E125: SpaceX launch, Fox News settlement, "Zombie-corn" exodus to AI, late-stage implosion

00:00:00.000 | Hey, everybody, welcome to Episode 125 of the all in

00:00:04.400 | podcast on a historic day we're taping for 20 really excited

00:00:09.080 | that SpaceX was able to launch Starship and it made it off the

00:00:14.800 | launch pad and incredibly successful today. Day today. We

00:00:18.800 | have of course with us the rain man David Sacks, the Sultan of

00:00:21.760 | Science David Friedberg, and of course, the dictator Chamath

00:00:24.760 | polyapathy. But two special guests are here special guests

00:00:29.060 | Gavin Baker from a tradies How do you pronounce it? A tradies

00:00:34.000 | house a tradies house a tradies if you know Dune, and then

00:00:37.640 | SpaceX board member Antonio grassy as one of the first

00:00:42.320 | investors in SpaceX Antonio big day for you. Maybe you could

00:00:46.120 | just tell the audience what happened today. Why that is so

00:00:50.920 | important in the history of this company.

00:00:52.720 | Well, first of all, thank you guys for letting me come on and

00:00:56.680 | have a little chat with you about this.

00:00:58.740 | Today was extraordinarily important for for SpaceX, I

00:01:01.620 | think for America and for humanity. And the Starship is

00:01:06.340 | the realization of the vision had Elon had 20 years ago 25

00:01:10.900 | years ago, even as a child really to go to Mars. And the

00:01:15.620 | engineers here at SpaceX and only entire team working

00:01:18.420 | extremely hard, or really just to get this this vehicle off the

00:01:21.860 | pad is as you know, I said, right, this is a brand new

00:01:24.620 | vehicle. Everything about it is new. So the engines, the

00:01:28.220 | material science, the structure, the design, all of it new. And

00:01:32.540 | the most important thing here was to get off the pad. So we

00:01:35.180 | collect data. And this technology platform is the

00:01:38.180 | platform that allow us to go to Mars. So from a non engineer

00:01:41.940 | standpoint, why this is important is that what we've

00:01:44.740 | proven with this flight, we got past a point called Max Q,

00:01:49.260 | which is the point at which the vehicle takes maximum stress.

00:01:52.180 | That's how I think about it. I'm sure engineers will tell you a

00:01:54.340 | lot more description to it, or David freebird give you a better

00:01:56.740 | script to it, but it's the most amount of stress in the vehicle,

00:01:58.780 | which means this vehicle will get to orbit. And this is the

00:02:02.860 | vehicle that's going to take us to Mars. So today is the day

00:02:06.460 | that all of the hardworking people at SpaceX accomplished a

00:02:10.140 | goal of making the human race spacefaring. When we look back

00:02:14.380 | in history, I believe this will be the day we mark the

00:02:17.420 | technological development that we broke through with the

00:02:21.260 | technology that broke through and built a vehicle that could

00:02:23.900 | actually go to Mars.

00:02:24.940 | Now, when we look at it, obviously, it didn't make it to

00:02:28.700 | orbit. Maybe you can give some context into what is the typical

00:02:33.100 | lifecycle of a new rocket ship coming out the Falcon, the

00:02:36.980 | original one has done I think 224 missions, 222 of them

00:02:42.020 | successful, I think 160 or so actually landed themselves. Yes.

00:02:46.420 | And so you had two or three mulligans, I think in the

00:02:49.380 | maybe two actually. So what can we expect here? Where are they

00:02:53.100 | going to stack and rack and launch the next one? Antonio,

00:02:56.220 | let's see what's the timeline here to getting to orbit? What

00:02:59.740 | would we expect versus some of the other projects that we've

00:03:02.140 | seen like the Russian rockets?

00:03:03.420 | So look, this is a brand new vehicle. And whenever we develop

00:03:08.020 | brand new vehicle, it takes a long time development. You know,

00:03:11.940 | my understanding all this is, as again, a layman and sort of as a

00:03:15.540 | board member, not an executive here is that it'll take at least

00:03:17.980 | called two or three months, two or three months to really get

00:03:20.100 | the pad rebuilt and get another vehicle back on for testing,

00:03:22.260 | maybe longer. But it's really important to note here that

00:03:26.340 | we've gotten sort of used to the idea that SpaceX launches

00:03:29.180 | rockets and all these rockets come back and all those

00:03:31.220 | vehicles are stable, because the Falcon nine and nine heavy are

00:03:33.940 | so stable. And they're so well engineered. And they're amazing

00:03:36.660 | vehicles, the most reliable vehicles on earth in human

00:03:39.700 | history. This is a brand new vehicle. This was a huge win. I

00:03:43.540 | mean, it was an enormous win for the company, enormous win for

00:03:46.020 | the country, just getting it off the pad and collecting the data.

00:03:48.860 | And now we know it works. We just have to get it stable now

00:03:51.820 | get up to orbit. So it's really it's a hard problem. But it's a

00:03:57.260 | solid problem from here. And the learned here is that this

00:04:00.940 | vehicle does work.

00:04:01.860 | Amazing. Can you guys talk about like, the impact of this

00:04:07.060 | vehicle cost to launch payload, like the big metrics that are

00:04:11.060 | that kind of help realize that outcome? Gavin, I think I saw

00:04:15.100 | you did a bunch of really good tweets on this, you shared some

00:04:17.180 | of the metrics that I thought were really succinct and really

00:04:20.460 | helpful.

00:04:20.860 | Yeah, sure. So when this is, I think it's a long road to full

00:04:25.020 | reusability. You know, the first step will be mechazilla, catching

00:04:30.220 | the booster doesn't doesn't have legs like the Falcon nine. And

00:04:35.180 | then the second step will be landing the Starship, which is

00:04:37.460 | really hard. But once you do that, they should be able to

00:04:41.900 | send over 100 metric tons to orbit at a variable cost of

00:04:46.580 | under $2 million per public data. This these are public

00:04:51.380 | statements.

00:04:52.180 | I would never confirm or deny those statements. This is

00:04:55.700 | Gavin's math.

00:04:56.340 | $2 million is the cost to get 100 tons into orbit. That's

00:05:00.900 | that's the metric.

00:05:01.940 | Variable cost, variable cost. So I think the point Gavin is

00:05:05.860 | making if I might just add is that it is a step function

00:05:08.940 | change. It's not like a small change. It's an enormous change.

00:05:12.420 | Right. Can you compare that to the numbers before for folks to

00:05:14.820 | understand?

00:05:15.260 | The Falcon nine mass to useful orbit is 17 metric tons. And the

00:05:24.420 | variable costs that you know, I, I have seen Elon tweet about is

00:05:29.940 | somewhere around $15 million. So you are lifting more than five

00:05:35.660 | times the mass to orbit. And based on other statements, 100

00:05:39.860 | metric tons is a very conservative estimate. And you

00:05:43.620 | are doing it at call it 10 to 15% of the cost. So this is a,

00:05:51.580 | you know, we can all do the math, but we can envelope it,

00:05:55.340 | you know, roughly a 50x huge change. And this, you know,

00:06:00.660 | massively changes unit economics for Starlink for sending

00:06:03.780 | anything into orbit. And as Antonio said, it's, it's great

00:06:08.220 | for SpaceX, it's great for America, and it's great for, for

00:06:12.620 | everyone. It's great for humanity.

00:06:14.820 | Can you explain how that then translates into going to Mars?

00:06:17.780 | So now we can get 100 tons into orbit for $2 million. What

00:06:21.100 | happens next in terms of like, how that payload capacity and

00:06:24.700 | low cost enables, you know, full transport to Mars. And, you

00:06:29.940 | know, I know that the timelines are tough, but it would be super

00:06:31.860 | helpful to just to translate the orbit concept into the let's go

00:06:35.220 | to Mars concept.

00:06:35.900 | It's important to know that like the size of this thing, it gives

00:06:38.300 | us a scale is the interior space of it is the size of the

00:06:42.580 | International Space Station. So it's a huge amount of tonnage,

00:06:46.380 | just think about all that's going to take to get to Mars,

00:06:48.780 | right, you've got to, you'd have to lift payload into orbit, you

00:06:52.140 | have to, you know, create a base here on the moon or in this

00:06:56.180 | orbit in the earth to actually refill ships and send them out

00:06:58.540 | into space. And this same design will scale up to become the

00:07:01.660 | Mars colonial transport or very similar design. That's why it's

00:07:05.060 | important. And look, the timeline that I don't know, I'm

00:07:07.780 | hoping that it will be while I'm still able to go, that would be

00:07:10.580 | great, physically able to go. But that's really why it's

00:07:13.460 | important to give this as a small version of the same

00:07:16.260 | vehicle we will actually use to go to Mars. And then all the

00:07:19.140 | stuff you have to transport to orbit becomes more more

00:07:21.340 | economic. Because as Gavin just said, we've had, you know, 50 x

00:07:25.700 | kind of reduction in cost.

00:07:26.980 | Can I ask you another question? Sorry, I don't mean to

00:07:30.300 | monopolize the questions. But these are things that I think

00:07:32.620 | are like super important questions, but that a lot of

00:07:34.780 | people often ask, or I hear them asking, but what happens with

00:07:39.980 | the space industry in the near term? So there's this great

00:07:43.020 | long term goal get to Mars, that's a that's a big project.

00:07:45.740 | There'll certainly be funding, I'm sure, to run that project.

00:07:49.540 | But what other economies now emerge as this, this cost down

00:07:53.140 | of 50 x happens? And what else do you think happens besides,

00:07:56.260 | you know, communications and Starlink? Obviously, there's,

00:07:59.020 | that's already a pretty scale business, what other markets can

00:08:01.220 | develop here in the near term? What other economies do you see

00:08:03.180 | happening?

00:08:03.700 | As a result of this cost?

00:08:06.060 | Yeah, I mean, look, Gavin could jump in here too. But the

00:08:08.820 | reality is, once you could take that much mass to orbit, you can

00:08:11.180 | move anything around the planet very quickly, you can kind of go

00:08:13.380 | up, but the Earth's been below you and come down. So

00:08:15.220 | transportation generally changes. You know, if you want to

00:08:18.580 | fly to Tokyo from New York City, it goes from being, you know, a

00:08:22.580 | day trip to a matter of hours. It's extraordinary.

00:08:25.380 | Or a container ship in a couple hours,

00:08:27.540 | kind of everything that's rapid transport around the Earth,

00:08:29.580 | even packages around there, everything gets faster.

00:08:31.340 | Gavin?

00:08:31.740 | Yeah, there will be no more trans Pacific or transatlantic

00:08:36.780 | cargo flights, I think in 5, 6, 7, 8, 10 years, you're gonna need

00:08:41.220 | a big starship fleet to accomplish that. But I think the

00:08:45.140 | transatlantic and trans Pacific aerospace cargo routes go away.

00:08:50.100 | So transportation logistics, I think is a fundamental change,

00:08:54.580 | human transport fundamental change. And then there's all the

00:08:57.740 | knock on effects of building this kind of technology. Look,

00:09:00.140 | the space program, the American space program that took us to

00:09:02.580 | the moon, created the cell phones we use, right? And

00:09:05.460 | there's so much this chip designs, all the technology came

00:09:08.420 | off of that, the same kind of effects we believe will happen

00:09:11.100 | here. So it's hard to predict, but it will be a lot of great

00:09:13.900 | stuff.

00:09:14.140 | Well, and that's kind of the point when you can get payload

00:09:16.340 | up there. Now entrepreneurs can think of a million different

00:09:20.140 | crazy ideas, and affordably put something up there, whether they

00:09:23.220 | want to mine an asteroid, or they have a science project. Now,

00:09:27.540 | 1000 flowers, a million flowers can bloom and entrepreneurs can

00:09:31.740 | start thinking about it. And that's already happened to a

00:09:33.660 | certain extent with Falcon, yes, that people are able to come up

00:09:36.740 | with great ideas. Well, I have to say,

00:09:38.820 | and inspiration provides, it does. Yeah, isn't it be here and

00:09:42.900 | feel the inspiration and the just the

00:09:45.060 | joy. I think that's what I was gonna ask you about if you know,

00:09:47.500 | as we wrap here with you to if you could, if you could take

00:09:50.940 | people inside mission control, which we're privileged enough to

00:09:53.980 | be in, the sense of history, and the feeling in that room, if you

00:10:00.020 | could describe it for the audience, what those engineers

00:10:03.700 | were feeling, and what you in fact, felt at that moment,

00:10:07.660 | Antonio, and then

00:10:08.340 | so I would start by juxtaposing with Monday. So we were here

00:10:14.020 | Monday, we're here Monday, Monday, and Monday. I think

00:10:17.900 | there was a real sense of concern, you know, the, the

00:10:20.780 | countdown stopped around 10 minutes, the vehicle, we had a

00:10:22.740 | valve failure, and the valve got stuck open, basically. And we

00:10:27.060 | had to stop and kind of regroup. And by the way, from my

00:10:29.860 | perspective, that's like a solid success, because the vehicle

00:10:33.860 | did not get destroyed in the pad, which is like the number

00:10:36.420 | one thing that happened here. So that's the second. And so that

00:10:40.100 | was kind of Monday. And I think Monday was, yeah, caution and

00:10:43.420 | intensity.

00:10:44.060 | It was a very intense, very intense. Like, can this will

00:10:47.260 | this will this ever happen? Yeah, when will it happen?

00:10:49.780 | Yeah. Today, what I felt in that room was a sense of, there was a

00:10:56.300 | high sense of intensity, a high sense of focus, and also a sense

00:11:00.900 | of

00:11:01.340 | people were excited. There was an excitement about it. It felt

00:11:08.100 | different today, it felt more electric today. They were super

00:11:11.700 | focused, but you could feel the excitement in the room, they

00:11:13.740 | believed it was going to happen, they thought it was highly

00:11:15.420 | probable, and that it was going to work. And when it did work, I

00:11:19.820 | would say it was a sense of elation and joy. And just, you

00:11:22.820 | know, this is this is 20 plus years of work. And, you know,

00:11:26.060 | Elon was here in the room with the engineers, and it just

00:11:28.540 | seemed him light up, seeing the joy that he felt seeing the joy

00:11:32.980 | the engineers felt together, for me. And having been a board

00:11:37.420 | member here in investment for a long time, and sort of been

00:11:39.020 | along this company and seeing develop, it brought a real sense

00:11:43.380 | of hope for what's going to happen to this country and

00:11:46.620 | what's happening to humanity. And it's a joy to my heart.

00:11:50.020 | Yeah. Gavin, do you have any emotional feelings there when

00:11:53.500 | you watch it you want to add?

00:11:54.540 | Yeah, well, I think it's also just what I would always

00:11:57.580 | strikes me when I'm here is this is a sandy spit of land. There

00:12:02.260 | was no power, no electricity, no potable water, you know, no

00:12:07.060 | sewage, no utilities, nothing. And out of this, you know, sandy

00:12:11.980 | spit of desert, you know, on the Gulf of Mexico, a extremely

00:12:17.660 | talented group of engineers, the last five years have lived in,

00:12:21.940 | you know, these, these airstreams, you know, a long way

00:12:27.300 | from a major city. And it is, it is just an amazing place to

00:12:32.820 | visit. And, you know, the sense of commitment. And when you talk

00:12:36.980 | to anyone at SpaceX, anyone here at Starbase, you know, what are

00:12:40.380 | you trying to accomplish? Make humanity multi planetary

00:12:42.980 | species, get to Mars. So just the experience of visiting

00:12:48.180 | Starbase is amazing. Second, I would just say launches are very

00:12:51.460 | visceral. It's shocking if you have not experienced one.

00:12:54.820 | The ground shaking.

00:12:57.780 | Yeah, feeling your chest, you feel it in your chest.

00:12:59.620 | You feel the, yeah, you feel your body shaking like an

00:13:02.900 | earthquake. Yeah, but it doesn't stop.

00:13:05.180 | And it's incredibly dramatic. You know, the rocket, it's going

00:13:08.660 | so slow at first, and then it accelerates. And then you hear

00:13:12.460 | this enormous crackling noise that's, you know, louder than

00:13:15.540 | any concert, louder than any, you know, sports stadium, you

00:13:19.700 | then blast of hot air hits you, you feel it. And I would say, a

00:13:26.300 | lot of people at launches cry, it's a very emotional

00:13:28.860 | experience, often for people who are not.

00:13:31.180 | Yeah, it's hard not to get emotional.

00:13:32.620 | I think just that human beings can accomplish something like

00:13:36.300 | this is amazing. And then what I would just say is, you know,

00:13:42.180 | there was the rocket flew for four minutes, and went through

00:13:45.820 | Max Q, it went to 39 kilometers, the Soviet N1, which was

00:13:50.660 | comparable rocket only reached 12 kilometers. Like the team was

00:13:55.220 | ecstatic.

00:13:56.220 | Yeah, the joy on their faces.

00:13:58.660 | Happy, cheering.

00:14:00.540 | Never seen anything like it.

00:14:01.620 | Yeah, it was awesome. It was very inspirational. And I felt

00:14:04.900 | very, very grateful to be there.

00:14:07.260 | Yeah, incredible.

00:14:08.660 | Yeah.

00:14:09.380 | Can I give you one thought of what I'm feeling right now?

00:14:11.180 | Yeah.

00:14:11.540 | The after effect.

00:14:12.340 | The after effect, afterglow.

00:14:13.580 | It's just an extraordinary sense of gratitude. I mean, there has

00:14:17.500 | been so much sacrifice here. And we witnessed it over 20 years

00:14:20.660 | from Elon, of course, and the amount of just, you know,

00:14:24.460 | unbelievable work done from him and the entire team here at

00:14:26.980 | SpaceX, his engineers, everyone who works here. It's been

00:14:30.020 | extraordinary. And it just really, I'm just deeply

00:14:32.260 | grateful. Incredible and grateful to you all for having

00:14:34.860 | us on. Thank you.

00:14:35.420 | Incredible.

00:14:36.540 | It's great to hear that perspective, because you would

00:14:39.060 | not have gotten it from off the Twitter feed. You know, from the

00:14:43.740 | mainstream media.

00:14:44.740 | David, if you'd come here with us, you could have gotten

00:14:46.500 | Yeah, David, you were invited.

00:14:48.900 | You were invited. You almost we almost shanghaied you from

00:14:51.580 | Miami. There's a new term called starship as opposed to

00:14:54.540 | shanghaied. We're gonna shanghaied you from Miami.

00:14:56.740 | We're gonna starship you.

00:14:57.460 | We're gonna starship you next time.

00:14:58.780 | Yeah, I'm bummed I couldn't be there. But I'm excited to see

00:15:02.340 | how excited you guys are. And just the point I was making is

00:15:05.780 | that when I was reading the mainstream media coverage of

00:15:08.820 | this, it was almost like ghoulish. It was like a type of

00:15:11.300 | glee. It was almost

00:15:12.900 | Unbelievable, right?

00:15:13.820 | that the rocket blew up. But they didn't they didn't really

00:15:17.340 | mention any of the things you're mentioning. I mean, from the

00:15:19.780 | point of view of the people who are there, it was a triumph. And

00:15:22.940 | it was exciting because of the data that was collected and the

00:15:25.700 | fact that this rocket even got off the earth and achieved this

00:15:29.140 | triumph for four minutes, but the media never really conveyed

00:15:32.140 | that. So thank you for giving us perspective that you just would

00:15:34.660 | not have gotten today from the New York Times or other

00:15:37.660 | mainstream media.

00:15:38.420 | And just to add to that, just a little bit of context. You know,

00:15:41.820 | this is an iterative design process with rapid improvement.

00:15:45.060 | This starship had 31 engines that were made over the course

00:15:49.100 | of one year had different tolerances behaved

00:15:52.180 | unpredictable, unpredictably. You know, this was far from the

00:15:56.500 | best starship, the one that's going to launch in three months

00:15:58.740 | or two months or four months or five months or whenever it is,

00:16:01.540 | they've already made over 1000 discrete improvements to it. And

00:16:06.660 | that was before they got all the data for today. And then there's

00:16:09.580 | a starship after that. And after that.

00:16:11.660 | So I think it really is a the what the mainstream media just

00:16:18.340 | failed to understand is the process under which a new rocket

00:16:21.900 | platform is deployed, and how revolutionary this is. They are

00:16:26.740 | iterating at a speed here. That's not what I don't think

00:16:30.380 | people can comprehend.

00:16:31.660 | I mean, on this, that's not important. There's, they don't

00:16:34.140 | care. They don't care. And it was a way to paint somebody who

00:16:37.980 | they dislike and they are threatened by the negative light

00:16:40.940 | that the front page of the Wall Street Journal says SpaceX is

00:16:43.540 | starship explodes shortly after launching uncrewed test flight.

00:16:48.100 | If you take Antonio gracias his explanation, which was

00:16:51.060 | articulate, and transparent and fair, and this headline, you

00:16:56.220 | could not be more further apart on the spectrum of truth.

00:17:00.220 | Antonio just said that this is a day just for the audience of

00:17:03.660 | which there are millions of people now. Antonio said, this

00:17:06.460 | is the day that you look back on when we are multi planetary, as

00:17:10.860 | this Cambrian moment, if you will, this incredible point of

00:17:15.420 | innovation and human ingenuity and teamwork and sacrifice. You

00:17:20.380 | know, Gavin said it as well, just giving up five years of

00:17:22.580 | your life to move in the middle of nowhere, live in an

00:17:24.860 | Airstream trailer. And then the Wall Street Journal was

00:17:28.220 | basically perspective.

00:17:29.180 | The rocket goes,

00:17:30.300 | I mean,

00:17:32.780 | it was just fireworks. It was just a firework display.

00:17:36.140 | I sent a note to my own teacher, I just said, I said,

00:17:39.380 | look, ignore, please ignore the news media. Yeah, it's total BS.

00:17:43.300 | This is a huge success news. It's a huge success. And we

00:17:47.620 | should just step back for a second and enjoy success.

00:17:50.340 | Because part of the problem, the news media is, this is a moment

00:17:53.140 | that should galvanize our country. I mean, it's basically

00:17:55.780 | it is about America, this is an American company. This is about

00:17:59.020 | America.

00:17:59.500 | I think they can't see that it galvanizes, potentially

00:18:03.580 | galvanizes support for a human being that they feel deeply

00:18:07.060 | threatened by. And that's what it all comes down to,

00:18:08.980 | ultimately. And that's what you see in the headlines. That's

00:18:11.780 | why what's so interesting about this is that the behavior of the

00:18:15.220 | mainstream media to now paint this as something unsuccessful

00:18:18.380 | or a joke or rocket goes boom or fireworks. When you look back

00:18:22.060 | on something as meaningful as this, it'll just make them even

00:18:25.340 | less credible. That's what that's unfortunately what

00:18:27.540 | they're doing to themselves is shooting themselves in the foot.

00:18:29.500 | It's pretty sad. Yeah. And this was Wall Street Journal, this

00:18:32.780 | is CNN, New York Times, everybody just painted it as a

00:18:36.300 | failure. And it's like, Oh, here's a collection headlines.

00:18:39.460 | Well done, producer. I mean, literally, you would think if

00:18:43.220 | you read the mainstream media that SpaceX failed, and it

00:18:46.860 | really the when I was talking to Elon months ago about this, you

00:18:51.620 | know, he said, Listen, 5050, we get off the launchpad. Yeah, if

00:18:54.980 | we can get off the launchpad, and we don't blow up the

00:18:57.820 | launchpad, that's a huge success. The fact that this

00:19:00.820 | thing got as far as it is in four minutes, and they got all

00:19:03.820 | that data. And they've got when you see the scale of this

00:19:07.420 | factor, and I hope you all get to come down here and all

00:19:09.820 | Americans get to see this, because for me, you know, and

00:19:13.820 | being friends with Elon for as long as I have, and to watch him

00:19:17.060 | go from the idea of this, and he showed me, I went with Elon to

00:19:21.860 | see the the Horton factory when he was considering renting. And

00:19:25.100 | from that moment to now, to see the suffering that he went

00:19:28.980 | through personally to do this, and the team, the amount of

00:19:32.540 | suffering to get to this point has been so tremendous. But when

00:19:37.420 | you go to the giga factory in Texas, when you see what's

00:19:40.580 | happening here at Starbase, it should let you know that this is

00:19:43.660 | still the greatest country in the world with the greatest

00:19:46.580 | entrepreneurs. And he is truly the greatest entrepreneur of our

00:19:50.020 | lifetime. And I'm not just saying that, because he's my

00:19:52.500 | bestie. I'm saying it because it's objectively true. And when

00:19:55.780 | you see headlines in the press, look at what has been

00:19:59.260 | accomplished. Look at the Tesla's on the road. Look at

00:20:02.620 | what happened with this rocket ship and judge the man by what

00:20:07.060 | has been produced to date and understand, he's going to keep

00:20:10.740 | going. And the team he has inspired is relentless. I spoke,

00:20:14.860 | I sat there on the deck, an hour or two after all this went down.

00:20:18.780 | And I just ate some chips and salsa with a half dozen of the

00:20:23.900 | people who were in mission control. They love the podcast,

00:20:27.060 | they listen to every episode of all in I kid you're not. And they

00:20:30.380 | said, Will you talk about this on all in I said, Well, we talk

00:20:33.860 | about an all in. Thank you for what you've done for humanity.

00:20:36.620 | This is the most inspiring thing I've experienced in my life.

00:20:40.420 | We love you guys, SpaceX. Charge ahead, be relentless as you've

00:20:45.540 | been. And know that despite these absolutely insignificant

00:20:50.300 | headlines, what you're doing is so meaningful to every American

00:20:54.660 | and every human on this planet. Don't stop, go faster, go

00:20:58.780 | harder, be more relentless. We're all sharing and we're in

00:21:02.540 | all of you. This is one topic we can all agree on. This is

00:21:06.020 | something that can galvanize America. This should be an

00:21:08.860 | important we are leading the world again. Yes, we're leading

00:21:13.180 | the world in the space race again. We're going to be on the

00:21:16.100 | moon. We're going to be on Mars. What about Uranus?

00:21:19.020 | You know,

00:21:21.020 | free bird keeps

00:21:23.340 | I love you, brother. Thanks for coming on. Give me a hug over

00:21:28.460 | here. Thanks for coming on. Bye guys. Thanks for coming on.

00:21:32.180 | Guys. See you Gavin. Bye Antonio.

00:21:34.980 | That was great. I'm surprised I beat him off to the punch there.

00:21:37.780 | Yeah. Oh, no, we were all queued up. Tamont was having a moment.

00:21:41.500 | He was like daydreaming about the future and not thinking

00:21:44.540 | about the line. I was taking the number of shares of SpaceX I

00:21:47.460 | know and multiplying it by a guild billion trillion

00:21:49.780 | billion trillion dollars.

00:21:53.340 | Yeah, the rest of us are thinking about humanity,

00:21:56.820 | America, inspiring people, and Chamath's got his like little

00:22:00.380 | calculator out. I'm gonna have like a babushka planes a plane.

00:22:03.780 | It's like

00:22:04.380 | right. It ruined the moment. Make it about you.

00:22:09.580 | I did have a business question about how the starship impacts

00:22:32.020 | starlink very simple. There's a graphic online you can find on

00:22:35.740 | the SpaceX YouTube channel. And they show the starship and it

00:22:40.180 | literally looks like a goddamn PEZ dispenser shooting out the

00:22:43.940 | next version of starlink. And these are you know, without I

00:22:49.140 | don't want to speak about any specifics, but you can you can

00:22:51.660 | watch it spit them out. You can put out more, and they're

00:22:55.180 | obviously going to be more powerful. And if you have seen

00:22:59.020 | the size of the satellite, I have starlink at both houses, the

00:23:02.460 | ski house and my main house as a backup. It's getting scary how

00:23:05.980 | good it is. And if you look at the size of them, and I again, I

00:23:10.620 | don't want to speak about any future products. It's not my

00:23:13.900 | place. But if you see the size getting smaller, there's one or

00:23:18.100 | two things that we all know about technology, cheaper,

00:23:21.460 | faster, better, smaller, just so I would just say if you're if

00:23:25.940 | you're a fan of starlink, just keep those words in mind.

00:23:28.780 | Yeah, it's gonna be pretty amazing what starlink is going

00:23:31.660 | to be able to do.

00:23:32.340 | Yeah, I thought that maybe I read this somewhere that

00:23:35.220 | starship can carry 600 plus satellites, whereas the previous

00:23:41.340 | top of the line rocket, the Falcon nine could only carry

00:23:44.860 | was it like 50 or something or

00:23:46.700 | yeah, a little less, yeah, there's like 3040. So

00:23:49.260 | so you're talking about 20 times the number of satellites can go

00:23:52.220 | up. And at a lower expense.

00:23:53.900 | Yeah. And I guess SpaceX has gotten permission from the FCC

00:23:58.580 | to put up about 12,000 starlink satellites. So you could do

00:24:04.740 | that, you know, with, I guess, just just 20, you know, 20

00:24:09.380 | missions,

00:24:10.020 | the big disruption is going to happen by the end of 2026.

00:24:13.220 | Because this next generation set of licenses, spectrum licenses

00:24:20.180 | that the FCC sold came with a condition that you had to launch

00:24:24.340 | satellite capacity by the end of 2026. I think otherwise you

00:24:27.500 | lose it. Or you have to do your first launch, I think by the end

00:24:30.300 | of 20 to any of the point is that the only company that

00:24:33.380 | actually has the capability to build and to launch is SpaceX.

00:24:36.620 | So they have a complete monopoly. And because they're

00:24:38.980 | advantaging their own solution, it puts everybody else behind

00:24:43.860 | the eight ball. So not only will they probably offer the best

00:24:48.260 | global internet connectivity at every single natural point in

00:24:52.140 | the world that you could be, which is going to be a really

00:24:54.420 | big leap. They're going to do it, Jason, as you said, at a

00:24:57.100 | throughput that's going to surprise people. And it's also

00:25:01.180 | going to render every other existing provider in a really

00:25:04.940 | difficult situation who's like, you know, what is their

00:25:07.420 | alternative, you can't launch with ULA, because they're

00:25:09.620 | inconsistent. You can't launch with Blue Origin, because

00:25:13.180 | they're inconsistent. You can't launch with the Europeans in

00:25:16.820 | general, because they're inconsistent. SpaceX is the only

00:25:19.100 | solution, but then SpaceX is just going to advantage

00:25:21.220 | themselves. And there's nothing illegal about that. So you're

00:25:24.380 | going to be left with a bunch of these existing tele

00:25:26.580 | communications companies in a really difficult spot in the

00:25:29.540 | next couple years. So it's going to be really dynamic space, I

00:25:32.020 | think very much worth paying attention to on sentences

00:25:34.420 | regards the all in community. He's taking a nap, man has not

00:25:39.180 | slept in the last couple days. He's taking a well deserved nap

00:25:42.340 | right now. So hopefully, we'll have them on in a future

00:25:46.380 | episode. Very quickly.

00:25:48.100 | Where are you taping from J Cal? Just curious, where are you

00:25:50.580 | taping from there?

00:25:51.460 | I'm at Starbase. And there are little tiny homes and he lent

00:25:57.300 | us one to stay in here. And yeah, it's because it's just

00:26:01.020 | inspiring to be here. It's been it's been a great experience.

00:26:03.500 | And I've been this is I've been here a couple times. And the

00:26:09.300 | scale of the factory, the ships, and just over the last like they

00:26:13.340 | said the last I've been here a couple times, maybe three or

00:26:15.700 | four years ago, it really is growing exponentially. And the

00:26:20.300 | other really positive thing is, people are driving, again, back

00:26:24.980 | to the enthusiasm in the public. And what you don't see mirrored

00:26:29.060 | in the press, which I think was a really astute point, sacks. I

00:26:33.300 | met a guy who gave me a ride in his golf cart. I was I was late

00:26:36.740 | to a meeting guy says, Hey, are you going somewhere? And I said,

00:26:39.500 | Yeah, because I was literally running down the street trying

00:26:41.300 | to get catch a flight. And the guy drives me in his golf cart.

00:26:44.660 | And I say, Hey, he says, Hey, you here for the launch? I said,

00:26:47.380 | Yeah, I'm here for the lunch. He says, So am I say, Can I ask

00:26:50.020 | you? Do you work for SpaceX? He says, No, I'm just a fan of

00:26:53.620 | Elon's. I'm a fan of SpaceX. And I said, Can I ask you a drove

00:26:56.340 | from his I drove 19 hours to somewhere in Texas, Houston or

00:26:58.780 | something. He drove 19 hours to come here to spend the week to

00:27:01.940 | see the launch. And the crowds here have gotten bigger and

00:27:05.260 | bigger. And there's hundreds of people. I think I call San

00:27:09.380 | Padre Island over here, a little beach community, kind of like a

00:27:13.540 | Las Vegas on the beach or Reno or New Orleans. And they're just

00:27:18.740 | lined up there with cameras. These are Americans. Just

00:27:22.700 | Americans in RVs, in cars, setting up cameras to see

00:27:28.380 | history happen. And it really is truly inspiring. These are just

00:27:33.420 | saw to the earth, normal folk, this isn't the media system,

00:27:37.340 | like affluent people are necessarily just Americans who

00:27:41.660 | who are inspired in and that's I think, what all entrepreneurs

00:27:46.260 | who hear these stories about what's going on down here,

00:27:48.780 | you'll overestimate what you can do in a year, you're going to

00:27:50.700 | underestimate what you can do in 10. And I think that's, you

00:27:53.660 | know, we all know Elon pretty well here and have watched this

00:27:55.860 | journey. They're cooking with oil, they're moving fast. And

00:27:59.700 | the iteration process is extraordinary. And they're

00:28:03.140 | making everything here. And it's Americans making everything that

00:28:06.100 | the tiles I remember being here three years ago, and Elon and I

00:28:10.340 | have two in the morning, we're walking through the factory

00:28:12.420 | while where they were working 24 hours a day trying to figure

00:28:14.740 | out the tiles on Starship to get it back in. And they were making

00:28:19.340 | the tiles themselves. And just trying to figure that for me.

00:28:22.460 | That's the level of detail that's occurring here. And as

00:28:24.700 | Gavin said, there's 1000 different things changing on

00:28:29.100 | each iteration of this. So more great stuff to come. I believe.

00:28:33.140 | Yeah.

00:28:33.660 | That's been another episode of Phil Helmuth mentions his

00:28:37.460 | relationship with Elon. Thanks, everybody for tuning in.

00:28:42.380 | No, I mean, what am I supposed to do? You know, like, I'm sorry

00:28:45.140 | that my friend, you know, started a rocket ship company. I

00:28:47.940 | don't apologize for it. You guys doing great stuff in the world

00:28:51.900 | as well. So do we want to talk about AI? Do we want to go to

00:28:55.260 | this tiger marking down their book? Where would you like to go

00:28:57.860 | gentlemen, we can talk about the Fox settlement with dominion.

00:29:02.020 | That was something you and I talked about last week, sex, I'd

00:29:04.500 | love to get your opinion on that they paid $787 million in this

00:29:08.740 | settlement. For defamation. It didn't go to trial. You were

00:29:12.940 | hoping it would go to trial. How do you feel? I mean, and this is

00:29:16.420 | an extraordinarily large settlement. So yeah, but what do

00:29:20.420 | you what are your thoughts on this? You wanted to see this go

00:29:22.100 | to the mat and go to the Supreme Court and maybe see the laws in

00:29:24.220 | the United States change eventually catch us up on your

00:29:26.980 | reaction to this ginormous fine. Yeah. Yeah. It was a big

00:29:30.700 | speeding ticket. Yeah.

00:29:31.500 | Yeah. Well, it's funny. You call it a speeding ticket. Because

00:29:35.340 | when I saw this reminded me of a scene at the beginning of

00:29:38.220 | apocalypse now, where Martin Sheen says that charging a man

00:29:42.140 | with murder in this place is like handing out speeding

00:29:44.220 | tickets at the Indianapolis 500. I mean, the analogy here is that

00:29:49.380 | the media is so dishonest, whether it's CNN or MSNBC, or

00:29:53.420 | the New York Times, I mean, are constantly inaccurate or

00:29:56.820 | whatever. And, you know, so for this one network to get a fine

00:30:02.300 | of like 800 million, it's like pretty, pretty incredible. I

00:30:06.220 | mean, they should be handing out a lot more of these in my in my

00:30:08.380 | view, not just to Fox. But yeah, look, I would like to see to

00:30:11.540 | that end, I would like to see the standard in your times

00:30:15.380 | versus Sullivan revised by the Supreme Court, the standard is

00:30:18.180 | actual malice. So you have to prove not just that the press

00:30:23.180 | told a lie, but that there was malice behind it. And that's

00:30:26.700 | what this trial would have been about. And Fox, so

00:30:29.780 | what should it change to? Yeah. I think that change to what

00:30:34.540 | would be a better standard in your mind?

00:30:36.420 | I think that if the media makes a mistake, they should have to

00:30:41.700 | correct it. And I would say the correction needs to be at the

00:30:44.060 | same level that they publicize the original story. So if they

00:30:48.900 | make a mistake, if it's untruthful, and it damages

00:30:51.460 | someone's reputation, and they refuse to post a correction,

00:30:55.660 | then I think they should be liable. That seems fair to me.

00:30:59.140 | If you were to put something on page a one, if you were to give

00:31:02.780 | it five minutes at the start of a show on whether it's Rachel

00:31:05.900 | matter or Tucker, whoever makes the mistake can be anybody. If

00:31:09.620 | they made the mistake in the first five minutes top of the

00:31:11.740 | show, they don't get to bury it on the website, they don't get

00:31:14.020 | to bury it on page seven. They got to say it up front. Hey,

00:31:17.060 | listen, we made a mistake. Correct. Here's the mistake.

00:31:18.980 | Yeah, I think it's reasonable.

00:31:20.940 | Correction should get same publicity as the original story.

00:31:23.340 | And by the way, if they correct it, that would be like a safe

00:31:26.220 | harbor. But if they refuse, and they publish a lie, and it

00:31:30.100 | damages somebody, then they should be liable for that.

00:31:32.460 | I think there should also be some that's what I think. But

00:31:35.140 | yeah, I'm in agreement with that. Because there is the trick in

00:31:37.940 | journalism to bury the correction. And there's another

00:31:41.780 | trick that I think needs to be looked at. It's a little more

00:31:44.300 | nuanced, which is somebody makes a mistake, or an accusation in a

00:31:51.140 | publication. And then the next publication says, Oh, the New

00:31:54.780 | York Times, Fox News, CNN said this, but they don't check it

00:31:58.780 | themselves. So they're using another publication as like a

00:32:03.020 | proxy to kind of give them some level of protection, I think

00:32:05.700 | they should have to on a first hand basis, right?

00:32:08.140 | No, that's the game they play. You're right. So they start with

00:32:10.820 | a super shady source. Yeah, that, you know, it just

00:32:15.340 | attributes it to some sort of anonymous source, then the

00:32:18.060 | second, most shady publication quotes that one. And then the

00:32:21.980 | third most shady quotes that and then it goes to the whole food

00:32:25.260 | chain. Yeah. So you're right, reposting something in the echo

00:32:28.500 | chamber, because other publications are doing it.

00:32:30.300 | You're right, that should not be protected. They should have to

00:32:33.140 | their own sourcing, basically.

00:32:34.540 | Yeah, or just some base level of fact checking if you and now if

00:32:37.860 | if you called it Fox opinion, that's slightly different than

00:32:41.300 | calling it Fox News. So maybe the part of this is branding

00:32:43.420 | Chamath or freebird. Germany thoughts on this? Just in

00:32:47.620 | general, Fox, I think has only 4 billion of cash. So they just

00:32:51.100 | spent 20 some odd percent of it paying this off. And if I were a

00:32:55.140 | shareholder, the question I would ask is, did we actually

00:32:57.220 | make enough money to justify having to pay almost $800

00:32:59.940 | million of our cash balance? The answer is probably no. And this

00:33:03.980 | is the first of a bunch of lawsuits that they have. The

00:33:08.300 | next one, which is I think, is like smartomatic, which is

00:33:11.300 | another voting machine company. That's an even bigger lawsuit,

00:33:14.580 | actually, that's a two and a half billion dollar lawsuit. And

00:33:17.780 | so it's, could it be the same outcome and another settlement?

00:33:22.340 | And so now all of a sudden, you would deplete half their cash,

00:33:26.340 | all for a lie to do what at some point, some smart business

00:33:30.260 | governance needs to kick in over at Fox, and they need to realize

00:33:33.020 | that this stuff just doesn't make economic sense. Maybe they

00:33:37.580 | thought it made political and ratings sense, but you can't

00:33:41.460 | justify that when it costs $2 billion.

00:33:42.940 | There is a concept here, I think, sex that is particularly

00:33:46.940 | interesting in Finland. When you get a speeding ticket, speaking

00:33:50.580 | of speeding tickets, your speeding ticket is proportional

00:33:53.260 | to your net worth. And so these NHL players who like to speed

00:33:57.820 | and a Nokia executive, it was given the equivalent and this is

00:34:00.740 | a bit excessive of $103,000 fine for going 45 into 30 zone on his

00:34:06.020 | motorcycle. And an NHL player got a $39,000 fine two years

00:34:10.100 | earlier. I think that this is part of the problem is sometimes

00:34:13.700 | fines don't match the crime and or the they're not proportional

00:34:18.060 | enough for the person to feel them. And so then we kind of can

00:34:21.140 | joke that they're speeding tickets. One very rich person

00:34:24.100 | said to me, you know, when they would, they had watched them

00:34:27.260 | parking, you know, incredibly illegally in a small town. And I

00:34:31.540 | said, you're gonna get a pretty serious ticket. That's in some

00:34:35.020 | pretty gnarly spot to be parking. And they said, Oh, you

00:34:37.620 | mean the VIP parking charge? And I was like, yeah, that kind of

00:34:41.460 | sucks, but okay. So there might be some concept here of a

00:34:46.740 | proportional fine. And I think the EU is starting to work on

00:34:50.700 | that as well. Because, you know, big tech was ignoring this is

00:34:55.060 | going to embolden a lot of people to take matters into

00:34:58.860 | their own hands and sue some of these media companies if the lie

00:35:01.460 | is egregious enough, and it negatively impacts them enough,

00:35:04.700 | I think it would embolden a lot of folks. So, Saks is right that

00:35:08.180 | up until now, most folks haven't done anything about this. But if

00:35:12.500 | you feel like the media has really wronged you in a

00:35:14.860 | meaningful way. There's probably also now a lot of private equity

00:35:22.420 | organizations that would do the lawsuit finance or hedge funds

00:35:25.380 | that would do the lawsuit finance. And so now you're

00:35:27.860 | jilted. Yeah, like you're free rolling it, right. So you you

00:35:30.660 | get one of these folks to pay it, they get 50% of the gains,

00:35:33.220 | you get 25%, the lawyers get 25%. And you go and you litigate.

00:35:37.100 | I'm sure that you'll see more not less because this fine is

00:35:41.620 | it's really big. And again, we don't know the end of all of

00:35:44.700 | these 2020 election hoax shenanigans because this is the

00:35:48.460 | first not the last of these.

00:35:49.980 | I do think it's a really big number. I mean, I did. I did

00:35:53.700 | want the the case to go to all these courts so they could

00:35:57.140 | revise New York Times versus Sullivan. But I do wonder about

00:36:00.620 | the size of this settlement here. It's just it seems

00:36:02.780 | extraordinary.

00:36:03.460 | They paid it.

00:36:04.220 | There was a interest. It's a settlement. Yeah, they

00:36:06.780 | voluntarily agreed to do it. Yeah, absolutely. So. So in any

00:36:10.940 | event, look, I hope to mouth is right that this actually

00:36:13.420 | incentivizes more actions against media companies, because

00:36:16.740 | I think their feet need to be held to the fire. And they need

00:36:19.580 | to do a better job publishing the truth. There was an

00:36:22.380 | interesting thread by a Twitter poster called can a coa do I

00:36:29.060 | don't know if you guys saw this, where he posted an hour of

00:36:33.260 | footage by Democrats and Democratic groups and more

00:36:39.500 | Democrat leading political science experts questioning

00:36:43.220 | whether voting machines could be hacked. Basically, this, this

00:36:47.100 | idea that voting machines could be hacked is not it's not an

00:36:51.740 | allegation that is unique to Fox. So apparently, there's

00:36:56.380 | evidence that Fox knew was bogus. So they definitely

00:36:59.700 | should not have run with it. But I do wonder, hey, why? Why

00:37:03.740 | shouldn't other people be liable for this too?

00:37:05.460 | Well, I mean, the question is, I think those internal text

00:37:09.060 | messages between the host who knowingly knew it was false, and

00:37:13.460 | then we're doing it. I think that's why they they took that

00:37:15.740 | settlement, because 800 million or whatever, or so is a lot less

00:37:18.940 | than 1.4 or 1.5. And so there is speculation that maybe

00:37:21.780 | clearly they got some bad discovery. They got some

00:37:23.580 | discovery problems. Yeah, I'm just saying that problems in

00:37:26.460 | these allegations about electronic voting machines being

00:37:30.020 | hackable or rigged. This seems like an allegation that's been

00:37:33.660 | made. That's actually interesting, not just in 2020.

00:37:36.300 | But it's been made multiple times by whichever side loses.

00:37:39.940 | Yes. So I would wonder why more parties aren't liable for this,

00:37:44.260 | by the way, I never I never bought into I never bought into

00:37:47.580 | those allegations. I said so at the time, I thought they were

00:37:50.220 | bogus. I thought the whole Sidney Powell thing, you know,

00:37:52.900 | the release the Kraken or whatever was ridiculous. So I

00:37:55.780 | don't feel too bad for Fox or anything like that. But it seems

00:37:59.620 | to me, like I'm saying, they're, they're not the only one

00:38:02.340 | speeding here. There's a lot of people who need to get speeding

00:38:04.940 | tickets. Yeah, there is a roadmap for the press to learn

00:38:07.860 | from this and to get better, right? Like to maybe take to

00:38:11.620 | heart that maybe the public now is looking at them and assuming

00:38:16.140 | that the trust in media has is at an all time low Alex Jones

00:38:19.780 | got find a billion dollars, right? It's a judgment, judgment,

00:38:23.100 | a judgment, the Fox things a settlement, right? He got a

00:38:25.980 | judgment of over a billion from multiple courts. Yeah, so he

00:38:29.660 | said a bunch of stuff that, you know, was in court provable to

00:38:33.940 | be false. And then he kind of restated it and he got, you

00:38:37.180 | know, this massive fine. I think there's an interesting question

00:38:40.460 | here on how far this goes with respect to, you know, maybe it

00:38:46.060 | invites the lawsuits, like you guys say, where there's things

00:38:49.820 | that are more on the on the line. And then we really start

00:38:52.820 | to have kind of a tough set of conversations that maybe there

00:38:56.180 | are things that are factually debatable, arguable,

00:38:59.220 | opinionated, where they were true at a certain point, and

00:39:02.100 | then you didn't really have evidence to disprove it. What

00:39:04.940 | are you allowed to say? Are you only allowed to say things that

00:39:06.820 | you've proven or things that haven't been disproven? And that

00:39:09.700 | becomes a pretty tough set of conversations. And what I think

00:39:11.740 | might be interesting from here, if so much of media over time

00:39:15.340 | gets replaced by chat and AI aggregating lots of different

00:39:19.380 | information, synthesizing that and making representations back

00:39:22.540 | to us, and that becomes our primary source of call it news,

00:39:25.780 | or quote media in the future. What happens when those models

00:39:31.140 | or the synthesis of data or the source of the data leads to a

00:39:34.700 | statement that has a similar sort of descent around whether

00:39:37.740 | or not it's true or not? And that you really end up kind of

00:39:40.820 | ending up in a pretty cloudy environment. You know, by

00:39:44.940 | starting starting this process,

00:39:46.380 | I think is a very insightful moment, we'll get to in a

00:39:48.580 | minute, I just coming as a coming from a journalism

00:39:50.980 | background myself, and then becoming a commentator, there

00:39:54.300 | really needs to be three or four very simple things that the

00:39:58.420 | media needs to do. Number one, more fact checking. And number

00:40:01.460 | two, less anonymous sources, it's they rely too much on

00:40:04.460 | anonymous sources. And then there needs to be very clear

00:40:07.340 | delineation between what is a fact and what is an opinion. And

00:40:11.580 | the public is trying to sort this out. Is it Fox News is an

00:40:14.380 | opinion? And what you're saying is this an opinion? Or is this a

00:40:17.140 | fact? Did you do journalism? Or did you just have an opinion? Is

00:40:20.740 | Rachel Maddow an opinion? Or did she actually have a journalist

00:40:23.500 | check these facts? And I think this is where self policing and

00:40:27.020 | maybe rebuilding their rebuilding trust is on the

00:40:30.660 | media, it is now the news and the media's job to rebuild

00:40:33.460 | trust. And if not, they're going to get more fines. But let's get

00:40:37.020 | into, I think some of the stuff we're seeing with AI we had

00:40:40.220 | talked on this show before, many times about the corpus of data,

00:40:44.620 | under which these models are being built, or Reddit announced

00:40:48.820 | plans to start charging companies that uses data training

00:40:51.700 | and models. The co founder Steve Huffman, who came back after

00:40:55.420 | condo, NOS, NASA had bought Reddit and then sold it back to

00:40:59.460 | the founders. And paradoxically, I believe Sam Altman has a major

00:41:03.100 | investment in Reddit, he said more than any other place on the

00:41:05.820 | internet, Reddit is a home for authentic conversations. There's

00:41:08.500 | a lot of stuff on the site that you'd only ever say in therapy,

00:41:11.020 | AI or never at all. A lot of people use pseudonyms,

00:41:13.820 | obviously. And the Reddit corpus of data is incredibly valuable,

00:41:17.020 | but we don't need to give all that value to some of the

00:41:22.140 | largest companies in the world for free. Crawling Reddit

00:41:25.500 | generating revenue and not returning any of the value to

00:41:27.860 | our users is something we have a problem with. It's a good time

00:41:31.020 | for us to tighten things up your thoughts shamath on what we

00:41:35.380 | talked about two different episodes, maybe we'll play drop

00:41:37.980 | a clip in here, Nick, if you want to in post, it's going to

00:41:40.500 | be the large data sets, Cora, Yelp, the App Store reviews,

00:41:44.060 | Amazon's reviews. So there are large corpuses of data that you

00:41:47.900 | would need like Craigslist has famously never allowed anybody

00:41:50.740 | to scrape Craigslist. The amount of data inside Craigslist as but

00:41:54.380 | one example of a data set would be extraordinary to build chat

00:41:57.460 | GPT on chat GPT is not allowed to because you as you brought up

00:42:01.220 | robots dot txt last week, there's going to need to be an

00:42:03.940 | AI dot txt Are you allowed to use my data set in AI and under

00:42:07.580 | and how will I be compensated for it? Will the rights to the

00:42:12.900 | data will will Google just state a Cora Hey, we'll give you a

00:42:16.700 | billion dollars a year for this data set if you don't show

00:42:19.140 | anybody else they should come off. Those were our previous

00:42:22.180 | discussions that we just played. What do you think?

00:42:24.260 | It's so incredible. We are witnessing such an important

00:42:28.860 | moment for Silicon Valley, but frankly, how the world works.

00:42:33.980 | And it's just everything is changing. That's what I'm just

00:42:38.260 | in awe about that. You know, we talked about this. And we were

00:42:41.540 | basically spitballing something two or three months ago. And not

00:42:45.580 | but 60 or 90 days later, these things come to pass. Right? We

00:42:50.900 | talked about something in one week. And then, you know, 14

00:42:53.860 | days later, it's completely upended, like how impressed

00:42:58.220 | sacks was about plugins. And then plugins were rendered

00:43:01.620 | useless, and somewhat impotent two weeks later by auto GPT.

00:43:05.780 | It's just so profound, I think what's going on. So Google

00:43:10.860 | today announced that they're going to merge two organizations

00:43:14.020 | that I thought were so orthogonal to each other,

00:43:18.260 | disparate brain and deep mind. The cultures just seem so

00:43:22.780 | totally different. But now they're merging those two things

00:43:26.220 | together, something that I thought would never happen. They

00:43:28.100 | did it. So all these competitive pressures are so real. I was in

00:43:32.780 | LA, for the breakthrough prize, I was flying home with somebody

00:43:35.940 | on Saturday. I won't say who it is. But they are right at the

00:43:40.340 | bleeding edge of a lot of this AI stuff. And they let go a

00:43:44.620 | third of their company replaced it with an agent within six

00:43:49.780 | weeks of training. So how is this not going to affect

00:43:55.820 | everybody else, I guess is maybe the bigger question. And then I

00:44:00.180 | go back to what I said last week, which is that we've talked

00:44:03.140 | about a lot of the positive things. And I think it's

00:44:05.100 | important to make sure that people understand that there are

00:44:08.180 | a bunch of non trivial negative things. And I think I shared one

00:44:11.140 | on Twitter, which was around this company that use an AI model

00:44:13.940 | to build a library of 40,000 toxic compounds that could kill

00:44:17.660 | all kinds of numbers of humans. So there's all kinds of really,

00:44:21.380 | really tough things going on right now that I think, to me

00:44:24.340 | means it's the moment where I have the least sense of how to

00:44:27.940 | do my job. And so I've tried to kind of like put a pin in

00:44:32.820 | everything and just go back to learning mode.

00:44:34.620 | It's a bit humbling is what you're saying, like,

00:44:36.460 | it's incredibly humbling entire rulebook, even for us as capital

00:44:39.740 | allocators, company formation, it's has you it has you come up

00:44:43.860 | wondering even as I do this, as a CEO, I'm like, should I be

00:44:48.460 | using models to do parts of the workflow inside of my business?

00:44:52.540 | Inside the portfolio companies that were invested in? Am I

00:44:56.940 | supposed to go into the board meeting now on Monday and say,

00:44:59.620 | Hey, XYZ person just did one, two and three, and cut off x by

00:45:05.060 | a third? Do I demand the CEO do that? Do I force change if they

00:45:10.940 | don't do it? Do I say, so I don't I don't I don't exactly

00:45:14.700 | know what to do.

00:45:15.500 | The carousel is spinning increasingly faster, and we're

00:45:19.580 | all on it.

00:45:20.060 | I'll just say a general point. Which I kind of made that this

00:45:25.300 | event today. It feels like the pace of change is so high that

00:45:29.780 | you're kind of in a dust storm, you don't really know where

00:45:32.060 | you're going to end up. So it's very hard to sit as an investor

00:45:35.020 | right now and say, I'm going to pick these things because, you

00:45:37.700 | know, two weeks later, you just don't know whether that path

00:45:41.140 | even exists anymore, because the dust storm washes it away, you

00:45:44.660 | know, blows it away. And I think that there will, as a result,

00:45:50.620 | there will be a lot of money lost by investors by companies

00:45:54.940 | building in this space. Net net, the index for investing in like

00:46:02.180 | dot com companies, the majority, a large amount of money was

00:46:06.740 | lost during that era. But from that era also emerged a handful

00:46:12.660 | of winners. And those winners ended up creating extraordinary

00:46:15.900 | value, I think we're at a point in time right now, where we

00:46:18.460 | could see 10 times the value generated in this phase of

00:46:21.980 | technology advancement than we saw during the internet, and the

00:46:25.540 | advancement of the internet. And if if that is true, I think

00:46:29.060 | you'll end up seeing certainly the same thing happen, which is

00:46:31.540 | the index will lose money. But the few winners will accrue such

00:46:35.860 | extraordinary gains. The problem is, you can't deterministically

00:46:39.940 | pick those winners today, totally because of the dust

00:46:42.540 | storm problem, you just don't know the path totally. So if you

00:46:45.340 | were to meet Jeff Bezos versus some CEO of some.com selling pet

00:46:51.180 | stuff, back in 1995 to 9794 to 97, would you have recognized

00:46:56.460 | Jeff Bezos was going to stand out? Would you have recognized

00:46:59.020 | Larry and Sergey, we're gonna stand out? Would you have

00:47:00.580 | recognized Bill Gates was going to stand out or suck? At the end

00:47:03.860 | of the day, this is harder than it has ever been in terms of

00:47:07.260 | predicting a technology cycle. But what we still know to be

00:47:11.580 | true is that the capital will be allocated within a company, the

00:47:14.980 | operations will be run, managed, and driven and led by an

00:47:18.740 | individual or a set of individuals. And that's

00:47:20.860 | effectively what I think a lot of investing in the cycle is

00:47:23.460 | going to come down to, we're all going to sit here and

00:47:25.500 | pontificate and intellectually masturbate ourselves to some,

00:47:28.660 | you know, genius, you know, path that we think is going to evolve.

00:47:31.300 | And at the end of the day, most of it won't turn out to be true.

00:47:33.940 | And that path won't be real. Because this is such a dynamical

00:47:36.700 | system right now, there are so many feedback loops, one thing

00:47:39.660 | makes one step change, and it changes every other step. But

00:47:42.620 | what we still know is that great leaders can lead, you know, and

00:47:46.980 | especially coming out of this, this Elon discussion, and seeing

00:47:50.420 | the extraordinary achievements he he's delivered, particularly

00:47:53.420 | today. I think that's maybe what a lot of early stage venture is

00:47:57.380 | going to shift to an AI, it's really, you know, finding great

00:48:00.660 | people. And I'll tell you one thing for sure. And I was kind

00:48:03.780 | of commenting on this earlier today was, I really think a lot

00:48:07.460 | of series C and later companies, and I know we're going to talk

00:48:10.020 | about this implosion discussion later, so many of those

00:48:13.300 | companies have a valuation that's less than their

00:48:15.620 | preference stack. And as a result, those founders that work

00:48:19.820 | there, and those employees that are there are getting their

00:48:22.460 | equity wiped out, they'll have to get free bird, can you just

00:48:26.060 | explain what that means technically to the audience?

00:48:27.900 | Probably when you when you when you raise money into a startup,

00:48:31.900 | the investors that give you that money that invest that money,

00:48:35.180 | it's effectively a loan, you owe them that money back first,

00:48:39.180 | before your shares get paid out in the future. So if the company

00:48:43.100 | ends up being worth less than the money that they've invested,

00:48:45.860 | they get the money first. And ultimately, if the company goes

00:48:50.420 | public or get sold, they can convert their what are called

00:48:53.660 | preferred shares into common shares and participate. So even

00:48:56.820 | though you only quote, sold 20% of your company, for let's say

00:49:01.020 | $200 million, that $200 million actually has to get paid first.

00:49:05.140 | So now you've raised this $200 million, the investors, the

00:49:09.220 | company is now repriced, because the market has come down by 80%.

00:49:12.500 | And investors are saying, hey, your company is now worth 175

00:49:16.020 | million, your company is now worth less than what you owe the

00:49:19.740 | pre or the private preferred investors. And if it's worth

00:49:22.580 | less than what you owe, which I think is the case for over 70 or

00:49:26.300 | 80% of series C and layer companies. You know, we can kind

00:49:29.820 | of Yeah, and this, but this number comes from what I shared

00:49:33.620 | a few months ago, which is that 70% of publicly traded companies

00:49:37.820 | that went public in the last three years, are trading below

00:49:40.620 | the cash that they've raised. So if you translate that on a one

00:49:43.580 | to one basis to the private market, you know, and these, by

00:49:46.180 | the way, were the best companies actually got public. So in the

00:49:49.060 | private market, you've got to assume that something in that

00:49:51.060 | late stage market is on the order of 70 80% trade is worth

00:49:54.460 | less than their preference stack. So a lot of those

00:49:56.820 | employees are going to run. Those founders don't want to go

00:49:59.420 | work for the VCs when they get recapped and get offered a 4%

00:50:02.140 | are they going to go because it looks like they're going to

00:50:04.620 | start AI companies. And I think that's fantastic. And I think

00:50:07.500 | that's what's really shifting it right now. That's kind of a big

00:50:10.220 | dynamic is a lot of these I'm calling them zombie corns are

00:50:14.420 | going to see this kind of mass exodus of talent. And a lot of

00:50:18.060 | the investors that don't know how to price stuff and don't

00:50:20.380 | want to deal with recaps in the late stage, or diverting their

00:50:22.900 | attention to seed and a and early stuff. And so there's

00:50:25.860 | both a rush of talent and a rush of capital to this kind of very

00:50:29.500 | early stage. And so we'll create this massively bubble iffic, you

00:50:33.780 | know, index of AI stuff, but some number of these things with

00:50:38.140 | some great leaders will emerge and will accrue extraordinary

00:50:41.020 | value across many industries.

00:50:42.660 | I really agree with a lot of what you're saying. The thing to

00:50:46.020 | keep in mind is that the problem with the use of auto GPT is as

00:50:50.260 | an example is that the order of magnitude of capital that you

00:50:53.260 | need has now just gone down. Yeah, yeah, instead of a $10

00:50:56.820 | million Series A. So we used to, you know, people in the height,

00:51:00.100 | we're doing 30 and $40 million Series A's into crazy, very

00:51:05.740 | bubblish ideas and NF T's and all this other stuff. That's

00:51:10.180 | idiotic today. Because a two or three person company can now do

00:51:15.500 | the work of 20 to 30 people. And the amount of capital that they

00:51:19.540 | need is really their salaries, plus the cost of renting some

00:51:24.660 | GPUs on your favorite, pick your cloud. And so all of a sudden,

00:51:29.820 | you can get huge amounts of progress in weeks and months,

00:51:33.580 | with hundreds of 1000s or low millions of dollars. So if you've

00:51:37.820 | raised all of a sudden, a $5 billion fund, because you were

00:51:42.020 | trying to do late stage deals. And now all of a sudden said,

00:51:45.540 | Well, wait, we'll just pivot to early stage. But what are you

00:51:48.900 | going to do find the next 30 person company that's not going

00:51:51.300 | to work because you have to know how to write 500,000 to million

00:51:54.820 | dollar checks with two or three people. And I love it really,

00:51:58.660 | and really help them and really understand their technical

00:52:01.860 | ability to execute, right? Yeah. But then it also quickly becomes

00:52:05.900 | a thing where maybe you're better off just doing 500 of

00:52:10.020 | these two and three person teams. We tried this experiment

00:52:14.420 | seven years ago, this thing called capital as a service

00:52:17.540 | where we were doing this automated investing. I don't

00:52:20.140 | know if you guys remember this, but it was like some machine

00:52:22.300 | learning that we did on all of our portfolio companies. And all

00:52:25.700 | somebody had to do was fill out a form and send us some metrics.

00:52:28.900 | And we would have a machined decision, right? So humans would

00:52:32.060 | not be allowed to make the investment decision. The problem

00:52:35.260 | that we ran into was there was a lot of great companies all

00:52:37.460 | around the world. But the administrative burden of

00:52:40.580 | supporting 500 companies was unbelievably large and

00:52:45.820 | complicated. Oh, you have a company in Indonesia. Well,

00:52:48.220 | there's another company in South Korea. And here's a company and

00:52:51.500 | you know, they're raising a new round, they have to get board

00:52:54.260 | approval, they got to do this and signatures. I mean, it's

00:52:57.020 | hard to scale. Yeah. So so the VC, which is a software light

00:53:01.380 | people heavy artisanal business, all of a sudden becomes

00:53:04.700 | misfactured, right? So you actually need to be highly

00:53:08.260 | automated and use software yourself in order to put 500

00:53:11.740 | three person teams on the field. So this is what I mean by it's

00:53:16.660 | really, I think freebergs use of the term dust storm is a really

00:53:21.060 | good one. It's extremely, extremely confusing what to do.

00:53:24.460 | And if you have large amounts of money that may actually now what

00:53:29.660 | used to be a real differentiator, and a key to

00:53:33.020 | success may actually become an impediment, because you get

00:53:37.540 | reversed, you are forced to do business in a classical way.

00:53:41.740 | That has changed, frankly, in the last 90 days. What do you

00:53:45.540 | think, sex? What's the question? Because we're touching a lot

00:53:48.180 | different things here. Do you feel like this is a dust storm?

00:53:51.740 | And it's murky, and it's just hard to place bets as a capital

00:53:54.980 | allocator? Because something comes out the next day, or 48

00:54:00.780 | hours later, or the next week that takes the previous idea and

00:54:03.460 | wipes it out? And then how do you scale and be capital

00:54:07.420 | efficient?

00:54:07.820 | Well, we're at the early stages of a huge new wave. And I think

00:54:11.540 | that creates a lot of opportunity. So yeah, you've

00:54:14.060 | got to basically separate what's really interesting from the

00:54:17.660 | fool's gold, there's definitely gonna be a lot of that. But at

00:54:21.860 | least there's a reason now to believe that, say, dozens of

00:54:26.420 | unicorns could be created in the next couple of years. So before

00:54:29.940 | we were getting kind of long in the tooth on some of these tech

00:54:32.340 | cycles. I mean, cloud, social, mobile, I mean, there was a

00:54:35.820 | reason to believe that those earlier waves that sort of

00:54:38.780 | played out that the big winners already been determined, and

00:54:41.580 | maybe there wouldn't be too many more big winners in those

00:54:44.420 | spaces. But now we have a whole new catalyst for founders to do

00:54:49.420 | all sorts of new things. And so I tend to think that's super

00:54:52.460 | exciting, you know, we're in the early stages. And I do think

00:54:55.940 | there will be dozens of new unicorns minted in various

00:55:00.780 | aspects of AI could be in AI infrastructure. You know,

00:55:05.820 | whether you're seeing now there's a lot of funding that's

00:55:07.380 | gone into vector databases, or platforms for creating agents.

00:55:12.460 | Or it could be in AI co pilots, basically that tackle various

00:55:17.780 | professional categories and create a co pilot for coders or

00:55:21.500 | co pilot for doctors or lawyers, or architects, I think there's

00:55:25.300 | going to be potentially multiple unicorns created in in those

00:55:29.980 | categories. I think there's going to be SAS software

00:55:33.860 | products that were just good before, but now will actually

00:55:36.460 | be great. Because the incorporation of API's from, you

00:55:41.940 | know, AI foundation models, we'll just turbocharge the

00:55:45.300 | capabilities. And so there's a whole bunch of SAS products that

00:55:49.540 | I think become newly interesting and better, they go from being

00:55:54.500 | vitamins to painkillers. So, you know, we're looking at all those

00:55:57.740 | categories, and I think we'll end up making some bets. But

00:56:00.660 | there's also going to be a lot of companies that are flashes in

00:56:03.940 | the pan or get undermined, you know, there'll be SAS companies

00:56:07.380 | that actually become less attractive because of

00:56:10.620 | disruption from AI. But look, I think all of this, this

00:56:14.140 | maelstrom is great for an investor. I mean, if you're

00:56:17.060 | going to spray and pray, it's not good. You got to be

00:56:19.380 | selective about where you take your shots. But I think this is

00:56:23.500 | the most exciting environment we've been in in a number of

00:56:27.020 | years. I mean, it makes me want to go to work every day and see

00:56:30.980 | it's so funny.

00:56:31.580 | You say that sacks because I literally am looking for an

00:56:35.340 | office space in San Mateo to start like doing the incubator

00:56:39.780 | in person again. And on Monday, I'm having 60 companies come to

00:56:43.380 | San Francisco will be at my attorney's office. And we're

00:56:46.300 | having like a founder university with just all these new startups

00:56:49.620 | that we invested in to just hang out for a day. The enthusiasm

00:56:53.460 | right now is amazing. And what's really unique is the developers

00:56:57.780 | who had three out of seven companies they interviewed with

00:57:02.140 | offer them 150 or 250 k packages, RSU is whatever. Now

00:57:06.860 | there's no offer from Facebook, there's no Apple, there's no

00:57:09.380 | Twitter, there's no Google, or Microsoft offer coming in to be

00:57:14.620 | the backstop against starting a company. So what are they doing?

00:57:17.540 | They're saying, you know what, I got two friends who got laid

00:57:20.180 | off, I got one friend who's halfway out the door, let's just

00:57:22.980 | start something, let's just start something who can give me 100

00:57:25.260 | K who can give me 500 k. And it's, it's, it's so invigorating

00:57:30.580 | to see the talented people, not people who've learned how to,

00:57:35.020 | you know, hack a pitch deck together and tell a story, but

00:57:38.740 | people were actually coding and making MVPs. It's truly

00:57:42.980 | exhilarating right now the amount of two and three person

00:57:46.020 | startups I'm seeing. Yeah. And so while you'll have this, and

00:57:49.780 | it's, it's an incredible, I've never seen this amount of

00:57:52.460 | destruction and creation occurring simultaneously. I love

00:57:55.740 | this zombie concept. You have one half of your portfolio

00:57:59.780 | coming apart at the seams, layoffs, reducing their targets,

00:58:04.580 | while people are coming in the door with products that are

00:58:07.860 | absolutely awe inspiring. I just give one example, I had a

00:58:11.220 | company come out of our founder university, I gave them $25,000

00:58:13.980 | to incorporate a developer and his brother who's a screenplay

00:58:16.540 | writer. They're taking screenplay writing software

00:58:18.900 | sacks, you'll appreciate this having produced two amazing

00:58:21.180 | movies. Thank you for smoking and the dolly film is called

00:58:23.660 | Dolly land. Dolly land. Yeah, coming out in two months.

00:58:28.620 | Coming out two months. Congratulations to me award

00:58:31.460 | winning Oscar winning producer is gonna win an Oscar this time.

00:58:34.540 | He's you know, the screenplay writing tools that have existed,

00:58:39.340 | they're like, what word processors with formatting, what

00:58:42.100 | they're doing is they're saying, hey, write some dialogue. And

00:58:45.900 | then you can have dialogue and say, Hey, make it a little

00:58:48.700 | snappier, make it a little Tarantino ish, make it a little

00:58:51.180 | more, you know, sorkin ish, and then make a storyboard with, you

00:58:56.020 | know, stable diffusion. And I was like, well, this is the

00:58:59.500 | genius idea. I mean, it's unbelievable. Of course, I'll

00:59:01.820 | give you $25,000 for your incorporation. And then they're

00:59:04.820 | coming to the excelling and give another 100k. And in every

00:59:08.060 | single piece of software,

00:59:09.740 | well, that company in success ever raised 25 or $30 million.

00:59:12.860 | Do you think?

00:59:13.660 | No, I think there'll be 12 people. I think it'll be 12

00:59:15.820 | people. I'll give them, but the 25 100k and then our industry

00:59:21.060 | raises $100 billion a year on the premise that each company

00:59:25.020 | before they become a unicorn will absorb between 500 and a

00:59:28.500 | billion dollars.

00:59:29.900 | Yeah, I'm gonna own 20% 10 to 20% of the company for low

00:59:33.660 | millions. And, and we'll see

00:59:35.620 | mid journey is 12 people and no, it's totally bootstrapped. Like,

00:59:39.780 | I guess what I'm saying is, because in the world of AI, so

00:59:43.660 | much work is done for you for free. This is why I'm asking,

00:59:47.660 | maybe we will have to change how we do business.

00:59:50.100 | On the Hollywood example, there's about to be a Writers

00:59:52.620 | Guild strike. And they may want to think twice about that.

00:59:55.860 | Because this is not the time where you want to be

00:59:58.940 | encouraging the industry to find alternatives to writers.

01:00:02.300 | You want to get back in the office and you want to say, Hey,

01:00:04.700 | can I could Is there any other work I can do this weekend, boss?

01:00:07.380 | Did you see the news about BuzzFeed today? They had won a

01:00:10.580 | Pulitzer. They just shut down BuzzFeed news, the entire news

01:00:14.020 | division gone. Another 15% gone, the layoffs and then there was a

01:00:18.900 | report this week that Zuckerberg is doing his third round of

01:00:21.500 | layoffs, another 4000 people that puts him at 24,000. Yeah,

01:00:26.660 | with a hiring freeze.

01:00:28.020 | So the way I describe the current funding environment is

01:00:30.740 | it's a tale of two cities. It's the best of times, it's the

01:00:33.420 | worst of times. If you're a hot AI startup that's able to tap

01:00:38.660 | into the zeitgeist, that's doing something that's perceived as

01:00:42.180 | cutting edge or relevant, there's a strong why now and

01:00:45.740 | you're early, you know, you're early stage, you're able to

01:00:48.060 | raise money for that the spigot is turned back on, there's a lot

01:00:50.900 | of funding for those types of early stage startups. But if

01:00:54.420 | you're a series C stage startup, you're a late stage startup with

01:00:58.380 | a it's called a pre AI model. The spigot is just turned off

01:01:02.580 | completely. I mean, let's look at that chart from crunch base

01:01:06.700 | where the amount of series C funding has gone from something

01:01:11.500 | like 10 billion a quarter last year to like zero. I mean, this

01:01:16.460 | is hardly, I thought this was an error in the chart. Look at this

01:01:21.140 | chart, everybody's seriously funding to us companies by

01:01:23.860 | quarter, there is just no growth stage funding is just completely

01:01:26.740 | dried up. I mean, look at that.

01:01:28.860 | I mean, it got cut in a half, and then it got cut in half

01:01:33.660 | again. And then it just flatlined. So this is your

01:01:38.540 | thesis. Let me ask you this. Is your thesis here that people

01:01:40.900 | aren't trying to raise money, and they're just busy cutting

01:01:43.620 | their companies down to a smaller team size, and they'll

01:01:46.180 | come back out in the second half of the year? Or that anybody

01:01:49.820 | with that amount of dry powder is out of the game now?

01:01:52.420 | Yeah, I think that we're in this awkward stage where the, the

01:01:57.460 | companies who raise money and call it 2020 and 2021, all those

01:02:01.740 | valuations are obsolete. And you've had a lot of late stage

01:02:05.900 | players leave the game, or they're in the penalty box or in

01:02:08.980 | timeout. I mean, look at tiger, for example, the single most

01:02:11.660 | active funder at late stage is trying to figure out how much to

01:02:15.540 | mark down his portfolio. So I just think that a lot of the

01:02:18.740 | funding has dried up there. This idea that there's tons of dry

01:02:20.980 | powder sitting out there, I think is a myth. Or maybe it's

01:02:23.940 | there, but there's no willingness to deploy it. The

01:02:26.300 | valuations are all out of whack. And VCs generally would rather

01:02:31.140 | lead around in a new startup with a fresh cap table, then in

01:02:36.500 | a cap table, they got to restructure because no one

01:02:38.620 | really wants to do this.

01:02:39.420 | About a year ago, we talked about a year ago, Jamal, I asked

01:02:42.980 | you point blank, would you if they cut the valuation, and, you

01:02:47.140 | know, they redid everything and said, Hey, listen, we

01:02:48.940 | understand this is reality, would you get involved in cut a

01:02:51.460 | check? And you're like, I don't want to deal with that kind of,

01:02:53.820 | you know, that kind of

01:02:55.180 | too hard, too hard bucket for you. Yeah. And so now once again,

01:02:59.180 | a year, six months or a year after we talk about this, it has

01:03:02.740 | now manifested this is metastasized.

01:03:04.860 | No, no, it hasn't even started. I think we are starting. Okay, I

01:03:08.900 | think I think we're still being really prescient. Like, the

01:03:11.660 | tiger thing was very important, because they are in many ways,

01:03:15.340 | at the front of the line, in terms of the number of companies

01:03:18.740 | they've touched the amount of capital they've written. And

01:03:21.740 | because they're in the middle of a very large fundraise, their

01:03:24.860 | need to mark to market quite accurately so that their

01:03:28.140 | existing LPs know what they're signing up for in this next

01:03:30.660 | fund. So they're the ones that have the most incentive to move

01:03:35.500 | the marks. But it still leaves an entire industry of folks that

01:03:39.460 | don't necessarily need to do that, because they have, whether

01:03:43.540 | it's dry powder, that dry powder is real or not, the point is

01:03:46.420 | that there's a lot of money that hasn't been deployed. And so

01:03:49.100 | again, I've asked this question before, what is their incentive

01:03:52.220 | to really mark their book down 50%? They don't have an

01:03:55.420 | incentive. Why would they do that they would rather let it

01:03:58.380 | decay down naturally. I'll give you an example of this

01:04:01.420 | or do converts that keep it alive that basically allow them

01:04:04.300 | to delay.

01:04:04.940 | Yeah, anybody even the convert market free birth that was hot

01:04:08.100 | for about six months, and then it just, nobody's doing that

01:04:10.980 | stuff either. But I'll give you one example. There's a very good

01:04:13.340 | company that we are investors in, along with every kind of

01:04:19.020 | big blue chip tier one muckety muck organization, we did the A

01:04:22.660 | and they stacked on afterwards. And when we thought about what

01:04:27.660 | our valuation should be, we did something we got to a number

01:04:31.020 | which was a third of what the mark was. And we're like, well,

01:04:36.540 | if we think the price is two thirds off, we should probably

01:04:39.020 | just sell it now. And we actually went and got some term

01:04:42.700 | sheets from some private equity firms to validate it. And what

01:04:46.700 | they were was incredible. They both independently got to that

01:04:49.020 | same number. And so while the deal was closing, we went

01:04:52.620 | through the end of quarter, we moved the mark down and we

01:04:55.740 | pointed to that valuation. And we said, Look, this is what these

01:04:59.860 | two other very well known firms have said this is what we've

01:05:02.260 | said. So this is what our new valuation is. And you know,

01:05:04.780 | we're trying to sell it and we ended up selling it. But every

01:05:07.460 | other organization didn't touch their their valuation, that

01:05:09.900 | valuation,

01:05:10.460 | the private equity folks, maybe you could explain to the

01:05:12.820 | audience why the private equity folks are such a good backstop

01:05:16.860 | in terms of valuation versus a venture capitalist.

01:05:19.180 | Well, I think that venture capitalists, we tend to be

01:05:23.300 | glass half full. And we are conditioned, especially if you

01:05:28.620 | do your job well, to be smart buyers of deep out of the money

01:05:33.780 | options. What does that mean? It's like when you meet an

01:05:35.700 | entrepreneur and you give them three or 4 million bucks or

01:05:38.380 | $500,000, or whatever, at some nominal valuation, you're not

01:05:43.020 | trying to get your money back, you're trying to figure out

01:05:45.260 | whether he is a Zuck or an Elon or Larry Page, and all of a

01:05:48.460 | sudden, you get 1000x on your money back, right. So we are

01:05:51.500 | buying these deep out of the money options, most of them

01:05:54.300 | don't hit. But when they do, they can just have these crazy

01:05:58.020 | statistical outlier outcomes. So we're trying to buy the future.

01:06:03.940 | And we tend to be believers of what can go right. Private

01:06:07.900 | equity has refined a very powerful toolkit of putting two

01:06:14.340 | or three orders of magnitude of the money we put into companies

01:06:16.980 | to work on the premise that the glass is actually half empty. And

01:06:21.460 | what can go wrong? And how do we mitigate that risk? And so they

01:06:24.900 | tend to be much more sober, I think, in my experience dealing

01:06:28.500 | with them, in what is the true valuation of a business? What

01:06:31.980 | are the upsides of a business? What are the warts on a

01:06:35.100 | business, they really kind of see the truth, the ground truth

01:06:37.860 | much better than VCs do in general, because they're closer

01:06:40.940 | to public markets. And they're they flip these things every two

01:06:43.420 | or three years, their margins are much thinner. They're

01:06:46.460 | they're trying to make one to five 1.6 x their money to x is a

01:06:50.580 | huge outcome for them. Yes. So they have a much more sober

01:06:54.580 | version of reality. But as Tiger stuff, yeah, got released. And I

01:07:00.940 | mean, their funds underwater, just like Masi Yoshi sounds fund

01:07:04.180 | is underwater. And it's going to be years of pain and suffering

01:07:08.260 | to get out from under this. And so again, I think sacks nailed

01:07:11.660 | it with tale of two cities. Anybody else want to chime on

01:07:14.620 | this before we talk a little bit about? Well, for our friend of

01:07:17.340 | the pod, Brian Armstrong,

01:07:18.300 | I've been I've been investing off balance sheet since 2018. And

01:07:23.460 | six months ago, we started to explore whether we should raise

01:07:26.060 | a fund. And I think it was like two weeks ago, we brought the

01:07:29.780 | senior partners in me and the five other guys that run our

01:07:33.020 | business. And we said, we're not going to raise a fund. And the

01:07:38.060 | biggest reason is this dynamic, which is that, you know, we

01:07:40.740 | have dollars of private assets, I don't actually know what

01:07:45.940 | they're really worth. But I have a responsibility to try to get

01:07:49.260 | as much of that capital out. And so I thought the best thing to

01:07:52.100 | do is just to take our time and try to figure it out. Because I

01:07:57.180 | have way more questions than answers right now. And that's

01:07:59.740 | really the first time since I've moved to Silicon Valley, where

01:08:02.300 | I've held had that sensation is a sensation humility. I think

01:08:07.340 | it's like, I mean, I'm joking, but it is it is for somebody

01:08:11.220 | like you who has done so well placing bets deeply, deeply. I

01:08:15.180 | mean, I say it as a joke, but I mean it as like a point of self

01:08:19.100 | awareness for you. Because listen, you play some amazing

01:08:22.340 | bets, whether it's the Warriors or Facebook,

01:08:24.020 | or Bitcoin or whatever, or Slack or whatever. I don't know

01:08:27.340 | whether I should be writing $200 million checks or $200,000

01:08:31.180 | checks. And I don't know whether I should be doing that sort of

01:08:34.500 | as an incubator, actually, as an accelerator, what I'm doing, or

01:08:39.100 | actually just as a series a detached investor. So I don't

01:08:43.020 | know, I'm trying to take the time to figure it out. And I and

01:08:45.300 | my thought was, if I raise a fund right now, I could barely

01:08:47.900 | stand the idea of me putting money to work right now of my

01:08:51.460 | own capital without any answers. But then the idea of like having

01:08:54.460 | a bunch of sovereign wealth funds and folks that were ready

01:08:57.300 | to work with us. I don't know, I just I just took the right time.

01:09:01.980 | Just to tell you my fundraising story. I am publicly raising

01:09:05.580 | launch fund for I get over $50 million in just, you know, high

01:09:10.340 | net worth individuals, you know, and family offices who are

01:09:12.900 | interested, immediately close down on 2627 28 of it, and then

01:09:17.500 | I'm going to go out on the road to meet with LPS. And Silicon

01:09:20.020 | Valley Bank blows up. Nobody's can take a meeting that month,

01:09:23.300 | right. And so now, thank the Lord, I said, I'm going to have

01:09:26.540 | a one year window to raise the fund. And I talked to some old

01:09:29.860 | school VCs, Fred Wilson, Bill Gurley, these people would take

01:09:34.380 | a year to raise a fund. It used to be, or I'm sorry, in the

01:09:37.900 | height of this bubble, you tell me a sacks the quickest you

01:09:41.260 | close one of the the crafts funds. But I was hearing people

01:09:44.180 | saying they're closing funds within two or three months. I

01:09:46.820 | think we're back to it's a year on the road to close a fund.

01:09:49.140 | What's your experience accidents and you're an all star. So I'm

01:09:52.220 | curious, the shortest to the reality.

01:09:54.940 | I think it's just depends on your situation, to be honest.

01:09:58.820 | But, but I, I think the important thing for founders to

01:10:02.620 | know is just that the way that late stage financing is dried up

01:10:06.420 | is very real. I'll give you like two data points just this week.

01:10:09.500 | So I got my first notification from a portfolio company. This

01:10:13.620 | is a company I invested in before craft. It's not a craft

01:10:16.740 | investment, or my personal investments. And they're doing a

01:10:19.740 | pay to play round. You know what that is?

01:10:22.500 | That means pain. Yeah.

01:10:23.860 | Yeah. So basically, the way it works is they say they're going

01:10:27.700 | to raise $20 million. Well, by the way, they said they went out

01:10:30.380 | to raise growth funding, weren't able to get a term sheet from

01:10:33.860 | anybody. And no takers, and this is a good product. I mean, a lot

01:10:39.580 | of startups use this product. I think they're ars in the 20

01:10:44.220 | something million, maybe 30 something million. It's not like

01:10:47.780 | doubling year over year, it's growing, like, let's call it 50%

01:10:50.100 | year over year. This is a company that should have been

01:10:52.020 | able to raise money. I don't understand why they weren't,

01:10:54.260 | maybe because they're burning too much money. So instead of

01:10:57.500 | cutting costs the way they should, they're doing like a $20

01:10:59.820 | million pay to play around. And what that means is that

01:11:02.820 | everybody is an investor in the company, you either have to do

01:11:06.460 | your prorated share of the 20 million, or you get diluted 10

01:11:09.500 | to one,

01:11:10.020 | if you had 10% of the company, you have to put in $2 million,

01:11:13.140 | or your 10% of the company is now 1%.

01:11:16.300 | No, it'd be it'd be more because you would look at, let's say 50%

01:11:20.980 | of the company is owned by the investors and the other 50%

01:11:24.460 | common, just to take round numbers. Okay, if you own 10% of

01:11:28.180 | the company, that would actually be 20% of the progress. Yeah,

01:11:30.940 | the employees are not buying shares in this 20% of the of

01:11:33.900 | the of the 20 million,

01:11:35.620 | just 4 million, 4 million. Yeah, exactly. So basically, you have

01:11:38.940 | to own 1%.

01:11:39.980 | Right, right. So basically, it's almost like a capital call,

01:11:44.420 | where you just have to pony up more money in order to preserve

01:11:48.020 | your ownership in the company.

01:11:49.180 | If it is, but

01:11:52.340 | super punitive. I had one of those just happened to me as

01:11:55.540 | well. And I was just like, we'll put in the bare minimum,

01:11:58.300 | because like the thing that it puts you in, it paints you in a

01:12:00.260 | corner where you're like, well, I've been with this thing for

01:12:02.580 | eight or nine years. Is this the moment to basically lose all of

01:12:08.620 | that compounding or value or work that you put in or seen

01:12:13.140 | their team do? And it's just a really tough position.

01:12:16.500 | Right? So look, I'm not on the board. So I don't know what

01:12:19.540 | reasoning went into this. But what they should be sending out

01:12:23.300 | to all the shareholders is look here, all of our metrics. Here's

01:12:26.660 | our burn, you know, here's the steps we took to reduce our

01:12:29.540 | burn. I don't really like the idea of having to do essentially

01:12:32.820 | a capital call from your existing investors, when you

01:12:35.140 | haven't reduced your own burn. I mean, why can't the company

01:12:38.180 | operate at break even if you're at 30 something million of air

01:12:41.380 | are, you should operate, you may not want to operate at break

01:12:45.020 | even, but you should be able to,

01:12:46.540 | but this is what I mean, I'll tell you after we stopped

01:12:48.940 | taping who it was that that told me this about their company, but

01:12:52.860 | they were basically able to let go a third of their workforce by

01:12:57.020 | moving a bunch of work to models.

01:12:58.860 | And let me guess the founders get to keep their shares or they

01:13:02.060 | get reopt in this whole machine gonna

01:13:04.140 | know, but wait, hold on, can we can I just finish? Yeah, please.

01:13:06.660 | So let's go. So the point is, like, if you can cut off x by a

01:13:10.220 | third, by using all of these new AI, you know, models and GPT

01:13:14.780 | and auto GPT. What are you as a board member or shareholder

01:13:18.260 | supposed to do? And also, as a founder, don't you have to go

01:13:23.500 | there first before you start to ask people for more money? And

01:13:27.820 | why aren't people doing that first, much more aggressively?

01:13:30.660 | And so this is what doesn't make any sense to me.

01:13:32.860 | That's exactly my point is what steps were taken to cut costs

01:13:35.620 | before you just went to the investors to pony up more money.

01:13:38.700 | That's what I want to know if they actually did that work, and

01:13:42.020 | this is like the last money they need, okay, then, you know, I'll

01:13:45.460 | pony up my share. And by the way, we need investors. No, we

01:13:49.260 | don't. And we need investors to be much more aggressive in

01:13:51.580 | holding folks accountable, because these examples need to

01:13:55.860 | be better discussed. While effects YZ company was able to

01:13:59.220 | do it, why aren't you able to do it? And if it's because we're

01:14:03.340 | not technically capable, Matt, that's maybe a plausible answer.

01:14:06.300 | But even that reason will go away in a few months, I suspect.

01:14:09.700 | But if it's that we just have such institutional rot, we're

01:14:12.620 | incapable of doing it. Well, then you might as well just not

01:14:15.700 | write the check because that company is going to get

01:14:17.340 | undercut by some new white sheet version of that business that

01:14:20.900 | doesn't have any of these impediments that management has

01:14:23.060 | told you a bunch of agents in a way to Moffett sacks management

01:14:26.380 | has told you they're incapable of running this business, this

01:14:29.500 | concern in a in a thoughtful way. I had this happen to us as

01:14:33.380 | well. And the question I have you sacks is, in these

01:14:36.300 | situations where this pay to play happens, you basically

01:14:39.700 | everybody gets wiped out except those who play. But the founders

01:14:44.100 | and the management team always seem to get re up. And they're

01:14:46.540 | whole because the new investor doesn't want the management team

01:14:48.900 | not incentivized. So in these kinds of situations, it's kind

01:14:53.340 | of like the management team gets to reboot the cap table. And

01:14:56.420 | they don't get penalized.

01:14:57.260 | No, I actually I don't I don't have those details yet. Yeah.

01:15:00.700 | Remember, I didn't lead around. I was just an angel investor in

01:15:04.020 | the company. So I checked with one of the VC firms that led

01:15:07.660 | around and I'm like, Are you going to do this? And they said,

01:15:10.100 | probably not, you know, and so like the round might fail. I

01:15:14.460 | mean, they can make it as punitive as they want. But if

01:15:17.140 | the shareholders don't believe that the company has fixed this

01:15:21.060 | problems, they're not gonna pony up the money. Let's get free

01:15:24.620 | bargain. Yeah, I think one of the problems that a lot of folks

01:15:27.620 | are facing is it becomes less about the fundamental value of a

01:15:35.060 | business in a lot of these conversations, as you guys know,

01:15:37.660 | and it's becoming a lot more about who will fund the next

01:15:41.180 | round if the company is still burning money. And so you're

01:15:44.060 | making a social market bet, not a bet on the team or the

01:15:48.180 | business or the value. It's that there's someone else that's

01:15:52.660 | going to lead the next round. And this is fundamentally why

01:15:55.620 | he's called the greater fool. That's called the greater fool.

01:15:58.140 | Look, I mean, it's historically, we wouldn't call him a fool if

01:16:00.780 | it's just about progress towards profitability. But right now,

01:16:04.540 | there's so much trepidation. It's almost like a self

01:16:06.780 | fulfilling prophecy, that there's so much trepidation and

01:16:09.420 | doing late stage rounds, that no one wants to be the last guy in,

01:16:12.860 | because you're not sure if the next guy is going to be there to

01:16:15.020 | fund the last round to get to profitability. And that's why

01:16:17.580 | half of biotechs that are public are trading below cash. Because

01:16:22.020 | historically, the way biotech companies, which is a really

01:16:24.420 | good pointed example of this, they make progress to hit

01:16:27.860 | milestones, and then the next round of capital comes in, they

01:16:30.300 | make progress hit milestones, next round of capital comes in.

01:16:32.820 | And then eventually you get, you know, phase three approvals, and

01:16:35.220 | you go sell the company or whatever, you get profitable,

01:16:38.340 | and they almost always get acquired. And in the case of

01:16:41.260 | other technology companies, if the business has to do three or

01:16:45.180 | four things, it's got three or four milestones, it has to hit,

01:16:47.980 | in your case, tax, it might be that they got to get to 50

01:16:50.140 | million ARR. And they got to get, you know, the certain cost

01:16:53.060 | function down in the business. And if they can do those two

01:16:55.300 | things, and the business profitable, but it's going to

01:16:57.340 | take us around a 20, we'll get the first chunk down, and then

01:17:00.300 | another round of 30 to get the last chunk done. And no one

01:17:02.660 | knows if the next 30 is going to be there. And that's really where

01:17:05.780 | a lot of these market dynamics are falling apart, that there's

01:17:08.540 | historically been a model in the market of hit milestones, next

01:17:12.380 | round shows up, hit milestones, next round shows up. And now no

01:17:15.700 | one knows if the next round will show up. So no one wants to fund

01:17:18.700 | this round, particularly where there's high burn, it requires a

01:17:22.020 | lot of capital to make that bet. So the social, you know, the

01:17:24.980 | self fulfilling problem, the social market that right now is,

01:17:28.100 | you know, it's self fulfills. And we're, you know, we're

01:17:31.740 | sitting here, kind of spinning our thumbs wondering if the next

01:17:35.540 | guy's gonna fund it.

01:17:36.100 | Do you think that only 10 or 15% of companies have now properly

01:17:43.020 | reset value? Like you said, 70% of these unicorns are actually

01:17:46.340 | zombie horns?

01:17:47.140 | Yeah, that's why I think the number from I don't want to I

01:17:49.420 | don't know tigers book at all. But when I hear numbers like 20%,

01:17:53.500 | for a for a fully invested mature book and invested during

01:17:56.860 | the peak of the cycle, it doesn't sound right that it's 20%.

01:18:00.980 | It sounds like it should be a lot lower.

01:18:04.180 | I think that 20%, by the way, you know, comes after like two

01:18:08.060 | other smaller write down so they might be cumulatively

01:18:10.580 | I don't want to talk about Tiger, I don't want to talk

01:18:12.460 | about Tiger, I think, like, sure, the statistic of 70% of

01:18:15.460 | these public companies trading below their cash, that the cash

01:18:18.380 | that they've burnt that they've raised in their lifetime. And

01:18:22.660 | again, just to for anyone that's an analyst at home trying to

01:18:25.500 | figure out how we get to that number, you look at the retained

01:18:29.020 | earnings on the balance sheet. And so the cumulative retained

01:18:32.060 | earnings tells you if it's negative tells you how much

01:18:33.860 | money they've burnt over their lifetime. And that tells you

01:18:36.260 | effectively how much money has been invested. So when you look

01:18:38.580 | at the enterprise value, which is the market cap, minus the

01:18:41.300 | cash they have today, you get their enterprise value, if their

01:18:43.700 | enterprise value is less than their cumulative retained

01:18:45.980 | earnings, it means that they're currently worth less than the

01:18:48.740 | money they've spent. And that's a statistic that is a fact right

01:18:52.860 | now in public markets in technology gone public in the

01:18:55.460 | last three years. And then you compare that to private markets.

01:18:58.260 | And I don't think we've seen a 70% write down yet. Or, you

01:19:01.700 | know, 70% of these things being worth less than the cash. So

01:19:04.700 | it's, you know, it's still Yeah, I think you're right.

01:19:07.420 | Jamaat is probably another hammer to drop multiple hammers,

01:19:12.100 | multiple hammers,

01:19:13.660 | before we move on to a different topic. So I think one

01:19:16.100 | of the interesting differences in opinion and in Silicon Valley

01:19:19.820 | is the way that founders and VC see the nature of the

01:19:23.580 | relationship. And I've been on both sides of this, I've been on

01:19:25.940 | the side of being a founder. And I've been on the side of being

01:19:29.380 | a VC. And what you'll see is that VCs always talk about it as

01:19:33.300 | a partnership. But a lot of founders will talk about it as

01:19:36.260 | if the money is just a commodity. And frankly, when

01:19:39.220 | everything's up into the right, and everything's going great,

01:19:40.980 | and you're in a bull market, and you can just keep raising money

01:19:43.500 | and definitely because there's always someone willing to lead

01:19:45.820 | the next round, then the money is a commodity. But when you're

01:19:49.500 | in a, in a down market, and all of a sudden, there is no market

01:19:54.060 | like you can't raise your next round, all of a sudden, it is a

01:19:56.580 | partnership, because you've got to go to your investors and ask

01:19:59.900 | them to do something that they may not otherwise want to do is

01:20:03.460 | this was purely a transactional decision, as opposed to a

01:20:07.660 | relationship, they might not want to fund your next round.

01:20:10.740 | And you're asked them to say no, actually, believe in our

01:20:13.300 | long term relationship. And I think that, you know, this is a

01:20:17.540 | type of environment, which you find out it is more of a

01:20:19.500 | partnership.

01:20:20.180 | And it's been it should have always been it should have been

01:20:23.700 | but it but it wasn't. And look, I don't know what happened with

01:20:26.500 | that other company. And all of a sudden, I get a notification

01:20:29.220 | out of the blue. Well, I want to understand the thinking that

01:20:31.260 | went into that. Before, you know, I'm just gonna basically

01:20:35.500 | this is where trust comes in, right. And like, I think in a

01:20:39.060 | zero interest rate environment, you know, there's no need for

01:20:42.620 | trust. You just this cash splashing around, just grab

01:20:44.900 | whoever the latest person in town is who wants to drop a

01:20:47.260 | couple of bags. You just take one of their bags.

01:20:49.460 | The most important thing to me, like what would make it a

01:20:51.820 | partnership is for me to know that the founders have done

01:20:53.980 | everything in their power to reduce costs and put the company

01:20:57.980 | on the right trajectory before going out and basically issuing

01:21:01.420 | capital calls to the investors. I want to know they've done that

01:21:03.300 | work.

01:21:03.660 | All right, listen, freeberg. I know you got to go. Take care

01:21:06.300 | of Sultan of science. I'll just wrap up with the other boys here

01:21:08.660 | with one piece of breaking news stack overflow says they will

01:21:12.220 | join the parade of data providers like Reddit and

01:21:16.220 | Twitter that will require permission and payment to use

01:21:19.100 | their data sets. And stack overflow has a lot of answers to

01:21:22.460 | a lot of developers questions in there. I was just curious to get

01:21:25.660 | your thoughts. SEC obviously sent to wells known as we talked

01:21:28.860 | about this before to Brian Armstrong of Coinbase. He said

01:21:32.340 | he's thinking about or considering relocating out of

01:21:35.980 | the US if the regulatory clarity does not improve crypto is dead

01:21:40.100 | in America.

01:21:41.300 | It is dead in America. Crypto is dead in America. I mean, now

01:21:44.540 | you have a ganzler. You had ganzler even blaming the banking

01:21:48.380 | crisis on crypto. So they've the the United States authorities

01:21:53.340 | have firmly pointed their guns at crypto.

01:21:55.540 | Is it a scapegoat? Or was it a fuck around? Find out moment for

01:22:00.860 | crypto? In your mind? Or a little bit of both?

01:22:03.700 | I don't know. I just think that they were probably the ones that

01:22:07.620 | were the most threatening to the establishment.

01:22:11.100 | Okay. And they were the ones that in fairness to the

01:22:14.660 | regulators did push the boundaries more than any other

01:22:17.060 | sector of the startup economy. And yeah, so now they're paying

01:22:21.660 | the price for that. The bill has come due for them.

01:22:23.540 | sacks? Is it a fuck around? Find out moment? Is it protecting the

01:22:28.300 | American dollar somewhere in between? Or incompetence on

01:22:32.420 | regulators part?

01:22:33.180 | The more I think about it, the more I think it's probably not a

01:22:36.100 | coincidence that you're seeing all these concerns about

01:22:38.660 | de dollarization at the same time they're cracking down on

01:22:40.900 | crypto. So look, there were a bunch of crypto companies that

01:22:44.700 | might have done shady things. But I think we all agree that

01:22:47.220 | Coinbase was not one of them. Coinbase was the gold standard

01:22:50.260 | in terms of doing everything right. And they've just agreed

01:22:52.540 | asked over and over again for a regulatory framework. They're

01:22:55.300 | just like, tell us how to operate and we'll do it. So I

01:22:59.060 | think Jamal is right that they're effectively banning

01:23:01.460 | crypto in the United States, they're going to drive all these

01:23:03.580 | companies overseas, which is terrible for American

01:23:06.940 | innovation. I don't know exactly where blockchain and crypto are

01:23:10.220 | going to go from here. But I think that we should find that

01:23:13.940 | out in America. You know, we don't want that innovation going

01:23:16.700 | offshore.

01:23:17.260 | You bring up a really good point to it's just like Coinbase played

01:23:22.140 | by the rules stood in line, tried to do the right things. It

01:23:26.700 | seems that every step along the way, right, everything from

01:23:29.780 | board composition to executive composition to how they tried to

01:23:34.460 | interact with the regulators, yet, they were probably the

01:23:37.060 | furthest away from getting a license. The one that came the

01:23:39.180 | closest was the one that was the most fraudulent, which is FDF.

01:23:41.900 | Fascinating. How is that even possible? I mean,

01:23:47.300 | because he had skills in gaming the system.

01:23:50.180 | Yeah, he's splashy, cashy, splashy, cashy.

01:23:52.500 | Well, he he probably got large amounts of money because it

01:23:55.780 | wasn't his money. So it was easy for him to make huge donations.

01:23:59.220 | But he knew how to play the game. To quote SPF. He said,

01:24:02.980 | This is the dumb game we woke Westerners play. We say the

01:24:05.860 | right shibboleth so everyone likes us. That's the game he was

01:24:08.740 | playing, which is my whole concern about if we jump the gun

01:24:12.100 | on regulating AI too quickly, it'll turn into another, you

01:24:15.940 | know, woke game that everyone's gonna play.

01:24:18.820 | So here's, here's how the world works. regulate yourself, behave

01:24:23.300 | yourself, act in the interest of consumers, or get regulated or

01:24:28.140 | smashed. And I think we've gone over this. We talked about it.

01:24:31.140 | In fact, last week, whether the movie industry, crypto AI,

01:24:34.780 | regulate yourself, behave properly, don't push the

01:24:38.180 | boundaries too far, you can bend the rules, but you don't want to

01:24:41.340 | break them.

01:24:41.860 | I think the regulate yourself that you use the MPAA. I don't

01:24:45.060 | think that's the right example. I think if you're going to

01:24:46.740 | regulate yourself, look at the tobacco industry. They tried to

01:24:51.300 | regulate themselves. But what they did was just lie to

01:24:54.780 | maximize profit in an area that was much less benign than movies

01:24:59.020 | and content. Maybe you could have some lascivious content in

01:25:02.860 | a movie or a video game or an album. But that was a lot less

01:25:06.660 | harmful than smoking, which not just impacted the smoker, but it

01:25:10.420 | turned out the second hand smoker as well, or the second

01:25:13.340 | hand smoke. So it touched everybody, right? You could be

01:25:16.180 | in a restaurant, not smoke and yet have years of your life

01:25:19.180 | taken. So I think that the self regulation for areas that impact

01:25:24.220 | everybody, independent of whether you participate in the

01:25:27.180 | system or not, is where you have to look for good examples, Jason,

01:25:30.660 | and I'm not sure there are many good examples of separate

01:25:32.540 | allegations, those kinds of systems.

01:25:34.100 | I mean, I like your workshopping it here. I mean, some

01:25:37.180 | restaurants would have a smoking section and non smoking section

01:25:39.700 | before there was regulation, right. And I think if crypto had

01:25:42.500 | just thought had been more thoughtful about hey, which

01:25:45.340 | tokens NFT projects, we're going to support which ones we're not

01:25:48.620 | going to that maybe they would have avoided a little bit of

01:25:51.860 | this. I'm not sure. You know, it's it's it's hindsight 2020

01:25:54.940 | here, but a little more regulation.

01:25:57.260 | I don't think those smoking non smoking sections work too well.

01:26:00.180 | The smoke went all over the place.

01:26:01.620 | Do you remember you remember coming out of a bar and you woke

01:26:05.420 | up the next day and your clothes smell like smoke? You'd have to

01:26:08.580 | take a shower when you went to a bar or a restaurant or a club.

01:26:11.340 | You would have to come home take a shower because your hair and

01:26:15.460 | your clothes smell of smoke goes you can sleep in a bed then your

01:26:19.220 | bed had to get to change your sheets. Discuss remember when

01:26:21.940 | you went on a commercial flight that a smoking section of non

01:26:25.540 | smoking section non smoking. It's a tube the smoke gets all

01:26:28.900 | over the place.

01:26:29.620 | You know you're on the wrong airline when they have the

01:26:34.300 | welded shut. ashtrays they used to have an ashtray in every seat

01:26:39.180 | in but in the armrest was

01:26:41.140 | a friend of mine this is like such a throwback but a friend of

01:26:44.860 | mine well known guy that you know I'll say the name you can

01:26:47.740 | bleep it out. Please

01:26:51.340 | that out please very important we don't want to

01:26:53.100 | is a notorious smoker and so I flown with him.

01:26:56.180 | That's the worst.

01:26:57.740 | And we get in there on his plane and then we he shuts the door

01:27:02.180 | and I'm like, smells a little odd in here smells a little

01:27:04.860 | clovey.

01:27:05.540 | Seven hours I'm gonna have to be in this

01:27:10.580 | to the pilots get hazard pay. I mean, how do you compensate? I

01:27:16.820 | mean, this is not a turbo prop. He's on he can't crack the

01:27:19.620 | window.

01:27:20.420 | No. It was a global, huge global. It was it was three

01:27:25.580 | cabins, you could go to the cabin felt so sick.

01:27:28.540 | It's the worst.

01:27:30.140 | It's the absolute worst worst smoking is the worst.

01:27:33.940 | All right. Well, we didn't so long to the Sultan of silence

01:27:37.460 | as a science rather their polling update here, sex. I

01:27:41.300 | don't mean to poke the bear. I know it's a rough week with the

01:27:43.940 | Fox News news.

01:27:45.060 | Bring it up. Bring it up.

01:27:47.940 | No, go for it.

01:27:49.300 | Quick polling update between putting Ron I'm sorry, to

01:27:53.220 | Santa's and trying to happen.

01:27:54.740 | The Santa's is not happening.

01:27:56.340 | In late March, news of Trump's indictment boosted him over to

01:28:00.940 | Santa's by 26 percentage points among Republicans and

01:28:05.340 | Republican independence. But earlier this week, the same

01:28:07.420 | poll showed that Trump's lead shrunk by 10 points in the last

01:28:11.460 | two weeks to just a 16 point advantage, which is still

01:28:14.660 | significant. But there's more University of New Hampshire

01:28:18.740 | Survey Center poll. I don't know if any of these polls are

01:28:21.020 | reasonable or not. That seems like call people on the phone.

01:28:23.540 | I don't know who's got a landline. Release Wednesday

01:28:26.260 | showed a 20 point to Santa's deficit. What's going on here?

01:28:31.540 | Saks did your boy peak too early?

01:28:34.140 | No, I don't think so. If you if you look at the Republican

01:28:37.940 | primary field, just answers is the only person who's got a

01:28:41.460 | shot other than Trump. You look at Nikki Haley, she's pulling in

01:28:45.620 | the 345% range, all the others are at one or 2%. There's not a

01:28:49.940 | candidate other than to Santa's that has over 5%. So in my view,

01:28:55.180 | this is a Trump to Santa's race. Now what you saw is that when

01:28:58.820 | Alvin Bragg press charges and indicted Trump, it created a lot

01:29:03.300 | of sympathy for Trump among Republicans. Effectively, what

01:29:06.620 | happened is Republicans registered their displeasure

01:29:09.820 | with Alvin Bragg by indicating support for Trump. Let's go. And

01:29:13.940 | that's, that's what you'd expect to happen. And a lot of people

01:29:16.460 | speculated that might be the purpose of Bragg's prosecution

01:29:19.900 | is to make Trump the candidate. So we knew that was happening.

01:29:24.220 | But I think this this new poll that you just mentioned is

01:29:26.540 | really interesting, because it shows that that sugar high of

01:29:30.340 | Trump's poll ratings was a temporary bounce, and it's

01:29:34.700 | coming down somewhat. And so you know, what you saw actually is

01:29:38.820 | that this huge poll bounce that Trump got is somewhat

01:29:42.660 | normalizing. Now, there's no question that this answers is

01:29:47.140 | running behind Trump, and he's got his work cut out for him if

01:29:49.980 | he's going to upset Trump as the nominee. But this thing is just

01:29:53.100 | getting started. I mean, to Santa's isn't even formally

01:29:56.260 | announced yet. And remember, we're still very, very early in

01:29:59.180 | this race, the primary battle that this most reminds me of

01:30:02.140 | would be Obama versus Hillary in 2007. And at this time in 2007,

01:30:10.460 | Hillary had a huge advantage over Obama. She was considered

01:30:14.540 | the favorite, she was considered the one who couldn't lose. And

01:30:18.340 | it was Obama that pulled off a huge upset. And he did it by

01:30:21.740 | out fundraising her out hustling her, especially in

01:30:24.620 | building organization and some of those early primary states.

01:30:27.980 | And then he eventually created a narrative that it was time to

01:30:31.780 | turn the page. But he didn't do that until much later in the

01:30:35.500 | year, much closer to the primary. The first Republican

01:30:38.820 | primary is not till February. So there's plenty of time here.

01:30:41.500 | And I, you know, we'll see what happens.

01:30:43.940 | To my thoughts.

01:30:45.220 | I think Nikki Haley is going to win the Republican nomination.

01:30:48.180 | The more people here, here's the thing. People, the number of

01:30:53.660 | people that have told me the most impressive moment with

01:30:57.340 | DeSantis was before they met him. The second most impressive

01:31:01.660 | moment was their first meeting. And then it just falls off a

01:31:05.140 | cliff where he becomes more and more unimpressive, the more and

01:31:08.300 | more time spent with this guy. Hey, Nikki Haley, come on the

01:31:11.380 | pod.

01:31:11.660 | Nikki Haley is the opposite.

01:31:12.900 | Nikki Haley announced that in all of q1 in all of q1, she

01:31:17.460 | raised $5 million extremely unimpressive. You're probably

01:31:20.020 | 20% of that month.

01:31:21.260 | And Nikki Haley, come on the pod. We'll double it.

01:31:23.700 | How much is 5 million was was you?

01:31:26.580 | I can say definitively you said q1 zero.

01:31:33.180 | Zero.

01:31:35.700 | But let me ask a question here. I because I am not informed on

01:31:39.140 | it. But you're a master strategist here. 1600 rated

01:31:44.620 | chess player sacks.

01:31:45.780 | That's not that good.

01:31:47.860 | Well, I mean, it's double 800 where I'm at. You're killing me

01:31:51.420 | in 27 moves on average. DeSantis is fighting with Disney over and

01:31:56.460 | over again. He's getting a little involved in the LG, GPT

01:32:00.060 | q everything and he just seems to be getting involved in the

01:32:03.220 | culture wars. Is that like a primary strategy and then he

01:32:07.420 | moves to the center when he comes to the general or and do

01:32:11.260 | you agree with this general fighting with Disney and the

01:32:15.100 | culture war stuff? Well, he's talking strategically, not your

01:32:19.260 | personal opinion on these issues. I know that you're a

01:32:20.980 | very tolerant person.

01:32:22.140 | Yeah. So I think this is an issue that works for him

01:32:25.020 | certainly in the Republican primary, but I also think it's

01:32:26.980 | gonna work for him in the general and you have to

01:32:28.980 | remember that this bill that they're fighting over was a

01:32:32.220 | parental rights bill, that basically it gave parents the

01:32:36.060 | right to know what their kids were being taught in schools and

01:32:40.060 | it basically prohibited the teaching of this sort of gender

01:32:43.820 | ideology and in schools and I think most parents are on board

01:32:47.780 | with that now. Yeah, he didn't go. Yeah, he didn't go looking

01:32:51.580 | to pick a fight with Disney Disney then got involved and

01:32:54.900 | took the side that calling this a don't say gay bill, which I

01:32:58.020 | think just factually is not true. The bill doesn't mention

01:33:00.940 | you know, gay or homosexuality or anything like that. It was

01:33:05.060 | really about this trans issue. And Disney got involved. And

01:33:09.220 | this was Bob Chaypek and Bob Chaypek lost his job and Iger

01:33:13.300 | came in and Iger has said that he he had basically lectured the

01:33:17.580 | Disney employees saying that we need to stay out of politics.

01:33:19.780 | And we need to respect our audience's views. So I think

01:33:22.860 | that it was Disney who kind of interfered. I think this is

01:33:25.420 | overall played to the census benefit. And look, the problem

01:33:29.020 | for Disney, they may win the battle over this or that tax

01:33:32.180 | benefit that they're fighting over. But they've lost the war

01:33:36.460 | over this issue, because parents used to be able to trust that

01:33:40.980 | they could just pop their kid down in front of a Disney movie

01:33:43.860 | or a Disney show like Disney was like the babysitter. And they

01:33:47.220 | just want 100% absolutely trusted all Disney content. And

01:33:51.380 | if you look at polling now, Disney's brand, it used to have

01:33:54.340 | like an NPS of like in the 50s is now in the single digits

01:33:58.340 | because let's call it half the country's parents, the more

01:34:01.700 | Republican ones don't fully trust Disney's content and

01:34:04.900 | programming anymore. Really?

01:34:06.140 | Yeah, implicitly. What could they ever do that's objectionable?

01:34:11.620 | I've never seen anything objectionable.

01:34:13.140 | A lot of parents are questioning what content Disney might be

01:34:17.580 | putting in there. Their recent programming. Obviously, we're

01:34:19.860 | not talking about the stuff that we grew up on. So look, whether

01:34:23.660 | you believe that is a problem or not, what I'm saying is this has

01:34:27.180 | been a brand disaster for Disney getting involved with to Santa's

01:34:30.900 | this way they should really, I think just try to patch this

01:34:33.820 | thing up. I don't understand the benefit.

01:34:35.540 | For just a bad look for both. It's a bad look for both people.

01:34:39.020 | Yeah.

01:34:39.460 | Well, I think I understand the benefit for to Santa's I don't

01:34:42.340 | understand the benefit for Disney. If I were there, I'd be

01:34:44.300 | trying to patch this up.

01:34:45.860 | I think there's a really valid discussion to be had about

01:34:50.220 | representation in movies and all that stuff. And I'm very pro

01:34:53.220 | that. The thing I think all parents agree is we should just

01:34:58.260 | at least know what's being taught to our kids. And we can

01:35:00.060 | have a thoughtful discussion about it. There seems to be some

01:35:02.940 | small group of people that thinks we should hide from

01:35:06.980 | parents what they're actually getting what's being taught. And

01:35:10.340 | I find that's very strange. I think just a little bit of like

01:35:13.940 | transparency and what's being taught in schools is an obvious

01:35:17.740 | thing that nobody should be disagreeing on it.

01:35:20.540 | To taxes point, I think it was Pew that put out a study

01:35:23.820 | recently, it is the most polarizing issue amongst

01:35:27.580 | Americans where Democrats and Republicans are literally on

01:35:30.580 | opposite sides of the spectrum. It's gonna be a big issue on the

01:35:33.660 | whole trans issue. Now, despite the polarization, in terms of

01:35:37.380 | the quantity of the number of people, it's actually an

01:35:40.820 | important issue for a small percentage of both sides. So

01:35:43.860 | it's a highly complicated political dynamic in America.

01:35:47.020 | Yeah, very. So this is where DeSantis clearly has taken the

01:35:51.900 | approach that not only is this important to the base to win the

01:35:54.820 | nomination, but it's going to scale into the general and it

01:35:57.420 | could very well be but it's a it's a very divisive issue.

01:35:59.900 | Yeah, I wish people were given a little bit more consideration

01:36:05.540 | and maybe they could have I feel like maybe we're covering this

01:36:10.820 | issue too much. I you know, I've heard some other folks in the

01:36:13.740 | community saying like, maybe people could be given a little

01:36:15.980 | bit of their privacy and to handle these things.

01:36:18.180 | I think you're right, Jake out in this sense, I think this

01:36:20.260 | issue has become a lightning rod. And, and whenever you have a

01:36:23.380 | lightning rod issue, the amount of attention paid to it, it

01:36:26.060 | seems disproportionate to the attention on that issue.

01:36:29.500 | However, I would say that this is a lightning rod for a larger

01:36:34.140 | issue, which is the quality of education in this country, which

01:36:38.260 | I think is shockingly bad. And it's bad. Because of the decline

01:36:43.620 | of standards. They're getting rid of advanced math, they're

01:36:46.660 | getting rid of

01:36:47.060 | unions,

01:36:47.820 | asking,

01:36:48.740 | competition, and and the schools are run by these unions who are

01:36:53.060 | managing it for their own benefit, not for the benefit of

01:36:54.860 | the students. And look, there is a significant ideological

01:36:57.580 | component that's crept into these schools as well. So look,

01:37:00.540 | I think that overall, I think that when you get into the

01:37:03.740 | general, you have to up level the issue and talk about it in

01:37:07.540 | broader terms that every kid in our country deserves a high

01:37:10.980 | quality, non ideological education. I think if you can do

01:37:14.700 | that, you will get 70 80% of the public on your side on this

01:37:18.780 | issue.

01:37:19.140 | Yeah, I feel like, yeah, I think that's, yeah, I think we can all

01:37:23.260 | agree on that. Democrats, Republicans, everybody in

01:37:25.020 | between, if you're a parent, you're not looking for an

01:37:27.500 | ideological battle at school, you're looking for math,

01:37:30.140 | science, technology, history, creativity, you know, there's a

01:37:34.220 | whole bunch of other things that we should be really focused on.

01:37:36.620 | Alright, listen, it's been another amazing episode of the

01:37:38.940 | oil and podcast to people going to the episode 125 meetups, you

01:37:42.700 | can type in all in meetups. Our team over there, we have super

01:37:46.860 | fans are doing it in over 50 cities, the day this comes out.

01:37:50.820 | So you may miss it, but you sign up for the next one. I'll be

01:37:53.780 | phoning in and zooming into them. So for the fans, are you

01:37:57.260 | crazy lunatics getting together? Have a great time. Have a great

01:38:00.340 | time and tweet it and mention us on Twitter. For the Sultan of

01:38:04.820 | science, the rain man, the dictator I am the world's

01:38:08.980 | greatest moderator and we'll see you next time. Bye bye. Bye

01:38:11.100 | bye.

01:38:11.500 | All right. Let your winners ride. Rain Man David Sackman.

01:38:17.340 | We open source it to the fans and they've just gone crazy with

01:38:23.900 | it. Love you.

01:38:24.700 | Besties are

01:38:33.940 | dog taking a

01:38:37.260 | driveway.

01:38:38.940 | Oh,

01:38:39.220 | we should all just get a room and just have one big huge orgy

01:38:46.340 | because they're all just useless. It's like this like

01:38:48.180 | sexual tension that they just need to release somehow.

01:38:50.460 | What you're about to be

01:38:53.260 | your feet

01:38:55.220 | waiting to get

01:38:57.620 | merch. He's our

01:38:58.460 | I'm going all in

01:39:00.460 | I'm going all in

01:39:08.340 | (music)

01:39:09.580 | [BLANK_AUDIO]

E125: SpaceX launch, Fox News settlement, "Zombie-corn" exodus to AI, late-stage implosion

Chapters