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point of privilege saks wore this hat last week what what's this brand is this a
00:00:05
montclair hat yeah and actually did you see that that tweet people it started trending it
00:00:11
started trending after i wore it so it's sold out dude you sold out the montclair
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hat so we have no advertising we i feel like if we're not going to do any advertising on the show we should at
00:00:22
least get free clothes we get to pick through them where would we like i know where's my cut where's my cut as an
00:00:28
influencer the tweet basically said that i named dropped laura piana and sent it through the roof and inside steve
00:00:33
dropped eau claire both brands obviously are italian both entrepreneurs we know very well
00:00:39
and so i asked that i said matt can you basically send this tweet over to them so maybe they can give us free clothes
00:00:45
let's get the griff going boys now we're talking now we got some bestie grits no you're speaking my language this is his
00:00:51
cup of tea speaking of griffs i do like montclair the way that chamoth likes laura piano just so you guys know at the
00:00:57
birthday jason that you missed are we going to lots to do we played poker we had a birthday we had a
00:01:03
surprise birthday party for me that threw it sack showed up
00:01:09
free brook showed up their wives showed up it was incredible j-cal basically stiff-armed me
00:01:15
i'm very sorry it was a by the way that came together four days before your birthday so just show you uh-huh well
00:01:20
you know what kevin hart showed up give us the best one-liner which one landed oh no jacob you have no idea these guys
00:01:26
roasted me it was [ __ ] incredible but the best of it was at the end
00:01:32
k hart gets up with no preparation and skewers everybody free bird i mean d
00:01:38
what do you think of like kevin's rest it was carter he was so funny he's like my wife walked in here and she looks at
00:01:44
me and she's like these these guys it was so
00:01:49
funny complete my [ __ ] out nick but it was so funny he dropped line after well he's a
00:01:55
ringer he's a professional well he's maybe the funniest person in the world and then sax had to come after it yeah
00:02:01
exactly xander i don't know why xander was the emcee but because i should have saved kevin
00:02:07
hart for last but instead he calls up k hart in the middle sax was so tilted
00:02:13
okay so wait so i i couldn't make it because i had burning man the xander does the emceeing
00:02:19
then kevin hart you were saying is just to fill in the audience here so they can understand it
00:02:24
kevin hart comes in he gives this incredible ad-lib roast
00:02:29
and then sax has to go after him yeah first of all sanders is
00:02:37
xander's as funny as a root canal he should not have been the emcee so yes we did miss you j kyle you should have been
00:02:43
the mc second k heart should have been left for last obviously of course but xander you know xander being a good
00:02:50
liberal couldn't censor me outright so he had me go after k hart that's like
00:02:56
the next best thing did you steal his documents did you steal all his jokes and put them in your i just threw i had
00:03:01
all these like jokes written i just threw them out the window because i can't what am i gonna do i'm not gonna deliver jokes after kevin hart so i just
00:03:07
told a story you know kevin hart like killed i mean the room was i mean that's like that's like getting punched by mike
00:03:13
tyson and being like oh my god that hurt he's like yeah it's mike tyson yeah
00:03:20
[Music]
00:03:30
[Music] we were at
00:03:36
the the code conference we had the poker game it was the last one after twenty big shout out to cara swisher picture
00:03:42
just i wanna say uh to walt mossberg and kara swisher because they did the conference many years together congratulations on a 20-year run uh
00:03:49
they're not going to do it o'cara is not going to do it next year but my friend jim bankoff who runs vox is going to run
00:03:55
it next year uh so congratulations to him and cara for a great run and all things d
00:04:00
they you know they they they had steve jobs at the first one first speaker and um you can look it up i got to ask him a
00:04:06
question if you remember this but you and i were there when uh gates and jobs
00:04:12
uh did that speech together unbelievable what what what an incredible legacy that she documented remember this
00:04:18
code is incredible like i mean the number of the amount of memories i have from that place is incredible that's great and so we'll see where the poker
00:04:23
game goes next year probably the only time i think the all in summit could have been that it's it's heartbreaking
00:04:29
it's heartbreaking i'm not saying that i'll be hosting the code conference next year but you know they're looking for an
00:04:34
impresario this is the problem with this pod is we're drawing too many high-profile people in now but uh interestingly freeberg and i
00:04:41
we now have uh the press wants the the the press are trying to do
00:04:46
a profile of the pod and so we had three or four different press outlets now i won't say which ones but i've all asked us to do like a
00:04:53
sit for a profile we've said no uh but uh just because i said why don't we do a profile of them
00:05:00
who's to make them the media you know well i mean that's what's great our competitors our competitors want to do a
00:05:06
a piece on us why would we cross the audience you know it's gonna be a hit a hit piece it'd probably be hippies yeah
00:05:12
of course because we're we're stealing influence and clicks and views away from them
00:05:19
and besides they're ideologically motivated anyway so they're they're message police sex you don't think
00:05:24
you're ideologically motivated listen if you contract the official narrative then they write a hit piece about you that's how they try to enforce
00:05:31
discipline it's true actually but not i like the independent ones i do i have to say like this whole
00:05:38
you know sub stack movement in independent artists or independent journalists becoming
00:05:43
even more indie in fact kara swisher is more indian now she left the new york times uh specifically because they were
00:05:49
you know giving her a hard time about certain guests or certain conversations and now she's you know doing her podcast
00:05:55
independently uh with vox publishing it for her so you're seeing more and more of the voices go independent new republic is doing a hit piece on me
00:06:01
right now i have no idea why it's the same thing emo me and see them and i was like here's my official comment i can't
00:06:08
wait to visit sax when he's in the white house in 20 years and the guy's like so you're saying sax is writing for a president i'm saying no i'm saying that
00:06:14
you don't understand a joke that was a joke yeah and then and then after you copied me then they're like oh
00:06:21
yeah we were reaching out to david too to get in no yeah and they hadn't reached out to you yet right they hadn't
00:06:26
reached out anyway yeah so they were going a little sneaky sneak they were trying to get me something i don't know i don't have time to talk to them you
00:06:32
know it looks a nice that would be a nice profile i think nobody reads it uh
00:06:38
if it were if it were michael kinsley running the new republic i'd be happy to you know take the time but it's not that
00:06:44
anymore it's just another left-wing rag that's into policing speech um you know
00:06:49
they asked they sent us a bunch of questions like you know why well i don't i don't have them in front
00:06:55
of me but they're like they're basically like why did you support the recall of chase and booty and stuff like that and
00:07:01
my you know pr person got back to him and said have you seen the all in pod have you read david's like twitter
00:07:06
because he explained this like abundantly for the two years he was advocating every week every week we
00:07:13
talked about this and the guy was like right he's like oh he talked about in
00:07:18
the pod he the guy didn't listen to the pod he's like he tweeted about this no he just thinks i'm like some right-wing
00:07:25
donor who was like trying to get it kicked out that kind of narrative you
00:07:30
know so i'm like this is a total waste of my time go read all my tweets go watch the all in pod and then come back
00:07:36
with any questions that haven't been answered it's just lazy reporting on the new republic's part why would you do a profile if you didn't actually i got
00:07:42
better two of you are having a serious conversation about free bird he's [ __ ] around with his backgrounds
00:07:48
enough what is his background what is that it's a future city in saudi arabia who else is planning on doing a hit
00:07:53
piece about us okay so the information uh reached out
00:07:59
and we said no are you going are you saying this actually on the show right now i guess i think this way we should deal with all
00:08:05
inbound press inquiries is we'll tell them no and then discuss it on the pod yeah because they want a quote if they
00:08:10
want to quote listen to our pod and then transcribe what we say on this pod or reverse it my quote for the new republic
00:08:17
is that if michael kinsley were still the editor i'd be happy to spend my valuable time talking to you
00:08:23
but you feel they will not they of course it's not going to be fair there are the speech police now
00:08:30
and the fact that he didn't even know the fact he didn't even know that i wasn't just a donor on the chase of boudin thing i was the first person
00:08:37
that i'm aware of at least within silicon valley who called out chase abu deen for the horrible job he was i mean
00:08:44
that was bipartisan by the way it's not like david sacks is one of the three percent of san franciscans who are
00:08:50
republican like he's not able to vote for the 69 percent of people who voted
00:08:56
chesaputin out so like you can't spend that one you're categorizing me as like just a partisan that's not really how i
00:09:02
come at these issues can we go back to your quotes so uh that was your comment for new republic jkl do
00:09:08
you have a comment for new york times and then uh it started with eric i got to be a fair eric newcomer who's awesome
00:09:13
who worked at the information started his own sub stack um which is really good by the way and uh he comes on my
00:09:19
other pod um he's awesome and so i'm going to be a guest on his pod because i promised him and he does my part but i'm
00:09:24
not going to be a guest my philosophy is i told him i said you can have me as a guest but it can't be more than 10 all
00:09:29
in because i don't want it to become an all-in profile we agree it as a group we're not doing it all in profile right now
00:09:35
so up to 10 can be about all in but the other 90 has got to be my other projects and he said totally fine um he
00:09:40
understands but he asked first and actually i would be inclined to do with him because he's if we were going to do it but then um what do they need i mean
00:09:48
like we create like hours and hours of content and the drama is out here for everybody to i mean like i don't
00:09:53
understand like what is what do you need our cooperation i think you wanna no you wanna maybe frame
00:10:00
uh and get a couple of sleep no you want you just wanna get a couple of quotes that are unique so that's worth reading
00:10:06
these two guys have shoved their heads up each other's asses it's like a serpent a never-ending
00:10:12
serpent you're clear up here clean bill of health sacks uh so anyway eric newcomber asked and then the
00:10:19
information asked him and then kevin rush no the new york times just asked right okay what was the nice thing about your
00:10:25
comment my comment in new york times is uh yeah enjoy the pod while it lasts we're
00:10:32
trying to keep it together i mean i'll say the other big issue is i got approached by a couple of um by two different people
00:10:37
who wanna who want to represent the pod they say there's seven and a half million dollars in advertising we're leaving on the
00:10:43
table by the way 150 a week good work okay and literally that was i want that
00:10:49
number to grow to 10 million 20 million guys are killing me you realize i would have a plane if you guys just let me
00:10:55
sell the [ __ ] heads on this thing i could get like a million and a half dollars in jet stream yeah you would have a plane if you just did one other
00:11:01
thing you're doing a hundred different things just do one thing i'll tell you what it is you'd have a plane if you're
00:11:06
smarter that's not that's not nice sex that's
00:11:12
not nice i would have a plan if i got luckier i will say whoever said this is going to help our our core businesses
00:11:17
and that's the reason i think it might have been youtube i am raising my fourth fund
00:11:23
i am doing at 506c which is public i tweeted about it i had 1200 people
00:11:30
sign up for the webinar and this means i might have to increase the
00:11:36
size of my fourth venture fund because so many people listen to this pod and want to hang out so thank you to
00:11:42
everybody who listens to the pot i think for you bro well i mean it's just nice you know i
00:11:47
you know i struggled to raise the first couple funds you guys backed me but like i couldn't break through
00:11:52
as a solo gp with the with the big lps but i'm hoping to get one big lp this time and you know
00:11:58
it's i'm going to be oversubscribed with all the high net worth individuals and everything but i'd like to get like a memorial sloan kettering or somebody
00:12:04
doing cancer research just to feel good about it you know i just want to say that i supported j cal as a friend in
00:12:09
fact i was the first lp check in your fund but that does not mean that i tore this in any way in any way or that
00:12:15
anybody else should come in i mean whatever you're i don't want to say the performance but
00:12:21
um you're doing okay let's leave it at that yeah and i would like to say that i was not the first but i was the biggest
00:12:27
yeah you did you did pretty big yeah absolutely and i will say that i'm still waiting for that moment to join you guys
00:12:33
in jake yeah exactly uh yeah and i'll just keep coming to your lp meetings and
00:12:39
entertaining your mps thanks pal entertaining wait is jkl an investor in production board no uh we do we have
00:12:45
done we've done a syndicate you are my smallest investor you're in the
00:12:50
don't know how that bill but yeah but let's get to work guys do you guys want to talk about the queen the passing of the queen real quick before we start or
00:12:57
is that i would like to yeah i was born in sri lanka i was raised in canada so and now i live in the united states
00:13:03
obviously i've been a citizen of all three countries so two of the three countries
00:13:09
i've been a subject to the queen i mean i'm part of the commonwealth and i just want to say
00:13:15
it was really sad for me like these last couple days when i saw that she was sick and then she had passed
00:13:21
i got to be honest with you like it really touched me she is an incred i can't describe to you guys
00:13:28
for someone who is part of that realm how important she is as a person and then you know if you've seen
00:13:35
you know the the show on netflix it kind of romanticizes a little bit but you know
00:13:42
she has seen 17 prime ministers she's seen so many presidents she has seen the history of the world
00:13:49
uh the modern world being made in front of her so yeah i'm a little sad and i think
00:13:54
she's an incredible person and even if you don't agree necessarily with monarchies in general i think you have to be super
00:14:00
positive or the history of imperialism there's a lot of people that are kind of using this as a moment to be negative right in jamaica wants to become a
00:14:07
republic australia wants to become a republic they'll prosecute that in due time but for right now
00:14:14
i just think that we have to celebrate this incredible woman who lived to an incredible age who saw
00:14:20
incredible things and who dedicated her entire life to the public service and lived it
00:14:26
totally neutrally which in today's world nobody else does everybody else takes the point what's the point everybody
00:14:32
else everybody else tries to basically like you know create a schism she never
00:14:38
did that in 70 years as the queen yeah like very stoic very stoic and a symbol
00:14:43
of service not a symbol of dictatorship right i mean there seems to be a very different role that she's taken as a
00:14:49
monarch than i think what yeah has maybe historically been the role which is incredible pretty profound
00:14:55
right it's extraordinary that somebody would put 70 years of service and be that diligent i think stoic and
00:15:02
and there for her people and to the people who are you know suffering and and grieving you know that word you said
00:15:08
really resonated with me like diligent is such a great word because it's like you're disciplined you put in hard work
00:15:15
you're focused on the long-term goal and then you're selfless yes not many people not many people
00:15:20
jacob you know this exhibit that at all but then definitely don't exhibit it over 70 years
00:15:26
it's it's extraordinary and yeah it's i i know a lot of people are grieving right now so you you have ourselves somebody as a citizen of the monarchy i
00:15:33
am of the commonwealth rather i am pro queen elizabeth and it deeply saddens me
00:15:38
to see that she passed possibly all right listen we got to talk about uh winter is coming i'm not talking about game of thrones let's talk about
00:15:43
something serious that's going on here um and we you know we don't like to be too repetitive here but i think
00:15:49
we correctly um predicted that you know this if this ukraine i think maybe saks you pointed
00:15:54
this out this year what do you mean weak kimo sabe all right listen i'm trying to give you [ __ ] credit and you're interrupting
00:16:00
me can you just take the [ __ ] win you're such a miserable bastard i try to give you one [ __ ] game finish what
00:16:06
you're saying and you cut me off all right listen we've been talking about this ukraine thing stacks correctly predicted if this goes to winter
00:16:13
this is going to get acute and of course uh right on cue here we have it russia has
00:16:19
essentially cut off uh gas to europe right now by claiming that the north stream one
00:16:25
the north pipeline that russia built that goes under the baltic sea
00:16:31
they basically say a turbine's broken in it magically at this point in time right before winter this turbine broke
00:16:36
according to putin and he needs a turbine um and if they give him a turbine he said he's going to turn it
00:16:41
back on uh this in the face of europe saying they were going to cap the price of
00:16:46
russian gas i don't know how that works exactly that you tell people what they can charge for gas but russian gas shipments uh which
00:16:54
germany is particularly uh dependent on have fallen 89 since last year and the price of
00:17:00
liquefied natural gas in europe is four times level a year ago uh in eight times uh the level of the us
00:17:07
obviously we are have gotten incredibly lucky to find all this uh natural gas here and we are a huge exporter of
00:17:14
natural gas and oil in the united states so we're good uh this is the highest power prices have
00:17:19
been in three decades and the perfect storm is not limited to
00:17:24
oil in the russia and the ukraine war france's 56 nuclear power plants are
00:17:29
running at half strength because of shutdowns over corrosion problems and as we talked about maybe two episodes
00:17:35
droughts have undermined hydroelectric power uh because of these that's not the main issue here the main issue is the
00:17:41
cause this is there is a perfect storm here it's not just that 40 percent of
00:17:46
europe's uh energy consumption comes from russia and natural gas forty percent and so
00:17:52
you could see variants there's a base load requirement for lighting and electricity and then
00:17:57
there's industrial production and then there's heating and cooling heating and cooling demand is linearly
00:18:03
tied to the number of degrees above or below 65 fahrenheit on average and so as the
00:18:09
temperature goes up people turn air conditioners on as the temperature goes below 65 they turn their heaters on so there's a linear demand for power
00:18:14
consumption at those so number one is you could kind of you could either cut base load which is
00:18:20
lighting and basic kind of operations number two is cut industrial production which is already happening a
00:18:26
lot of fertilizer plants are shutting down in the country that are dependent on natural in the in the continent
00:18:31
that are dependent on natural gas and number three is the scooting heating and cooling and that really ends up being
00:18:37
kind of a market-driven function which is how pricey is this stuff because there's limited supply so you could normally in a normal year see
00:18:43
fluctuations around five ten fifteen percent maybe with good kind of action
00:18:48
and behavior forty percent of energy being cut is a massive massive problem
00:18:55
there will be significant price climbs for the kind of variable demand and heating and cooling and so on but for
00:19:01
the price to go up by 6x 7x 8x 10x 15x
00:19:06
over normal prices for someone is unbearable by the average household
00:19:11
unbearable by the average small business unbearable by the average small building um and so it's causing critical failure
00:19:19
uh across the economy across the currencies across debt markets and there's real concern that
00:19:25
ultimately the shutting off of 40 of the energy supply to the continent leading into winter winter is coming where
00:19:32
energy demand spikes because of the need for heating is going to cause real kind of problems
00:19:38
so there's the cataclysmic problem of people actually being able to keep their homes there's the industrial problem of
00:19:43
parts of the economy shutting down and then there's the currency
00:19:48
problem of the governments needing to step in and bail out industry buy super
00:19:53
expensive gas give it to their citizens and their businesses at a discounted price and seeing their national and
00:19:59
sovereign debts skyrocket which is now expected to happen and as a result the british pound is trading at its lowest
00:20:05
level since 1985. and as a result people are rushing to the street from prague to
00:20:12
cologne germany even in london proclaiming that the governments aren't doing enough number one to stall the uh
00:20:19
the rate of inflation to make energy prices cheaper through action by having the government subsidize and number
00:20:24
three which i think was inevitable and is now becoming kind of the surprise factor to the ukraine crisis citizens
00:20:30
are saying end this war now get to the table with russia come up with a settlement and get the heck out
00:20:37
of ukraine by the way that's not everyone saying it just to be clear but there is this rising
00:20:42
rioting protesting behavior happening across europe particularly in eastern europe um as a result of the ukraine war
00:20:48
and so we're seeing you know i think a big shift in attitude and a big shift in kind of the societal
00:20:54
perception of this war particularly in europe because they're so acutely feeling the effects and we are not in the u.s they're acutely feeling the
00:21:00
effects and they're saying we need to stop this war now we need to get out of the way we need to let russia turn the gas pipeline back on and we need to
00:21:06
figure out a resolution stop supporting ukraine and that's what it is that's a voice that was that's a voice that did not exist very loudly yeah at the
00:21:13
beginning and it's and it's starting to swell running out of food or you know running out of heat to keep your kids warm i
00:21:19
mean these are pretty acute situations traumatic what's the vibe in the middle east about this are they looking at it
00:21:25
and seeing it as an opportunity are they looking at it and seeing it as you know a manageable crisis and or and
00:21:31
what do they consider their participation in this to be there's a very structured framework for energy
00:21:36
production which is opec and opec plus and you know
00:21:42
they have done not just the middle east but frankly the middle east plus
00:21:47
um united states the best job possible to basically get the maximum demand so that
00:21:53
there's as much energy as possible the reasons that europe are in an energy
00:21:58
crisis really should be discussed honestly so number one
00:22:05
an entire continent essentially allowed a 16 year old girl
00:22:11
to dictate their energy policy and when greta thumbberg was able to
00:22:16
shame an entire continent into basically walking away from nuclear and not really
00:22:23
evaluating how you can actually have energy independence what they did was they put europe in an
00:22:31
incredibly fragile position and at the beginning of this war it wasn't
00:22:37
clear how much damage the lack of russian energy would do to the european economy
00:22:43
but now it's absolutely clear how does that see that we said it on the board we said it on
00:22:49
the pod in february i mean trump said it years ago i mean the first thing we said how is it not
00:22:54
obvious the problem is you had these look to be honest you had these two goofballs you had a goofball on the left
00:23:00
which was a 16 year old girl who knew nothing and you had a goofball on the right which is a president whose
00:23:06
language turned people off even though the message that he was delivering was a
00:23:11
hundred percent right when when trump went to the united nations he was clear
00:23:17
he was precise and in hindsight and i'm saying this as a democrat he was right
00:23:23
oh about obviously the german reliance on russian gas and and the european
00:23:28
reliance on gas what did they think would happen the important thing was was the reaction remember the german
00:23:34
delegation snickering while he was they were laughing they were laughing but but we're but we're missing the real lesson
00:23:39
the real lesson is that in all of our haste to basically
00:23:45
overtly judge trump because of his delivery and his you know his personal style or whatever
00:23:52
we ran towards a 16 year old person who has no rooting in science or technology
00:23:57
to dictate the energy policy of an entire continent i mean the she was nominated for a nobel
00:24:03
prize just to remind you guys this is how insane
00:24:09
all of these people were so in an effort to virtue signal to the hilt and beyond
00:24:15
what we essentially did what the entire world did was turn a blind eye to science
00:24:20
and turn a blind eye to mathematics and simple understanding of supply and demand and so now you have a situation
00:24:27
where the entire continent of europe is probably on the precipice of the minimum
00:24:33
a recession but frankly there's a lot of scenarios where it could be meaningfully worse
00:24:39
and i think what it does is ultimately it has forced the russian endgame
00:24:45
and that russian endgame is essentially the following which is that
00:24:51
germany will probably be the first to capitulate but it'll be
00:24:57
the combination of the united states and europe who negotiate some kind of a settlement
00:25:03
they have to follow and and the reason well without calling it folding i would
00:25:08
just say there's a settlement and the reason the settlement is necessary is you're going to start to impact
00:25:14
tens of millions of people's lives in an incredibly arduous way
00:25:20
and those people are asking their leaders to tell them why it's
00:25:27
worth it that's why you're seeing protests all around europe people have
00:25:32
decided that this war has gotten two or three steps beyond what they thought they were getting into
00:25:38
and that it was shining light on a whole set of decisions that never should have been
00:25:44
made sax what's i i i think what people most want to know and i'll go to freebird after sex freeberg i think
00:25:50
people are going to want to know how do they close this gap in terms of the 40 dependency so you can start thinking about that but saks how do we
00:25:58
resolve this issue with russia without enabling them because nobody wants to enable them and reward them for evading
00:26:03
countries but here we are they didn't settle this thing in the whatever nine months we're in now
00:26:08
and they don't have any more cards to play they they need heat they need people can't freeze to death in germany
00:26:15
so they're gonna have to fold in some way and it doesn't seem like there's any gap that can be closed here in terms
00:26:21
there's not enough firewood to go around it's all these stories about stockpiling firewood that doesn't seem practical
00:26:26
sure you could reduce consumption by 10 20 maybe 25 that does seem reasonable
00:26:31
but there's still a huge gap here so so what's the end game saks i mean well first just just to put some numbers
00:26:37
on this there's a good report by goldman sachs called europe's energy crisis is
00:26:43
at a tipping point this came out on september 8th and it says here that the price of
00:26:49
natural gas in europe it used to just be 20 euros per megawatt hour it's now
00:26:54
above 200 per megawatt hour so we're at 10 times
00:27:00
the 10-year average in the market and winter isn't even here so you know europe is the titanic winter is
00:27:07
the iceberg the main difference between this and the titanic story is that everyone can see the iceberg and yet no one is really
00:27:14
changing course so liz trust the new prime minister of the uk said that ukraine can depend on uk for support in
00:27:21
the long term olaf schultz said that germany will support ukraine as long as it takes
00:27:26
macron you know from france so that nato will stand together and prevent russia from winning the war
00:27:31
so you know leader after leader is doing the opposite of what you and and chamath have just said which is try to figure
00:27:38
out a compromise in fact in the last week or so new information came out about actions boris johnson
00:27:45
took back in march or april when they remember when there was discussion about a peace deal about a month into the war
00:27:52
it turns out that boris johnson went to ukraine and said no deal do not take the deal we need to weaken putin and russia
00:27:58
not compromise with them so the fact of the matter is that the european leaders are increasingly
00:28:06
out of touch with their own people the agenda they are serving is not the agenda of or the desire of their people
00:28:14
to basically stay warm in the winter or pay reasonable energy bills they are serving this larger foreign policy
00:28:20
agenda this is why you're seeing people in the streets in czech slovakia and these other countries and this is why
00:28:25
the crisis will only grow in winter i think you guys are just assuming there's going to be a
00:28:31
compromise i'm not sure that's true these leaders are stubborn so this is why for example we've already
00:28:36
now seen in the uk boris johnson lost power although list trust basically
00:28:42
has the same policy mario draghi has basically lost in italy if bulgaria
00:28:47
replaced their pm so the leaders the dominoes are starting to fall in europe and i think there's
00:28:52
going to be a lot more of this and who knows what governments we're going to end up with in europe
00:28:58
what's the end game then i mean what do you what do you predict will happen you think they're going to hold their ground and not have a conference
00:29:04
so jamal pointed out the mistakes that these leaders made following greta thunderberg i think there's another
00:29:10
mistake they've made which is i think all of these leaders have pulled a tony blair do you remember tony blair tony
00:29:16
blair was the bill clinton of the uk after margaret thatcher he was the first labor pm to get elected he was
00:29:23
incredibly talented as a politician and he was very popular in the uk until he
00:29:29
did one thing you know what that one thing was he went along with george w bush's iraq war the people of the uk did
00:29:36
not want to get involved in that war and blair acted as w's lap dog and went
00:29:42
along with it and bought into all of the lies about that war and today he has
00:29:48
zero credibility in the uk it's really actually a sad story i think that these
00:29:53
european leaders are making a similar kind of mistake with respect to biden's proxy war against russia now let's go
00:30:00
back i want to go back to a point you made jason just now let's turn to freebird which is you talked about the fig leaf
00:30:06
that the russians are blaming this on our turbine i don't think that's even really true anymore i mean the russians
00:30:11
have basically said he's lying of course yeah yeah but but i think the russians have basically said that um
00:30:17
that listen this is also because of sanctions it's sanctions and a turbine it's like
00:30:22
pick one right you can't listen but but the point i'm trying to make it look obviously this is retaliation by the
00:30:27
russians the problem is the stupidity of western leaders in not thinking
00:30:33
there's going to be retaliation i mean all you're hearing right now from western leaders is indignation that
00:30:39
russia would play the only card they have the card that was obvious they were going to play you
00:30:45
know meanwhile look at what we've done so you've got administration officials
00:30:51
talking about the fact that we have commandos on the ground in ukraine you've got administration officials bragging about the fact that we are
00:30:58
helping to paint targets on the backs of russian generals so they can be killed you have administration officials
00:31:04
boasting about providing the um the artillery spotting so we could sink the mosfet the russian
00:31:10
flagship i'll provide receipts for all these things okay you've got biden saying that putin cannot remain in power
00:31:16
you've got lindsey graham saying okay we know all this what is the let's go forward how does it resolve you've got lindsey graham saying
00:31:22
they need to be assassinated like caesar you've got um the u.s appropriated 40 billion hold on a second in weapons to
00:31:28
ukraine so my point is this okay the us and the western alliance they are
00:31:34
doing everything in ukraine except pulling the triggers okay they are doing
00:31:39
the attack okay so the point is we are in a proxy war with russia what did you expect was
00:31:46
going to happen these leaders are not even playing what should happen forward
00:31:51
you're in the review forget about playing chess they're not even playing checkers meaning they cannot even anticipate what the russians are going
00:31:57
to do next it was imminently predictable imminently predictable that the russians were going to turn off european gas and
00:32:04
create this crisis so what should they have done what they should have done was work out a white
00:32:09
steel i know that but we're kind of repeating the same position you have every week here i'm trying to get to
00:32:15
going forward so uh freeburg what should we do going forward here both on an energy basis and a political basis
00:32:21
that's the thing i i get the sort of breakdown of what occurred here in your position sex but what do
00:32:26
you think freeburg should happen going forward how do you remember there's an acute energy shortfall you can't just make that up you can't
00:32:33
convert oil into natural gas to heat people's homes it's impossible structurally right now in the time frame
00:32:39
that it's needed so what should the should the eu be doing now that they're not doing
00:32:44
yeah i think that there's gonna be this inevitability that we're gonna need to broker a deal
00:32:50
with russia and there's and what i think you'll see over the next couple of months
00:32:55
particularly because winter is coming is you need to
00:33:00
uh there's going to be a lot of saving face and so i think i've always said from the beginning i
00:33:06
think that putin's calculus is to go as far and as deep as he can go
00:33:11
so that he could eventually negotiate himself back out in a way that leaves him with what he originally wanted in
00:33:17
the first place and i think that there are certain strategic regions and certain strategic assets that it's pretty clear and
00:33:24
evident he wanted and if he's gotten enough in addition to that he can give up the additional part
00:33:31
and he can get sanctions lifted and he can turn gas back on and be left with what he actually wanted and ultimately
00:33:36
get out of this thing and then the the face saving will be from the west will be hey we got him to give up this we got
00:33:43
him to give up this we got him to agree to non-incursion and there'll be some sort of you know hey we got putin
00:33:48
knocked down a bit and you know we got him out of there we did it we won high five meanwhile putin's smiling because
00:33:55
he got exactly what he wanted i think that's where this is all going to end up over the next several months i think
00:34:00
that's that's if it doesn't there's going to be significant writing and civil unrest in europe and um and there
00:34:07
will be a significant significant economic effect because so much of germany and so much of the broader
00:34:12
continent is dependent on a stable low-cost energy or lower enough cost energy supply for the production of
00:34:19
things that are produced in europe and if those things can't be produced profitably because the end market won't
00:34:24
pay for it the economy will be shattered economies will be shattered and people
00:34:30
will be really unhappy food will climb and the currency will will be destroyed and you know what happens when
00:34:35
currencies get destroyed all imports become inflated in price and then you have inflation if there isn't a
00:34:41
resolution in the next few weeks there will be civil unrest there will be a really cataclysmic concerning economic
00:34:47
effect and you think that forces the governments to just fold to putin and give him some yeah and i think the thing
00:34:53
that we don't know for sure is what are they going to do from a face-saving move perspective what are they going to say that the ukraine or the the western
00:35:01
ukraine we are gonna have to plow so much money into the ukraine uh to make them feel okay about what
00:35:08
we're gonna ask them to do in order to remove um or to end the crisis and so there's gonna be this huge
00:35:14
check this huge investment in ukraine the western investment in ukraine the the support mechanism for the country
00:35:21
for the people left behind in order to get this thing resolved and so my guess is huge amount of money from the west
00:35:27
and eu going into ukraine ukraine agrees to let putin keep some region some
00:35:32
assets putin agrees to remove himself from certain regions and give up certain assets sanctions are partially lifted
00:35:39
but they're partially lifted enough to get the flow of gas going and to get the economy turning again jamath any final
00:35:45
thoughts here as we turn uh around uh third base here on this uh of lessons
00:35:50
learned and how to avoid this you may you may want to find the clip
00:35:55
nick from july where i said the tip of the spear in the fall was going to be the european energy crisis
00:36:01
oil is at 105 bucks a barrel russia is basically trying to break the back of europe by now messing with their nat
00:36:08
gas supplies the german energy minister yesterday said that if that happens it could be a
00:36:15
contagion equivalent to lehman brothers with respect to energy you're already starting to see
00:36:21
food riots food insecurity energy and security rampant inflation uh sovereign defaults
00:36:28
and you have to ask yourself like how are we going to really tourniquet this whole thing and prevent
00:36:34
a much bigger contagion like freebird just talked about if russia decides to play hardball
00:36:40
against europe or america we better hope that it's a mild winter because very quickly
00:36:46
you can go from plus one million barrels to minus two in a heartbeat yeah my final thought to the following
00:36:51
which is that i think that the european
00:36:57
system is going to be put under stress because there are really a bunch of different countries with very
00:37:02
different incentives right now um where some countries are in desperate need of energy
00:37:08
some countries can probably stave it off for a little bit longer other countries are so adamantly focused
00:37:15
on their position on russia over and above
00:37:22
any source of energy that they may need or don't have so i just think like this is a really good
00:37:28
point to take a step back and realize that in all of these conflicts
00:37:35
sadly whenever you have like all of these very complicated countries fighting very complicated wars it's really important to understand what
00:37:42
these tradeoffs are because ultimately what we're learning in europe is that irrespective of what you morally and
00:37:48
ethically believe is right in the ukraine the minute that it affects you and jason
00:37:53
you've said this what is it like you're only one meal away from a revolution so yeah it's three meals away yeah and i think it would be
00:37:59
you're only like five days away from having no heat before people ride on the street it's probably going to be applied
00:38:04
but but that but that's the lesson which is that at the end of the day it is
00:38:10
when you're in a position of comfort you can focus on forward and outlooking
00:38:15
moral attributes and ethical perspectives that matter
00:38:21
but the minute that you are affected at home where you cannot take care of your children or heat your house
00:38:28
all bets are off and i think this just goes to show you that
00:38:33
if you're going to sort of engage in proactive foreign policy you need to make sure that domestically
00:38:41
you don't have any achilles heels and europe had a massive achilles heel which is energy
00:38:47
and then you know the minute that they were stress tested basically they're gonna have to take this much more seriously uh going into next year
00:38:54
because they've enabled a madman that is the dominant narrative there is a simplistic binary that has been set up
00:39:01
that this is a war between autocracy and democracy and that's all there is to it and my point is that this conflict has
00:39:07
always been more complicated than that okay and if you really want to understand this conflict you have to go
00:39:13
back and understand the history of it and you know the american media and the british media they basically act as if
00:39:20
this whole thing began on february 24th for a good example of this there was an excellent piece
00:39:25
by william perry who is bill clinton's defense secretary
00:39:30
okay he said how the u.s lost russia and how he can restore relations and he
00:39:36
talks about how we can chart away ford for peace which i think is your question what perry points out remember again he
00:39:43
was clinton's defense secretary in the 1990s he almost resigned in protest
00:39:49
over nato expansion eastward this was basically a contradiction of the verbal
00:39:55
assurances that james baker and and president george herbert walker bush had
00:40:00
given gorbachev that we would not expand nato one inch eastward in any event
00:40:06
that's when nato expansion began was the late 90s perry was against it because like george kennan like
00:40:13
former ambassador to the server union james matlock he understood that it would be provocative it would be seen as
00:40:19
a provocative move by russia okay he was against that policy the other thing he points out
00:40:25
is that in the 1990s the russian economy collapsed because they moved off of
00:40:31
the soviet system and we did absolutely nothing to help them as a result of that we bred the conditions for a strong man
00:40:39
to emerge who basically prioritize the restoration of russian
00:40:45
pride dignity and strength okay so he points out the ways that our policies
00:40:50
helped create putin i think what he basically suggests in terms of the way forward is look we have
00:40:56
to realize that the security architecture of europe was crafted in the late 90s
00:41:03
and early 2000s at a time when russia was flat on its back okay what are the russians basically demanding what were
00:41:10
their demands prior to this war there were two things they really didn't like okay number one was they did nato at
00:41:15
their doorstep we've been on this yes they didn't want ukraine admitted to nato and then number two is they didn't
00:41:20
want american missiles right on their border that could hit moscow in five minutes okay those were their two
00:41:26
demands the fact of the matter is we never were willing to negotiate at all
00:41:32
on those two demands at all and instead we basically just claimed they were a pretext by the russians for
00:41:38
an invasion well look we never earned the right to call those a pretext if you want to call them a
00:41:44
pretext you take those issues off the table then if the russians invade you know they're liars the truth of the
00:41:50
matter is we were refused to negotiate anyway we never played that move and so we'll never know i i i don't disagree
00:41:57
with you about that point okay the biggest thing the
00:42:07
i want to keep going with this because i think this issue is so much deeper okay listen one of the problems we have in this
00:42:12
country is that when a war doesn't work out we just ghost it we never talk about afghanistan anymore
00:42:19
we never talk about iraq anymore we understand they were gigantic mistakes but who is analyzing why they happened
00:42:26
who's responsible for the failure the fact that matters there's been no accountability the same people who drove
00:42:32
our disastrous foreign policy in the middle east are the same people who have driven our ukraine policy in eastern
00:42:38
europe there is no accountability military contact not just that it's the foreign policy elite in this country okay so my point
00:42:45
my point is that there's my points yeah okay so my point is this and you're it sounds to me like you're willing to now
00:42:50
say what compromise can we find to get out of this war okay my point is since i'm trying to avoid war from the
00:42:56
beginning i i do think we did not play the piece of hey if nato is not here if
00:43:02
we don't let them in nato and we take that off the table will you move these troops back from the border and who we don't know if they ever offer
00:43:09
that or not but we do know actually there was there was new information that came out the last couple of weeks okay obviously they should have offered that
00:43:15
i mean the the real issue here is dependency on dictators for energy because if he if
00:43:21
he did not have the ability to yank that gas chain if he didn't have that nord he
00:43:26
would be neutered right now yeah but we knew that we knew that so so if you're playing you're not even saying it accurately
00:43:32
it's not that if he didn't have nord it's that doesn't exist without an entire other counterparty agreeing to it
00:43:38
i agree if germany had kept their nukes going and if they had made other plans
00:43:44
perhaps with them okay but or the united states i mean don't forget biden canceled our energy
00:43:50
independence the first day he was in office it doesn't matter that it's a dictator on the other side there is a
00:43:56
dependency on the other side and that is an issue for energy independence since the beginning i've been talking about
00:44:01
nuclear since the beginning for decades i've been talking but jake one of the challenges is if everyone creates
00:44:07
independency on all of their supply then there is no export market for countries that benefit from exports because they
00:44:13
have a surplus and so we see this around the world with food with energy with manufacturing would you know maintain
00:44:19
anything with oil that would be a good thing with oil wouldn't it china there was no market for it if there was no market for oil then a
00:44:26
lot of countries a lot of countries that do not have energy stocks locally would not be able
00:44:32
to acquire energy stocks and so a more free more does it make sense if you if you're saying if we lowered
00:44:38
our use of oil that would make it cheaper which means that developing countries would pay less
00:44:44
jacob just just let me finish with my point for one second in every country you are either an
00:44:50
importer or an exporter you're an importer of manufactured goods or an exporter of manufactured goods you're an
00:44:56
importer of energy you're an exporter of energy an importer of food and exporter of food it doesn't matter and we often
00:45:02
use this as a way to characterize the leadership at these countries as being bad when we end up in conflict
00:45:07
with them it doesn't matter that this person is that there's an autocracy in the other side or if there's a democracy
00:45:13
on the other side at the end of the day if there's a global trade agreement if there's a supply agreement and that
00:45:19
supply agreement gets broken it's both parties faults for being dependent on the supply agreement and then allowing
00:45:24
conflict don't think what you're saying is accurate and i'll explain why reasonable parties
00:45:30
who are democracies if they get into a trade dispute generally do not invade each other's
00:45:35
countries so that's where your argument breaks down it would be absolutely fantastic if the lesson the european union learned here was let's not be
00:45:42
dependent what did the united states hold on what did the united states do to iraq okay did we not invade those
00:45:48
countries i'm not talking about that i'm talking about the department that's what you just said you said that democracies do not invade and libya no i said we
00:45:55
shouldn't invade democracies two democracies that are in a trade war are generally not going to invade each other we invaded afghanistan
00:46:01
actually this is 9 11. okay and the the first iraq war we invade we protected um
00:46:08
kuwait right and so you know i'm not here to justify every war the united states has been in i'm just talking
00:46:13
about in this situation the eu lowering their dependency and if you were going to lower your dependency on any country you'd start with the
00:46:20
autocratic ones you'd start with the dictatorships it's not not logical to you freedberg there's a there is a neo-liberal view
00:46:41
they become more democratic that hasn't worked out so well i'd say economic interdependence theory hasn't worked out so well either so this is a core failing
00:46:48
now you're modifying the theory to say well only economic interdependence among democracies fine but that was not the
00:46:53
view that was not the view for the last 20 years it was a quartet
00:47:00
if we make ourselves dependent on these other countries then somehow it's going to lead to peace no it actually has just
00:47:06
led to dependency it was a foolish policy we should have been energy independent europe should have been energy
00:47:12
independent they should not have made them i do agree that it was foolishness we're in agreement yes you're disagreeing with
00:47:17
vibrant okay no no i'm not disagreeing with february i think but by the way i'm not i'm not a proponent of people not
00:47:23
being energy independent the reason i think people can be energy independent today is because of technology like nuclear and i think that all these every
00:47:29
country in the world should find a way to get energy independent i'm also an advocate of global trade i am an
00:47:36
advocate because i think that global trade enables economic progress it allows the consumer to get the cheapest
00:47:41
product possible and for the producer to find a market for the products that they make and that there's an element of this
00:47:47
which is energy but energy doesn't need to be a trade traded market as much anymore because of technology
00:47:52
manufactured goods food we still haven't cracked the nuts we are then in agreement freeburg yeah i
00:47:59
mean this is sort of an ancillary point but i just want to say that historically there's been no basis for believing in
00:48:06
economic interdependence theory if you go back to world war one germany and the uk were each other's largest trading partners before war one didn't stop them
00:48:13
from getting into war war ii i think russia's biggest trading partner was germany up until the moment when hitler
00:48:19
invaded them so listen economic interdependence has never has never bad man theory it doesn't yeah but the point
00:48:24
is there's very little historical basis for believing that economic interdependence prevents wars
00:48:30
which by by the way that really speaks to the foolishness of our china policy but look this is sort of a science
00:48:36
question with it with the china policy because i think this is a very important discussion we've discovered which is
00:48:42
energy independence is one thing and then you have trade which is another and does this actually push off wars
00:48:49
do we actually know that we we might have actually pushed off a war with china because we make iphones together could we have been in a
00:48:56
conflict earlier if we weren't so independent and have we actually pushed out a potential conflict
00:49:01
with taiwan etc with the benefit of hindsight
00:49:07
yeah with the benefit of hindsight what we can see is that our chinese policy of interdependency really was called
00:49:13
constructive engagement was a complete and unmitigated disaster why it was because we made china rich
00:49:22
you go back to the beginning of deng xiaoping began getting his economic reforms the average chinese made two
00:49:28
dollars a day now their economy is roughly the same size as ours and how are they using their newfound economic
00:49:34
wealth to build up their military their navy they're basically militarizing the south china sea they're basically being
00:49:40
aggressive towards their neighbors we fed that chinese tiger until it became a
00:49:46
dragon that was capable of challenging us for global preeminence that was a
00:49:51
foolish foolish strategy the fact of the matter is that and listen this is a mistake that
00:49:57
economists make is that they only look at whether trade creates surplus as opposed to the distribution of those
00:50:04
benefits and the fact of the matter is that china benefited disproportionately
00:50:09
far more than we did from the china trade over the last counter argument we've made on this podcast is i think
00:50:14
freeburg made it is that we lifted 500 million people i think i made it as well out of abject poverty in china but as to
00:50:21
your point what yeah it's like it's going to work we have created we have created the return of a we've created
00:50:27
the return of great power rivalry we have created a competitor to the us who
00:50:33
has roughly almost our same size economy and that is going to challenge us for
00:50:39
privacy and we need diplomacy we need very sophisticated diplomacy because this situation with china
00:50:45
it's it's not a clear path why is it that you think that we need diplomacy with china when we didn't need
00:50:50
it with russia no i i do think we did i i fully conceded that we should have avoided we
00:50:56
should have taken it off the table i said that from day one listen it's really important to not just say that oh
00:51:02
we failed to play chess here that this policy isn't working like let's not forget how we got into this conflict we
00:51:09
got into this conflict because the administration said i think there are four main pillars to
00:51:15
our current ukraine strategy number one that ukraine could basically defeat russia if we basically just gave them
00:51:20
weapons that has not happened yet number two the administration said that sanctions
00:51:26
would weaken russia maybe even destabilize its leadership and collapse this economy that has not
00:51:33
happened the ruble's at an all-time high and because gas prices have gone up so much their economy has suffered but on
00:51:39
the whole it's still doing pretty well the third contention that was made by advocates of
00:51:45
this proxy war is that the sanctions would hurt russia more than europe that has not
00:51:50
happened europe is already hurting more than russia and it's about with winter coming it's going to hurt even more and
00:51:56
then the last thing the last contention that was made our support for ukraine would rally the
00:52:02
world around us and would strengthen the western alliance and i think what we're starting to see is that the western alliance is
00:52:08
fracturing and you see these gigantic protests in prague and these other countries so listen these were the
00:52:15
pillars of our ukraine policy and they have all turned out to be flawed
00:52:21
and wrong and they're becoming more wrong by the day and yet there is no reappraisal of our policy that's coming
00:52:28
out of washington or london or paris none of these leaders are saying that
00:52:34
there's a problem so i think we're headed for not just an economic crisis but a political crisis
00:52:40
in europe because the fundamental tension between the needs of these people which is to basically preserve
00:52:45
their economy and to stay warm in their homes and the ideology of their leaders who
00:52:50
are financially committed to waging a proxy war against russia instead of finding a diplomatic outcome that was
00:52:56
available last year it was available in january it was even available in march or april that disconnect is the
00:53:02
fundamental problem all right let's go come on let's talk about kim k come on there's no word on how much money she's
00:53:08
raised for her private equity from from russian oligarchs but kim will serve as co-founder and co-managing partner
00:53:14
uh the firm was co-founded with 16-year carlisle veteran jay salmons uh who run day-to-day ops
00:53:21
and uh people may not know this but kim founded skims that's her undergarment company in 2019 it was last valued at 3.2 billion
00:53:28
dollars um she is obviously got the largest following and is the biggest influencer
00:53:34
in the world 329 million followers on instagram alone our friend gavin baker
00:53:39
uh responding to mr beast actually mr beast actually just passed okay so those are
00:53:46
two examples of people who can put a consumer package good in the world and make it number one instantly gavin uh
00:53:52
baker a friend of ours uh tweeted uh that she adds massive value uh in this exact regard
00:53:57
uh what do you think boys is she gonna have here's why i think here's why i think this is so important go i i have a
00:54:04
really strong belief that in the next 30 years or so all traditional brands are going to die
00:54:10
and i think that what we're seeing happening right now with the with the power of um
00:54:16
democratized media like us creating a podcast there are hundreds and now thousands of
00:54:22
individuals who have stood up and created their own brand and their own presence because of the content that
00:54:28
they create on twitch on twitter on youtube etc on podcasting and as a
00:54:35
result they become the trusted sources of influence and it's why they're called influencers and ultimately these
00:54:40
influencers are becoming the brands they can like mr beast launched a chocolate bar became like the number one chocolate
00:54:47
bar in the country he just opened up a burger restaurant last week tell me when people showed up number one no more than
00:54:52
that like a hundred thousand or something it was insane it was like the number one burger restaurant uh opening
00:54:58
or number one restaurant opening in history um kylie jenner launches a makeup brand
00:55:03
takes off becomes this billion dollar brand kim kardashian launches a clothing brand becomes a three billion dollar
00:55:09
brand these are not just brands they're businesses and here's what i think is the most prescient m a transaction of
00:55:15
2022 and you guys can tell me i'm crazy i think the most important m a deal of 2022 was when pen gaming bought barstool
00:55:22
sports because it shows that every consumer package good or every consumer services business ultimately needs to be
00:55:30
a content business and if you don't naturally have content creation in your blood you have to go and buy a content
00:55:36
business or you are going to die and that's why i think all traditional brands that aren't oriented and built around content creation as their primary
00:55:43
differentiating foundation will not survive and will not be able to compete effectively and instead what we're going
00:55:49
to see is influencers and individuals that create content build and distribute
00:55:56
consumer goods and consumer services in a more efficient way because guess what they've got distribution built in
00:56:02
distribution is the number one problem with all consumer services and all consumer goods so i think in the future
00:56:08
advertising all advertising and marketing gets replaced by content creation and content
00:56:14
creation direct to consumers through the the social media platforms becomes the mechanism by which people are aware of
00:56:19
and buy goods and services so that's why i think this deal is so important and i think it's a it's another one of what we're seeing in 2022
00:56:26
which is the stacking away towards the end of nameless faceless brands and the evolution of the influencer i think kim
00:56:33
kardashian is incredible she is an incredible businesswoman
00:56:38
and the fact that she can stand up what will probably be like a multi-billion dollar private equity fund
00:56:44
and frankly the companies that she invests in has a really compelling chance of being
00:56:51
successful because she can basically pour so much visibility and notoriety and awareness of a brand into that company
00:56:59
that that cap table if i was a director i would say of course give her whatever she wants
00:57:05
so that's the first thing and the second thing i would say is that
00:57:10
i think what threeburg says is completely right i think we're at a point in time where the biggest thing that if you want to
00:57:17
build a consumer business my advice to you as an entrepreneur is you need to build
00:57:23
direct distribution and scale because what that translates into what kim kardashian proves what mr beast is
00:57:29
proving is it's all about subsidized cac where you don't custer cost of
00:57:35
customer acquisition where you are not paying dollars to facebook and google
00:57:40
but instead because you have direct distribution and a relationship with tens or hundreds of millions of users
00:57:46
you can pour them into different experiences and when you can do that it's basically virtually zero cost
00:57:54
your entire margin structure of how you build a consumer business has changed overnight so that's what they've proven
00:57:59
they've proven that you need to first build a brand and then you can put you convert that brand into a distribution
00:58:06
funnel and then to basically pour all kinds of services into it and one of the services as it turns out is now a
00:58:12
private equity fund so i think it's incredible and i hope she's super successful saks do you think this um
00:58:17
influencer uh [Applause] strategy is here for and going to have a
00:58:22
major impact on the venture business i think that's pretty interesting but i think it's pretty interesting in
00:58:28
the consumer space for the reason freeberg said which is distribution is so hard so creating a great product is
00:58:34
hard distribution's even harder and this is a realization i had you know many years ago and which is
00:58:40
when i started doing yammer and then you know craft started focusing on sas which is at least when you do a b2b product
00:58:48
you know a software as a service you can charge enough money for it that you can get a sales team to pencil
00:58:55
so in other words you charge an enterprise enough money for the software that you can then pay a salesperson to
00:59:01
go out and sell it so there was always a distribution model built in for b2b
00:59:07
and that's why i've always liked that is there's a playbook there where if you just build a good enough piece of enterprise software good enough
00:59:13
product there's always going to be distribution for it however that's not true with consumer because consumer
00:59:18
products are usually ad based you can't generally charge that much if you can charge it all they have high churn rates
00:59:25
and so therefore b2c only works if you can find a very low cost scalable distribution channel
00:59:32
and i think that's what to free books point i think that's what the kardashians are offering it's clearly worked for their own products i guess
00:59:38
we'll see how extensible it is but this is really the key challenge with all consumer stuff is just how do
00:59:44
you find a very cheap way of distributing it in the past the consumer products i've been involved in
00:59:50
like paypal or investing in social networks like facebook they were viral then they were exponentially viral so
00:59:57
they were able to basically grow virally for free so you either have to have you know extraordinary virality to the
01:00:03
product or some other distribution trick that allows you to scale at low cost because you can't afford a sales team
01:00:10
and what we're seeing is the base of doing that is to create content mr beast created content for years before he
01:00:17
built a big enough audience to do that kim kardashian did content for years before she had a distribution to do that
01:00:23
dave portnoy and barstool sports i mean the guy dave portnoy and this is incredibles
01:00:28
jason calacanis yeah seriously i mean portnoy was out uh raiding pizza and you
01:00:33
know now he has all these other kind of you know media and content kind of um branches of his platform but it's all
01:00:40
content creation and on top of that content not everybody's good at it freeburg that's the pro of the product i get it but that's not what i'm saying
01:00:46
and that's my point so let's say coca-cola tried to build a content business today how good would they be
01:00:51
not very good that's why they're gonna end up dying or they're to end up needing to that's a really interesting concept i mean do you think mr
01:00:58
beastberger could beat mcdonald's yes and that's what i'm saying that's my point that's why i opened it it's kind
01:01:03
of insane when you think about it if mr beast had 5 000 franchisees yeah but this is exactly my point that i said at
01:01:09
the beginning every traditional brand will get destroyed in 30 years and they will get destroyed by the influencers that have
01:01:16
built an audience through content creation and now creating businesses on top of that that compete with the
01:01:21
traditional incumbents not technology advantage businesses i'm talking about core consumer goods and services they
01:01:27
also have to be good pen gaming pen gaming does betting you know there's no real advantage in betting you build a
01:01:32
sports book that's it the reason pen gaming bought barstool is they now have an audience that they can drive to their
01:01:38
sports books right and so the same will happen we still have to make a great product though i mean that's the other
01:01:43
challenge here is can you also be a product savant can you be a virtuoso in
01:01:48
building a product in addition to being an influencer yeah i mean i think that's what kim gets right she makes great
01:01:54
product and mr beast his first burger was not good but now this new burger from what i understand is awesome so you
01:02:00
have to have both things switched on think about think about what's easier and what's harder what's easier building an audience of two billion or a
01:02:07
billion people that listen or watch you every week or building a great burger it's a lot harder to build the audience
01:02:15
if it's a car it's really hard yeah it's not i'm not talking about complicated cars and stuff or electronics i'm
01:02:21
talking about basic consumer goods cereal beverages food why not um
01:02:26
commodities music audio like like all the stuff that's commodity uh you know betting i mean this is not chocolate bar
01:02:32
betting is not a differentiated service offering to consumers so ultimately how do you differentiate it's the it's the
01:02:37
audience that you've now built the brand that you've built through the audience because of content creation and so this is why i just want to point out
01:02:44
distributed content creation i think represents one of the most profound investing opportunities over the next
01:02:49
decade because if you can give individuals the ability to make high quality content they can scale an
01:02:55
audience that that that now can be monetized in a thousand ways not just putting freaking ad spots on youtube but
01:03:01
there's a thousand products you as an as an influencer can build on top of your audience or sell to your audience boom
01:03:07
it really changes the whole landscape for cpg and services um and not to bring everything back to mr beast but
01:03:14
a large number of his videos he told us um he lost money on so the videos at some
01:03:20
point started losing him money and it was an investment in that brand and you know it's it's clearly going to
01:03:26
pay off now i i saw alexis ohanian from um uh you know reddit fame and
01:03:32
capitalist 776 he went to go see the burger place and he's like
01:03:38
what like there were at that point in time ten thousand people online mr beast had to tell people please do not show up
01:03:44
which of course then dwight about some people show up anybody have plugs or anything that they uh want to get off their chest sacks anything else
01:03:51
okay we gotta plug i do there is a
01:03:56
an epidemic right now of the over prescription of amphetamines to children who are
01:04:03
diagnosed with adhd it is an enormously important issue that
01:04:10
doesn't just touch kids anymore but now also touches adults you've seen
01:04:17
a lot of really kind of bad companies that are over prescribing this stuff get shut down and get sanctioned
01:04:24
so i just wanted to let anybody who's listening know and this is me talking my book so take
01:04:30
this with a grain of salt but there's a company that i'm involved in that has a video game that has been approved by the
01:04:37
fda to be a useful treatment for kids who have
01:04:43
been diagnosed with adhd so if you have an 8 to 11 year old you can go and talk to your pediatrician
01:04:50
to find out about the solution it's called achilles and it will allow you to prescribe to
01:04:56
them the video game that they play 30 minutes a day you want to make sure people hear the name it's achille
01:05:02
a-k-i-l-i so if you do a google search for achilles
01:05:12
go and read the label have the doctor decide okay so i'm not telling you to go do this but i'm asking you look into it
01:05:18
you just look into it but the idea is that there are drugs that affect
01:05:25
your brain and now we are increasingly able to design software that exquisitely targets
01:05:32
certain aspects of your brain and are able to train them and this is really the first example of such a thing that
01:05:39
the fda who has reviewed all kinds of clinical data
01:05:45
has decided to approve and so it's launching in the next few weeks we've already written
01:05:51
prescriptions to kids in every single state of the united states and so to the extent that you're deciding what to do
01:05:59
or you have a child or you have somebody in your family that is of age 8 to 11 years old that's dealing with this i
01:06:05
would just encourage you to learn about it that is a plug and you know all the disclaimers i know it's a great plug i think we should at the end just talk
01:06:11
about some things we're working on and this is an incredible one the number of kids on this you know
01:06:16
adhd drugs attention drugs depression drugs anxiety drugs millions it is out of control there is an act listen i
01:06:23
don't want to tell parents how to parent um but i will say this is becoming a dependency and the number of drugs i
01:06:30
interviewed saw that new york times story where they put this one girl on 10 drugs they're prescribing multiple drugs and we don't know exactly what the
01:06:36
long-term effects of children using these are and there are other solutions i'm not judging any parent i'm not
01:06:42
judging any teachers who's advising this but this country and a society needs to really look deeply at this issue and say
01:06:48
should children because we didn't go on these drugs when we were kids they didn't exist and they haven't existed
01:06:53
for all of humanity and we need to think what kind of experiment are we running on 10 20 30 percent kids in some schools
01:06:59
you're stating something so incredibly important you know when you have kids that are pre-teens and teenagers their physiology
01:07:06
is changing dramatically and all of a sudden when you introduce a secondary chemical compound into all of that
01:07:13
you're exactly right we don't really know what the outcomes are and right now i think a lot of people
01:07:20
are worried that the over prescription of drugs in this kind of condition is
01:07:26
going to create a next version of an opioid pandemic or epidemic and i think that that's the thing that's exactly the
01:07:32
analogy chamath right now this statistic is crazy this is in the new york times express scripts a mail order pharmacy
01:07:37
recently reported that prescriptions of antidepressants for teenagers rose 38
01:07:42
from 2015 to 29 we are prescribing these at an alarming rate i have many parents in my circle who have kids who had what
01:07:49
i would consider modest behavioral issues or modest attention issues and they talk to me
01:07:54
about this and they felt in multiple cases like they were being bullied or
01:08:00
pressured by teachers to put their kids on behavioral drugs because their kids were behaving
01:08:07
10 as badly as i did in middle school or or high school this is being used i believe this is my
01:08:14
personal belief i know there are some kids who need these drugs or i assume that there are but i think this is being used to keep
01:08:21
kids in their seats and to make it easier for parents to have to deal with what
01:08:27
are normally the hardships of teenager you know teenagers and just be very careful
01:08:32
parents about the extent to which you know you might be being pressured perhaps parents have told me they felt
01:08:38
bullied into giving their kids these drugs it really is infuriating to me and i think it's really great that you investment people should look into it
01:08:44
exercise talking to your kids these things also work we have guidance counselors
01:08:50
we had a guidance counselor at uh at our school tell me that they thought that one of my
01:08:56
children should just get put on these drugs and i was like
01:09:02
it was the most random statement and all i could get from her
01:09:07
was that she just didn't want to deal with the fact that every now and then this kid would just you know be
01:09:14
exuberant to your point i want to kill their spirit i had the same conversation i don't want to get into it too much but
01:09:20
you know i think that these teachers now and i'm not saying it's all teachers
01:09:25
they are like it's just easier to manage kids who are on focused energy drugs and then there are some parents who want
01:09:31
their kids to do really good on standardized testing i would have done better on standardized testing if i was on
01:09:36
adderall or whatever these attention drugs are we everybody would score 10 better but what does it do to the quality of
01:09:42
your life long term that's the question we need to ask about this stuff and we don't have answers for it i don't want to be tom cruise on this
01:09:48
podcast but there are other ways to keep you know kids healthy and to deal with
01:09:54
these issues and i think these things are to say they're over prescribed it's going to be a huge understatement we're going to look at this like the opioid
01:09:59
crisis i guarantee it i think that's exactly if you you start dope sick right and people thought they were doing the right
01:10:05
thing oh these people have pain this drug manages pain and then they found out like oh yeah you
01:10:10
know what this drug also could make you an addict and could ruin your life uh great job on that investment um and
01:10:17
and i hope it works yeah thank you uh saks anything else uh any companies your portfolio want to give a shout out to we might as well get
01:10:23
something out of this [ __ ] pod since we're leaving seven and a half million dollars on the [ __ ] table and you guys won't even let me run on summit two
01:10:29
so i can get a half milli i don't have anything to plug right now but no company you invested in you need
01:10:34
to plug for how about you super gut can we get some supergut.com in here these bars taste great fredberg i love this
01:10:40
thank you thank you i literally just ordered another pack of them i'm glad thank you
01:10:46
super got do you have supergut.com by the way this is where i'm having yeah super cut.com but i'm this is actually
01:10:51
one of my lists of ddc companies where i'm having a lot of these conversations about how do you actually
01:10:58
avoid just buying ads on facebook and uh google and how do you actually build
01:11:03
an audience right how do you ultimately convert your customers by creating content and so this was originally
01:11:09
unique right and then you changed the brand yeah yeah based on the science around um uh around resistance starch and how it
01:11:15
changes the gut biome and so um but this is general i'm on the board of a couple of d to c companies and it
01:11:20
is universally the conversation right now because in the last year the cost of d2c uh direct-to-consumer
01:11:27
marketing on facebook and google is brutal double tripled and a lot of the unit economics are falling apart on d2c
01:11:32
businesses because of it uh you know costs a lot more to acquire the customer than you make from them and so
01:11:37
everyone's scrambling to figure out okay how do i acquire customers and that's where this content creation strategy is becoming a critical linchpin for most
01:11:44
consumer businesses now it's a really important part i think a couple of us are investors in eight sleep and they were like please let us advertise on all
01:11:51
and i'm like sorry no ads but i'll shout you out here hate sleep it's a great product i have a plug but i want to save
01:11:56
it so what [ __ ] drop a plug for one no no the product hasn't launched yet
01:12:01
give me like a month all right yo and if anybody wants to be a venture
01:12:07
investor jason calacanist.com to come to one of my webinars and see my latest fun since we all started allowing all of
01:12:12
these plugs i thought we had no idea it was just a setup it was a setup i just wanted to round up a plug so i could get mine in so i was being generous worked
01:12:19
plan worked i got you on the hook for yours what was your what was your plug what were you doing your your venture fund i'm doing watchful
01:12:25
well if you're plugging stuff over subscribe plug i'll plug this calm if you want to call in app we're
01:12:30
all involved everybody's calling up let's you know we should do a call-in we should all do like an after hours
01:12:36
where we take questions from the audience that would be great i would do that yeah i would do that can i get a point all right let's go everybody this
01:12:42
has been all in episode 95. wait wait wait wait should we just create more places that was that that was another deal you
01:12:48
turned down just like the ukraine deal this is a theme here is that you turn
01:12:54
down deals you later regret that later you admit i should be registered i was right you should have taken the
01:13:00
deal i should have taken the volunteer look how hard chamoth is crashing right now look at him look at him what time is
01:13:05
it there it's like 11 30 right midnight it's 11 30.
01:13:10
it's 11 30. i'm losing my life i lost my voice i lost people
01:13:16
send us an invite for uh uh ama for the four of us on calling colleen hold on everybody download quality do that okay
01:13:22
yeah just remember maybe yeah live ama live ama with the
01:13:28
best i'm gonna show a car i'll show
01:13:34
yeah i'll show up i'll be happy to do it uh i'm back in the united states tomorrow all right well let me play poker
01:13:40
in 14 hours two hours after you get here you're gonna we'll ask everybody to come airport we'll pick you up from the
01:13:46
airport we'll pick up the airport we'll play chinese poker in the back of the car all right everybody
01:13:51
better than we thought it would be suck a lozenge you need something a little honey i i i need a lozenge i have some tea
01:13:57
over there i love
01:14:03
[Music]
01:14:12
and they've just gone crazy with it [Music]
01:14:22
besties [Music]
01:14:46
we need to get these [Music]
01:14:56
going on [Music]
