Jason Calacanis: Startups, Angel Investing, Capitalism, and Friendship

00:00:00.000 | The following is a conversation with Jason Kalacanis,

00:00:03.240 | who's an entrepreneur, investor, author of "Angel,

00:00:06.880 | How to Invest in Technology Startups,"

00:00:08.920 | and as many people may know, he's a fun, brilliant,

00:00:13.400 | longtime podcast host of "This Week in Startups,"

00:00:17.480 | and co-host of the "All In" podcast

00:00:20.920 | with Chamath Palihapitiya, David Sachs, and David Friedberg,

00:00:25.640 | who all happen to be poker buddies

00:00:28.000 | and self-proclaimed besties.

00:00:30.320 | The result is always a great listen

00:00:32.880 | due to both the love and the heated disagreements.

00:00:37.080 | Quick mention of our sponsors, Brave Browser,

00:00:40.120 | Linode Linux Virtual Machines,

00:00:42.720 | Four Sigmatic Mushroom Coffee,

00:00:44.760 | and Rev Speech-to-Text Service.

00:00:47.480 | Click the sponsor links to get a discount

00:00:49.760 | and to support this podcast.

00:00:51.680 | As a side note, let me say that I've been learning a lot

00:00:53.960 | about real-world finance in the past few months.

00:00:56.560 | To give you a bit of context,

00:00:58.120 | on the side, I've studied trading

00:01:00.000 | from an algorithmic trading perspective

00:01:02.360 | as a machine learning and a game theory problem

00:01:04.960 | off and on for a few years in undergrad and grad school.

00:01:08.280 | I found the distributed, complex system aspect of finance

00:01:12.040 | and economics in general fascinating.

00:01:14.480 | But now, I find even more fascinating

00:01:17.040 | the human side of the whole thing,

00:01:19.040 | ideas of greed, power, freedom, and truth.

00:01:23.440 | Wall Street bets, Robinhood,

00:01:25.520 | and the whole beautiful mess around this topic

00:01:28.080 | allows us to have great conversations about human nature

00:01:31.800 | and the systems that underlie the rise

00:01:34.720 | and fall of civilizations.

00:01:36.800 | If you enjoy this thing, subscribe on YouTube,

00:01:39.280 | review it on Apple Podcast, follow on Spotify,

00:01:42.400 | support on Patreon,

00:01:43.800 | connect with me on Twitter @LexFriedman.

00:01:46.600 | And now, here's my conversation with Jason Kulikanis.

00:01:50.680 | I have a million things to talk to you about,

00:01:53.560 | but we do happen to be living through

00:01:57.120 | what I would think of as a historic event

00:02:00.480 | in terms of its impact,

00:02:02.080 | in terms of almost philosophically

00:02:04.560 | thinking about the role of people

00:02:07.280 | and how they can fight power

00:02:09.560 | with this whole Wall Street bets and GameStop situation.

00:02:13.520 | I was wondering, you've covered

00:02:15.160 | in your amazing All In podcast,

00:02:18.120 | you guys have been having fascinating battles

00:02:20.500 | over this whole situation.

00:02:22.480 | I was wondering if you could tell maybe

00:02:23.960 | from your perspective, as it's unrolling,

00:02:27.800 | the saga of Wall Street bets and GameStop,

00:02:30.280 | what are some interesting insights

00:02:33.000 | that you have about this whole set of events?

00:02:36.800 | - In full disclosure,

00:02:37.680 | I was an angel investor in Robinhood before they launched.

00:02:41.000 | And when I met the founder, Vlad, and his partner,

00:02:44.760 | you know, they pitched me at a bar

00:02:46.920 | not too far from where we are right now in Palo Alto

00:02:48.920 | called Antonio's Nuthouse.

00:02:51.040 | And my friend, Adeo, it's a really good story.

00:02:54.560 | My friend, Adeo, had asked me

00:02:55.760 | to speak at his founder's institute,

00:02:57.040 | which is kind of like an accelerator

00:02:58.920 | for people who are thinking about starting a company.

00:03:01.440 | And so I gave a talk and then he said,

00:03:02.880 | "Hey, let's go to Antonio's Nuthouse

00:03:04.320 | "and we'll meet Elon for a drink."

00:03:07.400 | And so Elon met us for a drink there.

00:03:09.640 | And it's the divest of dive bars.

00:03:12.020 | Like you'll take a beer-

00:03:14.200 | - I love the image of all of this.

00:03:15.560 | You hanging out with Elon at a crappy bar.

00:03:18.680 | - Yeah, I mean, it is the worst bar in the peninsula.

00:03:23.680 | Like just garbage on the floor

00:03:25.800 | and like cheap beer and warm beer.

00:03:28.320 | And like you'll pick up your pint glass

00:03:29.760 | and be lipstick on it.

00:03:30.800 | It's just brutal.

00:03:31.800 | - Classy.

00:03:32.640 | - Not your lipstick, you understand.

00:03:34.080 | Somebody else's lipstick.

00:03:35.720 | And so we're sitting there

00:03:37.720 | and Vlad walks up with his partner

00:03:41.720 | and he says, "You're Jason Calacanis."

00:03:43.320 | And I said, "Tell me about your startup."

00:03:44.760 | He said, "How do you know I have a startup?"

00:03:46.040 | I said, "You recognize me."

00:03:48.400 | And I mean, that's the only way.

00:03:50.720 | And he goes, "Is that Elon Musk?"

00:03:51.840 | I said, "Yes, Elon, come say hi."

00:03:53.240 | And he came over and said, "Hi."

00:03:54.520 | I said, "Tell me what you do."

00:03:55.360 | He said, "Well, I'm a quant."

00:03:57.000 | I said, "What's that?"

00:03:57.920 | And he said, "Quantitative analysis."

00:04:00.960 | And I was like, "Oh yeah, yeah, I know about that.

00:04:02.120 | "That's like you guys make algorithms

00:04:03.960 | "and then try to beat the market, right?"

00:04:05.200 | He's like, "Yeah."

00:04:06.040 | I was like, "So you're gonna pitch me on a startup

00:04:08.260 | "and you're gonna sell your algorithm to other people.

00:04:10.400 | "And if it was so good,

00:04:11.380 | "why wouldn't you just use it yourself and print money?"

00:04:13.880 | He's like, "Yeah, yeah, no, no, that's not our business.

00:04:15.320 | "Our business is we're gonna create an app

00:04:17.180 | "to get millennials to trade stocks."

00:04:19.640 | And he said, "Hmm, you do realize

00:04:22.060 | "there's no retail investors anymore.

00:04:23.740 | "Like the dot-com crash plus the 2008 financial crisis

00:04:27.360 | "eliminated any individual's belief

00:04:29.560 | "in participating in the stock market."

00:04:31.680 | And he said, "That's the opportunity."

00:04:32.920 | I said, "Okay, I like it.

00:04:33.920 | "Tell me more."

00:04:35.040 | He said, "Well, we're gonna get these millennials to trade."

00:04:37.040 | I said, "The same ones who live in their mom's basements

00:04:40.540 | "and take Uber and Lyft and are on their parents

00:04:43.260 | "have no money, got screwed and went 250K into debt

00:04:47.300 | "for school and now can't get a job, those people?"

00:04:50.580 | And he's like, "Yeah."

00:04:51.420 | I'm like, "Okay, they have no interest in their future,

00:04:54.340 | "but they're gonna trade stocks."

00:04:55.760 | He said, "Yeah, that's the opportunity."

00:04:56.720 | I was like, "How are you gonna make money?"

00:04:58.800 | And he said, "Well, that's the best part.

00:05:00.000 | "It's gonna be free."

00:05:01.060 | And I said, "So your idea is to get a group of people

00:05:03.920 | "who have no interest in saving for their future

00:05:06.340 | "to trade and your business model is free."

00:05:08.040 | And he said, "Yes."

00:05:08.880 | I said, "I'm in."

00:05:10.320 | Because in almost all cases,

00:05:12.260 | the crazy outlandish ideas that nobody believes in

00:05:15.760 | are the ones that have the greatest returns.

00:05:17.600 | I mean, Uber, I introduced to about 25 investors

00:05:20.720 | and three of us said yes.

00:05:22.280 | So a full 12% of the community who saw that deal

00:05:26.540 | decided to do it.

00:05:27.640 | - So your sense about this idea being good

00:05:30.800 | had to do with the fact that this guy was just crazy

00:05:33.880 | and ambitious and bold thinking,

00:05:35.480 | or was it that there's something here

00:05:37.920 | in allowing a much larger magnitude of people

00:05:41.040 | to be able to be investors?

00:05:42.420 | - Yeah, the way to do really well as an angel investor

00:05:46.580 | or just in technology or in life

00:05:49.260 | is to not say what could go wrong,

00:05:51.060 | but to say what could go right.

00:05:52.420 | And then to just imagine for a moment,

00:05:54.600 | if it does work, what would the world look like?

00:05:58.100 | And so when Elon was investing in Tesla

00:06:00.660 | and some other guys were running it

00:06:02.780 | and he was trying to save the company,

00:06:04.680 | is this gonna work?

00:06:08.120 | It was almost positively not gonna work.

00:06:11.820 | And he knew that.

00:06:12.720 | But if it does work, what does the world look like?

00:06:16.300 | And so that's really what you're looking for

00:06:18.200 | is not the chances of success,

00:06:21.820 | but if it does succeed, what would that look like?

00:06:25.100 | And that's what the world needs more people doing.

00:06:28.820 | And so when you looked at Robinhood, it was like,

00:06:30.340 | well, if he does succeed, what would the world look like?

00:06:32.620 | And now we've seen what it looks like.

00:06:34.480 | You have a generation who are so financially sophisticated

00:06:39.220 | that they know how to do puts and calls and shorts

00:06:42.460 | and research at a level

00:06:44.560 | that dominated the hedge fund industry.

00:06:48.540 | So let's pause for a second.

00:06:50.480 | These traders sitting there on a subreddit

00:06:52.940 | in a Discord server are able to do analysis and research

00:06:56.820 | and then act in unison to say,

00:06:58.820 | we're going to beat in the Robinhood sense,

00:07:03.380 | this group of sophisticated insiders

00:07:05.240 | who have more access and more access to capital,

00:07:08.060 | but we will figure out how to solve this problem.

00:07:11.140 | And most things don't work.

00:07:13.900 | It's like the Wikipedia.

00:07:16.260 | There's no way the Wikipedia would ever work,

00:07:18.860 | except it did.

00:07:20.820 | You're like, how is this ever gonna work?

00:07:23.480 | You're not paying anybody,

00:07:24.940 | but it's built the largest corpus of an encyclopedia ever.

00:07:27.660 | So I think Robinhood actually succeeded.

00:07:29.900 | And then what we saw was this system,

00:07:33.140 | and a lot of the systems in our society,

00:07:35.220 | whether it's the political system,

00:07:37.260 | the Constitution of the United States,

00:07:39.940 | education, higher education, which you're involved in,

00:07:42.940 | and then even the financial system,

00:07:44.620 | we have not stress tested it,

00:07:47.500 | and we don't actually know all the edge cases

00:07:50.340 | and how it works.

00:07:51.260 | So Trump was able to just really put this crazy stress test.

00:07:54.820 | Is the democracy going to hold?

00:07:59.140 | Are we gonna break this 200-some-odd-year-old experiment?

00:08:03.400 | And then we looked at the financial markets,

00:08:04.720 | and it turns out there were more people shorting the stock

00:08:07.800 | than shares were available.

00:08:10.120 | I don't know how that's possible.

00:08:11.560 | And then I'm trying to uncover,

00:08:13.160 | where can I see a list of people who have shorted the stock?

00:08:15.040 | And it's like, you can't,

00:08:16.600 | but we can tell you sort of how many every two weeks

00:08:19.280 | or maybe twice a week.

00:08:20.280 | We can create a report.

00:08:21.640 | Maybe we know.

00:08:23.040 | - I was surprised that nobody knows

00:08:24.760 | the list of people who were shorted,

00:08:26.160 | and you guys were trying to figure that out.

00:08:27.720 | - Yeah, there's no transparency on a lot of these systems.

00:08:29.960 | And if you call to try to short a stock,

00:08:32.440 | it's almost like they'll tell you on the phone,

00:08:33.800 | like, "Let me see.

00:08:34.640 | "I think I might know a guy who has shares to loan out."

00:08:37.000 | So it's like, am I calling to try to find

00:08:39.960 | a '73 Mustang Grande in gold,

00:08:43.760 | and you're gonna call around?

00:08:44.880 | It's like, shouldn't this be on a ledger somewhere

00:08:47.640 | and be completely transparent?

00:08:49.140 | So now we're seeing those things,

00:08:50.880 | and I think the investigations will make it super clear.

00:08:52.880 | But of course, in a vacuum, without information,

00:08:57.000 | there are so many investors in these startups

00:08:58.760 | that conflicts can start to appear,

00:09:00.560 | and then you know how it is with people,

00:09:01.840 | and conspiracy there is, the mind starts to wander.

00:09:05.840 | And so in some cases, there is actually a conspiracy,

00:09:08.620 | and then in other cases, people's mind will fill in,

00:09:11.680 | like, "Oh my God, there's some grand conspiracy here."

00:09:13.320 | I can tell you, Robinhood's only goal

00:09:15.040 | is to get more people to trade stocks

00:09:17.000 | and to democratize it even more.

00:09:18.880 | And they apparently were on the brink of seizing

00:09:23.640 | as an entity if they didn't get more money

00:09:26.720 | to cover all these trades.

00:09:28.040 | I mean, they were on the brink,

00:09:30.080 | and they raised three and a half billion dollars

00:09:31.640 | or something like that in a week.

00:09:33.040 | - Yeah, so in some sense, Robinhood enabled this very,

00:09:37.240 | like, the magic of this distributed system

00:09:39.320 | of Wall Street bets, right?

00:09:41.000 | You said Wikipedia, which is another,

00:09:43.280 | which is probably one of my favorite websites

00:09:45.360 | and one of my favorite examples

00:09:47.320 | of a distributed system somehow coming together in a way,

00:09:50.440 | just like you said at that crappy bar,

00:09:53.360 | I would have guessed it would never work.

00:09:55.440 | But if it does work, it changes everything, and it did.

00:09:58.760 | And Robinhood in that same way probably enabled

00:10:02.440 | or was one of the major enablers of Wall Street bets,

00:10:05.240 | of giving power, like, empowering young kids

00:10:10.160 | to learn about how this whole messy financial system works

00:10:13.840 | and take on the big elite centralized players.

00:10:17.680 | - Yes, and you know, it's very easy.

00:10:20.000 | When these companies get big,

00:10:21.480 | one thing that's changed is the footprint of these startups

00:10:26.240 | and the velocity at which they grow.

00:10:28.080 | So something like Airbnb is another perfect example

00:10:30.160 | of something that should really not work in practice,

00:10:33.080 | but it does.

00:10:33.960 | Like, I'm gonna rent my couch or my extra room to somebody

00:10:38.040 | like a serial killer,

00:10:39.120 | or I'm gonna stay in somebody's house

00:10:41.200 | like a serial killer's house.

00:10:42.320 | And, you know, it's like, it really sounds scary,

00:10:44.720 | but it actually works.

00:10:45.960 | And it has not destroyed the hotel business.

00:10:50.960 | It has added.

00:10:52.680 | So the best startups induce a market to exist.

00:10:55.960 | If you look at, you know, Uber or Airbnb,

00:10:59.360 | people replace their cars,

00:11:01.640 | and Uber was not competing ultimately with taxis.

00:11:05.400 | They were competing with car ownership,

00:11:07.400 | public transportation, walking, or just not going out.

00:11:11.640 | And then you look at Airbnb,

00:11:12.680 | a lot of people who stay in an Airbnb

00:11:14.240 | would not be taking a trip to Kyoto,

00:11:17.440 | if not for the fact that they could get a $75

00:11:20.040 | beautiful room with great reviews in Kyoto for three weeks.

00:11:24.600 | It inspires people and it manifests a market

00:11:27.960 | because the product is so transcendent, right?

00:11:30.520 | And I think that's one of the things that Robinhood did.

00:11:33.400 | You can't learn how to do this options trading

00:11:36.040 | and puts and calls and all this sophistication stuff,

00:11:38.680 | unless you actually do it.

00:11:40.040 | It's just too hard to learn, except in practice,

00:11:42.400 | just like poker.

00:11:43.400 | If you wanna learn how to play poker or guitar

00:11:45.600 | or tennis or skiing, like you could talk about it,

00:11:47.960 | you can watch YouTube videos,

00:11:49.320 | but at a certain point you gotta get on the mountain.

00:11:51.120 | At a certain point, you gotta put some chips in the pot.

00:11:54.280 | And it's gonna be painful.

00:11:55.960 | Like poker's gonna be painful.

00:11:57.120 | You're gonna lose a lot of money.

00:11:58.240 | That's why you should play at the small tables first.

00:11:59.840 | And even in trading, like you look at people

00:12:02.240 | who are doing this crazy trading in GameStop,

00:12:04.880 | a company that's worth maybe a couple of billion dollars,

00:12:07.840 | but certainly not tens of billions of dollars.

00:12:10.000 | Of course, the people who are throwing their money in last

00:12:12.080 | are gonna lose it.

00:12:13.240 | I think everybody knew that.

00:12:15.480 | And so it was a momentum play

00:12:16.760 | and they're betting against the hedge funds.

00:12:19.520 | So I think it's good for people to learn

00:12:22.160 | and become financially literate

00:12:23.440 | and just always understand the concept of the risk of ruin.

00:12:27.640 | The good news is for a young person,

00:12:29.040 | the risk of ruin might be like they lose $5,000 or something

00:12:31.760 | and then they have to build their stack back up.

00:12:33.680 | But that's really the only thing I am concerned about

00:12:36.240 | is there are people who will play poker or blackjack

00:12:40.320 | or sports betting or whatever it is and lose control.

00:12:43.080 | Just like there might be people

00:12:44.320 | who try alcohol and lose control.

00:12:46.640 | But we can't build a system based upon limiting

00:12:49.920 | the average person's behavior based upon somebody

00:12:53.240 | who can't control their ability to drink,

00:12:56.560 | two glasses of wine instead of 20.

00:12:58.200 | - How does this whole thing end?

00:13:00.280 | - Probably in tears.

00:13:01.840 | - For who?

00:13:02.960 | Who's crying?

00:13:03.800 | Is everybody crying?

00:13:05.280 | - Who's crying when?

00:13:06.520 | So I think there were some of the hedge funds

00:13:08.080 | that were crying initially.

00:13:09.240 | That may be some of the Wall Street bets people

00:13:10.960 | who bought last would be crying.

00:13:13.040 | And then eventually there's probably another set

00:13:15.880 | of hedge funds or even the Wall Street bets mob,

00:13:19.120 | and that army, some of them might've broke ranks

00:13:22.280 | and then shorted the stock.

00:13:23.760 | So nobody knows.

00:13:24.800 | So everybody has to be aware of what's happening in the game.

00:13:27.960 | So if Wall Street bets said,

00:13:28.920 | "Hey, let's squeeze these hedge funds

00:13:30.720 | 'cause they have too much short interest.

00:13:32.120 | Let's all buy the stock."

00:13:33.820 | Then some of them might've said,

00:13:35.360 | "Okay, it's at two or $300.

00:13:37.840 | Maybe I'll join the short movement now that they've covered."

00:13:40.720 | And they could have shorted their double agents.

00:13:43.640 | So people have to understand this stuff is gnarly

00:13:46.980 | and it's a free for all.

00:13:48.400 | I mean, it is a literal free for all.

00:13:49.880 | - There's a kind of morality,

00:13:51.480 | like a big statement that Wall Street bets made

00:13:54.360 | in terms of like the elites can't just push us around,

00:13:57.720 | they can't bully around.

00:13:59.560 | But at the same time,

00:14:01.480 | they're also interested in making money, right?

00:14:04.120 | Is, what's your sense?

00:14:05.960 | You said that some of the people in the Wall Street bets

00:14:08.080 | might've broken off and shorted the stock.

00:14:10.400 | Are they more interested?

00:14:11.960 | There was an emergent morality that emerged

00:14:15.320 | and said like, "We're not gonna put up

00:14:18.000 | with the centralized elites."

00:14:19.480 | But is that going to continue?

00:14:22.480 | Are they going to fight the power structures

00:14:24.640 | that are bad for society?

00:14:26.320 | Are they going to now like,

00:14:28.720 | I mean, are they ultimately going to introduce more chaos

00:14:31.080 | that's going to damage the economy and damage the world?

00:14:33.480 | Or are they going to continue being the good guys

00:14:35.560 | and fighting the evils that manipulate the market?

00:14:40.560 | What's your sense?

00:14:42.760 | - You know, it really feels like

00:14:44.300 | the "Dark Knight" series of films

00:14:45.960 | where like some people just wanna see the world burn.

00:14:48.760 | I think there is a contingent of people

00:14:50.520 | who just literally want to see chaos.

00:14:52.880 | Like, you know that contingent on some of these forums

00:14:56.640 | who just wanna create chaos, right?

00:14:59.320 | So there's certainly that chaos contingent,

00:15:01.160 | but I think overall what the arc will show is

00:15:03.440 | a group of people getting massively educated.

00:15:05.840 | You see it in crypto as well.

00:15:07.520 | There was like a three-year period

00:15:09.260 | where all of these failed entrepreneurs who I knew

00:15:13.640 | who couldn't build companies were then coming back to me

00:15:18.000 | after their companies has failed or after they gave up

00:15:20.320 | or couldn't clear a market,

00:15:21.160 | raising money with the venture capital community,

00:15:23.380 | and they were doing ICOs.

00:15:25.320 | And I was like, "I met you before, right?"

00:15:28.160 | And they're like, "Yeah, yeah, yeah.

00:15:29.000 | No, I'm doing an ICO now."

00:15:29.880 | I'm like, "Okay, where's your company at?"

00:15:33.040 | And they're like, "Here's a white paper."

00:15:34.240 | And I was like, "This white paper with spelling errors in it

00:15:37.080 | that says you're going to destroy Airbnb

00:15:39.800 | because everybody's apartment's

00:15:41.360 | gonna be on an immutable ledger."

00:15:43.340 | Like, wouldn't that be better in a regular database

00:15:45.360 | that was private and not public?

00:15:47.200 | Like, why does it need to be on an immutable ledger?

00:15:49.200 | It can't change.

00:15:50.040 | I'm like, "Not changing the database is a feature?

00:15:53.080 | That does not seem like a good feature."

00:15:55.280 | And they couldn't explain it.

00:15:56.160 | They were like, "Well, just people are interested in ICOs."

00:15:58.040 | And there was that ICO mania.

00:15:59.800 | And what it showed was there was a global appetite for risk.

00:16:02.360 | People want to try new things.

00:16:05.600 | This is one of the great things about the human spirit

00:16:07.600 | is one of the great things about capitalism.

00:16:09.720 | And one of the things that concerns me most

00:16:11.940 | about where we're at in society is the sort of socialism,

00:16:14.800 | communism, entrepreneurship is bad, technology is bad,

00:16:19.800 | and polarization of wealth,

00:16:22.000 | and people getting rich is a bad thing.

00:16:23.780 | When I grew up, I'm 50 now,

00:16:25.360 | but when I was a Gen Xer growing up,

00:16:27.120 | we kind of maybe too much idolized Bill Gates

00:16:29.800 | and people who were doing interesting things in the world,

00:16:31.600 | and we thought capitalism was a force for good.

00:16:33.480 | I still believe capitalism is a force for good

00:16:36.200 | because when a group of people builds a product or service

00:16:39.840 | that changes the world and it gets globally distributed,

00:16:42.960 | whether it's Tesla, or SpaceX, or Google,

00:16:45.800 | or Airbnb, or Uber, or Robinhood,

00:16:47.920 | everybody gets to benefit from that product or service

00:16:52.420 | having to compete.

00:16:53.400 | And if you look at the places where there's no competition,

00:16:55.440 | like public education, or less established colleges

00:17:00.440 | and stuff like that,

00:17:03.360 | less competition for accreditation degrees,

00:17:05.960 | things tend to get a little weird, don't they?

00:17:08.360 | And people tend to be protected, and that's not good.

00:17:11.280 | You need competition.

00:17:13.720 | Does it mean that people shouldn't have global healthcare?

00:17:17.120 | Does it mean that we shouldn't have a safety net?

00:17:19.240 | But we need to keep capitalism vibrant,

00:17:21.280 | especially because China has now co-opted capitalism

00:17:24.360 | and created their own version of capitalism,

00:17:26.920 | which is communism with capitalism.

00:17:28.960 | It's like this weird operating system.

00:17:30.920 | We still wanna keep communism

00:17:32.400 | so we can take any of your gains at any time,

00:17:35.480 | but we'd like you to be entrepreneurial.

00:17:37.360 | And then you have somebody like,

00:17:39.320 | you know, the founder of Alibaba, Jack Ma,

00:17:43.280 | who disappears for a couple of weeks.

00:17:45.200 | - Who's that?

00:17:46.040 | No, I'm just kidding. - Exactly.

00:17:47.320 | Who's Jack Ma?

00:17:48.160 | He kinda disappears for a couple of weeks,

00:17:50.680 | and then he comes back,

00:17:51.520 | and he's really sorry about the things he said,

00:17:53.400 | and then he disappears again.

00:17:55.280 | We have to be very careful.

00:17:57.720 | If China wins capitalism,

00:18:00.400 | this is gonna be an existential threat for humanity.

00:18:04.640 | The Chinese are no joke.

00:18:07.680 | I mean, they are seriously focused,

00:18:09.960 | and they are picking the winners.

00:18:12.000 | - It's a very weird system because it is, in fact,

00:18:14.920 | I don't know what you call it.

00:18:16.000 | Like communism and capitalism is such overloaded terms,

00:18:19.360 | but they do encourage entrepreneurship,

00:18:22.360 | but they, and they do a good job of it.

00:18:25.040 | - Oh, yes.

00:18:25.880 | - But then they're like,

00:18:27.200 | they're like the surveillance thing,

00:18:28.960 | and they're controlling things in a way.

00:18:31.000 | It's weird because it seems to work really well for them

00:18:34.840 | in the short term.

00:18:36.640 | - Yes, it's definitely got short-term benefits.

00:18:38.360 | - So the question is like what,

00:18:41.080 | how that gets distorted and then becomes worse

00:18:43.200 | and worse and worse, which it potentially might be.

00:18:45.800 | And I think on, you know,

00:18:47.980 | the entrepreneurial spirit,

00:18:51.680 | which you have a podcast all centered

00:18:53.840 | around the entrepreneurial spirit,

00:18:55.800 | is one of the magical things that makes this country great.

00:18:59.200 | I don't know if money is deeply tied into that.

00:19:02.200 | I do get bothered by people, you know,

00:19:05.280 | treating the word billionaire as if it's a bad word.

00:19:07.920 | - Yeah.

00:19:08.760 | - But in general, like all the hard things,

00:19:12.120 | all the difficult things we're going through

00:19:13.520 | in this country, it seems like the way out

00:19:16.280 | is going to be making the entrepreneur

00:19:21.280 | the hero of society, of like letting that young kid

00:19:25.040 | with a big dream and the guts to take the big risks

00:19:28.200 | and build something totally new,

00:19:29.800 | giving them a chance and whatever that involves.

00:19:34.000 | I don't think it's about taxes.

00:19:35.520 | I don't think it's about like regulation, all that stuff.

00:19:38.720 | It's about us and just public discourse saying

00:19:42.120 | that that kid, that guy, that girl, they're badasses.

00:19:45.680 | Like encourage them to do it.

00:19:47.440 | - We have to have people buy in to the fact

00:19:50.760 | that they have that opportunity.

00:19:52.640 | And I think one of the problems in society

00:19:54.600 | is there's a group of people who actually don't believe

00:19:57.840 | that they can succeed or they don't believe

00:20:00.240 | even more perniciously that other people can.

00:20:02.960 | And that's the group of people that I think

00:20:05.280 | are highly vocal, but a small group of people,

00:20:07.840 | which are generally people of incredible privilege,

00:20:11.600 | rich parents, white city dwellers, liberals.

00:20:15.360 | They kind of look and say, poor people

00:20:17.120 | cannot change a lot.

00:20:18.880 | And they're battling in their minds to protect poor people.

00:20:23.320 | But they have this very weird patriarchal

00:20:25.160 | kind of approach to it, which is they think

00:20:27.240 | that they're not capable of changing their lot in life.

00:20:29.720 | And they're like, it's not possible.

00:20:31.480 | And then once in a while, I'll tweet something

00:20:33.240 | where I say, it's really incredible

00:20:35.200 | that every piece of knowledge you could possibly want

00:20:37.800 | is now available for free on YouTube.

00:20:39.840 | And every course from MIT and Harvard and Stanford

00:20:43.880 | is available on edX or Coursera.

00:20:46.240 | And all that information is there freely available.

00:20:49.280 | And you can take the lectures.

00:20:51.000 | This is amazing.

00:20:51.840 | And then people will be like, yeah,

00:20:53.040 | but people don't have access to it.

00:20:54.360 | I'm like, they do, it's free, here's the link.

00:20:57.600 | And they're like, yeah, but they don't have internet.

00:20:59.400 | And I'm like, here's the chart of internet penetration

00:21:02.400 | in America.

00:21:03.240 | And they're like, well, poor people don't have internet.

00:21:05.080 | And I'm like, really?

00:21:07.400 | Find me any downtrodden person without a smartphone

00:21:11.200 | with a high-speed connection that capitalism provided

00:21:14.160 | for $12 a month or $15 a month.

00:21:16.400 | It's very hard to find that.

00:21:18.240 | And we have it so well in this country.

00:21:20.960 | And there's so much opportunity.

00:21:22.560 | But people don't believe it.

00:21:25.720 | And that's actually one of the problems.

00:21:27.200 | See, the average American still watches

00:21:28.440 | four or five hours of television a day.

00:21:30.640 | And often I meet people and they're like,

00:21:32.000 | I need a technical co-founder.

00:21:33.600 | But all I need is a million dollars.

00:21:36.600 | And I'm like, okay, well, what is your skill?

00:21:37.840 | And they don't have a skill.

00:21:39.280 | And I'm like, well, are you a designer?

00:21:41.600 | No.

00:21:42.440 | Are you a product manager?

00:21:43.260 | No.

00:21:44.100 | Are you a developer?

00:21:44.940 | No.

00:21:45.760 | Are you a sales executive?

00:21:46.600 | No.

00:21:47.440 | Okay, what are you?

00:21:48.260 | It's like, well, I have an idea.

00:21:49.100 | Well, as my friend Sam Harris,

00:21:50.080 | I think your friend as well, says,

00:21:53.040 | everybody has a million ideas an hour.

00:21:55.800 | You don't really get credit for those.

00:21:57.160 | Even when you're asleep, your idea is spewing ideas.

00:21:59.760 | Like zero credit for your ideas.

00:22:01.640 | It's all about execution.

00:22:03.240 | - You have to believe that you yourself

00:22:04.880 | can be the core of that execution.

00:22:06.840 | You yourself can build the thing.

00:22:08.400 | And no matter what your circumstances are,

00:22:10.920 | I mean, we could talk about like structural racism

00:22:13.200 | and all those kinds of things that push things down.

00:22:15.320 | But from the individual perspective,

00:22:17.320 | when you just like are coaching

00:22:18.680 | or giving advice to an individual,

00:22:20.800 | you can literally change the world.

00:22:22.080 | I mean, Wall Street Bets is an indication of that

00:22:24.160 | in the financial space that you yourself

00:22:26.160 | can change the world.

00:22:28.120 | That's why this country is amazing.

00:22:30.200 | - Still the best country in the world, right?

00:22:31.600 | I mean, it still is amazing the opportunity

00:22:33.960 | provided to people,

00:22:35.360 | all this educational experiences online.

00:22:37.440 | And the ability, what I tell young people

00:22:39.720 | who are looking for advice,

00:22:41.140 | I say, you know, the skill you need to refine

00:22:43.880 | is the ability to learn new skills.

00:22:45.960 | Like if you become good at learning a new skill,

00:22:49.160 | and Tim Ferriss, a friend of mine,

00:22:50.960 | has really pioneered this.

00:22:52.720 | He can get to 60 or 70% of like the knowledge

00:22:57.720 | in a skill in some incredibly short period of time.

00:23:00.320 | Now I'm not saying he's gonna become a virtuoso drummer

00:23:02.760 | or a great basketball player,

00:23:03.800 | but Tim and I were on vacation together

00:23:06.280 | in like a group vacation in Italy,

00:23:07.760 | and there was a basketball court.

00:23:09.560 | And I said, "Let's go shoot some hoops."

00:23:11.720 | I'd never shot before.

00:23:13.040 | And I was like, "Okay, come on, I'll teach you."

00:23:15.120 | And Tim is fabulously uncoordinated.

00:23:17.640 | People don't know this.

00:23:18.880 | Like he tried to dribble a basketball and do a layup,

00:23:23.880 | and it looked like he had a blindfold on.

00:23:26.600 | I mean, you've never seen something less elegant

00:23:29.800 | than Tim Ferriss doing a layup in basketball.

00:23:32.000 | And then he watched me do it three or four times,

00:23:34.700 | and I watched him study me.

00:23:37.160 | And listen, I've been playing basketball in Brooklyn

00:23:39.280 | since I was a kid.

00:23:40.400 | I got a couple of moves,

00:23:41.560 | and he was just taking notes and taking notes

00:23:43.800 | and taking notes.

00:23:44.620 | And by the end of a couple of hours of doing this,

00:23:46.920 | I could just watch him checking his form

00:23:48.760 | and figuring it out.

00:23:50.480 | That's every skill in the world now.

00:23:52.760 | And what I tell people is like,

00:23:54.640 | I'm like, "Did you watch Game of Thrones?"

00:23:56.460 | And they're like, "Yeah."

00:23:57.300 | "Did you watch Breaking Bad?"

00:23:58.600 | Like, "Yeah."

00:23:59.440 | I'm like, "Okay, that's about 400 hours."

00:24:01.480 | How about you don't watch the next two,

00:24:05.120 | and you put that 400 hours into learning

00:24:06.700 | how to be a graphic designer, a UX person,

00:24:09.600 | a developer, whatever it is,

00:24:12.000 | and learn how to add skills.

00:24:13.760 | That's what I did my whole life.

00:24:14.760 | I was a kid from Brooklyn, went to school at night,

00:24:17.120 | but I was very quick to get to maybe 50%

00:24:20.200 | of the knowledge base of graphic design

00:24:22.080 | or being a writer or being a sales executive,

00:24:24.360 | whatever it was, a developer even.

00:24:26.520 | And I was just good enough to not have people

00:24:29.080 | be able to bullshit me like when I hired them.

00:24:31.440 | And that was a big unlock.

00:24:33.520 | When you know enough that people can't snow you,

00:24:35.840 | that's a really good one.

00:24:36.840 | And look at yourself.

00:24:38.520 | You figured out how to set up an entire podcast.

00:24:40.560 | People don't know this,

00:24:41.400 | but you don't have a team around you.

00:24:43.240 | I have a team of like five, six people

00:24:44.680 | working on my podcast.

00:24:45.520 | - And if you even know enough about to set this up,

00:24:48.120 | you would then be able to hire a team.

00:24:50.000 | - Correct.

00:24:50.840 | - And you'll be able to call them on their bullshit

00:24:52.040 | if they're not doing a good job.

00:24:53.720 | And that's really important.

00:24:54.560 | And I don't know that much about this whole thing,

00:24:56.240 | but I know enough to be able to then see

00:24:58.280 | who knows their stuff or not.

00:24:59.960 | You're absolutely right.

00:25:00.800 | And the process of learning how to learn

00:25:03.640 | is essential there because I did martial arts,

00:25:08.640 | jiu-jitsu and so on.

00:25:09.920 | And it's so funny to watch.

00:25:11.400 | - I did Taekwondo, yeah.

00:25:12.240 | - Taekwondo is awesome.

00:25:13.600 | It's funny that there's some people

00:25:15.080 | that do an activity for years,

00:25:17.560 | 'cause just sort of elaborate on something

00:25:19.960 | you were saying about hours.

00:25:21.880 | It's not always the amount of hours,

00:25:25.000 | it's the quality that you put in.

00:25:26.720 | - Yes, deliberate practice versus just doing some behavior.

00:25:29.700 | I mean, literally I've been playing chess

00:25:31.520 | and trying to get that going again

00:25:33.080 | after watching "Queen's Gambit" and I got chess.com.

00:25:35.520 | And I realized I was just playing

00:25:36.720 | and I'm not getting better.

00:25:37.540 | And then I was like, oh wait,

00:25:38.380 | there's a little analysis feature here in chess.com

00:25:40.680 | where it will show you your blunders and mistakes.

00:25:43.240 | And I'm like, oh, I'm spending no time

00:25:45.480 | reviewing my losses in chess

00:25:47.680 | and I just wanna play the next game.

00:25:49.200 | I should really review these losses

00:25:50.960 | and figure out what mistakes I made.

00:25:52.160 | And when I started doing that, I was like,

00:25:53.160 | oh, I'm getting better.

00:25:54.760 | Right, so some deliberate practice really works.

00:25:56.520 | - And if you wanna take it all the way,

00:25:58.240 | Magnus Carlsen, shout out to the guy,

00:26:00.520 | has an app, but there's a few other coaching apps

00:26:03.280 | where you focus on the end game,

00:26:04.960 | you focus drilling a particular,

00:26:07.400 | you basically don't play the game at all.

00:26:09.200 | You just focus on drilling the different aspects.

00:26:12.040 | - The openings, the end game.

00:26:13.360 | - The openings, yeah.

00:26:14.200 | - The end game, yeah.

00:26:15.040 | - And there's different kinds of puzzles.

00:26:15.860 | So you can really make it into a deliberate practice.

00:26:18.200 | - Not to make this episode sponsored by chess.com,

00:26:20.840 | but they literally have puzzles.

00:26:22.320 | So I was like, oh, and it's $100 a year for this product.

00:26:25.160 | And I just thought to myself, this is capitalism.

00:26:28.600 | They don't need to charge you $100 an hour for a lesson.

00:26:31.760 | They can charge you $100 and they've created

00:26:35.160 | the ability for you to play chess 24 hours a day

00:26:37.560 | against opponents who are perfectly matched against you

00:26:40.120 | based on your rating, and they analyze every game,

00:26:43.400 | and they have puzzles, and they have tutorials,

00:26:45.080 | and they've got everything else.

00:26:46.400 | It's like, just think about how much value

00:26:50.400 | is being provided to society because of capitalism

00:26:53.520 | and because competition.

00:26:54.580 | If you want things to get better

00:26:56.400 | and you wanna step up your game,

00:26:58.220 | just make it slightly competitive.

00:26:59.760 | It is one of these things in human existence

00:27:03.600 | that is so powerful.

00:27:05.120 | I don't know, did you see the Michael Jordan documentary,

00:27:07.200 | The Last Dance?

00:27:08.160 | - Like half of it, yeah.

00:27:09.520 | I'm still working through it.

00:27:10.480 | - He's so competitive and petty.

00:27:14.360 | It's so inspiring that all he cares about

00:27:17.440 | is just winning to the level of which he literally,

00:27:21.200 | there's this running meme, I took that personally,

00:27:23.960 | and I took that personally.

00:27:24.800 | I don't know if you've seen the images of him

00:27:26.480 | sitting smoking a cigar, looking at an iPad

00:27:28.720 | or a video clip, and it's like, I took that personally.

00:27:30.960 | And you can make a super cut

00:27:32.020 | of every time he took something personally.

00:27:33.840 | He literally takes everything personally

00:27:35.420 | to give himself that competitive motivation to win.

00:27:38.320 | That's capitalism.

00:27:39.920 | And when people are competing,

00:27:42.080 | man, look at what Elon did to the space of cars.

00:27:46.640 | Like every, they were literally laughing at him

00:27:49.360 | in the first 10 years, electric cars, ha ha,

00:27:51.960 | that company will go out of business.

00:27:53.320 | And now every single company is like,

00:27:55.620 | we're going fully electric by 2035.

00:27:58.400 | And he kicked their asses so brutally

00:28:02.240 | that they had no choice but then to step up their game.

00:28:05.800 | And that's what we want, right?

00:28:07.280 | And this virus and this pandemic,

00:28:09.320 | I think the great thing that will come out

00:28:12.880 | of this horrible experience that we've all had

00:28:15.120 | is psychologically, death, learning,

00:28:17.660 | just so many bad things occurred,

00:28:19.100 | the economy, people losing their jobs.

00:28:21.120 | But we also got to see the human spirit

00:28:22.840 | with these mRNA vaccines and just how,

00:28:27.200 | if we took out some of the regulation

00:28:29.440 | and people were super motivated,

00:28:31.300 | we might actually be able to eliminate all pandemics

00:28:37.240 | from ever happening again.

00:28:38.520 | And before that, Bill Gates was banging his fist

00:28:40.840 | and Jeff Skoll was doing the movie "Contagion."

00:28:43.720 | I mean, for two decades, people have been banging their fist.

00:28:45.960 | We have to be prepared for this.

00:28:47.640 | And everybody's like, yeah, whatever, YOLO.

00:28:49.680 | It's not gonna happen.

00:28:50.800 | And now it's happened and people are like,

00:28:53.040 | we need to be able to destroy every pandemic

00:28:56.920 | and virus before it happens.

00:28:58.400 | And listen, you know a lot more about science than I do,

00:29:01.580 | but these mRNA has been around for a while.

00:29:04.320 | We've just never gotten aggressive about doing it.

00:29:06.840 | And then you think about challenge trials.

00:29:09.080 | I don't know if you've been following this,

00:29:10.180 | but they're doing challenge trials now in the UK this month

00:29:13.600 | where they're introducing COVID into healthy young patients

00:29:17.400 | and then giving them the vaccine.

00:29:19.840 | And that is against all rules and regulations

00:29:24.400 | about do no harm.

00:29:27.200 | But then you think about it.

00:29:28.920 | We kind of celebrate people jumping out of planes

00:29:31.360 | and we got that one guy, Alex Honnold,

00:29:33.440 | who's climbing up mountains without a rope

00:29:35.200 | and they give him a Northstar back page ad

00:29:37.920 | and an endorsement deal.

00:29:41.560 | And we celebrate that.

00:29:42.720 | We celebrate people surfing with sharks.

00:29:44.920 | We celebrate people doing deep welding.

00:29:47.420 | We pay them extra to go 200 feet underground

00:29:50.320 | and weld stuff.

00:29:51.600 | And people do dangerous stuff all day long.

00:29:53.820 | Astronauts.

00:29:55.980 | Soldiers, firefighters.

00:30:00.640 | But we won't let people get paid to do a challenge trial.

00:30:04.360 | - Yeah, we'll rarely risk averse in certain areas

00:30:06.640 | that are completely don't make any sense.

00:30:07.880 | - It doesn't make, and this is where the world needs to be.

00:30:09.960 | We could have said these thousand people, young people,

00:30:13.120 | who we know are in all likelihood

00:30:14.680 | not going to have a bad outcome,

00:30:16.440 | but there's a possibility.

00:30:17.360 | - There's a possibility.

00:30:18.200 | - But it's very low.

00:30:19.040 | And it's certainly lower than riding a motorcycle.

00:30:22.040 | It's lower than riding a motorcycle.

00:30:23.240 | People ride motorcycles everywhere.

00:30:24.400 | We have ads for motorcycles.

00:30:26.120 | We could have just said to those thousand people,

00:30:27.480 | we'll give you a million dollars each to do this.

00:30:30.800 | Okay, there's your billion dollars.

00:30:33.120 | We're printing trillions of dollars of money

00:30:35.040 | to deal with this.

00:30:35.880 | If we had just done a thousand people

00:30:37.800 | for a million dollars each to do a challenge trial

00:30:40.880 | in March, April, May, when they had the mRNA vaccines ready,

00:30:45.800 | we could have deployed the vaccines in the summer.

00:30:47.480 | We would have been done with this.

00:30:49.160 | We would have been over by now.

00:30:50.600 | So we get to challenge all of that thinking.

00:30:52.720 | I think that's what the Great Pause did.

00:30:54.520 | It's letting everybody challenge that thinking is,

00:30:57.240 | why do we have that rule?

00:30:58.640 | Okay, yeah, we don't want to have people

00:31:01.720 | give up their organs for money.

00:31:04.280 | We obviously understand,

00:31:05.540 | but there's a reasonable discussion about,

00:31:08.040 | well, maybe there's a level of risk in a global pandemic.

00:31:10.640 | I mean, we fought the Nazis, right?

00:31:12.640 | We defeated the Nazis.

00:31:13.880 | That took a lot of deaths to do that,

00:31:15.440 | but we had to kill that evil.

00:31:17.920 | This is another evil which we must fight.

00:31:20.920 | And it's going to result in,

00:31:23.000 | it's already resulting in thousands of people dying a day,

00:31:25.040 | but we could have actually stopped it earlier

00:31:27.080 | if we just had a reasonable discussion.

00:31:29.020 | This is why podcasting is, I respect what you do,

00:31:31.560 | and it's why intelligent people are so drawn to podcasts,

00:31:34.360 | because you and I can expand on this

00:31:37.000 | and not cancel each other over this very suggestion.

00:31:40.400 | When I make this suggestion,

00:31:41.560 | are challenge trials reasonable or not?

00:31:43.520 | If I were to do that on Twitter,

00:31:44.600 | they'd be like, oh, Calacanis wants to give poor people

00:31:48.560 | coronavirus in order to save rich people.

00:31:50.720 | It's like, no, I didn't say that.

00:31:53.160 | But you and I could have a reasonable discussion about,

00:31:56.160 | are challenge trials something we should consider

00:31:58.120 | in a acute situation where millions of people

00:32:01.520 | are going to lose their lives?

00:32:02.640 | - Right, so that's an example of capitalism competition

00:32:06.840 | working really well.

00:32:08.120 | There's one of the, to me, sad thing to see

00:32:10.320 | about coronavirus is that, for example,

00:32:12.080 | testing at scale should have, it seems obvious.

00:32:16.640 | I was a little clueless about it,

00:32:18.800 | because I thought there's no way you can have

00:32:21.680 | antigen tests at hundreds of millions,

00:32:24.880 | order hundreds of millions of them and make them cheap.

00:32:27.080 | But actually, I realized recently

00:32:28.920 | that they've been available since about May.

00:32:31.800 | You were able to-- - In Korea, in Finland,

00:32:34.400 | all over the place.

00:32:35.240 | - And you could have done mass manufacture.

00:32:36.960 | So there, there's a little bit of a failure

00:32:40.480 | of capitalism to step up.

00:32:43.400 | And I don't know if you agree with this,

00:32:45.320 | but it seems that the blame has to be placed

00:32:47.680 | at the regulators and the various institutions.

00:32:52.320 | - Crony capitalism, in all likelihood,

00:32:54.200 | is what stopped it here in America.

00:32:55.880 | I mean, I had friends who had imported them

00:32:58.760 | from other countries, the testing kits,

00:33:01.200 | and you've probably been to parties

00:33:02.760 | where people had these kind of testing kits

00:33:04.360 | from other countries.

00:33:05.720 | And we're sitting here and they're just approving them now.

00:33:07.760 | Really, in February, month 11 of the pandemic in America,

00:33:11.640 | we're gonna have testing online, really?

00:33:13.800 | I mean, even if these tests were 80% effective,

00:33:17.400 | and they're 95% effective, mass producing them,

00:33:20.640 | we should have sent them in every postal,

00:33:23.800 | anybody with a post office box should have,

00:33:25.800 | with a mailing address, should have had 10 of them

00:33:28.640 | put in their mailing address,

00:33:29.520 | just for free from the government.

00:33:30.920 | And then everybody would be testing

00:33:32.560 | and we would have contained it.

00:33:33.680 | We don't have test and trace here in the United States.

00:33:36.000 | All the countries that are on the other side of COVID

00:33:39.480 | did it by having testing, tracing,

00:33:42.480 | and closing their borders and masks.

00:33:44.600 | That's the combination that works.

00:33:46.480 | - The problem with the coronavirus is,

00:33:49.400 | while there's a lot of institutions

00:33:51.160 | that did not behave their best,

00:33:52.640 | it's also the case that there's a lot of uncertainty.

00:33:55.080 | So I tend to give a little bit of a pass

00:33:57.640 | to everybody involved for the uncertainty.

00:34:00.680 | We were all--

00:34:02.280 | - I give them that until June.

00:34:03.920 | - I wonder how history will remember this whole period.

00:34:06.560 | I'd love to ask you,

00:34:08.120 | because you were an early investor in Robinhoods,

00:34:10.760 | and you're in a very nice place of being a huge supporter

00:34:15.760 | of the sort of Wall Street bets

00:34:20.080 | kind of distributed power of the people.

00:34:23.040 | And at the same time,

00:34:25.200 | because of you being an investor,

00:34:27.520 | like intellectually giving a chance to Robinhood

00:34:31.160 | in this kind of chaotic time of conversations

00:34:33.840 | to think about like, well, what did they do right?

00:34:36.520 | What did they do wrong?

00:34:38.040 | So you have a kind of a balance view on the whole thing,

00:34:40.360 | which is really nice.

00:34:42.080 | We've talked about what Robinhood did right, I think.

00:34:46.400 | Can you sort of steel man Chirmoth's arguments

00:34:51.400 | of what Robinhood did wrong in the last few days?

00:34:56.560 | - Yeah, I mean, communication is always the number one issue

00:35:00.000 | with these startups, right?

00:35:01.000 | And you have to get ahead of any problem,

00:35:04.400 | and you have to put all the bad news out immediately.

00:35:07.240 | And in the case of Robinhood, it seems,

00:35:09.020 | based on what has been in the papers

00:35:10.640 | and what Robinhood said publicly,

00:35:12.160 | is that they had this kind of liquidity crisis, right?

00:35:14.560 | Where they were being, because of these exchanges telling

00:35:18.200 | them you have to put up this amount of money in collateral

00:35:20.240 | and them being pinned at number one in the app store.

00:35:23.040 | There were so many people trying to buy five shares

00:35:26.000 | of this stock, five shares of this meme stock,

00:35:28.700 | that it kind of broke their system.

00:35:30.440 | And then the people who clear the trades for them,

00:35:32.360 | they said, you got to put up a billion dollars,

00:35:34.140 | $2 billion, $3 billion.

00:35:35.280 | We can't do that overnight.

00:35:36.920 | And I think that they were in an uncomfortable situation

00:35:40.600 | of going on TV and saying, we have a liquidity crisis.

00:35:44.560 | Like, that could be like a run on the bank.

00:35:46.880 | Everybody then logs in at the same time to Robinhood

00:35:49.280 | and tries to sell every share they own,

00:35:50.520 | 'cause they're afraid that the whole thing's

00:35:51.640 | gonna collapse, right?

00:35:52.480 | So I think there was this kind of like black swan event,

00:35:55.440 | and they probably didn't communicate it all that well.

00:35:58.160 | - At the center of that, this is really interesting.

00:36:00.280 | Maybe you can comment on the nature of communication.

00:36:03.680 | Vlad, the CEO, the guy you met at the bar,

00:36:07.440 | was at the, I think, at the center

00:36:09.360 | of the communication, right?

00:36:10.360 | - Yep.

00:36:11.200 | - So Elon is an example of a guy who also is at the center

00:36:13.760 | of the communication for his particular set of companies.

00:36:16.320 | And that, on Twitter, seems to be a really powerful way

00:36:19.240 | to communicate.

00:36:20.600 | And there was something, this is me saying it,

00:36:23.160 | there was something about Vlad that sounded

00:36:26.800 | like he's hiding stuff.

00:36:28.640 | As opposed to Elon, it doesn't sound

00:36:32.720 | like he's hiding stuff.

00:36:33.880 | It could be the nature, the beat,

00:36:36.480 | the timing of the conversation.

00:36:38.480 | Same thing with Mark Zuckerberg.

00:36:40.200 | Mark Zuckerberg, for some reason,

00:36:41.840 | often sounds like he's hiding something.

00:36:44.080 | And then there's like Jack Dorsey is much less so.

00:36:47.520 | And I don't know what that is about the CEOs

00:36:49.880 | that makes you trust them and not--

00:36:51.880 | - Might be the point in time,

00:36:54.800 | like in terms of escape velocity.

00:36:56.480 | There might be non-disclosures in place

00:37:01.200 | that we're not aware of, where they're not allowed

00:37:03.320 | to talk about certain relationships.

00:37:04.680 | - I see.

00:37:05.520 | And that results, like in Vlad's case,

00:37:08.520 | and that results in you being like acting weird

00:37:11.760 | and nervous. - Or opaque, or nervous.

00:37:13.440 | Yeah, it could just be the person is nervous.

00:37:15.160 | So it's really hard to be building one of these companies

00:37:18.400 | and you're at scale and, oh my Lord,

00:37:21.960 | the entire thing's coming apart

00:37:23.400 | and you're the most hated person for that day.

00:37:25.240 | You know how the rage cycle works

00:37:26.600 | and the media is just so crazy

00:37:29.560 | when they get their hooks into something.

00:37:31.360 | I saw it happen with Uber, we saw it happen with Facebook,

00:37:33.640 | and even Tesla.

00:37:34.720 | There were times when people did stupid things

00:37:37.880 | with autopilot and it's like,

00:37:39.520 | okay, somebody's watching a movie and sleeping in their car

00:37:42.920 | or leaving the driver's seat

00:37:44.280 | against all the rules of autopilot

00:37:46.280 | and somehow Tesla's responsible for that?

00:37:47.840 | It's like, we have people who stand on top

00:37:49.960 | of their motorcycles and drive down the road

00:37:51.680 | on a motorcycle and we don't blame Yamaha

00:37:54.760 | or Harley Davidson for some idiot standing

00:37:57.520 | on the seat of their motorcycle on a highway

00:37:58.960 | going 60 miles an hour.

00:37:59.840 | We just say, that person's an idiot.

00:38:02.000 | But when new technology comes out,

00:38:04.160 | we blame the technology, not the person operating it.

00:38:07.720 | And if you are going to operate,

00:38:10.520 | we basically vilify it and demonize it.

00:38:13.000 | I think that is part of it.

00:38:14.400 | When the person at, I remember Airbnb,

00:38:16.920 | we always thought, what if somebody trashes your apartment?

00:38:19.640 | And then sure enough, a bunch of meth heads

00:38:21.360 | rented this poor woman's apartment,

00:38:22.960 | she left all of her stuff in it,

00:38:24.280 | and then a bunch of meth heads had a drug party,

00:38:27.060 | destroyed her apartment, ripped up all her photos,

00:38:29.840 | and went crazy.

00:38:31.320 | And we knew that day would happen,

00:38:32.360 | but nobody remembers it now.

00:38:33.320 | But it was the number one story on every news channel

00:38:36.420 | because, wow, that's an exciting story.

00:38:38.480 | And I just thought to myself,

00:38:40.240 | I wonder if there are any parties in hotel rooms

00:38:43.880 | where the hotel room's being trashed

00:38:45.040 | and people are doing drugs and crazy things.

00:38:47.360 | It's like, yes, that's basically every hotel

00:38:49.920 | in Los Angeles right now is being destroyed

00:38:52.220 | by some rock band that's throwing a TV out the window.

00:38:55.200 | Like we expect it in a hotel,

00:38:58.160 | we just didn't expect it in somebody's house with Airbnb.

00:39:00.000 | And then Airbnb created rules around,

00:39:02.040 | you can't rent an Airbnb for a party.

00:39:04.440 | And they learned.

00:39:05.360 | So I think there's a learning curve with these companies,

00:39:07.640 | and they do get to scale at a level that is unprecedented.

00:39:11.640 | It used to take decades for a company

00:39:13.400 | to become an international phenomenon.

00:39:15.140 | Now it happens in two, three, four years.

00:39:17.400 | I mean, look at Clubhouse.

00:39:18.440 | This thing went from being a private beta six months ago

00:39:22.040 | to being the number one app in Germany and in Japan and here.

00:39:26.200 | Like just like that, boom.

00:39:27.940 | And it's because there's an ecosystem

00:39:30.160 | that has never existed, the app store.

00:39:32.360 | Then there's payments online.

00:39:35.200 | And then everybody has a supercomputer in their pocket.

00:39:38.000 | When we, the thing people got wrong

00:39:40.120 | about entrepreneurship technology and business,

00:39:44.520 | you know, over the last couple of decades

00:39:45.720 | was just how big the market was

00:39:48.000 | and then how quickly you could, you know,

00:39:51.320 | achieve relevancy in these markets.

00:39:54.220 | We thought the market was like

00:39:56.960 | the 60 million homes with broadband.

00:39:58.900 | And originally it was like maybe 10 or 20.

00:40:00.680 | Then it became 60 million.

00:40:02.000 | Then it was like, okay, well, how many hours

00:40:03.960 | are you at your desktop computer?

00:40:05.080 | Well, like probably at our computers for five hours a day,

00:40:07.200 | 10 hours a day at work, three hours a day on our own.

00:40:10.480 | And then it was like, yeah,

00:40:11.320 | nobody's on their desktop computer.

00:40:12.480 | Everybody's on their mobile phone.

00:40:13.760 | And oh, and by the way, they have it with them.

00:40:15.480 | So the people with mobile phones

00:40:16.480 | are now using this high-speed device

00:40:19.200 | with an app store with their credit card in it.

00:40:21.960 | In the early days of the internet,

00:40:23.320 | people were scared to put their credit card on the internet.

00:40:25.420 | That was considered a really dumb thing to do.

00:40:27.200 | If you put your credit card on the internet,

00:40:28.360 | you're gonna lose all your money.

00:40:30.320 | They're gonna hack you or whatever.

00:40:32.240 | And now it's just amazing to me

00:40:34.920 | how quickly when a company hits,

00:40:37.080 | how quickly it can get to a million subscribers

00:40:39.500 | or 10 million or a billion users, right?

00:40:42.120 | - And there's all these networks,

00:40:43.240 | like social networks that allow the spread of,

00:40:46.260 | the viral spread of like a new startup,

00:40:49.080 | a new company, a new app to be announced.

00:40:52.520 | - A meme, anything.

00:40:53.720 | An idea, a podcast, right?

00:40:55.120 | Like I mean- - Single thing,

00:40:56.800 | a single meme could change the world.

00:40:58.160 | Speaking of Clubhouse, I just wanna,

00:41:00.320 | we're saying so many interesting things,

00:41:01.720 | but there was a magical moment with Vlad and Elon

00:41:04.940 | on Clubhouse.

00:41:05.780 | - That was wild.

00:41:06.620 | - Yes, is there, do you have thoughts about that interaction

00:41:11.620 | which felt like so many aspects of this whole situation

00:41:17.040 | feels like totally novel, surreal,

00:41:20.120 | like it's defining some new era.

00:41:22.080 | - It is, yes.

00:41:23.040 | - Like a billionaire, the richest human on earth

00:41:25.920 | is interviewing the person at the center

00:41:30.240 | of one of the most interesting mass scale

00:41:34.320 | like power battles in finance ever, perhaps.

00:41:39.320 | - By the way, seven movies have been sold.

00:41:42.720 | - And just- - Two weeks.

00:41:43.560 | Just think about how fast things are moving, Lex.

00:41:46.160 | This thing happens.

00:41:48.280 | Like people had the idea to short the stock six months ago.

00:41:51.400 | They start doing their research, they build an army,

00:41:53.340 | they execute the trade, the system goes down.

00:41:57.080 | Robinhood raises three and a half billion dollars

00:41:59.080 | in four days.

00:42:00.580 | Elon is interviewing them on Clubhouse on Sunday

00:42:03.220 | after the Wednesday it happened.

00:42:04.480 | And now here we are, it's 10 days later.

00:42:08.040 | Doesn't it feel like it's been 10 months?

00:42:12.040 | It's been 10 days, Lex.

00:42:13.280 | - It's been 10 days.

00:42:14.280 | - 10 days.

00:42:15.120 | - Plus there's like a new president,

00:42:16.320 | all these things, and everyone forgot.

00:42:18.000 | - Oh, and there was an insurrection.

00:42:19.520 | By the way, we also have a revolution at the Capitol

00:42:21.840 | where a bunch of crazy people who have guns

00:42:26.200 | and body armor, and then a bunch of them

00:42:28.640 | who are just YOLOing in cosplay took over the Capitol.

00:42:32.760 | - Well, so, and the other more dramatic thing to me is-

00:42:35.280 | - That was one month ago.

00:42:36.200 | - That was one month, and the president

00:42:38.160 | of the United States got banned

00:42:39.880 | from every major social network,

00:42:42.360 | and which I think I'm still deeply troubled by

00:42:47.080 | is Parler being removed from AWS.

00:42:49.720 | That changed the way, that changed a lot of things.

00:42:53.480 | As somebody who's an aspiring entrepreneur,

00:42:56.400 | that changed the way I see the world.

00:42:58.240 | That little, maybe I'm being overdramatic, but-

00:43:00.880 | - No, you're not.

00:43:01.720 | I think you're paranoid for a reason.

00:43:03.840 | You're paranoid for a very good reason,

00:43:05.640 | which is as big as these companies can become,

00:43:08.880 | they are beholden to the mob.

00:43:10.800 | And if the mob says, "Hey, this person needs to be canceled,"

00:43:14.560 | they're going to get canceled

00:43:16.000 | because you can't lose your entire audience.

00:43:18.400 | You could lose your whole customer base,

00:43:19.800 | and you could lose all your employees.

00:43:21.640 | I think what's interesting about your fear

00:43:24.200 | about Parler and AWS taking off

00:43:25.920 | is we went from being a social network,

00:43:28.000 | which is the software layer,

00:43:30.640 | and then we went to the infrastructure layer,

00:43:33.000 | and they'll even go after Cloudflare,

00:43:36.240 | which is a CDN provider.

00:43:37.720 | They're just a plumbing, it's sort of like the telephone.

00:43:41.680 | So we're basically holding everybody responsible

00:43:44.640 | on the whole chain of events here.

00:43:45.920 | And what that's going to do is,

00:43:47.480 | I'm not a huge believer in crypto,

00:43:50.080 | but distributed computing,

00:43:52.120 | where nobody, and decentralized

00:43:54.160 | and distributed computing platforms, and open standards.

00:43:58.360 | Podcasting's an open standard.

00:43:59.840 | The web is an open standard.

00:44:00.960 | FTP was an open standard.

00:44:01.960 | But Twitter and Facebook are closed.

00:44:06.960 | And what's going to happen is,

00:44:08.720 | we will see a group of individuals

00:44:10.760 | create peer-to-peer networks for social media

00:44:13.960 | where nobody can control it.

00:44:15.200 | And the same for cloud computing,

00:44:17.000 | where there's a crypto project where everybody will,

00:44:22.000 | and I invested in a company that tried to do this

00:44:24.120 | and got sold and it didn't work out.

00:44:26.320 | But take your hard drive on your computer at home,

00:44:30.160 | you give a terabyte of your 10 terabyte drive

00:44:33.320 | over to the cloud.

00:44:34.480 | And then everybody else does their terabyte.

00:44:36.000 | And then all of a sudden you've got this virtual cloud,

00:44:38.360 | and anybody can store stuff on it,

00:44:39.720 | and it's all encrypted, and then nobody can stop it.

00:44:41.920 | And that could be tweets, it could be videos.

00:44:43.680 | And so this idea that YouTube

00:44:46.480 | will be able to tell people,

00:44:48.080 | to kick people off because they're skeptics of,

00:44:50.960 | I don't know, the pandemic or the vaccine,

00:44:52.640 | or they've, you know,

00:44:55.120 | they'll make things that are more censorship resistant.

00:44:57.240 | I think that'll be the reaction to all of this.

00:44:58.960 | - Well, this is my question for you,

00:45:00.640 | going back to that crappy bar and people pitching you.

00:45:03.720 | Is there, like with Clubhouse, do you see competitors?

00:45:08.680 | Do you think it's possible that another,

00:45:11.240 | perhaps more decentralized,

00:45:13.160 | or another kind of social media will emerge

00:45:15.280 | that will take on Twitter and Facebook,

00:45:17.880 | and might be able to replace them?

00:45:19.320 | If you look at the whole landscape,

00:45:21.120 | with Clubhouse and everything else,

00:45:23.520 | do you think some other company might emerge?

00:45:26.520 | - There'll be 10 versions of Clubhouse.

00:45:28.200 | We looked at social networking,

00:45:29.400 | we thought Friendster was it.

00:45:31.840 | Like Friendster was so good,

00:45:33.080 | nobody would be able to compete with that,

00:45:34.040 | it was growing so quickly.

00:45:35.240 | And then MySpace was a juggernaut,

00:45:36.880 | and they hit a hundred million in revenue,

00:45:38.520 | and a hundred million users.

00:45:39.600 | And it was like, well, that's game over.

00:45:40.880 | And then Facebook, and LinkedIn, and Snapchat,

00:45:44.000 | and FriendFeed, and countless others.

00:45:46.440 | So there's usually 20 people who will win in a category,

00:45:50.560 | and 80% of the category will be owned

00:45:53.320 | by the top two or three players.

00:45:55.080 | - But will those players change, do you think?

00:45:57.400 | What's your sense of that?

00:45:58.240 | - Oh yeah, for sure.

00:45:59.080 | I mean, if Facebook hadn't bought Instagram,

00:46:01.400 | it would be a company in decline right now.

00:46:02.960 | People would be shorting the stock, right?

00:46:04.280 | Facebook peaked and then was sort of heading down,

00:46:07.120 | and Instagram saved them, and WhatsApp saved them.

00:46:09.280 | So that's another kind of weird moment in history,

00:46:12.360 | that they were able to accumulate that much power,

00:46:14.600 | and consolidate that much power.

00:46:15.840 | Instagram should have never sold to them.

00:46:17.280 | That should have gone public.

00:46:18.120 | They had just raised money from Sequoia,

00:46:20.160 | and they had raised $50 million

00:46:22.200 | at a $500 million valuation,

00:46:23.760 | and they didn't need to sell.

00:46:24.840 | And that was a big mistake to sell.

00:46:27.120 | They should have kept going,

00:46:27.960 | and they should have took on Facebook.

00:46:29.600 | And if Instagram was a standalone company right now,

00:46:31.560 | it'd be worth 500 million.

00:46:33.240 | - Do you think-- - 500 billion, yeah.

00:46:35.120 | - Do you think Facebook might buy Clubhouse?

00:46:37.640 | Has been--

00:46:38.640 | - They'll probably copy it.

00:46:40.200 | Zuckerberg has no moral compass, or ethics, or anything.

00:46:43.760 | He's a marauder.

00:46:45.280 | He basically copied Snapchat seven times.

00:46:48.640 | He did poke, and he just kept trying,

00:46:50.440 | and trying, and trying.

00:46:51.600 | Part of the reason why the WhatsApp founders,

00:46:53.800 | and the Instagram founders left,

00:46:54.920 | is they found Zuckerberg so distasteful,

00:46:57.200 | in terms of his ability to copy.

00:46:59.240 | - What do you think makes a great leader in that sense?

00:47:02.760 | Okay, so when I look at Zuckerberg--

00:47:05.520 | - He's a great executor.

00:47:06.960 | - Is he a great executor?

00:47:07.800 | - But I don't think he's a great leader.

00:47:09.120 | I was bullish on, I was excited about Facebook

00:47:11.680 | in the very early days.

00:47:13.440 | I thought it was an exciting opportunity to connect people,

00:47:15.480 | and stuff started going wrong in certain kinds of ways.

00:47:18.760 | And again, maybe it's our human nature,

00:47:22.280 | but I attribute a lot of that to the leadership.

00:47:25.360 | - Absolutely.

00:47:26.280 | I mean, the guy started it because he was unable

00:47:29.080 | to ask girls if they were single and on a date.

00:47:31.360 | I mean, that was his explicit--

00:47:32.200 | - That could be a good motivator.

00:47:33.120 | That could be a good motivator.

00:47:33.960 | - Well, I mean, it does, I mean,

00:47:35.080 | the motivation of 18, 19-year-old men is,

00:47:37.760 | yeah, pretty clear.

00:47:39.640 | He was just trying, he had no game.

00:47:41.880 | He had no game, and he needed to know who was single

00:47:44.640 | so he could at least have a shot at getting a date.

00:47:48.160 | - It's a little creepy, a little creepy, yeah.

00:47:49.440 | - You know, he, I think, was so obsessed

00:47:51.860 | with engagement and winning,

00:47:54.080 | and he's kind of like one of those friends you have

00:47:56.320 | who's just really good at playing a video game,

00:47:58.200 | but maybe doesn't see the bigger picture in life.

00:48:00.240 | And I mean, there's a reason why everybody

00:48:02.400 | who worked for him hates him,

00:48:03.520 | and doesn't talk to him anymore,

00:48:04.760 | and then actively derides him.

00:48:06.080 | Like, so many, the people who sold WhatsApp to him

00:48:10.720 | then backed other projects like Telegram

00:48:13.360 | and said horrible things about him on the way out,

00:48:15.040 | these are the people he made billionaires,

00:48:16.720 | and they really don't like him.

00:48:19.200 | So I think there is something that he does

00:48:21.800 | that does not breed loyalty,

00:48:23.440 | but he's very successful in his focus,

00:48:25.600 | which is growth is all that matters.

00:48:27.320 | He's a marauder, and taking friction

00:48:29.540 | out of products and processes is the playbook

00:48:32.080 | of Silicon Valley for the last decade or two.

00:48:34.380 | So whatever the friction is--

00:48:35.220 | - I love the poetry of what you're saying right now.

00:48:36.560 | It's like you're speaking so fast

00:48:37.800 | that I almost forget that you're dropping bombs.

00:48:40.560 | But so removing friction,

00:48:43.720 | and you're saying Facebook is exceptionally good

00:48:45.440 | at removing friction. - He was the best at it.

00:48:46.960 | I mean, at Uber, they were like,

00:48:49.360 | we're gonna take out tipping,

00:48:50.720 | we're gonna take out the need for you

00:48:52.520 | to take out your credit card and do payment.

00:48:54.520 | It's just gonna be in your wallet.

00:48:56.260 | You got picked up, you leave, that's it.

00:48:59.080 | And I was like, we should have tipping,

00:49:00.240 | and they're like, it adds a step,

00:49:02.040 | and we're trying to have no steps.

00:49:03.800 | You put your address in, you click the button,

00:49:06.100 | and you do nothing else.

00:49:07.580 | And so we've been obsessed here in Silicon Valley

00:49:09.380 | is how many clicks can we take out of the process?

00:49:12.100 | - I guess Amazon is incredible at that as well.

00:49:13.980 | - Absolutely, one click was the start of it.

00:49:15.700 | And then you look at Clubhouse as an example.

00:49:17.960 | You open Clubhouse and you see rooms,

00:49:19.780 | you click on it, you're listening.

00:49:21.100 | So in one click, you're listening.

00:49:22.900 | And then in one click, if you raise your hand,

00:49:25.180 | you get invited, and you say yes, you're speaking.

00:49:27.940 | So it's two clicks to speak, one click to listen.

00:49:30.380 | I mean, the only way they could make that app work

00:49:33.780 | even faster is if you opened it up

00:49:35.600 | and your microphone was turned on,

00:49:37.680 | which is kind of scary, but that is the next evolution.

00:49:41.760 | And what happens when you go that fast

00:49:43.880 | is you get unintended consequences.

00:49:45.960 | And so this is why Facebook has had more fines

00:49:48.240 | than any company in the history of Silicon Valley,

00:49:49.840 | just giant fines for doing stuff like this.

00:49:52.120 | And one of them was, I don't know if you remember

00:49:54.280 | when they created groups,

00:49:55.280 | or if you have a group for your podcast,

00:49:57.320 | but you can just add people to a group

00:49:59.440 | without their permission.

00:50:01.240 | And there was this famous case

00:50:02.500 | when they first came out with it.

00:50:04.760 | Somebody created a Nambla fake group,

00:50:07.700 | National Man Love Boy Association or whatever,

00:50:10.060 | like pedophilia association.

00:50:12.060 | And they added Zuckerberg, Mike Arrington, myself,

00:50:14.420 | and like 20 other famous people in Silicon Valley.

00:50:17.160 | And I was like, and then somebody takes a screenshot of it

00:50:19.180 | and they're like, you're in Nambla?

00:50:20.220 | And I'm like, no.

00:50:21.560 | Facebook allowed you, and then Zuckerberg's response was,

00:50:25.020 | well, if your friends put you in that Nambla group,

00:50:26.940 | you should get new friends.

00:50:27.780 | And it was like, you got put in there too.

00:50:29.580 | - Yeah.

00:50:30.820 | - And then the sad part about it was

00:50:33.460 | there were a group of young men who were gay

00:50:35.500 | and who were in college,

00:50:36.540 | and there was a gay choir in their college.

00:50:38.460 | And the person who was coordinating their Facebook group

00:50:41.620 | added them.

00:50:42.700 | So Zuckerberg, it wasn't enough for Zuckerberg

00:50:44.700 | to make it so anybody could add anybody to any group

00:50:48.020 | because it will grow faster,

00:50:49.620 | let alone you have to confirm

00:50:50.780 | you want to be added to the group.

00:50:52.500 | What it also did was posted it on their walls

00:50:54.680 | to increase engagement.

00:50:55.820 | And what they inadvertently did was

00:50:58.620 | they outed a bunch of 18, 19 year olds in college

00:51:01.100 | to their families

00:51:01.940 | because they joined the gay men's choir at some college.

00:51:06.420 | And this is the kind of way,

00:51:08.660 | this is where Silicon Valley needs to check itself

00:51:11.060 | and to do better,

00:51:12.460 | is you have to really think,

00:51:14.700 | well, there is my incentive to grow faster,

00:51:16.900 | and then there's what's right for society

00:51:18.500 | and for the individuals.

00:51:19.340 | You gotta think it through, think it through.

00:51:21.940 | - It's sometimes very difficult.

00:51:23.780 | This is where vision is required

00:51:25.500 | to anticipate the unintended consequences.

00:51:29.500 | It seems like Mark Zuckerberg is not very good at that.

00:51:32.940 | You've talked to so many great leaders in this world,

00:51:37.140 | privately and publicly.

00:51:39.300 | What do you think makes a great leader

00:51:42.340 | of these tech companies?

00:51:43.500 | Do you have an example?

00:51:45.260 | Is Elon to you a great leader?

00:51:47.300 | He's also a controversial one, right?

00:51:49.500 | - Yeah, I mean, he's got a sense of humor.

00:51:51.300 | - Controversial in the sense that there is,

00:51:53.820 | and I know a lot of people who've worked with him, for him,

00:51:57.100 | that there's also a love-hate relationship.

00:52:00.220 | The hate comes from the fact

00:52:01.660 | that they get pushed extremely hard.

00:52:04.620 | It's a very competitive environment,

00:52:07.500 | but it's a positive one because there's a vision

00:52:12.220 | that's underlying.

00:52:13.060 | It's similar to the Steve Jobs thing.

00:52:15.020 | And it has to do with,

00:52:17.020 | back to our Michael Jordan discussion as well,

00:52:19.860 | that there seems to be the demons involved in tension

00:52:23.260 | and just anxiety, all those kinds of things.

00:52:27.820 | - If you wanna do great things,

00:52:30.060 | there will be some suffering,

00:52:31.500 | and there'll be some pain,

00:52:34.580 | and it's not easy if you wanna change the world.

00:52:37.020 | And then some people have this expectation

00:52:38.980 | that it's going to be easy.

00:52:40.340 | And what you'll typically find for any great leader

00:52:44.620 | who's trying to do something super ambitious,

00:52:47.140 | like if you wanna be like,

00:52:48.620 | if you're a rich guy and you start a restaurant

00:52:50.740 | and you don't care about making money,

00:52:52.100 | and people have made restaurants before,

00:52:54.260 | you could be high fives

00:52:55.180 | and everybody could love you or whatever.

00:52:56.900 | But if you wanna change the world,

00:52:58.780 | you wanna do something hard driving,

00:52:59.900 | there's gonna be sacrifice involved.

00:53:01.460 | And so the problem is people are looking at something

00:53:05.340 | that is an Olympic caliber sport or a Navy SEALs-like effort.

00:53:10.340 | In other words, an effort that requires massive sacrifice.

00:53:13.700 | We would not look at somebody who wins a gold medal,

00:53:16.020 | like Michael Phelps, and say,

00:53:17.380 | "Oh my God, he had to get up at 4 a.m. every day,

00:53:20.100 | and he had to swim and he had to do an ice bath.

00:53:22.380 | Oh my God, that poor guy, he suffered, he was tortured."

00:53:25.780 | People were super mean to him,

00:53:27.700 | they put him in an ice bath.

00:53:28.540 | It was like, "No, he wanted to be the greatest swimmer

00:53:31.260 | of all time, and he knew what the sacrifice entailed."

00:53:34.180 | And then what happens in work, in business,

00:53:37.180 | is that people conflate like,

00:53:39.300 | "Oh, well, I went to work to make a living to pay my bills,"

00:53:43.060 | versus Michael Phelps' approach to getting gold medals,

00:53:47.620 | or Michael Jordan, or pick the person, Elon, or Jeff Bezos.

00:53:50.900 | And when you look at the reviews of a place like Amazon,

00:53:54.140 | there was this incredible story in the New York Times

00:53:56.340 | where people were, I don't know if you remember it,

00:53:58.700 | "This is the worst place you could ever work, Amazon."

00:54:01.420 | And we talked to 200 people, and they all told us,

00:54:04.620 | they all described for us in the New York Times

00:54:07.140 | a culture of cutthroatness and brutality

00:54:10.180 | that has never before been seen.

00:54:11.900 | And then you see all these people who worked for Bezos

00:54:13.900 | for 24 years, from when they graduated with their MBAs

00:54:17.380 | until today, and they've never left the company,

00:54:19.940 | and they are ride or die forever.

00:54:23.580 | And what you're seeing there is,

00:54:26.260 | there's a mismatch of people going to work

00:54:29.300 | in an extreme sport or an extreme endeavor

00:54:32.780 | who should not do that.

00:54:34.340 | There are people who should go out into the rice fields

00:54:37.980 | and pick rice, and then there's another group of people

00:54:40.940 | who are samurai and who wield a sword

00:54:43.980 | and who take on missions that are dangerous.

00:54:48.420 | But if you're a rice picker and that's what you do,

00:54:50.780 | and you feel safe just getting a couple of grains of rice,

00:54:54.100 | put them in a basket, cleaning it, and then whatever,

00:54:56.740 | that's valid work, no big deal.

00:54:58.700 | I'm not deriding it, I am sort of.

00:55:00.300 | But that is one group,

00:55:02.380 | and then there's people who are samurai.

00:55:03.980 | And you cannot conflate the two,

00:55:06.020 | you cannot compare the two.

00:55:08.140 | And that's what is happening right now in business.

00:55:10.740 | Whenever you see these stories about,

00:55:12.340 | this person at this company is a tyrant

00:55:14.820 | and they're so horrible and they yelled at somebody,

00:55:17.260 | like if you're in the field

00:55:19.340 | and you're taking the beach at Normandy and it's D-Day,

00:55:22.300 | or you gotta take the hill

00:55:23.940 | or you gotta whack Osama bin Laden

00:55:25.860 | and you're the Navy SEALs and a rotor gets knocked off

00:55:29.460 | the back of the Black Hawk, this is serious shit.

00:55:33.380 | Don't do it if you're not serious.

00:55:35.580 | And if you're not serious about changing the world,

00:55:37.700 | why would you go work for Bezos?

00:55:39.500 | Why would you go work for Elon Musk?

00:55:40.900 | Don't do it, don't go work there.

00:55:43.260 | - Let me just sit back and enjoy the beauty of all of that.

00:55:49.940 | That's music to my ears,

00:55:51.020 | but I'm not sure what to do with it

00:55:52.660 | because it's conflicting to a lot of the things I hear

00:55:57.660 | from the way you're supposed to kind of act.

00:56:00.340 | I think in order to do great things, you have to,

00:56:05.100 | I always admired people that lose their shit a little bit

00:56:08.580 | because they're so passionate.

00:56:10.340 | And I apologize and all those kinds of things,

00:56:14.460 | but there's a tension,

00:56:15.900 | there's a drama to the creative process

00:56:18.740 | when especially in the early startup,

00:56:20.860 | this is not like the work-life balance idea.

00:56:26.420 | It doesn't even apply.

00:56:27.260 | - Work-life balance, ridiculous.

00:56:28.820 | It's a ridiculous concept.

00:56:31.260 | The idea that there's work-life balance

00:56:33.340 | in a startup is ridiculous.

00:56:34.620 | If you're looking for work-life balance,

00:56:36.700 | do not go to a startup or any kind of ambitious company.

00:56:39.740 | There is a series of places you can work in the world

00:56:43.340 | where you do not need to do anything more

00:56:46.980 | than what's put in front of you.

00:56:48.460 | And you just put the round peg in the round hole

00:56:52.380 | and the square peg in the square hole, Paul,

00:56:54.220 | and you go home and you get your little bits,

00:56:59.220 | grains of rice and you go heat them up and eat them.

00:57:02.380 | That's it.

00:57:03.300 | And then there's this other thing,

00:57:04.400 | which is the extreme pursuit of changing the world

00:57:07.620 | and sacrificing.

00:57:09.120 | And we have a generation of people,

00:57:11.220 | multi-generations of people who are soft.

00:57:14.300 | They're just soft.

00:57:15.140 | I mean, what is the big struggle we've had to deal with

00:57:17.820 | in America in our lifetimes?

00:57:19.540 | Like 9/11 and we didn't have the Vietnam War

00:57:21.740 | and then we had this weird Iraq Wars

00:57:23.500 | and Middle East Wars that were kind of like

00:57:26.180 | a small number of people went and we sent drones.

00:57:28.540 | We have not had to sacrifice.

00:57:30.460 | Gen Xers, maybe the tail-end of boomers

00:57:33.340 | experienced the Vietnam War, regrettably.

00:57:35.760 | But we've had a couple of generations now,

00:57:37.900 | three, I guess, that just haven't had to suffer.

00:57:40.740 | And so we're soft as Americans, we're soft.

00:57:42.800 | And then you look at people in China and we're like,

00:57:44.860 | oh my God, these poor Chinese people

00:57:46.220 | are living in these tiny cramped apartments.

00:57:49.200 | They were living in essentially lean-tos in Northern China

00:57:54.200 | with no running water or one spigot of ice-cold water

00:57:57.820 | for the entire village.

00:57:59.300 | They're thrilled to be joining the middle class,

00:58:02.100 | even if it's the bottom of the middle class.

00:58:04.580 | They've taken hundreds of millions of people in China

00:58:06.520 | and moved them into the middle class.

00:58:08.660 | And we're like, oh my God, these people are suffering.

00:58:10.380 | It's like, you know, they're up to $4 an hour,

00:58:12.500 | three or $4 an hour in the factories there.

00:58:14.620 | And they were just two decades ago at, you know,

00:58:18.020 | I don't know, it was probably 50 cents an hour,

00:58:20.980 | something crazy like that.

00:58:22.480 | And now they've improved the quality of life there so much,

00:58:26.420 | just like America did 200 years ago or 100 years ago.

00:58:29.100 | They've improved it so much in China

00:58:31.300 | that now they're getting outpriced for factories

00:58:33.540 | from Vietnam, Sri Lanka, Pakistan, India,

00:58:37.080 | and people in China are moving the factories out of China

00:58:41.120 | into other countries.

00:58:42.520 | - Yeah.

00:58:43.360 | - Because the Chinese are now outsourcing to Vietnam

00:58:46.200 | and other countries.

00:58:47.040 | So this is the way of the world.

00:58:48.680 | You know, people move up and they get a better lot in life

00:58:51.160 | for their families.

00:58:52.000 | And just in America, we've gotten soft.

00:58:53.560 | And there's a generation.

00:58:55.520 | How do people die in America now?

00:58:57.120 | Suicide, obesity, heart attacks, anxiety.

00:59:01.460 | I mean, we're suffering from things

00:59:04.260 | that if you told people 100 years ago

00:59:06.000 | that the top ways Americans would die

00:59:09.280 | would be overeating and suicide, they'd be like, what?

00:59:13.580 | You're literally killing yourself

00:59:14.720 | or eating yourself to death?

00:59:15.680 | That's what's happening in America?

00:59:17.000 | - And when everybody, not everybody,

00:59:19.800 | unmasks there's a large number of people

00:59:21.680 | who have become softer and softer.

00:59:24.000 | Capitalism creates an environment

00:59:25.560 | where there's people that still step up amidst that

00:59:28.440 | with a big dream and challenge the conventions

00:59:31.120 | and that human spirit just arise above that.

00:59:33.560 | As Elon's example of that, Jeff Bezos' example.

00:59:36.400 | - Countless, countless examples.

00:59:37.640 | - And they push the limits of those of human beings

00:59:42.640 | that are willing to step up.

00:59:45.280 | And I think about sort of how to create a company

00:59:49.880 | that amidst all of this softness

00:59:54.260 | still creates a revolution.

00:59:56.140 | It's not, it doesn't seem trivial.

00:59:58.480 | It seems like how do you build a culture

01:00:00.460 | that's once healthy but also unhealthy

01:00:05.460 | in the way that an Olympic pursuit is?

01:00:09.080 | - It's all top down.

01:00:10.520 | Everybody just, you asked earlier what leadership was

01:00:12.880 | and I never answered the question.

01:00:13.840 | I think what leaders do is they set the example.

01:00:16.420 | They set the bar.

01:00:17.720 | And if you look at someone like Elon,

01:00:19.960 | we're personal friends for 20 years

01:00:22.440 | and he is indefatigable.

01:00:24.760 | Like, I mean, the guy has a stamina that is just phenomenal.

01:00:29.040 | Like he does not get tired, he works relentlessly

01:00:32.260 | and he sets that standard for the rest of the team.

01:00:36.040 | And I think Bezos is very sharp and likes to debate stuff

01:00:39.920 | and is very, you know, and Jobs was just incredible

01:00:43.620 | at design and figuring out how to bridge that gap.

01:00:46.140 | So they just, leaders set the standard.

01:00:48.940 | They set the standard.

01:00:50.260 | And you know that your time is over as a leader

01:00:52.420 | when you can't set the standard

01:00:53.820 | and that's when you have to pass the baton, right?

01:00:55.740 | And Bezos did that.

01:00:57.180 | And Bezos now is saying, you know what?

01:00:58.900 | I'm 57, I'm the richest guy on the planet,

01:01:01.660 | depending on the week.

01:01:03.980 | And I would like to do some other challenges

01:01:06.620 | but I don't wanna grind it out at Amazon

01:01:08.880 | for another 25 years.

01:01:10.340 | I wanna do other things.

01:01:11.420 | And so he passed the baton.

01:01:13.080 | And that's the healthy thing to do in that regard.

01:01:15.380 | I do think there is a time period

01:01:17.220 | in which you can run that hot.

01:01:18.900 | And then at a certain point, you have to then change.

01:01:20.660 | Just like an athlete might go to be a coach, right?

01:01:24.420 | Or a commentator.

01:01:25.640 | And so, being an entrepreneur is brutal.

01:01:29.480 | It's seven days a week, 12 hours a day.

01:01:31.960 | Anybody who says anything differently

01:01:33.360 | is kidding themselves.

01:01:34.680 | You're gonna have to sacrifice.

01:01:36.600 | And this competition.

01:01:38.200 | And America has to fight.

01:01:39.980 | If America does not win capitalism and China does,

01:01:43.860 | it is literally the end of the human species.

01:01:47.920 | It's over for humanity.

01:01:49.720 | Right now, everything has been going really well

01:01:52.640 | in terms of the number of people living in poverty

01:01:54.720 | is plummeting.

01:01:55.920 | Lifespans have been rising.

01:01:59.200 | Science is booming.

01:02:01.160 | The economy is booming.

01:02:02.120 | All these things are incredible.

01:02:02.960 | The one thing that's kind of stagnant right now

01:02:05.100 | is the number of people living in democracy

01:02:07.120 | versus under authoritarian rule.

01:02:09.520 | It's flat.

01:02:10.360 | So when you look at all Steve Pinker's charts

01:02:11.960 | and he's really excited,

01:02:13.440 | there's one you're gonna see that's flat.

01:02:15.040 | And I think we peaked with 53 or 54% of people

01:02:18.520 | on the planet Earth being in a democracy.

01:02:20.360 | And now it's going below 50.

01:02:22.520 | And it's because some of the democratic Western countries

01:02:26.160 | don't have the population growth

01:02:27.420 | of some of the communist and socialist countries

01:02:30.320 | and authoritarian countries.

01:02:31.640 | And we have to make sure that we win capitalism.

01:02:36.000 | We must win economically.

01:02:38.200 | That is the battlefield.

01:02:39.640 | The battlefield of science, technology,

01:02:41.380 | and money, and economy, finance.

01:02:43.360 | That's the battlefield.

01:02:44.620 | China wins, authoritarians win.

01:02:47.480 | And at any time,

01:02:49.000 | Xi Jinping can pull Jack Ma into a room and say,

01:02:52.280 | it's time for you to be re-educated.

01:02:54.280 | Or they can put three or four million people,

01:02:56.320 | Uyghurs, into prison camps and say,

01:02:58.240 | you know what, this religious thing,

01:03:00.720 | that's counter to what is productive for us.

01:03:03.600 | Therefore, we're gonna shave your heads

01:03:05.480 | and we're going to have you

01:03:06.480 | literally pick cotton in the fields.

01:03:08.200 | They have Uyghurs with no sense of any kind of

01:03:12.880 | arc of history in the fields picking cottons

01:03:15.720 | as slaves in what can only be described

01:03:19.160 | by every humanitarian organization

01:03:21.140 | as a concentration camp.

01:03:22.320 | And every Jewish person I know

01:03:24.000 | takes great offense when somebody uses

01:03:25.400 | the Holocaust as a metaphor,

01:03:27.240 | except in the case of the Uyghurs right now.

01:03:29.520 | And every Jewish person I've talked to

01:03:31.480 | has said to me, that is a Holocaust.

01:03:33.500 | That is millions of people going to genocide

01:03:37.100 | because of their religious beliefs.

01:03:38.680 | And I'm an atheist,

01:03:40.160 | but if people wanna believe a certain religion, fine.

01:03:43.160 | But China's approach is,

01:03:44.800 | we need to win capitalism so bad,

01:03:47.200 | we need to win on the global stage so bad,

01:03:49.560 | we can't have any of this religious stuff going on here.

01:03:52.560 | That is a distraction from winning and beating America.

01:03:55.440 | And then in America,

01:03:56.680 | the people who are gonna make us win are the entrepreneurs

01:03:59.080 | and the scientists and the technology

01:04:00.560 | and our education system and finance.

01:04:02.400 | And we're vilifying those things.

01:04:03.880 | It's pretty dark.

01:04:05.460 | - It's dark, but I still believe that

01:04:07.320 | the vilification is just in the space of Twitter

01:04:10.600 | and the space of ideas.

01:04:11.440 | - I think that's probably a good--

01:04:12.260 | - And entrepreneurs win out in the end.

01:04:14.560 | They don't listen to any of that.

01:04:15.400 | - I believe we'll win.

01:04:16.240 | - And they'll build, we'll get the rocks.

01:04:17.760 | - Some of them do actually, in their darkest moments,

01:04:19.680 | I can tell you that they turn off their Twitter accounts

01:04:21.640 | and they, I've had to sit down

01:04:23.280 | with a number of entrepreneurs and say,

01:04:25.160 | "Turn off Twitter.

01:04:26.560 | "This is not healthy for you.

01:04:28.340 | "This is not a healthy pursuit."

01:04:29.680 | Because don't read the comments.

01:04:31.340 | If you do, it's like a full contact sport.

01:04:33.120 | You should just take it as like

01:04:34.760 | professional wrestling or something.

01:04:36.160 | But stay focused on building companies

01:04:38.080 | and advancing the human species

01:04:41.840 | through science and technology.

01:04:43.160 | I mean--

01:04:44.000 | - As you're describing,

01:04:44.920 | you've hosted this week at Startups

01:04:47.080 | for how many episodes?

01:04:49.440 | - 11 years, almost 1,200 now.

01:04:51.200 | - 1,200.

01:04:52.040 | - Yeah.

01:04:52.860 | - So you've talked to some of the great leaders

01:04:54.480 | in business in general.

01:04:56.240 | Is there a common thing that you see or--

01:05:01.240 | - Really messed up relationship with their parents.

01:05:03.900 | Like just, "Find me a great entrepreneur.

01:05:06.360 | "I will, show me the trauma."

01:05:08.440 | Their dad was like, "You're not good enough."

01:05:11.400 | - In the teenage years, is that truly, is there something--

01:05:14.280 | - There is definitely something to--

01:05:15.640 | - A hardship at some point in their life?

01:05:17.680 | - Yeah, I think so.

01:05:18.640 | I mean, and there's definitely something

01:05:21.000 | with immigrant parents.

01:05:22.920 | That is a bit of a stereotype out here.

01:05:24.840 | But I've heard from many investors,

01:05:26.320 | like that's like their,

01:05:27.960 | oh, were your parents immigrants?

01:05:29.560 | And did they beat into you that you have to succeed

01:05:32.520 | and you feel the need to succeed

01:05:34.280 | because they suffered to get you to this country?

01:05:36.000 | Like there is an archetype there that I hear.

01:05:38.840 | When I started investing, I heard from a lot of people.

01:05:40.880 | It's like, yeah, you wanna find those immigrant founders

01:05:43.120 | who are coming out of Stanford

01:05:44.120 | 'cause they had to fight to get there.

01:05:45.840 | And their parents had to fight, right?

01:05:48.000 | So it's like two huge fights and there's so much at stake

01:05:50.560 | as opposed to somebody who's fifth generation

01:05:52.440 | and had everything handed to them and they were legacy

01:05:54.920 | and got into schools for free.

01:05:56.000 | But I think in general,

01:05:58.320 | the ability to get people to join you on that journey

01:06:01.680 | is so critical.

01:06:03.120 | So you have to be charismatic

01:06:05.320 | and it doesn't mean like you're an extrovert.

01:06:07.360 | There are introverts who are super charismatic.

01:06:10.240 | Oh, and there are soft-spoken people.

01:06:11.640 | They don't have to be like super vivacious

01:06:14.120 | or rambunctious people.

01:06:16.600 | They could be just quiet assassins,

01:06:18.080 | but you need to be able to get people

01:06:19.880 | to come on the journey with you.

01:06:21.000 | You have to be that storyteller

01:06:22.720 | and you have to have that passion

01:06:23.840 | and then you have to transfer that enthusiasm to investors,

01:06:26.760 | the press, to customers, to all the stakeholders.

01:06:29.960 | And if you're enthusiastic about it and you're engaged,

01:06:33.240 | then it's easier for people to come on that journey.

01:06:35.200 | And that's why people really start to think about,

01:06:37.680 | well, what is the purpose of what I'm doing?

01:06:39.840 | And it sounds corny.

01:06:41.000 | And when I first heard that, I was like, it's kind of corny,

01:06:43.160 | but then I read this book by,

01:06:44.960 | I've got his name, Rick something.

01:06:47.520 | He wrote "The Purpose-Driven Church"

01:06:50.000 | and he had spoken at a TED or something

01:06:51.640 | and everybody went crazy about it.

01:06:53.920 | And he's like, a church should have one purpose,

01:06:56.640 | one single thing they do.

01:06:57.480 | And like his church,

01:06:58.960 | which was like one of these mega churches in San Diego,

01:07:01.400 | just wanted to do education for this specific country

01:07:05.760 | and that's all they did.

01:07:06.800 | And they benchmarked those.

01:07:08.360 | I think it's very important to have a purpose and a mission,

01:07:10.640 | not everything,

01:07:11.560 | but a specific purpose of some kind of joy

01:07:16.320 | that you want to put into the world.

01:07:17.600 | You want to solve some kind of big, hard problem.

01:07:20.360 | And then everybody knows

01:07:22.040 | why you're coming to work every day.

01:07:23.880 | And then for the founder,

01:07:24.920 | when you dread going to work that day

01:07:27.600 | and you don't feel like solving that problem anymore,

01:07:29.760 | that's the tell.

01:07:31.160 | And a lot of times I meet young founders,

01:07:32.480 | I'm like, why are you doing this?

01:07:33.320 | And they're like, well, I was looking for an idea

01:07:36.240 | and this is the one I came up with

01:07:37.360 | 'cause I think I'll make a lot of money.

01:07:38.560 | And it's like, you're gonna quit.

01:07:41.080 | You're gonna get to month nine or 10 of this

01:07:42.880 | and you're gonna run out of money

01:07:44.400 | or like your CTO is gonna quit,

01:07:46.440 | then your CFO is gonna quit

01:07:47.760 | and you're gonna lose your biggest customer

01:07:49.140 | and you're just gonna say this is not worth it.

01:07:51.480 | And if using Bezos or Elon as examples,

01:07:57.600 | they just needed to see the world change

01:08:02.600 | for in very specific ways.

01:08:04.360 | And Steve Jobs, they needed to see a change.

01:08:06.600 | And it doesn't matter if they made money

01:08:08.540 | or they were losing or winning,

01:08:09.880 | they just went to work every day and they had to change it.

01:08:12.480 | - It's almost like they didn't have a choice.

01:08:14.280 | - No choice.

01:08:15.120 | - Elon makes it sound like his torture, his whole journey,

01:08:17.360 | but he can't help it.

01:08:19.320 | - Having been a witness to it,

01:08:20.820 | just as friends for that long,

01:08:24.320 | I have never seen an entrepreneur suffer more than him.

01:08:27.280 | And he's been public about that,

01:08:28.920 | like you do not wanna be me.

01:08:30.320 | He has suffered for those companies.

01:08:33.560 | He has suffered to get them where they are.

01:08:35.200 | It has not been easy.

01:08:36.440 | - Can you psychoanalyze Elon in that aspect?

01:08:39.180 | Like, is it just he can't help it,

01:08:42.060 | he must see the change that he hopes for in the world?

01:08:46.420 | - He's just incredibly hardworking

01:08:48.700 | and he's very talented as well.

01:08:51.020 | I don't think people understand that.

01:08:53.820 | He actually is a really brilliant engineer.

01:08:56.060 | At the end of the day, he actually knows what he's doing

01:08:58.980 | and he asked the right questions.

01:09:00.380 | I mean, people were kind of aghast

01:09:02.860 | that he was asking Vlad such good questions

01:09:05.100 | and they're like, "Oh my God,

01:09:06.340 | Elon's the best journalist on the planet."

01:09:08.080 | And it was like, kind of anybody who knows Elon

01:09:10.960 | knows he has great questions.

01:09:12.040 | I mean, I used to have dinner in LA

01:09:15.260 | and my book agent also was Sam Harris's agent.

01:09:18.520 | Sam and I met through John Brockman

01:09:22.080 | and we became friends 'cause we lived near each other

01:09:24.080 | and I was friends with Elon.

01:09:25.640 | And then I used to invite them to both dinner in Brentwood

01:09:27.840 | 'cause one lived in Bel Air, one lived in Santa Monica

01:09:30.120 | and I lived in Brentwood.

01:09:30.960 | And we would go to this place, Popone,

01:09:32.360 | this Italian restaurant.

01:09:33.640 | And every Tuesday for years, we would just,

01:09:36.380 | the three of us, every other Tuesday or so,

01:09:37.980 | we'd have dinner.

01:09:39.180 | And I'd sit there and Sam wanted to know about AI

01:09:42.100 | and Elon's talking about artificial intelligence

01:09:43.980 | 'cause he's on the board of DeepMind.

01:09:45.220 | And Elon wanted to know about atheism and meditation

01:09:49.300 | and all this other stuff that Sam was an expert on.

01:09:52.660 | I got to sit there and just listen to these two guys talk.

01:09:56.380 | - And they have both piercing intelligences.

01:09:58.720 | But Elon, he goes straight to the gut,

01:10:02.460 | the questions that no engineer wants to hear

01:10:06.220 | is just the basic stuff that,

01:10:08.860 | it's like why the hell are you doing it this way

01:10:11.660 | when the obvious solution is much easier or this or that?

01:10:15.940 | Why haven't you tried this?

01:10:16.780 | - He can figure things out.

01:10:18.020 | I mean, he's a problem solver.

01:10:19.420 | I mean, and that's another thing,

01:10:21.060 | I think the great entrepreneurs can look at a problem

01:10:23.620 | with very fresh eyes, almost consistently.

01:10:25.860 | And Bezos described that as day one thinking, right?

01:10:30.100 | Like just pretend this is day one every day.

01:10:32.380 | And then other people use the term first principles.

01:10:35.660 | But it basically means like when you see a problem,

01:10:38.380 | pause for a second and really think through

01:10:41.620 | what is the best possible solution here?

01:10:43.380 | What are some alternative solutions and get from everybody,

01:10:45.740 | like how do we solve this problem?

01:10:46.980 | And what people do sometimes, they get in a rut.

01:10:49.020 | They just come to work and they just go through their email.

01:10:51.940 | They do whatever they did the day before.

01:10:53.720 | They don't think, why are we doing this?

01:10:55.460 | And is there a better way to do it?

01:10:56.940 | Now you can get so obsessive about that

01:10:58.900 | that you can over-engineer stuff

01:11:01.100 | and you can never actually ship a product.

01:11:03.420 | So there have to be some pragmatism and some goals

01:11:06.620 | and some dates associated with that.

01:11:08.340 | But it is a very cool thing to really think like,

01:11:11.460 | I wonder if we actually made the batteries ourselves,

01:11:14.660 | what that would look like.

01:11:15.500 | Or I wonder if we could get to two-day shipping,

01:11:18.420 | you know, or I wonder if we could do same-day shipping.

01:11:20.900 | Like you need to have somebody who's willing to say,

01:11:23.100 | you know what, fuck it.

01:11:24.300 | Let's set a crazy audacious goal,

01:11:26.540 | two-day shipping of any product,

01:11:28.300 | anywhere in the United States.

01:11:29.660 | And once you throw the gauntlet down like that,

01:11:31.180 | now everybody knows they're rowing in the right direction.

01:11:34.020 | Two-day shipping, Amazon Prime.

01:11:35.980 | And that's what people didn't realize about Amazon.

01:11:37.780 | The business wasn't shipping all those products.

01:11:40.060 | It was getting you to sign up for Amazon Prime.

01:11:42.960 | Then they have hundreds of millions of people

01:11:45.280 | doing Amazon Prime for 10 bucks a month.

01:11:47.380 | I think globally it's probably cheaper.

01:11:48.900 | But that was the driver of that business,

01:11:51.820 | was all of those people, 'cause they would,

01:11:54.260 | you're an Amazon Prime subscriber?

01:11:55.940 | Do you know how much you pay?

01:11:57.260 | - No.

01:11:58.100 | - Exactly.

01:11:58.940 | It started at $50.

01:12:00.260 | And I think they even had like 40, 50, $60

01:12:02.500 | was like the testing in the early days.

01:12:03.900 | And now it's, I think $149, 12, $13 a month.

01:12:08.460 | If you pay for the year,

01:12:09.300 | I think it goes down to 10 bucks a month, 120.

01:12:11.860 | And you're like, wow.

01:12:12.700 | And it's like, yeah, you're paying $13 a month

01:12:14.980 | for the privilege of shopping at Amazon.

01:12:17.900 | But you say it's the greatest thing in the world

01:12:21.700 | because anything I need, you know,

01:12:23.340 | if you forgot a microphone or a cable goes bad

01:12:25.100 | or a camera goes bad, you get it here,

01:12:26.460 | you know, within a day or less.

01:12:28.180 | - Yeah.

01:12:29.020 | - It's pretty amazing.

01:12:29.840 | - You've already been dropping bombs,

01:12:31.060 | incredible advice on startups in general.

01:12:33.500 | But let me maybe go straight in and ask,

01:12:38.500 | is there advice for somebody that wants to go big,

01:12:41.940 | to build the big startup to help them succeed?

01:12:44.740 | - Yeah, it's very similar to the advice I give to investors

01:12:47.620 | 'cause now I teach angel investing

01:12:49.860 | 'cause there's so many people who wanna invest.

01:12:51.700 | And so I wrote a book on that, Angel,

01:12:53.980 | and then I do a course called Angel University

01:12:55.900 | that I teach six times a year.

01:12:57.420 | And then I have a syndicate called thesyndicate.com

01:12:59.340 | where I invest in companies.

01:13:00.260 | There's 6,500 people who are members of that.

01:13:02.420 | It's the largest syndicate in the world.

01:13:04.140 | In fact, the first deal we ever did was calm.com,

01:13:06.780 | the meditation app.

01:13:07.620 | We put $378,000 into it

01:13:09.420 | when it was a $5 million product, a $5 million company.

01:13:12.100 | So we bought six or 7% of the company.

01:13:13.900 | It's now worth 2 billion.

01:13:15.100 | So you can do the math on that.

01:13:15.980 | We still own 5%.

01:13:16.820 | - What year was it?

01:13:18.100 | - Six years ago, so probably, yeah, maybe 2015, 2014.

01:13:23.100 | And nobody else would invest in calm.

01:13:25.220 | - Yeah.

01:13:26.060 | - But Sam Harris was the reason I did

01:13:27.140 | because I asked Sam, "Tell me about meditation."

01:13:30.620 | And he's explaining it to me.

01:13:31.740 | And I said, "What about this?

01:13:32.580 | "Do you have to have a mantra?

01:13:33.700 | "How does it work exactly?

01:13:34.660 | "I know positive."

01:13:35.500 | He was like, "Well, you should just go to UCLA

01:13:37.000 | "and talk to Diana Winston."

01:13:38.020 | And there's this whole project there.

01:13:39.820 | And I'm like, "UCLA does meditation?"

01:13:42.300 | He's like, "Yeah, there's a mindful institute.

01:13:43.700 | "They're teaching people to teach meditation.

01:13:46.820 | "And they're doing PTSD,

01:13:47.820 | "and I'm doing brain scans."

01:13:49.420 | And I was like, "Oh."

01:13:50.940 | And then I talked to the UCLA people,

01:13:52.900 | and they were like, "It's real.

01:13:53.740 | "Like we taught Phil Jackson and Kobe Bryant

01:13:56.780 | "and Shaquille O'Neal did."

01:13:58.180 | That's how they won their championships, they meditated.

01:14:02.220 | And I was like, "Hmm, if UCLA's doing it,

01:14:05.660 | "Sam says it's cool, well, fuck it.

01:14:07.280 | "I'll put money into that."

01:14:08.980 | And that's the second biggest investment in my career

01:14:10.900 | after Uber, and it will in all likelihood become the biggest.

01:14:13.860 | I mean, it's between Uber, Robinhood, and calm.

01:14:16.660 | And long story short,

01:14:19.060 | when I'm teaching people to angel invest,

01:14:20.540 | there's really two things that you cannot fake.

01:14:23.940 | One is a product that is built really well.

01:14:26.940 | So if you look at calm, Robinhood, Uber, Tesla, Amazon,

01:14:30.180 | these products are transcendent, they're well-constructed,

01:14:34.220 | there's craftsmanship to them, they're great products.

01:14:37.060 | - So you're saying not fundamentally like the idea,

01:14:39.460 | but the execution of the actual craftsmanship

01:14:41.620 | of the construction.

01:14:42.500 | - The actual product is amazing.

01:14:45.220 | Then there's customers.

01:14:48.860 | And every business has ultimately a customer,

01:14:51.820 | and that customer, if they are in fact delighted

01:14:54.660 | by that product, that's the magic.

01:14:57.740 | Because you need a team to build the product,

01:15:02.620 | and then you need customers to use the product,

01:15:05.420 | and really those three vectors are undeniable.

01:15:08.260 | Now, you can have great teams that build a bad product,

01:15:12.340 | doesn't happen too often,

01:15:14.260 | or you can have customers who don't like the product,

01:15:16.000 | but generally speaking, a great team

01:15:19.380 | will build a great product, or a good product and iterate,

01:15:22.980 | and then eventually delight customers.

01:15:25.340 | And so most people say the team is the most important,

01:15:28.780 | but there's a lot of smart people out there,

01:15:32.060 | and let's assume that you can raise money for your idea,

01:15:36.660 | or you have money, or you can just convince people

01:15:38.340 | to do it for free.

01:15:39.580 | If you make a great product and it connects with users,

01:15:41.500 | that's the magic.

01:15:42.340 | You look at Clubhouse,

01:15:43.160 | it's actually a really well-designed product.

01:15:45.660 | And that product is connecting with customers.

01:15:47.740 | And if you were to talk to the customers

01:15:49.020 | or look at the product,

01:15:50.340 | you would see a well-constructed product

01:15:51.940 | and a delighted customer.

01:15:53.580 | And you can tell the delighted customer

01:15:54.940 | by just the amount of time they use it.

01:15:56.660 | That's called engagement.

01:15:58.180 | It's a fancy word for how much they use it.

01:16:00.220 | And Snapchat, when that was going around,

01:16:02.900 | and they were trying to raise money,

01:16:04.580 | they had a fraction of the number of users,

01:16:07.260 | but the top maybe third were opening the app every hour.

01:16:12.100 | And nobody had ever seen that before.

01:16:15.000 | People were using Facebook a couple of times a day,

01:16:17.140 | the top users,

01:16:18.100 | but nobody had ever seen people using it every day

01:16:22.500 | for 100 days in a row, every hour.

01:16:25.380 | And I was like, "What's going on here?"

01:16:26.380 | It's like, "Oh, the ephemeral messaging."

01:16:28.780 | And then the streaks.

01:16:30.060 | They had created these streaks between people

01:16:31.700 | where every day, and then people would be on vacation.

01:16:34.420 | Like, "I just have to open my streak

01:16:35.660 | "and keep my streak with Lex

01:16:36.740 | "that we chatted every day going."

01:16:38.620 | And so they had this addictive nature to it.

01:16:40.300 | And that's why Clubhouse was able

01:16:41.420 | to garner so much investment,

01:16:43.240 | is the number of hours people were using it every month

01:16:46.800 | was just unbelievably off the charts.

01:16:49.500 | - Some of that is execution,

01:16:50.700 | but some of it is the weird magic of the-

01:16:53.540 | - Product market fit.

01:16:54.620 | - Yeah, so there's something.

01:16:56.140 | I mean, Clubhouse, there's a,

01:16:58.460 | it's still a mystery to me,

01:16:59.580 | 'cause I also use Discord voice.

01:17:01.660 | There's that intimacy to voice.

01:17:03.700 | - Oh, for sure.

01:17:04.540 | Well, you've got people's, yeah, tent.

01:17:06.340 | - But the video gets in the way, actually,

01:17:10.220 | in a weird way.

01:17:11.100 | There's a privacy when you just use voice.

01:17:14.320 | - People are not taking showers now, Lex.

01:17:15.800 | I mean, we're in a pandemic,

01:17:17.520 | and people just roll out of bed.

01:17:18.680 | - And the hair thing, nobody's getting haircuts.

01:17:20.360 | - Nobody's hair is good, nobody's getting haircuts.

01:17:22.440 | People are wearing gym clothes.

01:17:24.120 | I mean, Zoom is just horrific

01:17:26.480 | to be on Zoom for five hours a day.

01:17:28.040 | It is exhausting.

01:17:29.360 | - Well, it does make me wonder what,

01:17:32.000 | once we emerge from the pandemic,

01:17:33.660 | whether product market fit,

01:17:36.200 | how that evolves with Clubhouse

01:17:38.280 | and all those kinds of things.

01:17:39.220 | - Yeah, no, Clubhouse is a beneficiary

01:17:41.060 | of the pandemic, for sure.

01:17:42.260 | When do you think the pandemic,

01:17:43.820 | when do you think deaths will be under,

01:17:47.420 | let's say, 200 a day,

01:17:48.580 | and we'll have 200 million people

01:17:50.340 | on the other side of this?

01:17:51.260 | 'Cause that's kind of what it takes, right?

01:17:52.620 | You gotta get to 150, 200 million people

01:17:54.340 | on the other side in America?

01:17:55.780 | - I haven't, you know,

01:17:57.140 | I personally stopped deeply thinking about this

01:18:00.180 | because I've been frustrated for so long.

01:18:02.540 | - Ah, you checked out.

01:18:04.380 | - I almost checked out

01:18:05.660 | because it psychologically allows me to carry on

01:18:10.080 | because I thought for many months now

01:18:14.240 | that testing needs to be done at scale.

01:18:16.600 | - And it still hasn't gotten done.

01:18:17.800 | - It hasn't.

01:18:18.640 | - So ridiculous.

01:18:19.460 | - We gave up, basically, on testing.

01:18:20.300 | - We gave up?

01:18:21.260 | - Because we're all sitting there

01:18:23.160 | waiting for vaccine to come along.

01:18:25.560 | And the distribution of the vaccine is not,

01:18:29.080 | you know, it's struggling from the same kind of things

01:18:31.200 | as the testing.

01:18:32.040 | It's gonna take quite a bit of time.

01:18:33.680 | So it does, if everything goes great,

01:18:36.940 | meaning there's not a second strand of the virus

01:18:39.940 | that's going to create a second major wave,

01:18:44.000 | that I am cynical enough to think

01:18:46.600 | that it won't be until mid-summer

01:18:49.660 | that we start opening back up.

01:18:51.340 | - Yeah, I think it's gonna be May, June.

01:18:53.260 | I'm a little bit earlier than you.

01:18:54.660 | I've been tracking it.

01:18:55.500 | It's like 1.5 million shots in arms a day.

01:18:57.820 | I think this vaccine's been undersold.

01:19:00.060 | I mean, it's a miracle.

01:19:00.920 | Not one person who was in the trials died

01:19:03.580 | who took it, and only one went to the hospital,

01:19:05.940 | and they weren't even put on a ventilator.

01:19:08.080 | And the hospitalizations are plummeting,

01:19:10.120 | and we're at 10% now in the United States.

01:19:12.400 | At the pace we're going, at 1.5 a day.

01:19:14.820 | I think when the Johnson & Johnson one comes out next month,

01:19:16.820 | it'll be 3 million a day, maybe, 2 1/2.

01:19:19.780 | And we already have 100 million people

01:19:21.100 | who've likely had it.

01:19:22.020 | So I've been doing the math.

01:19:22.940 | I think we're like 60 days away, February, March.

01:19:26.420 | Yeah, sometime in April, I think,

01:19:28.120 | anybody's gonna be able to get a shot,

01:19:29.980 | and the number of deaths is gonna go below 200 a day.

01:19:33.380 | And once that happens,

01:19:34.420 | I think people have had enough of this.

01:19:36.260 | They're just gonna go YOLO.

01:19:37.660 | - But see, the crucial piece for me

01:19:41.660 | that I've been focusing on is the social media aspect

01:19:44.740 | of how it's not just about the reality of deaths.

01:19:49.500 | It's about the state of the collective intelligence

01:19:53.780 | of the human species, which is determined

01:19:55.740 | by our communication on social media.

01:19:58.300 | So we can be collectively afraid.

01:20:02.140 | The fear can spread, or it could be YOLO can spread,

01:20:05.740 | or it could be all different kinds of misinformation.

01:20:09.980 | And of course, during the election year,

01:20:12.580 | the politics influences our perception

01:20:15.300 | of what is true and not.

01:20:17.340 | But having real, rigorous, nuanced conversation

01:20:21.660 | about this kind of stuff is the way out of this.

01:20:25.460 | And that's where social media really comes in,

01:20:27.580 | because social media drives division,

01:20:30.360 | where people form tribes and so on.

01:20:32.660 | And it feels like it's honestly a technology problem.

01:20:37.460 | People say it's a human problem,

01:20:39.420 | but it just feels like, I believe humans are good,

01:20:42.420 | and technology can enable them to be thoughtful.

01:20:44.860 | - We talked earlier about the magic of Silicon Valley

01:20:49.540 | and then maybe going too far

01:20:51.180 | with the Facebook groups example,

01:20:53.260 | where you take out all that friction.

01:20:55.680 | What happened was, we used to have something called r/chron,

01:20:59.520 | reverse chronological order.

01:21:01.180 | That's how you consumed a feed.

01:21:03.060 | So any kind of social feed, like Twitter,

01:21:05.260 | was in reverse chronological order.

01:21:06.700 | The newest thing was up top,

01:21:07.780 | and you would just work your way backwards.

01:21:09.780 | And so it gave this really fresh feeling.

01:21:12.560 | And then a guy named Dave Morin

01:21:13.820 | and the team over at Facebook realized,

01:21:16.580 | you know, there are some things

01:21:18.460 | that got a lot of attention two hours ago,

01:21:21.100 | and the stuff since then has not been as important.

01:21:23.380 | But if you missed that, there was a really good tweet

01:21:25.820 | where there was a really good update.

01:21:27.620 | Somebody had a baby.

01:21:28.840 | Can we get the baby one at the top?

01:21:32.920 | And it was like, well, how would we do that?

01:21:34.320 | How would we know that that's the important one?

01:21:35.680 | It's like, well, let's put a like button on it,

01:21:38.880 | and let's see how many comments there are.

01:21:40.360 | So if it gets a lot of likes or comments or retweets,

01:21:42.800 | let's show those first,

01:21:44.160 | and then we'll kind of mix in the most recent stuff.

01:21:47.240 | And so when you're on Twitter,

01:21:48.480 | and then when Facebook did that,

01:21:50.800 | Facebook became so addicting,

01:21:52.640 | 'cause Facebook was on,

01:21:54.000 | what has got the most engagement, put that first,

01:21:56.840 | so every time you opened up Facebook,

01:21:58.400 | you get the dopamine hit.

01:22:00.020 | And then what happens when you see the bar mitzvah photo

01:22:02.740 | or the enraging story about some injustice in the world?

01:22:07.740 | You retweet it, you write a comment,

01:22:09.940 | you share it on your wall.

01:22:11.900 | And thus, this addiction to the outrageous,

01:22:15.820 | the outlandish, the inspiring occurred.

01:22:18.860 | And it used to be like inspiring stuff,

01:22:20.860 | puppies or some heartwarming story.

01:22:23.020 | And then it got dark.

01:22:25.300 | And then people started to realize,

01:22:27.020 | if I wanna show up on the top of my friends' feeds,

01:22:30.180 | if I say something controversial or I'm outraged,

01:22:33.540 | I get to the top.

01:22:35.020 | And then that's when outrage culture came in.

01:22:36.780 | And then that's when cancel culture came in.

01:22:38.420 | Everybody started to realize,

01:22:39.740 | if I try to cancel that person for being a racist

01:22:42.860 | or a sexist or a horrible human being

01:22:45.780 | or whatever they did that's wrong,

01:22:47.980 | I get to the top of the feed.

01:22:49.700 | And we all collectively started playing

01:22:51.260 | a very weird video game,

01:22:52.820 | which is how outraged can we all be?

01:22:55.020 | And to get to the top of the list.

01:22:56.620 | And then of course, with Trump, he realized it.

01:22:59.100 | And he's like, "Okay, yeah,

01:23:00.140 | I'm just gonna make fun of a celebrity

01:23:01.900 | and I get more retweets.

01:23:03.500 | Okay, I'm gonna make fun of Rosie O'Donnell

01:23:05.060 | for being overweight or something."

01:23:06.580 | And he just starts attacking people.

01:23:08.700 | And people are like, "Oh my God, what did he say?"

01:23:10.340 | And he copied that from Howard Stern.

01:23:12.460 | 'Cause he was in New York

01:23:13.420 | and he used to be on Howard Stern.

01:23:14.460 | And Howard Stern took over all the dialogue

01:23:16.220 | in the '80s and '90s because he was outrageous.

01:23:18.620 | And then Trump did that.

01:23:19.660 | And then social media incorporated that

01:23:22.540 | into the operating system.

01:23:23.780 | It became the actual device of social media.

01:23:26.580 | Was the ding, ding, ding, ding, ding.

01:23:28.740 | We've got something incredible for you.

01:23:29.980 | Everybody salivates like Pavlov's dog.

01:23:32.460 | Oh my God, I can be outraged.

01:23:34.700 | That's what's gotta be undone.

01:23:36.220 | And the only way for that to be undone

01:23:37.440 | is these things can't be billions of people

01:23:39.460 | where the most outrageous thing

01:23:42.320 | that happened in the world today,

01:23:44.460 | in the last five minutes, is now in front of you.

01:23:47.240 | And that's why people have anxiety,

01:23:48.700 | they don't sleep, and they doom scroll all night.

01:23:51.700 | It's because the human mind was not meant to process

01:23:54.500 | this much suffering, pain, anger.

01:23:56.860 | And that's why we have all this mental health issues.

01:23:59.100 | Also, young girls or even adults

01:24:02.580 | watching other people post their private jets

01:24:05.140 | and their vacations and YOLO adventures on their Instagram.

01:24:10.140 | To the point at which young people are now faking

01:24:13.760 | being on private jets to put on their Instagram.

01:24:17.260 | And creating this crazy FOMO around their Instagrams.

01:24:22.260 | We wonder why people are unhappy.

01:24:25.460 | If you think everybody's on a private jet

01:24:27.060 | going to some Michelin star restaurant

01:24:29.260 | or whatever the coolest thing in the world is today,

01:24:32.180 | going to the Grammys, going to whatever,

01:24:34.460 | Coachella, Burning Man, you're like, "Oh, but I'm home.

01:24:38.340 | "I'm in my house and I'm not at Burning Man."

01:24:43.100 | - Getting inadequate. - Exactly.

01:24:44.620 | So this whole system is creating

01:24:47.020 | the wrong set of incentives.

01:24:48.300 | I tend to believe it's possible

01:24:50.580 | to still have extremely high engagement

01:24:52.860 | and create a successful, profitable business

01:24:55.660 | while encouraging personal growth.

01:24:58.460 | Like encouraging people to be the best version of themselves.

01:25:01.260 | I just think we haven't,

01:25:02.980 | we got the first generation of social networks.

01:25:05.500 | I think a new generation needs to be built.

01:25:07.820 | - Is that your plan for a business?

01:25:09.380 | - Well, I have a longer term plan

01:25:11.860 | in terms of ambition,

01:25:13.220 | which is I believe in being able to have

01:25:18.220 | deep connection between human and AI systems,

01:25:22.180 | like partners, friends.

01:25:23.940 | There is a connection to there with social media.

01:25:26.220 | I do think AI has a strong role to play

01:25:31.220 | in representing us, in guiding us,

01:25:34.700 | in how we consume social media.

01:25:37.340 | So this algorithm that controls the feed for Facebook

01:25:41.060 | is a somewhat centralized algorithm.

01:25:43.980 | But instead to give more power to the people,

01:25:47.020 | individuals to where each one of us have our own algorithm.

01:25:50.140 | - Bring your own algorithm. - Bring your own algorithm.

01:25:51.980 | - B-Y-O-A? - B-Y-O-A, I like it.

01:25:54.100 | - Instead of bringing your own alcohol,

01:25:55.780 | bring your own algorithm.

01:25:57.020 | Well, I mean, if you thought about it,

01:25:58.300 | if we came and said, "I want,

01:26:00.340 | "when I look at my Twitter feed,

01:26:02.080 | "I would like to see the people

01:26:03.440 | "who are the most helpful in the world,

01:26:06.320 | "generous, kind, intelligent, considered,

01:26:10.120 | "commenting on things that I don't already know about

01:26:15.040 | "'cause I wanna open my worldview."

01:26:17.280 | That could be a beautiful thing for society.

01:26:19.160 | And actually Jack was talking about,

01:26:21.640 | potentially on Twitter,

01:26:22.980 | letting people bring their own algorithms

01:26:24.760 | and sort their feeds themselves.

01:26:26.520 | This would be a wonderful thing.

01:26:27.360 | I think it's one of the reasons Clubhouse has resonated

01:26:30.340 | is it's such a diverse group of people

01:26:32.620 | that I've been able to drop in on conversations

01:26:35.640 | with people who are nothing like me.

01:26:37.720 | And listen in and hear conversations

01:26:40.200 | that I wouldn't normally be privy to.

01:26:42.040 | And everybody's like, "Oh, come join as a speaker.

01:26:45.260 | "I wanna do a room with you."

01:26:46.200 | I get asked every day, "Can we do a room?

01:26:47.720 | "Can we do a room?"

01:26:48.560 | Ask an angel investor, talk about startups.

01:26:50.720 | And I'm like, my usage of Clubhouse

01:26:54.700 | is going on my Peloton treadmill,

01:26:56.840 | putting Clubhouse on, picking a room, and just listening.

01:27:00.000 | It's so delightful for me as a podcaster

01:27:02.540 | where my job is to talk, to sit back

01:27:05.560 | and just put in a couple of miles and play chess

01:27:08.160 | and listen to a Clubhouse discussion

01:27:10.040 | that is about relationships or some fashion or hip hop

01:27:15.040 | or whatever it is that I'm not part of.

01:27:17.600 | I just sit there and I listen and you learn.

01:27:20.100 | It's like such a delightful thing.

01:27:21.360 | I always think about these kids who go to college

01:27:23.560 | and I've always been so jealous of these Ivy League kids.

01:27:25.420 | They go and they're like, "Oh, I gotta go to class."

01:27:26.960 | And I'm like, "I would just love to sit there

01:27:29.200 | "and listen to Professor Lex talk."

01:27:33.120 | What a privilege to sit there and let somebody else drive

01:27:36.720 | and talk and listen and learn.

01:27:38.240 | - Yeah, that's the beauty of podcasting.

01:27:40.040 | But of course, Clubhouse creates a whole nother experience

01:27:42.440 | where it's conversations, it's different.

01:27:44.280 | - I think it's gonna be the in-between.

01:27:45.720 | I like it as a, you release your podcast.

01:27:49.040 | You and I are gonna release this podcast, right?

01:27:51.080 | And then at some point I'll have you on my pod

01:27:52.480 | when you launch your startup.

01:27:53.440 | And then at some point somebody's gonna be like,

01:27:56.640 | you and I will run into, and I ran into you,

01:27:58.720 | I saw you were on Clubhouse the other night,

01:28:00.640 | and I was busy, but I was almost gonna click on you

01:28:04.000 | and say, "Let's start a room together."

01:28:05.280 | But you and I will start a room together

01:28:06.520 | with Eric Weinstein or somebody,

01:28:07.680 | or Sam Harris will jump in or Elon,

01:28:09.320 | and we'll have a different experience,

01:28:10.920 | which would just shoot the shit.

01:28:12.200 | And it'll act as like a fabric and a little filler

01:28:16.820 | between the tentpole podcasts, right?

01:28:19.880 | Like you and Eric, you've done three, I think, with Eric?

01:28:22.080 | - Yeah, we did four, but I haven't released the fourth yet.

01:28:24.200 | - Oh, okay, so I'm gonna watch all three

01:28:26.420 | 'cause I really thought your U-Way

01:28:28.440 | and him giving you advice was very interesting dynamic.

01:28:32.160 | I thought it was a very interesting dynamic.

01:28:34.560 | And I find him like a fascinating cat.

01:28:36.560 | We know everybody in common except we've never met.

01:28:39.560 | It's very weird because you think about the social graph

01:28:41.920 | in the real world, this is why I think augmented reality

01:28:44.240 | is gonna be such an amazing product.

01:28:48.440 | I just have one killer feature I want for augmented reality.

01:28:52.240 | We wear our glasses, and when I look at you above your head,

01:28:57.000 | I see the relationships we have

01:28:59.440 | and the things we've done together, right?

01:29:01.840 | So I see, oh, you both know Sam Harris,

01:29:04.160 | or you had Elon on the podcast on this date,

01:29:06.840 | or you and I were both at Burning Man in 2016.

01:29:10.840 | - So it's the most meaningful element

01:29:12.760 | of our connection in the network, yeah.

01:29:14.560 | - And then, 'cause we would discover that through small talk,

01:29:16.920 | but imagine you're like at a party,

01:29:18.800 | and you look, and it just, people glow.

01:29:22.800 | And you just see a glow around a person,

01:29:24.320 | and green means you have some financial relationship,

01:29:27.040 | blue means you have some friendship one,

01:29:29.000 | or yellow means you have friendship one,

01:29:30.520 | blue means you know nothing about each other,

01:29:33.120 | you have no connections.

01:29:34.040 | You're like, wow, these blue people I have no connection to.

01:29:36.960 | These people, that one's glowing red,

01:29:38.740 | we know seven or more people in common,

01:29:41.000 | and those are the seven people.

01:29:42.200 | Oh, we should go talk about how we know each other.

01:29:45.200 | That could, and that sort of happened with Facebook,

01:29:47.160 | remember, or MySpace, where you were like,

01:29:48.520 | oh, you know that person, friend of a friend?

01:29:50.680 | But that's what is gonna be AR's,

01:29:53.560 | this is why I think if Apple figures out AR,

01:29:56.560 | or Snapchat, and they just have those glasses,

01:29:58.960 | forget about VR, it's just nauseating and whatever,

01:30:02.840 | but AR, where you put the glasses on,

01:30:04.520 | you see the real world, but you augment it.

01:30:06.720 | - You make, just like you were saying,

01:30:08.720 | you make it frictionless, a very low friction,

01:30:12.320 | to make a deep human connection,

01:30:13.840 | because you have all the basic elements there already.

01:30:17.080 | - Now think about the unintended consequences

01:30:18.680 | of what I just described.

01:30:20.520 | It could get creepy and weird.

01:30:21.760 | - The privacy thing.

01:30:23.200 | - I mean, people will, here's the thing.

01:30:25.920 | People, your privacy is an illusion.

01:30:28.520 | Like, all this information is there,

01:30:30.600 | and then people are more than willing

01:30:34.240 | to give up privacy in exchange for some value.

01:30:37.920 | You know, it's a value trade.

01:30:39.600 | And giving, if my Tesla, when I'm driving

01:30:44.360 | in the direction of my house, just starts the navigation

01:30:46.600 | and saves me three clicks, and that friction's gone,

01:30:49.400 | I'm willing to give Tesla my location

01:30:51.720 | and my home address, right?

01:30:53.640 | I'm not willing to give Zuckerberg anything,

01:30:55.000 | 'cause I don't trust him, but you get the idea.

01:30:56.960 | I mean, it will be that way with DNA and other things.

01:30:59.200 | At some point, we'll just be like,

01:31:00.120 | yeah, just take my DNA.

01:31:01.160 | Like, I don't, yeah, sure, people can look

01:31:02.920 | and see that I'm a mental midget,

01:31:05.040 | and my IQ's lower than, I don't wanna bring

01:31:07.360 | the bell curve up or whatever, but you could figure out,

01:31:11.640 | if we all put our DNA in a sequenced online,

01:31:13.840 | and be like, oh yeah, Lex has got 10 more IQ points

01:31:17.120 | than J. Cal, and Sam's got 10 more than Lex,

01:31:20.040 | and all of a sudden, people are like,

01:31:21.240 | all bedded out of shape about it,

01:31:22.480 | but what if we did that, and they were like,

01:31:24.280 | and by the way, you also, all three of you

01:31:26.200 | are gonna get Parkinson's, unless you do X, Y, and Z,

01:31:29.400 | unless you eat more blueberries,

01:31:30.520 | or whatever we figure out.

01:31:31.840 | - They're going to accept it pretty quickly.

01:31:33.440 | Yeah, that's-- - Brave new world.

01:31:35.240 | - Brave new world.

01:31:36.120 | I have to ask you, you're, Justin, you were saying

01:31:39.760 | you're one of the world experts in investing in--

01:31:43.600 | - In startups. - In startups.

01:31:45.400 | Yeah, VC and so on.

01:31:47.940 | From the perspective of the startup,

01:31:50.600 | I was always kind of skeptical of raising money.

01:31:53.960 | It feels like people do it too quickly, too easily,

01:31:57.440 | but I don't know what the hell I'm talking about.

01:32:00.440 | When is the, when should a startup raise money,

01:32:04.560 | and from the perspective of the investor,

01:32:07.160 | when should the investor invest in a startup?

01:32:10.120 | Like, is there a timing thing here?

01:32:12.080 | Is there a, what, yeah, what--

01:32:14.520 | - It's a very important question,

01:32:16.560 | because the venture capital community

01:32:19.480 | is only going to fund sub-1% of enterprise

01:32:24.040 | that started in the United States every year,

01:32:26.080 | like maybe 10 basis points of them, like one in 1,000.

01:32:29.840 | And the reason is, it's jet fuel.

01:32:33.360 | You only want to take that money

01:32:35.080 | if you really want to build something big,

01:32:36.880 | and you want to build it fast.

01:32:38.400 | And when you put jet fuel behind a startup,

01:32:42.040 | as we've seen with other rockets,

01:32:43.520 | things can blow up, and people can die.

01:32:45.880 | You know, it's not people literally dying,

01:32:47.240 | but the business can go up in smoke, right?

01:32:49.300 | Like, rockets get blown up all the time at SpaceX

01:32:52.840 | as part of their ambitious plans.

01:32:54.120 | And startups, seven out of 10 startups we invest in,

01:32:57.200 | go to zero.

01:32:58.580 | Now, if you were to start the business

01:33:00.120 | and only build it off customer revenue,

01:33:01.880 | and use your own money, and go nice and slow,

01:33:03.940 | and grow 10% a year, the chances of you

01:33:07.040 | blowing up the rocket are very low,

01:33:09.320 | because you're riding a bicycle.

01:33:11.240 | Like, so, you can go a little faster,

01:33:13.360 | but the bicycle can only go so fast.

01:33:15.520 | And once you start taking that money,

01:33:18.240 | the way venture capital is constructed

01:33:21.600 | in the mix of like MIT or Harvard's endowments is,

01:33:28.120 | you know, we're gonna put some money into safe things,

01:33:31.160 | and then we're gonna have these

01:33:32.040 | really binary things over here.

01:33:33.760 | And they probably put 5% in venture capital traditionally.

01:33:38.360 | It's grown to 20% just as a function

01:33:40.600 | of how successful it's been.

01:33:42.700 | So, you know, the Harvards of the world and MIT

01:33:44.880 | is probably want 5% or 10% in venture,

01:33:48.020 | but it's grown to 25% because, you know,

01:33:50.080 | companies like Airbnb and Uber

01:33:51.480 | have grown so big, and Tesla.

01:33:53.520 | But the goal is, in these venture funds,

01:33:56.640 | we're gonna invest in 30 names,

01:33:58.640 | and one or two of them are gonna return

01:34:01.000 | three times the capital we've deployed.

01:34:02.960 | So, it's a $300 million fund, and there's 30 names,

01:34:05.160 | and they each got 10 million.

01:34:06.400 | That means one of the 10 million

01:34:08.320 | is gonna return the fund plus.

01:34:11.080 | So, that means it has to grow 30x,

01:34:14.480 | and then 60x to double the fund.

01:34:16.960 | And you're really supposed to be doing

01:34:18.560 | three times cash on cash.

01:34:19.920 | So, that $300 million fund's expectation

01:34:22.460 | is in 10 years to return 900 million.

01:34:25.020 | Triple the person's money, as opposed to the stock market,

01:34:27.160 | which doubles your money in the same period.

01:34:29.320 | So, you're supposed to do 25% annualized returns

01:34:32.700 | in order to triple the money.

01:34:35.480 | And maybe have an outlying chance

01:34:36.920 | of four or five times the money,

01:34:38.040 | which does happen sometimes when you have an outlier

01:34:39.800 | in your portfolio like Uber or Facebook was.

01:34:42.640 | And what that means is, the venture capitalist behavior

01:34:46.580 | in the game they're playing

01:34:47.420 | is different than you as the founder.

01:34:48.920 | You as the founder, you may really care about this,

01:34:51.560 | and it dying really matters to you.

01:34:53.780 | And then you got a venture capitalist who's like,

01:34:55.160 | we're betting on 30 names, we need two of them

01:34:57.600 | to hit it out of the park, maybe three.

01:34:59.640 | And nothing else is meaningful.

01:35:01.340 | So, now you start thinking about the game theory there.

01:35:05.840 | You're dealing with money that is coming in

01:35:09.800 | that only cares about you going 100x.

01:35:13.680 | - Yes.

01:35:14.640 | - It's a whole different ballgame.

01:35:17.100 | Whereas, if you build off revenue,

01:35:18.580 | you don't have to do that.

01:35:19.420 | And if you look at a company like Calm.com,

01:35:20.860 | we invested at five million,

01:35:22.080 | the next round they did was 250.

01:35:23.300 | They were so capital efficient

01:35:25.240 | that they grew from $10,000 a month in revenue

01:35:27.880 | to millions of dollars a month in revenue

01:35:30.200 | over those four years since we invested,

01:35:32.320 | and they didn't raise money in between.

01:35:33.860 | - Wow.

01:35:34.780 | - It was unbelievable.

01:35:36.020 | And I've only seen this happen three or four times.

01:35:37.820 | - So, it doesn't happen,

01:35:38.660 | all this capital efficient meaning

01:35:41.020 | based on customer revenue alone

01:35:43.580 | plus some small amount of fundraising,

01:35:46.080 | you're able to grow.

01:35:47.420 | How hard is it to do that?

01:35:49.500 | - It takes extreme product market fit.

01:35:52.500 | You have to have a great price for your product

01:35:54.400 | that has a great margin.

01:35:55.700 | Yeah, and if you're doing something in hardware,

01:35:59.280 | it's probably impossible

01:36:00.380 | 'cause it's super capital intensive.

01:36:01.660 | So, it's probably gotta be a software business.

01:36:03.780 | Hardware businesses take a lot more.

01:36:05.740 | - Do venture capitalists get in the way at all

01:36:08.020 | of the business?

01:36:08.860 | Or is it possible to get out of the way?

01:36:11.000 | - Yeah, if you get young venture capitalists

01:36:13.460 | who are starting their career,

01:36:14.740 | they're very nervous and scared

01:36:16.620 | because they're putting all these bets.

01:36:18.740 | And then there's a very weird thing that happens.

01:36:21.780 | The bad news comes first.

01:36:23.820 | So, companies that don't work out

01:36:26.820 | go out of business immediately.

01:36:28.620 | So, if it's not gonna be Comm or Robinhood or Uber,

01:36:31.820 | those take seven,

01:36:32.900 | you know you have one of those great successes

01:36:35.300 | somewhere in your five, six, seven, eight as an investor.

01:36:38.480 | What is the first five years like?

01:36:40.340 | The first five years you feel like an idiot

01:36:42.160 | 'cause you, let's say you make these 10 bets.

01:36:45.720 | In year two, two or three of them come back

01:36:49.580 | and they don't have product market fit

01:36:50.740 | and they're out of money.

01:36:51.740 | And they say, "Can we have more money?"

01:36:52.740 | And you say, "No, we have to go get it from somebody else

01:36:54.540 | 'cause you have to prove that there's still a market for it.

01:36:56.660 | We may keep our pro rata.

01:36:58.140 | We may put a little bit in

01:36:59.340 | to maintain our percentage ownership,

01:37:00.900 | but we're not going to give you another big chunk of money."

01:37:03.900 | And that company dies.

01:37:06.180 | So, now you've got 10 million, poof, up in smoke.

01:37:08.740 | Boom, 10 million up in smoke.

01:37:10.180 | So, this is called the J curve

01:37:11.740 | where your performance goes down.

01:37:14.380 | And then it's only in years four or five and six

01:37:16.380 | it starts going up.

01:37:17.220 | And what you're seeing right now

01:37:18.180 | is the people who started like I did in 2000,

01:37:20.980 | you know, just 11, 12 years ago in 2009,

01:37:23.460 | I started investing.

01:37:24.600 | We all look like geniuses.

01:37:26.300 | Why?

01:37:27.380 | We're at the end of the cycle.

01:37:28.940 | We invested after when the stock market was on the floor

01:37:32.380 | after the financial crisis.

01:37:34.020 | And it's gone straight up since.

01:37:35.700 | So, everybody look,

01:37:36.540 | there's a couple of little blips in there,

01:37:37.440 | but generally speaking,

01:37:38.540 | there hasn't been like a major crash

01:37:40.380 | with the exception of the pandemic crash,

01:37:41.540 | but that bounced right back.

01:37:42.780 | And so, you know, it takes a decade

01:37:45.300 | to figure out if you're good at it.

01:37:47.340 | And then if the market crashes again,

01:37:48.740 | everybody feels like it again, the cycle starts again.

01:37:50.860 | So, you are now, as a founder,

01:37:53.780 | you are now inserting yourself into that casino.

01:37:56.820 | And now you've got all these other forces

01:37:58.500 | pushing and pulling.

01:37:59.860 | And you're growing,

01:38:00.860 | let's say your company was growing 50%.

01:38:03.180 | You feel like, "Wow, I'm successful.

01:38:04.420 | I made a million dollars last year

01:38:05.580 | and now I'm doing a million and a half."

01:38:07.380 | And the first thing a VC is gonna say to you

01:38:09.300 | is, "How do we triple?

01:38:10.260 | We're growing too slow."

01:38:12.100 | - See, but that's like you said that beautifully,

01:38:14.140 | is a rocket fuel.

01:38:15.380 | It's, in a sense, it's a kind of motivation.

01:38:18.980 | It's a drive.

01:38:19.820 | I mean, it's a positive.

01:38:20.980 | - So, if you want that.

01:38:22.020 | - Yes, if you want that.

01:38:23.660 | - If you want that,

01:38:24.540 | if you wanna go to Navy SEAL school,

01:38:27.060 | you're gonna be in pain

01:38:28.060 | and they're gonna put that hose in your face

01:38:29.780 | while you're underwater

01:38:30.900 | with your hands tied behind your back in the pool

01:38:32.700 | and you're gonna be choking

01:38:33.980 | and they may have to do CPR on you.

01:38:35.540 | And like every couple of years,

01:38:37.020 | tragically, somebody dies in Navy SEAL school.

01:38:40.220 | - Yeah, well-

01:38:41.060 | - Does it mean we're getting rid of the Navy SEALs?

01:38:42.620 | - Brock, if he dies, he dies.

01:38:43.900 | I don't know if you know who David Goggins is

01:38:45.460 | by any chance.

01:38:46.300 | - I do.

01:38:47.140 | I mean, I don't know him personally, but oh my Lord.

01:38:48.780 | - So, I'm running 48 miles together with him in person

01:38:52.220 | in a month.

01:38:53.060 | - What?

01:38:53.900 | You're doing an ultra marathon?

01:38:55.380 | - With him and probably other stuff

01:38:58.500 | because he enjoys just breaking people and making them cry.

01:39:01.860 | - Oh my God, I'm so jelly.

01:39:03.180 | - So, no, I, well, I offered,

01:39:05.140 | we agreed a while ago to do a podcast

01:39:08.260 | and he's like, "Oh yeah, come, we'll do it this day."

01:39:10.980 | - Is he in the Bay Area?

01:39:13.100 | - I don't know where the hell he is,

01:39:14.340 | but we're doing it in,

01:39:16.020 | I don't think I'm supposed to say where it is,

01:39:17.620 | but it's not anywhere close to anywhere of this.

01:39:19.500 | It's in the middle of nowhere.

01:39:21.220 | But he seems to be in a bunch of different locations.

01:39:24.220 | Like he's in Oregon or something like that.

01:39:27.260 | - What does he do for,

01:39:28.260 | outside of writing books and being inspirational,

01:39:30.020 | does he actually train people or like-

01:39:31.900 | - No, he's just,

01:39:33.860 | he's a full-time insane.

01:39:35.620 | Like he fights forest fires like for a few months a year

01:39:40.460 | as a fireman, like unpaid labor.

01:39:42.900 | Like he, you know,

01:39:43.740 | there's a bunch of people who are like him,

01:39:46.140 | like Navy SEALs and so on,

01:39:47.700 | that kind of make a career out of motivational speaking,

01:39:50.420 | all that kind of stuff.

01:39:51.260 | He's not interested in any of that.

01:39:53.100 | He's literally interested in just doing hard shit

01:39:57.940 | all the time.

01:39:59.060 | - Breaking himself.

01:40:00.060 | - Breaking himself personally.

01:40:00.900 | - He seems like he wants to break himself.

01:40:03.160 | And that book is amazing.

01:40:04.900 | And the audio book's amazing

01:40:06.340 | when he's talking about how fat he was

01:40:08.180 | and how he just had to go and keep running

01:40:10.860 | and his legs are broken and he's just in super pain

01:40:14.380 | and he just goes through it.

01:40:15.220 | It's really inspiring.

01:40:16.540 | - The inspiring thing also-

01:40:17.380 | - Are you gonna videotape yourself doing this?

01:40:19.300 | I can't wait to see you get destroyed.

01:40:21.580 | - Yeah, well, you guys-

01:40:22.420 | - This is gonna be so entertaining for the Lex audience.

01:40:26.900 | - The pain.

01:40:28.340 | But the other inspiring thing is he's happily married

01:40:32.220 | and there's a partnership there that's,

01:40:34.260 | everybody finds this attention as a push and pull

01:40:38.020 | that's beautiful, I think.

01:40:40.260 | But in speaking of beautiful push and pull,

01:40:43.140 | how about that transition?

01:40:45.980 | - Yeah, here we go.

01:40:47.420 | - You and Chamath, he's a friend of yours.

01:40:50.900 | - Bestie.

01:40:51.740 | - Besties, yeah.

01:40:52.740 | - Yeah, good friend.

01:40:53.580 | I mean, there's very few people in my life,

01:40:55.420 | him, Elon, David Sacks, John Brockmans,

01:40:58.920 | very few people have supported me as much as those folks.

01:41:01.180 | I mean, I'm a huge debt.

01:41:02.460 | - So he's also co-host on the All In podcast.

01:41:05.660 | - We taped episode 21 today.

01:41:07.420 | - Oh, today, cool.

01:41:08.260 | - Yeah, every Friday now, they wanna do every Friday.

01:41:10.400 | They're addicted like me and you are to podcasts.

01:41:12.060 | - So you're going to release it when?

01:41:14.240 | - It's probably released as we're sitting here.

01:41:16.260 | - Oh, okay, beautiful.

01:41:17.500 | I can't wait.

01:41:18.340 | - Special guest on it.

01:41:19.160 | We had Draymond Green from the Warriors phone in.

01:41:22.020 | So we had our first guest.

01:41:23.180 | - Awesome.

01:41:24.020 | - Yeah, so it's really funny 'cause he plays poker with us

01:41:26.260 | and we're all besties, so yeah.

01:41:28.100 | - Beautiful, so you guys went pretty heated

01:41:32.140 | against each other on Robinhood.

01:41:34.900 | - Yes.

01:41:35.740 | - There's two things I wanna ask.

01:41:37.540 | First, on the actual Robinhood discussion

01:41:41.020 | and the Wall Street Best discussion,

01:41:42.860 | can you steel man his argument?

01:41:44.340 | What was the nature of the disagreement?

01:41:46.340 | 'Cause I don't think it's as big as a space

01:41:51.340 | as it came off as sounding.

01:41:53.940 | What is the nature of the disagreement?

01:41:55.420 | - He felt that Robinhood turned off trading

01:42:00.420 | because the hedge funds told them to

01:42:04.240 | and that they were bowing down

01:42:07.180 | to the pressure of the hedge funds.

01:42:08.420 | That's not true, but in a vacuum of information,

01:42:11.980 | you know what happens to people's minds,

01:42:13.560 | conspiracy theories abound

01:42:15.060 | and sometimes there is a conspiracy theory

01:42:16.940 | and sometimes there's just the appearance of impropriety

01:42:21.100 | or a bunch of related things.

01:42:24.120 | Like when you look at the Trump situation with Russia,

01:42:26.940 | was Trump trying to coordinate with Russia

01:42:29.940 | or were the Russians just screwing with a bunch

01:42:32.700 | of neophyte, idiotic dipshits like Donald Trump Jr.

01:42:37.700 | who don't know any better?

01:42:39.060 | And they don't know that you shouldn't meet

01:42:40.640 | with the Russians and if you do meet with the Russians,

01:42:43.820 | you are probably a useful idiot.

01:42:45.220 | You probably should tell the FBI.

01:42:47.140 | They're just a bunch of idiots in all likelihood, who knows?

01:42:49.780 | - And it's a vacuum of information.

01:42:51.300 | - And it's a vacuum of information, we don't know.

01:42:52.980 | And the Russians are trying to compromise everybody.

01:42:55.160 | So would you call it a conspiracy

01:42:57.640 | or would you call it an attempted conspiracy?

01:43:02.200 | There was no conspiracy here.

01:43:03.360 | What it was was Robinhood needed to raise billions

01:43:07.260 | of dollars to say solvent in all likelihood

01:43:10.360 | and they weren't allowed to talk about it.

01:43:13.320 | So they were forced into not talking about it

01:43:15.880 | in all likelihood and had to come up

01:43:17.600 | with that money or shut down.

01:43:19.120 | And then what got me upset with Chamath

01:43:21.600 | and we had a talk afterwards that people don't know about.

01:43:25.320 | I'll talk about it here for the first time.

01:43:27.260 | On Sunday, we had to have a little, we had to air it out.

01:43:30.960 | - Yeah, in the episode after,

01:43:32.120 | you guys sound like you've had a private, you've made up.

01:43:35.360 | - We had a private discussion, just one-on-one.

01:43:37.560 | And we said, listen, we love each other, we're besties.

01:43:39.680 | We've always been there for each other.

01:43:41.340 | What happened here?

01:43:42.720 | And what happened there is I'm fiercely loyal to my folks,

01:43:46.240 | whether it's Chamath or Travis from Uber or Sachs or whoever.

01:43:50.200 | I'm just a loyal guy.

01:43:51.400 | - Yes.

01:43:52.240 | - And I'm always ride or die with my founders.

01:43:54.160 | If I invest in them, even if they make a mistake,

01:43:56.120 | and Uber made plenty of mistakes,

01:43:57.360 | I always went on CNBC, on my podcast and said,

01:44:00.000 | hey, we're gonna fix these things.

01:44:01.560 | I'm in touch with the team.

01:44:03.360 | Mistakes were made, we're gonna solve them.

01:44:06.160 | This is a group of people with great intent

01:44:08.280 | who want to make the world a better place.

01:44:10.440 | And you know what?

01:44:11.280 | I was hated for a period of time with Uber.

01:44:13.360 | I was hated for it last week with Robinhood.

01:44:15.520 | I got a lot of blowback.

01:44:18.440 | But I think in both of those cases, eventually I was right.

01:44:20.720 | Uber's doing great stuff in the world.

01:44:22.200 | Robinhood's doing great stuff in the world.

01:44:23.920 | And I like to be loyal to my investments and my partners.

01:44:27.680 | I feel like if you invest and you're on the team,

01:44:30.120 | you have really three choices.

01:44:32.560 | You can either fight for your team, you can go silent,

01:44:35.520 | or you can throw your team under the bus.

01:44:37.080 | And I've watched investors throw the team

01:44:39.120 | that they invested in that made them a bunch of money

01:44:41.040 | under the bus, not acceptable to me.

01:44:42.840 | And being quiet's not acceptable to me.

01:44:44.400 | So I always ask the founder, do you want me to,

01:44:46.200 | is it okay if I go out and defend you publicly?

01:44:48.520 | If they say yes, I do it.

01:44:49.920 | - That's beautiful, by the way,

01:44:51.080 | 'cause what else do we have in this world if not friendship?

01:44:53.680 | - Loyalty means everything to me.

01:44:54.600 | I grew up in Brooklyn where if you were not loyal,

01:44:57.100 | and you were not loyal to your crew,

01:45:00.840 | then you were a ronin.

01:45:03.600 | You were out there on your own, flailing in the,

01:45:06.840 | trust me, you do not wanna be on your own

01:45:09.640 | in 1970s, '80s Brooklyn, Manhattan.

01:45:12.260 | You need to have a crew with you.

01:45:13.360 | I've gotten into, you don't wanna get into a fight

01:45:15.760 | with 10 guys and be alone or just be with,

01:45:18.240 | you need a crew to survive.

01:45:19.920 | So I just learned early, and my dad, who owned a bar,

01:45:23.840 | just drilled into me being loyal.

01:45:25.440 | And so for whatever reason, I'm a bulldog

01:45:27.120 | when it comes to loyalty.

01:45:28.240 | And Chamath came out and said,

01:45:30.280 | these guys need to go to jail, and they're scumbags,

01:45:32.240 | and da-da-da.

01:45:33.080 | And I'm trying to defend them,

01:45:34.560 | and I'm in a position where I can't defend them

01:45:36.680 | because I don't have complete information.

01:45:38.240 | There is no complete information,

01:45:39.440 | and it's in the heat of the moment,

01:45:40.760 | and then it becomes the number one story.

01:45:43.320 | And it's my number three investment.

01:45:46.100 | And Chamath has a competing company, SoFi.

01:45:48.220 | And he's killing my guys.

01:45:50.980 | And then I started killing his guys.

01:45:53.140 | And then all of a sudden, we're like, wait a second,

01:45:54.940 | we're best friends, and we're swinging our swords

01:45:59.620 | at each other, and we're a group of the seven samurai

01:46:02.540 | who fight together.

01:46:04.740 | When did we turn on each other?

01:46:06.580 | And then everybody else who's on the pod,

01:46:08.020 | the two Davids, who, you know,

01:46:09.540 | are both on the spectrum a bit.

01:46:10.780 | They got a little Asperger's or whatever.

01:46:13.020 | No offense, Lex.

01:46:13.860 | (laughing)

01:46:15.220 | - Untaken.

01:46:16.060 | - Untaken.

01:46:16.880 | I'm not saying, you know.

01:46:17.720 | There is a, you're into AI, and you might be somewhere.

01:46:22.460 | - It's not a coincidence, yeah.

01:46:23.740 | - Might not be a coincidence.

01:46:24.580 | Anyway, we upgraded the two Davids' firmware.

01:46:26.180 | We're gonna upgrade your firmware after this.

01:46:27.620 | I'll give you, yeah, you're on the 1.5.

01:46:30.700 | You have the three emotions now.

01:46:32.060 | Or should we add a fourth?

01:46:32.900 | Do you wanna go with joy?

01:46:34.060 | - I'm on the 2.0 already.

01:46:35.340 | - You're on the 2.0, you got the joy.

01:46:36.660 | Oh, my God, how's it working out in the joy chip?

01:46:38.620 | - It's difficult.

01:46:39.460 | - It's difficult, you'll get there.

01:46:41.060 | Just let it happen, Lex.

01:46:42.180 | Just let the joy happen.

01:46:44.940 | So anyway, we just talked about it offline,

01:46:47.220 | and we decided, like, listen,

01:46:49.220 | we didn't pre-game that episode,

01:46:52.020 | and I happened to be skiing with my family.

01:46:53.860 | I had taken the first vacation

01:46:55.500 | since this goddamn pandemic started,

01:46:57.540 | and I was having a wonderful time,

01:46:58.820 | and then this whole thing blows up.

01:46:59.900 | I'm coming off the mountain,

01:47:01.820 | just having a great time with my daughter skiing,

01:47:04.020 | and then I'm mixing it up with him,

01:47:06.100 | and he had a short fuse about it,

01:47:07.940 | 'cause he was triggered, he told me,

01:47:09.300 | because he really feels like he's fighting to defend

01:47:13.780 | the everyman, and I was like,

01:47:15.060 | that's what my team's doing.

01:47:16.460 | That's why they named the company Robin Hood.

01:47:19.140 | We're on the same side here.

01:47:21.340 | And then over time,

01:47:22.180 | we've started to see the explanation come out,

01:47:23.660 | and people who are friends are gonna have disagreements.

01:47:28.100 | In the podcast, it happened to happen very publicly,

01:47:30.540 | and we didn't know it was gonna become

01:47:32.040 | the number one story in the world.

01:47:35.180 | If Trump still had his Twitter handle,

01:47:36.940 | this would not have been a story.

01:47:39.180 | Trump would have said something about GameStop,

01:47:41.500 | and he would have co-opted the entire conversation.

01:47:44.180 | So in a way, going back to our censorship discussion,

01:47:47.580 | I might actually be in favor of Trump being censored,

01:47:51.140 | only because, only because,

01:47:54.020 | how delightful has it been since January 20th

01:47:57.260 | that we can all focus on something other than him?

01:48:00.300 | He was exhausting.

01:48:03.220 | I mean, the amount of cycles he took on our processors.

01:48:06.580 | - He monopolized the conversation.

01:48:08.900 | And now this is a little bit more of a distributed,

01:48:11.980 | like this bunch of-- - Yeah, everybody gets

01:48:13.060 | a chance to be the number one news story.

01:48:14.900 | Everybody gets a chance to discuss it, but--

01:48:17.340 | - So on a scale of one to 10, how much do you love Chamath?

01:48:20.740 | - Oh, 11, I mean, I love Chamath.

01:48:23.180 | I mean, we played cards last night.

01:48:24.780 | We're besties, and I would literally jump

01:48:27.900 | in front of a bullet for him.

01:48:29.580 | - I mean, what's the lesson in that discussion?

01:48:31.140 | 'Cause it was super, I wouldn't,

01:48:32.900 | I think the love was felt,

01:48:34.340 | and the respect was felt throughout,

01:48:35.580 | even when you guys were going pretty vicious on each other.

01:48:38.740 | Is there a lesson to be learned?

01:48:40.100 | Do you regret any of that conversation?

01:48:41.980 | - No, I mean, I think he told me

01:48:44.420 | that he regretted some of the things he said.

01:48:45.740 | He said publicly on the podcast,

01:48:47.020 | like, "Listen, I was a little hot.

01:48:48.020 | I may have said things in the heat of the moment."

01:48:50.860 | But I don't live with too much regret,

01:48:52.580 | 'cause I always think about intent.

01:48:54.220 | And it's one of the, nuance and intent

01:48:56.300 | have been totally lost.

01:48:58.260 | The idea that we could have any kind

01:49:00.140 | of a nuanced discussion about things

01:49:01.860 | seems to have been forgotten.

01:49:04.260 | And the fact that people don't look at people's intent,

01:49:07.500 | if you hurt somebody's feelings,

01:49:08.900 | or you disrespect somebody,

01:49:11.180 | or you do something mean or whatever,

01:49:14.540 | I always look at the intent.

01:49:15.940 | And I've had people attack me,

01:49:19.140 | and I look at the intent, and I'm like,

01:49:21.620 | "That person feels bad about themselves."

01:49:23.260 | Or maybe I said something, and I insulted them,

01:49:25.780 | and that's why their blowback's there.

01:49:27.340 | So I always try to think, what's the intent of the person?

01:49:29.300 | And then almost universally, you talk to somebody,

01:49:32.300 | and you find out you ascribe some crazy intent

01:49:36.220 | that's not there.

01:49:37.260 | And they're like, "Oh yeah, you know what happened?

01:49:38.540 | "I got in a fight with my spouse,

01:49:39.820 | "and I didn't sleep last night,

01:49:41.460 | "and I've had a lot of anxiety about my business,

01:49:44.020 | "and I just snapped and said something about you."

01:49:47.500 | And it's like, "Oh, okay."

01:49:48.580 | Like I literally had somebody on Twitter this past summer,

01:49:52.580 | I had said something.

01:49:53.740 | I was complaining about a New York Times journalist,

01:49:57.780 | and something I thought was wrong.

01:49:58.780 | And this person was a fan of that journalist.

01:50:00.940 | And they went, I kid you not,

01:50:02.820 | onto my social media account,

01:50:04.380 | found a picture I'd taken about

01:50:06.340 | how blue the sky was one day.

01:50:07.900 | They reverse image searched the tree line,

01:50:11.620 | found the tree line on Google image search,

01:50:15.020 | somehow with a reverse image search,

01:50:16.220 | found an old listing that some broker had listed

01:50:20.580 | on their website of my house,

01:50:23.060 | and then posted my home address, the value of my home,

01:50:26.140 | and doxed me on Twitter.

01:50:31.140 | And I'm like, "What is going on here?"

01:50:33.660 | So I call the person, and I look them up,

01:50:37.020 | and they work in private equity in Boston.

01:50:40.260 | And I look, and I'm like, "This person works in Boston,

01:50:42.700 | "this is July 4th week."

01:50:44.500 | So, and I, when I look at the person's LinkedIn,

01:50:47.460 | we have seven people in common.

01:50:49.500 | So going back to the AR conversation a while ago,

01:50:51.540 | I'm like, "Okay, this person literally just doxed me.

01:50:53.780 | "I asked them to take it down.

01:50:54.900 | "They told me they won't take it down."

01:50:57.380 | And then I look, so then I DM him back on Twitter.

01:51:01.500 | And I said, "By the way, your boss, Susan,

01:51:04.460 | "and I know seven people in common."

01:51:07.100 | And these are the seven people, here's a screenshot.

01:51:09.820 | "What is she going to think when I call her on Monday,

01:51:12.500 | "and you've doxed me?

01:51:14.500 | "Here's my phone number if you'd like to talk."

01:51:15.900 | He calls me.

01:51:17.420 | I said, "What's going on?

01:51:18.500 | "Why would you do this?"

01:51:19.460 | He's like, "Well, I really pissed off

01:51:20.660 | "about what you said about this person."

01:51:21.860 | I was like, "You understand I've had like two

01:51:23.620 | "or three stalkers, like, and anybody who's high profile

01:51:25.920 | "like I am, like, or medium profile,

01:51:27.940 | "you're gonna have weird things happen.

01:51:29.420 | "You literally put my home address,

01:51:30.580 | "you put my family at risk.

01:51:32.320 | "What if I put your home address?

01:51:34.300 | "On my, I have 400,000 followers,

01:51:36.420 | "or 300,000 followers, you have like 300.

01:51:39.040 | "What if I post your address?"

01:51:40.940 | He's like, "Well, I wish you wouldn't do that."

01:51:42.300 | I was like, "Well, I asked you kindly

01:51:43.180 | "to take my address down."

01:51:44.820 | And I said, "Are you married?"

01:51:46.600 | I said, "How old are you, like 25 or something?"

01:51:50.140 | He's like, "No, I'm 42."

01:51:51.860 | I was like, "You're 42 years old."

01:51:53.220 | I was like, "Are you married?

01:51:54.060 | "Do you have kids?"

01:51:54.900 | He's like, "Yeah, I just had a baby like six months ago."

01:51:56.260 | I'm like, "You're home with your wife.

01:51:58.080 | "It's July 4th weekend.

01:51:59.540 | "You're doxing Jason Calaganes

01:52:01.220 | "because you're upset at me

01:52:03.060 | "because I said something about a New York Times writer."

01:52:05.860 | He's like, "Yeah, this is the biggest mistake of my life."

01:52:08.140 | I said, "I tell you what, let's forget it ever happened."

01:52:12.180 | And he wrote me back.

01:52:13.580 | And he said, "I just wanted to thank you

01:52:14.620 | "for how you handled it.

01:52:15.900 | "My wife said I'm a complete fucking moron."

01:52:19.220 | And he literally sent me an email.

01:52:22.540 | My wife says I'm a complete fucking moron

01:52:24.220 | and I'm really sorry, blah, blah, blah, blah, blah.

01:52:26.660 | And I wrote her back.

01:52:27.480 | I said, I wrote her back and I said,

01:52:28.700 | "My wife says the same thing to me all the time.

01:52:30.480 | "She says, 'Welcome to the club.'

01:52:31.860 | "It's totally fine."

01:52:32.980 | - But see, this--

01:52:33.820 | - But intent, nuance, it matters, right?

01:52:36.540 | And the person could be having a bad day

01:52:37.980 | and they do something stupid they regret.

01:52:39.460 | And what am I gonna do, cancel the guy?

01:52:41.460 | Or if I had called his boss,

01:52:43.620 | he would have been fired immediately.

01:52:45.380 | And then I gotta live with this guy got fired

01:52:47.860 | and he's got a kid.

01:52:49.980 | And what is this personal destruction?

01:52:51.580 | Why are we doing this to each other?

01:52:52.980 | Life's hard enough.

01:52:54.800 | Life's hard, right?

01:52:56.060 | Like just getting through the day is hard.

01:52:57.780 | - Yeah, and that little bit of empathy,

01:53:00.540 | thinking about the intent of the person

01:53:02.740 | allows you to then sort of deescalate

01:53:04.780 | this kind of conversation

01:53:05.900 | that social media wants to escalate.

01:53:08.340 | - Yes.

01:53:09.180 | - So social media wants to escalate.

01:53:10.000 | - Back to what we were saying.

01:53:10.840 | If this, in my younger years,

01:53:14.020 | I would have retweeted the guy's home address

01:53:16.180 | and my address and would have called his boss

01:53:18.100 | and tried to get him fired or whatever.

01:53:19.380 | And it's like, now I'm just like,

01:53:21.280 | what, why are we attacking each other?

01:53:23.580 | Life is so hard.

01:53:24.540 | I mean, this is what the pandemic,

01:53:25.580 | I think we should make everybody realize is like,

01:53:27.620 | look at how hard it is.

01:53:29.840 | Life is hard.

01:53:30.680 | And then just think about all the people suffering right now

01:53:32.580 | who are at home, the single mom or dad

01:53:34.860 | with two or three kids at home in public school.

01:53:38.640 | Maybe they've been laid off and their kids aren't learning

01:53:41.860 | and they're in a tiny apartment.

01:53:44.140 | I mean, this has been brutal for a lot of people,

01:53:46.740 | not to mention people losing loved ones

01:53:48.540 | or maybe some people got corona

01:53:49.980 | and now their lungs are still not right.

01:53:52.220 | - Can I ask you about love?

01:53:53.500 | - Oh, sure.

01:53:56.060 | - I'm feeling it, you know, like we're an hour or two here,

01:53:58.580 | Lex.

01:53:59.420 | - Yeah, you feel you're getting it.

01:54:00.260 | - We could become besties.

01:54:01.580 | - We're good.

01:54:02.420 | - I feel like we got a bromance going here, Lex.

01:54:05.100 | - I feel it too.

01:54:05.940 | - I don't know if it's Eric Weinstein level,

01:54:07.280 | but I feel like it's close.

01:54:09.860 | - Yeah, I'm feeling the love.

01:54:11.420 | But you, we talked about the,

01:54:13.220 | - Yeah.

01:54:14.060 | - There's music to my ears,

01:54:16.500 | your whole rant on the Olympic nature of a startup.

01:54:21.380 | - Yeah.

01:54:22.220 | - Is there a role,

01:54:25.220 | like what role does love, family, friendship

01:54:29.060 | play in that brutal pursuit of excellence?

01:54:34.060 | That is building a startup, building a company

01:54:37.060 | or building any, creating anything new in this world?

01:54:40.540 | - Such a great question and totally unprepared for it.

01:54:44.400 | 'Cause I know nobody would ever ask me about that.

01:54:46.900 | So I think it's why you've got quite a following

01:54:49.460 | on your podcast is that you're able to ask these questions.

01:54:52.940 | And I can tell one story because,

01:54:56.700 | I don't talk about,

01:54:57.660 | I try not to talk about relationship with Elon that often

01:55:00.700 | because he's so famous now.

01:55:03.660 | I mean, when we met, I used to go out to parties with him

01:55:06.460 | and people were like, "Oh my God, you're Jason Kalka?"

01:55:07.780 | I was like, "Yeah."

01:55:08.620 | And like, "Who's your friend?"

01:55:09.440 | I'm like, "That's my friend, Elon."

01:55:10.280 | And they'd be like, "What, he's doing rocket ships?"

01:55:11.920 | But he's told this story publicly, so I can tell it.

01:55:14.380 | I would never talk about anything

01:55:15.620 | that he hasn't already talked about publicly,

01:55:17.140 | especially since he's so high profile,

01:55:18.460 | but it was pretty funny moment.

01:55:20.820 | He, there was a moment in time

01:55:23.060 | when Tesla almost went out of business

01:55:24.380 | and you've probably heard the story many times,

01:55:26.960 | but it was during the financial crisis

01:55:28.740 | and they were running out of money.

01:55:32.220 | And I said, "Let's go get a steak."

01:55:36.780 | And we're in LA, we drove to BOA

01:55:38.420 | and I had my orange Tesla Roadster

01:55:40.340 | and he had his P1 or P2, like the red one

01:55:43.700 | that I think is in space now.

01:55:45.820 | And we drove to the valet and we had a steak together

01:55:48.620 | and we're sitting there.

01:55:49.840 | And I said, I read the story in Gawker or whatever,

01:55:52.900 | in New York Times, you only got like five weeks

01:55:56.640 | of money left in Tesla.

01:55:58.420 | He goes, "It's not true."

01:55:59.260 | I was like, "Oh, thank God."

01:56:01.020 | And he goes, "We have two weeks."

01:56:02.100 | (both laughing)

01:56:02.940 | I was like, "Oh God."

01:56:04.820 | I was like, "Well, what's going on

01:56:06.420 | with the rocket ship company?"

01:56:07.820 | - Yeah.

01:56:08.660 | - You know, like, I know you did the one last month

01:56:12.100 | and don't you have one coming up?

01:56:13.340 | He's like, "Yeah, we've got the third one coming up."

01:56:14.820 | I was like, "Well, how's that going?"

01:56:16.380 | He said, "Well, we blow that one up.

01:56:17.940 | There's no more SpaceX."

01:56:19.620 | I was like, "So two weeks of money left in Tesla

01:56:22.340 | and SpaceX, you blew up the first two rockets,

01:56:24.260 | you blow up the third, SpaceX is over."

01:56:25.700 | He's like, "Yeah."

01:56:26.620 | I was like, "I can load you a couple million dollars.

01:56:29.460 | I don't have like a ton."

01:56:31.580 | He's like, "It's okay.

01:56:32.420 | Our friend, beep, has loaned me some money."

01:56:35.740 | And Elon's been super public about this.

01:56:37.740 | I would never tell the story unless he hadn't been,

01:56:39.380 | but he was talking, he never said who it was,

01:56:42.280 | but somebody had loaned him money to keep him afloat.

01:56:45.100 | He was functionally bankrupt.

01:56:47.140 | I mean, he had the equity in the companies,

01:56:48.600 | but the equity was quickly becoming worth zero

01:56:50.460 | and the financial crisis.

01:56:51.420 | And he's figuring out if he's gonna go on vacation

01:56:54.460 | for Christmas or not.

01:56:55.520 | And he's on the phone trying to save both companies.

01:57:00.520 | And I said, "Certainly there must be some good news."

01:57:04.060 | And he takes out his BlackBerry to date this conversation.

01:57:07.180 | There are no iPhones.

01:57:08.240 | Takes his BlackBerry and he starts swiping.

01:57:10.760 | And he says, "Don't tell anybody.

01:57:12.860 | This is what I'm building."

01:57:14.020 | And he shows me the Model S.

01:57:17.580 | And nobody knew that he was working on the Model S.

01:57:19.840 | We knew he was doing the Roadster

01:57:22.080 | and he was trying to save the company.

01:57:24.200 | And I looked at it and I was like, "That's gorgeous."

01:57:26.900 | It was the clay models.

01:57:29.240 | So it was a full-size clay model.

01:57:30.740 | So there's human being standing around a clay version

01:57:33.080 | of this tiny little BlackBerry picture.

01:57:34.360 | I'm scrolling through on the,

01:57:35.880 | remember that little pad or the ball on the BlackBerry?

01:57:38.640 | I'm scrolling through it.

01:57:39.480 | I'm like, "This is fucking great."

01:57:41.440 | And I just said to him, I was like,

01:57:43.040 | "What's the range gonna be?"

01:57:44.840 | He says, "Well, I think we get 250 miles."

01:57:46.480 | I was like, "250 miles?"

01:57:48.040 | He's like, "Yeah, I think it'd be the safest car ever."

01:57:49.880 | I said, "What is it gonna cost?"

01:57:51.240 | He says, "I think this could cost eventually $50,000, $60,000."

01:57:55.840 | I said, "Elon, if you make that car,

01:57:57.680 | you'll change the goddamn world.

01:58:00.240 | You have to, this company must survive

01:58:03.140 | because the Roadster's for like 2,000 people

01:58:06.960 | in the United States.

01:58:07.840 | This car is for every person in the United States.

01:58:11.000 | Every single person in the United States

01:58:12.840 | will want this car if it's $50,000."

01:58:15.120 | And maybe some of the people who have 20 or 30,000 cars

01:58:18.240 | won't be able to afford it, but they'll all want it.

01:58:20.640 | It's gorgeous.

01:58:21.880 | And he said, "You really think so?"

01:58:22.920 | I said, "Yeah."

01:58:23.960 | So I got home and I talked to my wife, Jade,

01:58:26.000 | and I said, "Do you have the checkbook?"

01:58:27.700 | She does all the finances and stuff like that,

01:58:29.240 | pays every the bills and whatever.

01:58:30.560 | And I said, "Don't tell anybody,

01:58:33.680 | Elon's making this great car."

01:58:35.160 | And I wrote two checks for $50,000.

01:58:38.040 | And I just took out a piece of paper and I wrote,

01:58:40.000 | "E, love the new car.

01:58:44.720 | I'll take two."

01:58:45.720 | And I signed it.

01:58:48.280 | I kissed the two $50,000 checks, put them in the envelope,

01:58:51.200 | and I FedExed it to him for Monday delivery.

01:58:53.960 | And I said to Jade,

01:58:55.240 | "That $100,000 is going to be gone in 48 hours

01:58:59.600 | 'cause it'll pay for one or two days of payroll on Tesla."

01:59:02.120 | So we just added like, instead of two weeks of roadway,

01:59:04.160 | he's got 12 days.

01:59:05.800 | And the checks don't cash,

01:59:09.680 | but then I read a story that he's closed the money,

01:59:12.000 | saved the company in like the next week or two.

01:59:14.680 | And a couple of months later, the checks get cashed.

01:59:19.240 | And I'm like, "Okay."

01:59:20.920 | Three years later, I get an email.

01:59:22.800 | "Your reservation number," it's from Tesla,

01:59:25.040 | "Your reservation number is 0000001."

01:59:29.680 | And then five seconds later,

01:59:31.560 | "Your reservation number is 00073."

01:59:35.120 | And I forwarded the number one to Elon.

01:59:36.720 | I said, "You know, I can't take number one,

01:59:40.640 | signature number one, I can't take that.

01:59:42.560 | That's yours."

01:59:43.840 | And he's like, "Oh, I got five of them.

01:59:45.280 | And besides, you're the first person who ordered it."

01:59:48.240 | And I was the first person who had seen it.

01:59:49.080 | - He's gonna get me to be teary-eyed.

01:59:50.960 | I mean, that's beautiful. - No, it was a very-

01:59:52.400 | - That's a beautiful moment.

01:59:53.480 | - It was an incredible moment for both of us.

01:59:55.080 | And we talk about it sometimes, those moments in time.

01:59:58.200 | And to your point about love, Elon-

01:59:59.040 | - That's like the darkest moment,

02:00:01.240 | one of the darkest moments in his life, probably.

02:00:03.440 | - I think it was, I can tell you,

02:00:04.920 | it was the darkest period of his life, for sure.

02:00:07.200 | And he's been very public about how dark that was.

02:00:09.840 | And I think, this is why I have great sympathy

02:00:12.520 | for the entrepreneurs of the world,

02:00:13.880 | like the suffering and the pain.

02:00:15.520 | And when he talks about the suffering and the pain,

02:00:17.520 | that all of these founders have felt,

02:00:18.840 | and then we're throwing rocks at them,

02:00:20.400 | and we're criticizing them as they try to change the world

02:00:22.520 | and save humanity.

02:00:23.360 | And in Tesla's case, I mean, they weren't,

02:00:25.520 | they weren't like delivering pizza.

02:00:28.520 | I mean, they were trying to get us off of fossil fuels.

02:00:31.400 | Like this was a big, heady mission

02:00:33.120 | to literally save the environment, the planet, humanity.

02:00:36.760 | And the way they shorted that stock and they attacked him,

02:00:40.200 | it was always perplexing to me why any human being

02:00:44.440 | who is standing on God's green earth

02:00:47.320 | would want to throw rocks at the guy

02:00:50.200 | who is trying to stem the dam of global warming

02:00:53.960 | that is about to engulf all of us.

02:00:56.680 | How dare they throw rocks at that guy?

02:01:00.120 | There's so many people you could throw rocks at.

02:01:02.140 | There's somebody who's making the Juul vaporizer.

02:01:05.200 | Throw rocks at that scumbag, no offense.

02:01:07.920 | But like whoever's making the Juul things,

02:01:09.800 | and is selling pina colada flavor to 12 year olds,

02:01:13.840 | like throw rocks at them.

02:01:15.140 | Somebody's doing something abhorrent, but not E.

02:01:19.000 | I mean, and yeah, anyway, that car is up the road here,

02:01:24.000 | sitting under a cover with 20,000 miles on it in my garage.

02:01:29.760 | And then the Roadster number 16 is in the garage next to it.

02:01:32.640 | And every day I walk by the two of them

02:01:34.520 | and I get a warm feeling in my heart

02:01:35.960 | 'cause I know E did it against all odds,

02:01:39.080 | against all odds, he pulled it off.

02:01:43.120 | And it was that moment, that month in that,

02:01:47.680 | it was probably December, January,

02:01:49.480 | it's December of 2008, I think.

02:01:51.920 | It was just 12 years ago,

02:01:52.960 | when you think about 13 years ago, it was dark.

02:01:55.320 | I mean, it was dark.

02:01:56.280 | And they almost had the same thing happen

02:01:58.720 | when the Model 3 production in June of two years,

02:02:01.240 | three years ago.

02:02:02.320 | And I remember him just trying to get the Model 3

02:02:05.320 | out the door and the company almost crashed then.

02:02:07.680 | Most of these companies have these kinds of moments.

02:02:10.640 | And I think friendship is you get what you give,

02:02:14.840 | you get what you give.

02:02:16.560 | And if you are there for people,

02:02:18.880 | you're gonna feel so good about having done that.

02:02:21.320 | And then the reciprocation effect,

02:02:27.280 | which you'd probably know very well,

02:02:29.400 | is so great in the world

02:02:30.600 | that anytime you're kind to people,

02:02:33.240 | you build this incredible bond.

02:02:34.520 | And then what are we at the end of the day, Lex,

02:02:37.080 | besides a series of memories with the people we love?

02:02:41.240 | That's all it is.

02:02:42.240 | It's just a series of memories and moments.

02:02:45.600 | It's just moments.

02:02:47.440 | You ever see "Blade Runner"?

02:02:48.760 | - Yes, of course.

02:02:49.680 | - Do you remember what Rucker Harris says at the end,

02:02:52.160 | "All of these memories gone like tears in the rain"?

02:02:55.040 | I mean, that's our existence.

02:02:56.880 | It just all goes away at some point.

02:02:59.360 | It's just these drops of rain.

02:03:01.080 | Each of those memories,

02:03:02.400 | just like one snowflake or one drop of rain,

02:03:05.280 | and they're all lost at some point,

02:03:06.560 | but they're here now.

02:03:08.320 | And that's why we have to be there for each other.

02:03:10.480 | That's why I feel like what I do

02:03:12.760 | is so important in this world,

02:03:14.840 | and I get such great meaning out of it.

02:03:16.320 | Just being a friend, just having these conversations.

02:03:19.000 | What you're doing on your podcast,

02:03:21.360 | just talking to intelligent people

02:03:23.320 | and spreading the word and the disciple,

02:03:25.880 | the gospel of what they're saying and amplifying it,

02:03:28.600 | you're inspiring so many people.

02:03:29.920 | Every podcast, you get 500,000 people,

02:03:31.760 | a million people watch these videos,

02:03:33.600 | and there's some kid in Sri Lanka

02:03:35.720 | or some little girl in Afghanistan

02:03:37.360 | who's gonna stumble upon this on YouTube,

02:03:39.840 | and they're gonna change the world in the next century.

02:03:42.880 | Because it's not just about America.

02:03:44.760 | Our story's almost over, right?

02:03:48.320 | We were the story of the last 200, 300 years.

02:03:50.080 | I hope it keeps going.

02:03:51.160 | But there's all these other places in the world,

02:03:52.720 | Sao Paulo and Africa,

02:03:55.000 | where people now have access to these videos.

02:03:59.240 | And somebody will hear this video and go, "Elon did it.

02:04:02.040 | "Oh, and that guy Jason was his friend.

02:04:03.860 | "Oh, and Lex does those interviews with the,

02:04:06.500 | "oh yeah, I could do it too."

02:04:07.920 | - Your little magical moment of love

02:04:10.200 | amidst the suffering with Elon,

02:04:12.380 | because you've talked about it,

02:04:14.320 | it'll have these ripple effects.

02:04:15.640 | It's fascinating to think about,

02:04:16.860 | and that gets to come. - So weird.

02:04:18.480 | - And new entrepreneurs being born,

02:04:20.560 | new, more love being put out there,

02:04:23.400 | and more support through these rough times

02:04:26.600 | when people are trying to create new things.

02:04:29.500 | I mean, that's a beautiful thing.

02:04:31.340 | That's a beautiful,

02:04:32.180 | I'm glad you think of friendship in this way.

02:04:35.400 | I'm deeply grateful that you're loyal

02:04:39.440 | in the way you are. - Every time you invest,

02:04:41.680 | here's the thing,

02:04:42.840 | it costs you nothing to make this investment either.

02:04:45.400 | The amount of time it takes to be bitter or angry,

02:04:49.920 | sitting at home, to be disappointed,

02:04:53.560 | you could just channel that same amount of energy

02:04:55.720 | into being loyal, loving, kind, and there for people.

02:04:59.640 | It just only takes the intention, right?

02:05:02.220 | The water's gonna, those emotions are gonna flow, right?

02:05:05.040 | Like Sam would always tell me

02:05:06.020 | when I was struggling in my life,

02:05:08.100 | and I talked to him, he'd say,

02:05:09.840 | "Jason, your brain is spewing all these ideas.

02:05:12.640 | "Imagine you're sitting by a river,

02:05:15.120 | "and the river is all your ideas.

02:05:17.120 | "You are not a slave to any one of these ideas.

02:05:18.900 | "They're just whipping by,

02:05:20.220 | "like each of those little waves in the river.

02:05:22.300 | "You can pick one of those ideas out

02:05:23.920 | "and look at it and examine it,

02:05:25.600 | "and either keep it,

02:05:26.680 | "or throw it back in the river and let it go."

02:05:28.860 | And I was like, wow, Sam.

02:05:30.080 | That was like, of my entire friendship with Sam Harris,

02:05:32.820 | that was like the one moment where I was just like,

02:05:34.600 | "Oh my God, all my life I've wondered

02:05:37.420 | "about all these thoughts in my head.

02:05:39.580 | "Insecurities, you know, imposter syndrome.

02:05:43.340 | "Like I didn't go to MIT.

02:05:45.480 | "You know, I'm not the smartest guy,

02:05:48.620 | "but somehow I made a career writing little 50K checks,

02:05:52.560 | "and now, you know, $3 million checks,

02:05:54.040 | "but whatever, you know, little checks,

02:05:55.320 | "and being a journalist and doing this little podcast."

02:05:57.560 | And it's added up to something.

02:05:59.740 | And I'm proud of it.

02:06:01.680 | I'm 50 and I'm kind of proud of what I did.

02:06:04.280 | And I wake up every morning, I'm super tired,

02:06:06.160 | I say, "I kind of like what I do.

02:06:09.280 | "I kind of like having the conversation

02:06:10.840 | "and writing the check,

02:06:12.200 | "and then being on somebody's team."

02:06:13.640 | And I got offered to be in these giant mega funds.

02:06:16.360 | And they said, "Jason, you're an idiot.

02:06:18.180 | "You invest in 60 companies a year,

02:06:20.540 | "you know, 500K at a time,

02:06:22.080 | "you put $30 million a year to work.

02:06:23.800 | "Come work with us,

02:06:25.180 | "write one $50 million check,

02:06:27.700 | "and then you can go to Aspen and Cabo and Coachella

02:06:32.180 | "and not work.

02:06:33.020 | "But why are you doing all this work?"

02:06:35.980 | It's like, well, the $50 million check is,

02:06:39.220 | like, it's like a formality.

02:06:40.340 | It's just like being an ATM.

02:06:41.420 | Like, the companies are already huge by that time.

02:06:43.880 | I really wanna meet the two people with the idea.

02:06:46.580 | I wanna meet them in year one.

02:06:48.540 | - Yes.

02:06:49.380 | - I wanna meet them on day zero.

02:06:51.060 | I wanna be the guy who wrote the first,

02:06:52.540 | second, or third check.

02:06:53.780 | I wanna be the guy who wrote the 3,000th check,

02:06:55.780 | the last check.

02:06:57.020 | It's fucking boring.

02:06:58.020 | - And make that basic human connection.

02:07:00.020 | - Totally.

02:07:00.860 | - And also be there, be with them through the rough times,

02:07:03.620 | be with them with that first,

02:07:05.440 | I mean, the first early successes,

02:07:07.220 | I mean, that's a beautiful--

02:07:08.060 | - Oh, so great.

02:07:08.900 | When a founder and their team get product market fit,

02:07:13.900 | and you just know it's gonna work,

02:07:16.420 | oh man, Lex, it's,

02:07:18.380 | when Com would email me and they'd say,

02:07:21.540 | we added, the company's been growing

02:07:24.100 | and we're not gonna go out of business,

02:07:25.700 | but we added some sleep stuff

02:07:27.260 | and then we added this other function

02:07:29.780 | and we have a streak now.

02:07:31.340 | We grew 10X in the last three months.

02:07:36.860 | And we're good.

02:07:38.540 | I was like, oh, that's nice.

02:07:40.220 | It's real nice.

02:07:41.060 | It's a nice feeling when you,

02:07:42.900 | well, because so many of them die.

02:07:44.100 | We talked about that J curve early.

02:07:45.920 | Imagine it's like,

02:07:49.220 | it's like all these baby turtles going out to the ocean

02:07:51.700 | and the seagulls are ripping them to shreds

02:07:53.580 | and then the sharks are eating them.

02:07:56.200 | But then like a couple of the turtles make it

02:07:58.700 | and they become wise old, 100 year old turtles.

02:08:01.940 | You know?

02:08:02.780 | And you're like, yep.

02:08:03.600 | I remember when you catched

02:08:06.100 | and like all of your brothers and sisters

02:08:08.260 | were ripped to shreds by the seagulls

02:08:09.740 | and you made it into the water.

02:08:11.460 | And then you made it out to the deep water.

02:08:13.500 | It's a pretty great feeling.

02:08:14.580 | - I think there's no better way to end it.

02:08:17.220 | - There it is.

02:08:18.180 | - The talk of the cruelty of life,

02:08:20.260 | that suffering that is life

02:08:22.180 | and the love amidst the suffering.

02:08:24.060 | Jason, I've been a fan of yours for a long time.

02:08:26.840 | You're one of the most special people in Silicon Valley.

02:08:30.620 | - Thanks, Lex.

02:08:31.460 | - And maybe you'll also call me in one of the rough times.

02:08:34.740 | - Oh yeah.

02:08:35.580 | - I'm sure there'll be many.

02:08:36.400 | - There will be, yeah.

02:08:37.240 | You know, there's one expression.

02:08:39.220 | Nobody gets there alone.

02:08:41.180 | Nobody gets there alone.

02:08:42.580 | And anybody who thinks that they got there alone

02:08:45.120 | is delusional and kidding themselves.

02:08:47.060 | And they will at some point wake up and realize,

02:08:48.940 | oh shit, there were a lot of people helped me get here.

02:08:52.580 | I need to write a couple of gratitude letters.

02:08:54.480 | I got a gratitude letter the other day

02:08:55.820 | from a friend of mine who I helped.

02:08:57.900 | And I was one of the,

02:08:59.460 | you know about these gratitude letters people are writing?

02:09:02.080 | It turns out Martin Seligman in,

02:09:04.220 | was it Authentic Happiness?

02:09:07.940 | Anyway, the guy who really studied happiness and joy,

02:09:10.820 | turns out one of the greatest amplifiers of joy in your life

02:09:15.100 | is to thank somebody for doing something for you.

02:09:17.740 | And somebody who I had helped just wrote me a letter.

02:09:22.060 | And I got in Christmas and I had the stack of Christmas cards

02:09:24.460 | and I hadn't opened them.

02:09:25.580 | And it's the second week of January

02:09:27.620 | and I was just getting to like the last stack.

02:09:29.980 | And I open it up and I almost missed it.

02:09:32.660 | It's an incredibly heartwarming letter

02:09:33.880 | about how meaningful like certain things I had done

02:09:37.220 | to help along the way

02:09:38.860 | and how he'd always appreciated my counsel.

02:09:41.700 | And I was just like, well this happened 25 years ago.

02:09:46.460 | And you wrote this letter now.

02:09:48.420 | And it just hit me like a ton of bricks.

02:09:50.300 | And I was just like, wow, you know,

02:09:51.980 | if you're hearing this,

02:09:53.460 | there's probably 10 people

02:09:54.660 | who are really instrumental in your lives, in your lives.

02:09:58.080 | Go ahead and call them on the phone,

02:10:00.420 | write them an email, or even better,

02:10:02.220 | just write a letter and send it to them

02:10:05.340 | and just tell them you're thankful.

02:10:06.980 | And let me tell you something,

02:10:08.500 | the amplification of joy in your life will go 100X, 100X,

02:10:13.180 | when you tell somebody you love them

02:10:15.380 | and that you really appreciate them

02:10:16.980 | and that what they did for you was magical.

02:10:18.540 | So just, and you can look it up, gratitude.

02:10:21.400 | Gratitude is like one of these incredible forces.

02:10:23.860 | - Amen.

02:10:24.700 | - I'm grateful for being on the pod.

02:10:25.860 | - I'm grateful.

02:10:27.460 | (Lex laughing)

02:10:28.300 | You wasted all this time with me.

02:10:29.860 | I love it.

02:10:30.700 | Thanks for listening to this conversation

02:10:33.220 | with Jason Kulakanis.

02:10:34.620 | And thank you to our sponsors,

02:10:36.740 | Brave Browser, Linode Linux Virtual Machines,

02:10:40.540 | Four Sigmatic Mushroom Coffee,

02:10:42.540 | and Rev Speech-to-Text Service.

02:10:45.820 | Click the sponsor links to get a discount

02:10:48.140 | and to support this podcast.

02:10:50.340 | And now, let me leave you with some words

02:10:52.620 | from the man himself, Jason Kulakanis.

02:10:55.700 | The number one reason a startup shuts down

02:10:58.420 | is not running out of money.

02:11:00.600 | The number one reason a startup fails

02:11:03.420 | is that the founder gives up.

02:11:05.980 | Thank you for listening and hope to see you next time.

Jason Calacanis: Startups, Angel Investing, Capitalism, and Friendship | Lex Fridman Podcast #161

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