley at night
01:06:55
and uh then you know let me highlight
01:06:58
this wall over here and put a sign and
01:07:00
put a red arrow sign and it just
01:07:03
generates it and it's doing this they
01:07:04
made specific note when they launched
01:07:06
this that all of this is done with stock
01:07:08
Photography they have the complete
01:07:09
license too so they can monetize this
01:07:12
without getting sued like Microsoft is
01:07:15
currently being sued and
01:07:18
Microsoft actually in addition to the
01:07:20
GitHub lawsuit
01:07:22
it turns out Twitter sent a letter
01:07:25
over 2
01:07:27
Microsoft as well so incredible demo The
01:07:30
Producers here at all in as our
01:07:33
production team grows producer Brian
01:07:35
made a little video here here's
01:07:37
chamothin before the Laura Piana days
01:07:41
that's that's Tom Ford yeah that's it's
01:07:43
Tom Ford this is Wendy's terrible the
01:07:46
hair is terrible you look tired uh the
01:07:48
watch is great
01:07:51
that night my God I played poker
01:07:53
literally I walked into that to that
01:07:56
CNBC right you went straight from the
01:07:58
poker table to the squad
01:08:03
wait no tie but he's wearing a title
01:08:06
that's a Tom Ford yeah he said to you he
01:08:08
said try this without the without a tie
01:08:09
I said okay when you were talking to Tom
01:08:12
Ford great what a flex yeah you know Tom
01:08:14
Ford has said me twice in my life I can
01:08:15
tell you both stories okay hold on a
01:08:17
second so we're degenerative AI add uh
01:08:19
make a yellow sweater is the prompt here
01:08:21
let's see if he goes to Bert
01:08:24
from Ernie to Bert there he is Sri
01:08:26
Lankan Bert as we call him in the um
01:08:29
it doesn't quite get the borders right
01:08:31
but it's terrible it looks like a
01:08:33
Warriors jersey oh there you go right
01:08:34
yeah pretty bad yeah
01:08:36
yeah
01:08:39
I think the demo was [ __ ] can we
01:08:41
change his hair can we can we have the
01:08:43
hair be less in sync less Hassan Minaj
01:08:47
and more I understand why they call you
01:08:50
Aziz Ansari I think the you had the
01:08:52
you're going there the hair yeah it's a
01:08:55
lot of lift and what was that day it's
01:08:57
honey what is that is it putty this is
01:09:00
like eight years ago
01:09:01
is that what are you using clay or putty
01:09:03
yeah it's like it's like a stiff it's
01:09:06
like a stiff hair wax I think it's kind
01:09:07
of a hair wax oh got it yeah I've come
01:09:10
such a long way since now you have much
01:09:12
more much more stylish I mean look at
01:09:14
Sax's crazy hair as we as we probably
01:09:16
did in the cold open my thought on the
01:09:18
Adobe thing for what it's worth is like
01:09:20
I mean do they want a mulligan on this
01:09:22
20 billion dollar figma thing or
01:09:25
um do they get to see the ongoing
01:09:28
revenues that figma's generating uh
01:09:32
all kinds of stuff it's a different
01:09:34
product though I mean the AI stuff
01:09:36
certainly has had an impact but I mean
01:09:38
so much of the benefit of figma as it's
01:09:40
web-based it's collaborative it's like
01:09:41
people kind of use it online to make
01:09:43
stuff together it's a little different
01:09:45
than the other tools that they offer
01:09:46
today so you don't think it from
01:09:48
September to now
01:09:50
like
01:09:52
nothing changes they should just close
01:09:53
this thing at 20 billion or
01:09:56
or they're half they're half page do you
01:09:58
think that they should pay a billion
01:09:59
break it up and then redo the deal at 10
01:10:01
and then
01:10:02
remember not all breakup fees mean that
01:10:05
you can break up for any reason
01:10:07
so there's only there's limited outs on
01:10:09
what you can pay a breakup fee to get
01:10:10
out of it one of which could be
01:10:12
anti-drugs to regulatory but otherwise
01:10:15
you may be forced to close in court if
01:10:18
you don't have a valid reason for
01:10:20
terminating the deal their only hope is
01:10:22
to get lean a content
01:10:24
muck it up yeah some weeks is your
01:10:27
argument more that they bought figma top
01:10:30
of market pricing which no longer makes
01:10:31
sense or is your argument that they're
01:10:33
innovating so well that they don't need
01:10:35
it I think it's a little bit of both but
01:10:37
it's it's more that
01:10:39
I think this generative AI stuff allows
01:10:42
you to refresh I tweeted this out so
01:10:44
Nick maybe you can put it up there but I
01:10:45
think the first thing is that your
01:10:48
feature set can catch up pretty quickly
01:10:49
so even if you set out a team and said
01:10:52
just copy exactly what figma has with a
01:10:54
co-pilot
01:10:56
enabling 50 Engineers that's like 500
01:10:59
Engineers cranking on something I would
01:11:01
be surprised if they couldn't just
01:11:02
replicate the product n10 that's the
01:11:04
first thing then the second thing is I
01:11:06
think that you've seen VC funding
01:11:09
basically crawl to a halt
01:11:11
and so the question there is how many of
01:11:14
those companies are just going to stop
01:11:16
spending because they're just not going
01:11:17
to exist
01:11:18
and then the third thing is if we're
01:11:21
sort of hashtag austerity
01:11:24
people are going to look at everything
01:11:25
they're spending money on and try to be
01:11:27
really disciplined about it if you roll
01:11:30
all those things together sax my thought
01:11:31
is
01:11:32
maybe the deal still makes sense but
01:11:34
does it make sense at 20 billion and
01:11:35
does it then just create a whole Suite
01:11:37
of shareholder lawsuits after the fact
01:11:39
that are just going to say these three
01:11:40
things and regurgitate them Ad nauseam
01:11:42
that's the Curiosity I had well so we're
01:11:44
here let's talk a little bit about the
01:11:46
state of Silicon Valley sacks we were
01:11:49
talking offline after the show last week
01:11:53
you've slowed down investment at your
01:11:55
firm craft you're being thoughtful
01:11:57
you're working on the existing
01:11:58
portfolios how would you describe your
01:12:00
activity so far in the first half of
01:12:02
2023 as a firm if you're so willing to
01:12:05
share them my take on what's Happening
01:12:07
is Silicon Valley right now or Tech more
01:12:09
generally is It's A Tale of Two Cities
01:12:11
it's the best of times for AI startups
01:12:13
and the worst of time show everybody
01:12:14
else
01:12:15
the AI startups there's a lot of
01:12:17
interesting things happening there and
01:12:18
money is being pushed at them by VCS
01:12:21
it's very frothy arguably bubbly
01:12:24
but then at the same time if you're a
01:12:27
pre AI company maybe the one that raised
01:12:29
a lot of money at a big valuation in
01:12:30
2020 or 2021 it's a pretty tough time I
01:12:34
don't know of any startup especially
01:12:37
like later stage startups who are
01:12:38
hitting their numbers everyone is
01:12:40
reforcasting down everyone's missing I
01:12:43
think that speaks to the larger economy
01:12:45
is not doing that well I think the
01:12:48
economist a year from now may say that
01:12:49
their recession had already begun
01:12:51
certainly fails like that yeah that's
01:12:52
what druck said at the Zone conference
01:12:54
and I think that starts are absolutely
01:12:56
seeing that in their sales right now
01:12:58
sales are slipping it's taking longer
01:13:01
buyers are sharpening their pencils it's
01:13:04
a really tough environment I think for
01:13:05
software startups that are actually
01:13:07
trying to make sales AI starts are a
01:13:09
little bit exempt for that because
01:13:10
people are still investing based on the
01:13:12
dream not based on the metrics and I
01:13:15
would say that we're very interested in
01:13:17
Ai and we're starting to make some
01:13:19
Investments but we also like to invest
01:13:21
based on metrics not just on a dream and
01:13:24
so we're being somewhat cautious about
01:13:26
how we approach it so you make a small
01:13:28
seed bat in somebody who has a dream if
01:13:30
I can translate here but if you're going
01:13:31
to make a bigger battery series a series
01:13:33
B you're going to want to see some
01:13:34
numbers on the board you're going to
01:13:35
want to see some product in mind I think
01:13:36
that's a really good way of putting it
01:13:37
because I think the standards change at
01:13:39
each round and then at the seat stage
01:13:41
you can absolutely just make
01:13:43
a bet based on the dream or just based
01:13:45
on a Founder sure great founder going
01:13:47
after the AI space idea still a little
01:13:51
bit to be fleshed out you can make that
01:13:52
bet but 500k 750 yeah or even even like
01:13:56
3 million will do as a big seed round
01:13:58
but um but then when you get to series a
01:14:00
and you want us to write a 10 12 50
01:14:01
million dollar check we kind of want to
01:14:03
see some Revenue yeah and certainly by
01:14:06
the time you get to series b or series C
01:14:07
we want to see like all the standard
01:14:10
metrics we want to see net dollar
01:14:12
retention expansion all that kind of
01:14:13
stuff yeah it's it's really hard for the
01:14:15
later stage startups because they raised
01:14:17
and this is the lesson if you're raising
01:14:19
at three four five hundred million sax
01:14:20
correct me if I'm wrong here
01:14:23
you're not you have to build into that
01:14:25
valuation and let's face it that
01:14:27
valuation a was never realistic it was
01:14:30
overpriced and then B you got the
01:14:32
headwinds and your customers are saying
01:14:33
oh you want 40 000 a year for this SAS
01:14:35
product we'll give you 12. and what
01:14:36
position are you in to turn down the 12.
01:14:38
you got to take the 12. and because you
01:14:40
got three competitors who are going to
01:14:42
roll up and take the 12. so it's hard
01:14:45
actually can I give you an update please
01:14:47
remember I mentioned there was a startup
01:14:48
in my portfolio um actually my my angel
01:14:51
portfolio yes that that way to play
01:14:54
around the cram down and I think it's
01:14:56
absolutely tragic because of what I
01:14:58
learned which is the founders got
01:14:59
crammed down too because a year ago they
01:15:01
brought in a professional CEO
01:15:03
and I think as a result of this they're
01:15:06
probably going to get nothing for 10
01:15:07
years of work whereas if they had just
01:15:09
cut costs damn it and you know the the
01:15:12
company has 32 million of ARR so imagine
01:15:15
if they cut their Opex to a million a
01:15:17
month they could have run 20 million
01:15:18
dollars of ebitda pivot to basically
01:15:21
private Equity model sell that company
01:15:23
for 150 million half would have gone to
01:15:25
pay off the investors in the other half
01:15:27
would have gone a lot of would have gone
01:15:28
to the common they probably would have
01:15:29
made 10 million dollars each and now
01:15:31
they're going to get zero because they
01:15:32
burnt too much money didn't want to cut
01:15:34
costs they bought into the dream of
01:15:35
bringing in the professional CEO is
01:15:37
going to re-accelerate growth it's never
01:15:39
done out never does and so it's like so
01:15:41
frustrating to me because I like feel so
01:15:43
bad for these Founders I wish they had
01:15:45
called me a year ago and I would have
01:15:47
been one of the guys pounding on the
01:15:48
table just cut costs and then control
01:15:50
your desk because listen yes and here's
01:15:52
the thing is if you're only growing 10
01:15:54
15 20 or even 50 a year you're not a VC
01:15:57
backable startup you're a private Equity
01:16:01
place you got to Pivot to that model of
01:16:03
making your business work as a cash flow
01:16:05
positive business yeah that's how you're
01:16:07
going to get an exit and you know if
01:16:09
you're growing 100 plus a year you can
01:16:10
continue to be VC back so it's so
01:16:13
important for Founders to understand
01:16:14
whether they're even eligible for
01:16:15
Venture Capital anymore and if they're
01:16:17
not you have to make a different kind of
01:16:19
model work if you want to see a return
01:16:21
yeah and when this happens a cram down
01:16:24
round
01:16:25
those Founders if they want a refresh
01:16:28
they have to prove their worth they're
01:16:30
not just going to get a refresh to keep
01:16:32
the relationship going this is 30
01:16:34
million dollars in Revenue they don't
01:16:35
need the founders anymore look these
01:16:37
guys been working for 10 years so even
01:16:38
if they got a refresh they had to put in
01:16:40
four more years of work and the other
01:16:42
thing is the scram down round I think
01:16:44
was way too big they raised 25 million
01:16:46
with a 3X lick pressure
01:16:48
75 million off the top off the top then
01:16:52
you've got to repay vague is triple yep
01:16:55
oh my God who this is where board
01:16:58
governance is so important tremath huh
01:17:00
like I mean who is on the board of these
01:17:03
companies
01:17:06
of these companies these are about
01:17:08
people had to build a company
01:17:12
and they may be educated or they may
01:17:15
have been an exec at a company and then
01:17:17
some VC who was
01:17:20
feverishly raising funds just hired some
01:17:22
dope put them on the board of this
01:17:23
company and then just the stupidity
01:17:25
compounds and trickles down it's so
01:17:27
frustrating compounding stupidity this
01:17:29
is the beginning of the beginning all of
01:17:31
these people who have zero judgment are
01:17:33
gonna [ __ ] so many companies up
01:17:35
it is the beginning of the beginning
01:17:37
well it's your mouth it's not just the
01:17:39
the bad board members it's the view for
01:17:42
so many years that who you put on your
01:17:44
board didn't matter remember there was
01:17:45
all these VCS who had a model where it's
01:17:47
like well we don't take a board seat and
01:17:49
they were selling that to Founders as a
01:17:51
positive as a feature as a feature not a
01:17:54
bug and the reality is for a lot of VCS
01:17:57
actually not being on the board probably
01:17:58
is the best they can offer but you know
01:18:02
that that model works that model works
01:18:05
when everything is up and to the right
01:18:06
where like this model of board seats
01:18:08
don't matter governance doesn't matter
01:18:10
that is a model in a boom where
01:18:12
everything just keeps going upward to
01:18:13
the right but when you hit a tough time
01:18:15
that is when you need a board member
01:18:17
who's seen this movie before who knows
01:18:19
what a cram down round is who knows
01:18:22
what's going to happen to you a year
01:18:24
hence when you get screwed into taking a
01:18:27
threes where you want the gray-haired
01:18:29
pilot you know in the right time to say
01:18:30
Hey listen here you want that hair you
01:18:33
want that sex here all right Freebird
01:18:35
you are always candid about your own
01:18:37
Journey you've had huge wins climate.com
01:18:39
from Billy raising funds but you know
01:18:42
sometimes things don't work out what are
01:18:44
you what's your take on some of these
01:18:45
hard lessons of great ideas you know
01:18:48
spun up during this really hard Market
01:18:51
I mean I think just to Echo the point
01:18:53
you guys are making in the last
01:18:56
15 years we've been in a college
01:19:00
structurally inflated environment
01:19:02
because of the zero interest rate policy
01:19:04
since the 08 financial crisis and
01:19:07
everything's been up into the writer so
01:19:08
much it's been so easy to kind of
01:19:09
inflate Things fill up hot air balloons
01:19:11
and go up into the right
01:19:12
and unfortunately most folks who are
01:19:14
working
01:19:16
in the investor community that are
01:19:17
sitting on boards weren't around for
01:19:19
the.com crash the last time this
01:19:21
happened
01:19:22
and I think you know just to kind of
01:19:23
echo your point why it's so challenging
01:19:24
I think right now to figure out a way
01:19:26
out there are there's a lot of failure
01:19:29
going on
01:19:30
in
01:19:31
in Silicon Valley right now you know sax
01:19:34
you talk a little bit about having pads
01:19:36
for exit and options for SAS companies
01:19:38
but there are many sectors in startup
01:19:40
land that don't have those sorts of
01:19:41
options in biotech in sinbio in fintech
01:19:45
and direct to consumer
01:19:47
e-commerce there's a lot of markets that
01:19:49
a lot of types of businesses
01:19:52
that feel like there isn't a great way
01:19:54
out and it's having a deep psychological
01:19:56
toll on entrepreneurs on Founders on
01:19:59
CEOs and everyone is experiencing some
01:20:02
degree of failure in this environment
01:20:03
there are very few folks who aren't
01:20:05
feeling this acute pressure in this
01:20:07
acute pain
01:20:08
you know I heard some pretty uh horrific
01:20:10
stories this week from a friend of mine
01:20:11
and someone who ended up in the hospital
01:20:13
because of the pressure he was under hmm
01:20:16
and it's really trying and you know even
01:20:18
within our friend group I mean not not
01:20:20
our direct friend group within our
01:20:21
broader community of investor friends
01:20:24
there are very few people who aren't
01:20:26
feeling this extraordinary pressure that
01:20:28
they've got a book that is declining in
01:20:30
value and they don't know how to get out
01:20:31
of the hole and you know that pressure
01:20:34
is like is generates deep questions
01:20:37
about one's ability and generates deep
01:20:41
existential thought for entrepreneurs
01:20:44
and investors about what the hell am I
01:20:46
good at and no one's really
01:20:48
talking about this out loud but it is a
01:20:50
happening across the valley we all have
01:20:52
these thoughts we all have these
01:20:53
dialogues as the failure begins to set
01:20:56
in in the slow motion train wreck of a
01:20:58
market that we've all been talking about
01:21:00
for weeks and months how do you deal
01:21:02
with it look I mean I just think that
01:21:04
number one it's worth acknowledging and
01:21:06
it's worth having the conversation that
01:21:08
no one is alone going through this pain
01:21:10
it is not a one-off that these companies
01:21:13
are failing it is that we are all
01:21:14
dealing with failure right now and we
01:21:16
are all trying to figure out what is the
01:21:19
best path forward and it is the kind of
01:21:21
thing that you just have to work your
01:21:22
way through and you have to persist
01:21:23
through this pain but this existential
01:21:25
question of am I good enough do I have
01:21:28
the skill set I thought I had am I just
01:21:30
an idiot did I blow it up Emperor has no
01:21:33
clothes all the kind of interfere and
01:21:35
turmoil that everyone's dealing with
01:21:36
you're not alone going through it a lot
01:21:39
of entrepreneurs a lot of investors are
01:21:41
in the exact same place
01:21:42
now with respect to going forward I
01:21:45
think having Integrity with respect to
01:21:47
how you handle these situations and
01:21:48
having thoughtfulness about
01:21:50
you know your reputation because this is
01:21:52
not a one and done environment here in
01:21:54
Silicon Valley failure is part of the
01:21:57
process and how you deal your deal deal
01:22:00
with people deal with investors deal
01:22:02
with entrepreneurs deal with each other
01:22:04
deal with your employees during these
01:22:06
difficult times says a lot about your
01:22:07
character and your ability that when you
01:22:09
do this the next time it will set you up
01:22:12
for success and you know as any great
01:22:14
athlete will tell you
01:22:16
you build muscle during the times that
01:22:18
you're failing and then you're ready to
01:22:19
go and execute the next time around so
01:22:21
you know let's save it for the next
01:22:22
quarter but let's play well as best we
01:22:25
can right now through this quarter
01:22:27
clearly you want to jump in here what
01:22:30
are your thoughts on separating
01:22:32
your identity from your startup from
01:22:35
your work and having a more balanced
01:22:36
view of yourself so that when things go
01:22:38
wrong
01:22:39
maybe you're not as devastated you don't
01:22:41
wind up in a hospital bed when things go
01:22:43
wrong
01:22:46
they go wrong in bunches
01:22:49
just like when things go right they tend
01:22:51
to go right in bunches
01:22:54
I called free bird last week and I was
01:22:56
telling him a story
01:22:58
about two or three of my businesses just
01:23:01
all just pounding eating dirt
01:23:05
and what I said to him was and then we
01:23:08
have a mutual investment
01:23:10
that's doing pretty well
01:23:14
and I needed to use the one that was
01:23:17
doing well to make myself feel better
01:23:19
about the three that were eating dirt
01:23:21
and I said to him something he's
01:23:23
effective it's just like nothing is
01:23:24
working I feel like literally nothing is
01:23:27
working it's a tough place to be the
01:23:29
only thing that you can do in those
01:23:31
moments is just realize
01:23:33
it would be so much worse to just be on
01:23:36
the sidelines oh I like it and I think
01:23:39
that's all you can do then you go and
01:23:40
hang out with your friends
01:23:42
go hang out with your family
01:23:44
kiss your wife
01:23:47
have as good of a time as possible
01:23:49
outside the context of work and then you
01:23:51
just start the grind again but yeah we
01:23:53
are in a moment where in most companies
01:23:55
there is something pretty wrong it's
01:23:58
either your burn
01:24:04
and
01:24:05
by the way that's always the problem but
01:24:09
it tends to be balanced by a few things
01:24:12
in your portfolio that are always going
01:24:14
well so that as an investor you can
01:24:17
maintain some Equanimity through the
01:24:19
whole process
01:24:20
but Freeburg is right when there aren't
01:24:22
enough of these positives and there's
01:24:24
just a parade of Terribles you're just
01:24:25
like wow this whole portfolio
01:24:28
is it all about to fail and then I get a
01:24:31
massive wave of imposter syndrome of
01:24:32
like what am I doing here and then I
01:24:34
have to recognize holy [ __ ] this is my
01:24:36
24th year
01:24:38
take a deep breath and it's great that
01:24:41
it's that that exhilarating where I
01:24:43
think it's back to 2000 and I just
01:24:44
emigrated here the conversation
01:24:48
were talking about like a string of
01:24:50
difficult things we were all dealing
01:24:51
with you know a couple weeks ago we
01:24:52
announced that we returned all the money
01:24:54
to all our all our customers at Canada
01:24:57
which was this molecular beverage
01:24:58
printer company I've been working on for
01:25:00
a few years I plowed north of 30 million
01:25:03
dollars of our Capital into building
01:25:04
this business we had two term sheets
01:25:06
last year both of which vaporized
01:25:09
as the markets that degraded it was
01:25:11
really a brutal experience for me and
01:25:12
these were very high valuations and we
01:25:14
were we needed funding to get the
01:25:16
production line stood up to manufacture
01:25:18
that device so we were that close I
01:25:20
ma'am and as the market went South
01:25:22
pre-revenue Hardware companies became
01:25:24
less fundable and despite our reputation
01:25:27
and a great working product and a pro
01:25:28
and a manufacturing ready prototype we
01:25:30
couldn't get it done it was a really
01:25:32
kind of brutal experience to go through
01:25:34
the nodes even after you've had a lot of
01:25:36
success in your life believe it or not
01:25:38
you still get a lot of freaking notes
01:25:39
and you get a lot of I don't believe
01:25:41
Youth and then to just have to get to a
01:25:43
point with this one was really difficult
01:25:44
and there's you know been other kind of
01:25:46
frustrating experiences of late and then
01:25:48
you know you kind of have a call one day
01:25:49
with another investment and you're like
01:25:52
oh my God this thing could be a home run
01:25:54
and that just comes out of nowhere and
01:25:56
you know as long as we kind of stay in
01:25:58
it
01:25:59
as an investor and you keep you know as
01:26:01
a builder and you kind of keep building
01:26:03
you don't know when that good knock on
01:26:06
the door is going to come yep you got to
01:26:08
stay in the game you got to start
01:26:09
building a business and one day you just
01:26:11
nail a sale that you just weren't
01:26:13
expecting or a partnership or an m a
01:26:15
inbound or something that happens that
01:26:18
you weren't expecting it pays for all
01:26:20
the pain and all the loss and all the
01:26:22
turmoil and all the downside I always
01:26:23
used to tell people for every you know
01:26:26
four days I'd be failing I'd have one
01:26:27
day of success but that one day of
01:26:29
success will get me slightly ahead of
01:26:31
where I was at the start of the week but
01:26:32
80 of it was failing I mean right now
01:26:34
it's like 19 days of failure and one day
01:26:36
of success but that one day of success
01:26:38
the goal is you used to have a couple of
01:26:39
those punctuated moments that are big
01:26:41
enough that make up for all this stuff
01:26:43
if you just keep grinding and if you
01:26:46
just keep grinding as an entrepreneur
01:26:47
you keep grinding as an investor and
01:26:48
stay in the game
01:26:50
you're describing living with the power
01:26:53
law there's a very relatable poker
01:26:54
analogy in this there's a there's a guy
01:26:56
that makes Poker content his name is
01:26:58
Jonathan little he's great who
01:27:00
he's wonderful I've been thinking about
01:27:02
hopping into one tournament at the WSOP
01:27:04
this year it's one of the big buying
01:27:06
tournaments so I'm like let me just take
01:27:08
a little tournament Refresher
01:27:10
and I was just looking for any content
01:27:12
and I found his and he had this
01:27:14
beautiful slide
01:27:15
which he said
01:27:17
if you are a mid-level poker player
01:27:21
you should expect to final table
01:27:26
every one in a hundred tournaments
01:27:28
roughly
01:27:30
and I thought about that for a second
01:27:32
and I was like that's a one percent
01:27:34
success rate
01:27:35
now if that is your 99th tournament you
01:27:38
have to be pretty resilient to go
01:27:40
through 98 losses where you don't cash
01:27:42
you don't make the money and you're just
01:27:44
putting money out you're deep in a J
01:27:46
curve and you're like is this ever going
01:27:47
to work out for me and so it's a really
01:27:49
really good reminder that it is the
01:27:52
grind yep and I thought that was really
01:27:55
interesting so you had a you had a
01:27:57
single or double I guess with call-in
01:28:00
maybe you could talk a little bit about
01:28:01
that experience and what decision you
01:28:03
made there we were obviously investors
01:28:05
so we're a bit conflicted but I'd love
01:28:07
to hear your candid thoughts on why you
01:28:08
decided to sell yeah we put together a
01:28:10
great team and they built an amazing
01:28:12
product I think it's by far the best
01:28:14
sort of social audio product and then
01:28:16
actually they added a video to it as
01:28:17
well and podcasting features so it's
01:28:19
kind of the synthesis of video and audio
01:28:22
podcasting with social audio we got
01:28:24
acquired by Rumble it's sort of like a
01:28:26
base hit type acquisition it's it's a
01:28:28
small deal relatively speaking but the
01:28:30
team wanted to do it and then the main
01:28:32
reason is because we got to hundreds of
01:28:35
thousands of users but in the consumer
01:28:37
space you really need to get to millions
01:28:39
and frankly tens of millions is what it
01:28:42
takes to have a successful consumer
01:28:43
product Rumble does have tens of
01:28:45
millions of users so the team wanted to
01:28:49
find a home and there's a lot of synergy
01:28:51
with Rumble both companies have a
01:28:54
Mission that's aligned around Free
01:28:55
Speech rumble's sort of the call it free
01:28:58
speech alternative to YouTube it's a
01:28:59
video platform and what Colin will do is
01:29:03
give Rumble Studio capability so it'll
01:29:05
be very synergistic for all their
01:29:06
creators to be able to create content
01:29:08
in-calling and then post it in Rumble so
01:29:12
it's not you know a huge outcome for
01:29:13
anyone but sort of a push for the
01:29:15
investors depending on what Rumble stock
01:29:17
ends up but look it's just you can build
01:29:19
a really great product and a great team
01:29:21
but unless you hit that Lighting in a
01:29:23
bottle with distribution you know you
01:29:25
won't get to the next level so I'm happy
01:29:27
about the deal I think the team's happy
01:29:28
about the deal and it's a good outcome
01:29:31
for for everybody involved but it's not
01:29:33
you know it's not a home run it's just
01:29:35
it's more of a base hit and that's what
01:29:36
most these things are yeah getting used
01:29:39
to a high failure rate and living inside
01:29:42
the power law where one investment out
01:29:44
of 30 or 40 or 50 results in ninety
01:29:48
percent of your funds returns for you
01:29:50
know that specific fund or so or maybe
01:29:51
two wins represent 95 that's a hard
01:29:54
thing for the human brain to handle as
01:29:56
is the J curve estimov you know points
01:30:00
out correctly man you invest for two
01:30:01
three years and then you watch the all
01:30:03
those things go down in value for two or
01:30:05
three years or the value I'm sure of the
01:30:06
portfolio go down for two three years
01:30:07
before it actually rebounds and goes
01:30:09
back up I remember man I had a run where
01:30:12
everything I touched turned to gold and
01:30:14
then Mahalo hit 10 million in revenue
01:30:16
and then boom Panda update and it just
01:30:18
goes up and smoke and you're like what
01:30:20
what just happened I I sold web logs 18
01:30:22
months after starting it I you know had
01:30:24
the Silicon report I just Uber
01:30:26
investment everything I touched went to
01:30:28
the Moon it was working yeah yeah and
01:30:29
then it's just a very frustrating
01:30:31
experience where you can't make
01:30:32
something work and you know like I
01:30:34
should be able to make this work why
01:30:35
isn't it working there's a very heavy
01:30:37
blanket of humility setting over Silicon
01:30:39
Valley right now and I think all of us
01:30:41
who have had strings of successes and
01:30:43
repeat successes and you know things
01:30:46
that we touch have worked and we do all
01:30:48
the same things and we do the right
01:30:50
things and we do them the same way in
01:30:51
the right way and it doesn't work and
01:30:53
then it doesn't work again and then it
01:30:54
doesn't work again it creates a very
01:30:57
different psyche whether you're an
01:30:59
entrepreneur building a business or an
01:31:01
investor investing in businesses that
01:31:03
what used to be the case isn't the case
01:31:04
anymore as the tides have shifted
01:31:07
it's uh it's it's it's a daunting
01:31:09
challenge to work your way
01:31:11
psychologically through this moment
01:31:13
but you know progress doesn't change
01:31:16
Innovation isn't going to stop
01:31:17
technology isn't going to keep shifting
01:31:19
forward and uh the opportunities to
01:31:21
continue to build and innovate are not
01:31:23
going away so I for want am deeply
01:31:26
optimistic and excited about what the
01:31:28
future holds but man you got to put your
01:31:29
freaking game face on right now to get
01:31:31
through this yeah for sure well yeah and
01:31:33
I would say there's one other exogenous
01:31:35
variable here which is I don't think any
01:31:37
of us realized how much our sentiment
01:31:40
was affected by one guy's decision at
01:31:44
the FED like what interest rates
01:31:47
yeah because you know what when there's
01:31:50
a lot of money in the system everyone
01:31:51
feels great totally and all the
01:31:53
portfolios look great and when the money
01:31:54
is being sucked out of this the buyers
01:31:56
are buying and you know oh my God like
01:31:58
when the money is being sucked out of
01:31:59
the system everyone's results look
01:32:01
terrible yep it's you know what it's
01:32:03
like before a tsunami the big wave gets
01:32:05
pulled out and then this tsunami comes
01:32:07
in yeah
01:32:08
the money is being sucked out of the
01:32:11
system like the tie before tsunami and
01:32:13
tsunamis give me all the failures and
01:32:15
bankruptcies but what I would say is
01:32:17
just in the same way that things weren't
01:32:19
as good as they appear to be during the
01:32:22
asset bubble they're probably not as bad
01:32:24
as they appear to be now however you
01:32:26
have to give yourself time to get
01:32:28
through this certain recessionary cycle
01:32:31
and it's so frustrating to me when
01:32:33
founders don't want to cut their person
01:32:36
the burn is the one thing they totally
01:32:37
control and they have all these excuses
01:32:40
for why they can't cut to an earlier
01:32:42
level of spending that they were the
01:32:43
company was working fine at and we can't
01:32:45
get them to go back to cut back to some
01:32:48
earlier state of being
01:32:49
if Zuckerberg can do it they can do it
01:32:52
and you know after seeing what Elon did
01:32:54
at Twitter where he reduced the staff by
01:32:56
80 I'm like I realize there's no good
01:32:59
excuse anymore for not giving yourself
01:33:01
the maximum chance of survival and if
01:33:04
you overcut like he admits he probably
01:33:06
did he literally in the the Dave Farber
01:33:08
great interview he did with him
01:33:10
he said you know like we probably
01:33:12
overcut
01:33:13
we cut people who were great and we
01:33:15
hopefully can welcome them back to
01:33:17
Twitter as we get this thing unstable
01:33:18
footing but we're gonna make mistakes
01:33:20
because we had an existential crisis
01:33:21
Elon Musk cut too many people admits it
01:33:24
and says he's going to bring them back
01:33:25
it's no fault of theirs and he said he's
01:33:27
going back into growth mode so you know
01:33:28
like sometimes you cut
01:33:30
you might cut too deep is the point and
01:33:32
you know that sets you up for growth in
01:33:34
the future you had something you wanted
01:33:35
to add I have two shout outs okay here
01:33:38
we go the first is to one of our besties
01:33:40
got a text from Jason [ __ ] he banked the
01:33:42
main event at the Triton for two and a
01:33:44
half million yeah be incredible who I
01:33:47
mean he's so strong he's a guy's a beast
01:33:49
so it's so great to have a professional
01:33:52
poker player in our Circle finally like
01:33:53
somebody
01:33:54
consistently over time
01:33:57
but he's so open and he teaches
01:34:02
stable rational humble humble
01:34:05
professional poker player like happens
01:34:07
to basically be the best poker player in
01:34:08
the world but you could you would never
01:34:10
know it you'd never know he'd never
01:34:11
bring it up like he is literally the
01:34:13
greatest and he won the Triton 2.5 Milli
01:34:16
yeah the second the second shout out is
01:34:18
okay here we go to the model y team at
01:34:21
Tesla I have been a die-hard
01:34:25
model X User from the beginning right I
01:34:28
think I have here we go number 13. so
01:34:31
I've been I've been I've had three or
01:34:32
four of these things and I was like wait
01:34:34
a minute maybe this why is really all is
01:34:37
cracked up to be and I'm a bit of a
01:34:39
curmudgeon and I have high expectations
01:34:40
but I just want to say that car kicks
01:34:43
absolute ass it is perfect incred no it
01:34:46
is incredible that model Y is going to
01:34:49
be the best selling car yeah it's going
01:34:51
to be the best-selling car in America if
01:34:53
you get the base level it's actually
01:34:55
cheaper than the average car in America
01:34:56
now with incentives yeah it's so so good
01:35:01
so huge shout out 300 miles range which
01:35:04
is a huge huge shout out to the model y
01:35:06
team at Tessa you guys nailed it yeah
01:35:09
incredible product and we I love it I
01:35:13
don't want to diminish the ax
01:35:16
is
01:35:20
the best yeah it's a great car it's a
01:35:23
great great car I can't wait for the
01:35:25
Cyber truck that thing looks like a
01:35:26
beast I can't wait to pick that up on
01:35:28
top of the Roadster I want the Roadster
01:35:30
you know I've been taking my uh 12 year
01:35:33
old uh Roadster app and my kids love
01:35:35
going for ice cream in the the original
01:35:38
Roadster 1.0 so I've been taking it out
01:35:40
every weekend or two number one number
01:35:43
16 of the Roadster which somebody
01:35:45
offered me a quarter million dollars for
01:35:46
I paid 160 for it I have number one of
01:35:49
the model S Signature Series so I have
01:35:51
signature 16 of Roadster they did 100
01:35:53
signatures and they did a thousand
01:35:54
signatures of the model S and I have
01:35:56
number one of that and somebody offered
01:35:58
me a million dollars for that I have a
01:35:59
number of the founders Edition number 13
01:36:01
of the X yeah that's pretty special yeah
01:36:03
I'd hold on to that
01:36:05
yeah there it's a special vehicle all
01:36:08
right listen everybody
01:36:09
all in Summit is uh basically so how are
01:36:12
we doing how's the all in Summit doing
01:36:14
guys we're starting to do our Outreach
01:36:16
and to figure out yes yeah so it's
01:36:19
exciting all right everybody for the
01:36:21
Sultan of science the dictator and Steve
01:36:25
Bannon 2.0 David sax the architect the
01:36:28
architect the architect I like that I
01:36:30
remain
01:36:32
even after Sax's triumphant spaces I
01:36:35
remain the world's greatest moderator so
01:36:37
excited for this weekend boys see you
01:36:39
tomorrow at the tarmac on the tournament
01:36:42
bye-bye love you bye
01:36:46
Rain Man
01:36:48
[Music]
01:37:00
besties
01:37:03
[Music]
01:37:18
it's like this like sexual tension that
01:37:20
we just need to release somehow
01:37:22
[Music]
01:37:33
[Music]
01:37:37
I'm going all in
