0:01
Like Jake, can you get any closer to the camera?
Search this video
0:02
I mean, your face is like right up in it.
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We can see your bloodshot eyes.
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I mean, it's really un I mean 9:00 a. m.
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start time is a little rough on Jake out.
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It's a little rough on Jake out. That's true.
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I'm on my second cup of coffee already.
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This is This is a lifestyle choice we may regret. Let your winners ride. Rain Man David Sacks.
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And I said, we open sourced it to the fans and they've just gone crazy with it. Hey everybody. Hey everybody.
0:35
Welcome to another episode of the All-In podcast. It's Saturday morning.
0:39
It's ridiculously early, but we're taping the show because one of the besties happens to have left the continent.
0:46
With us from an undisclosed location, Chamath Palihapitiya.
0:53
Are you in a wine cellar or in catacombs?
0:57
I am in I am in Look at it. Wait for it. Wait for it. Wow.
1:03
Did Were you able to see that or no? No. What was that?
1:06
Are you in a Are you in a cathedral somewhere?
1:07
You mean the ceiling of your room?
1:09
Yeah, I was looking at the ceiling. It's incredible.
1:12
You paid for the four walls and now you can afford the roof. Yeah, okay. Hold on. Hold on. Okay, hold on.
1:16
I'll do a little I'll do a little Let's see if you can just see outside and get a sense of the view. Oh, you can't. Oh, no.
1:22
It's hard to Just uh pause for a second. Oh.
1:26
Whoa, bestie lifestyle happening there.
1:28
Just got to hold it for a second and then the No, that's my architect. Hold on. I'm cool with that. Wow.
1:35
I love how the I love how the house is already built and he's still paying the architect. Yeah.
1:38
He's like, "Uh do me a favor.
1:38
This came out great, but can you rip down these four rooms and then just start over?" All right.
1:43
Well, we lost uh bestie C as he walks around his castle in some European country.
1:47
Welcome to Lifestyles of the Rich and Famous.
1:51
What time is it there for you?
1:51
Well, it's uh 6:00 in the afternoon 6:00 in the evening.
1:55
I I was in London last week and holy mackerel.
1:58
The weather If you want to see climate change, uh spend some time in Europe because literally day over day uh London on the first day I landed was call it 24° C, so whatever that is 80 78 maybe. Beautiful.
2:12
Literally the next day it was 62 and raining.
2:19
And it just kept bouncing back and forth.
2:21
It is the weirdest thing.
2:21
And if you're in Europe right now, you you just see some of the craziest weather patterns literally day over day.
2:28
Massive thunder showers, then you know, it's completely normal.
2:31
I mean, no wonder everybody here takes uh climate change so seriously.
2:35
You actually feel it every day.
2:38
And with us as well, uh David Sacks is here, the Rain Man himself tearing up the Twitter.
2:43
We've been off for 2 weeks, so there's a lot to cover.
2:45
And of course the queen of quinoa chairman of the production board David Friedberg.
2:53
Right off the bat, I think we got to go science and get the Friedberg ratio up from the get.
2:59
Biogen has an Alzheimer's drug that on Monday the FDA approved.
3:02
It's the first new treatment for Alzheimer's in almost two decades.
3:06
And Biogen's drug is not a cure for Alzheimer's and Friedberg will get into that.
3:11
It does not reverse the disease's progression, but it does mitigate it gets it getting worse.
3:15
Very strange moment in time.
3:17
The FDA's advisory panel, three members of it have quit because they didn't want to approve this drug because it had such a modest efficacy.
3:28
Three quit, but unanimous vote against approval. Right.
3:30
So, unanimous vote against, then three quit.
3:32
And this is I think out of 10 or 11 individuals.
3:37
Um so, this is truly significant.
3:37
The drug is going to cost $55,000.
3:41
It still requires brain scans and all this kind of stuff, but it's hope for people suffering uh and so the FDA approved it.
3:46
Um Friedberg, tell us on a science basis what we're seeing here.
3:52
It is what's happening in journalism and social media now happening in science or is this some other you know, search for truth uh or some other issue?
4:03
The Biogen drug that was approved this week is called aducanumab.
4:07
Remember, any drug that ends with mab, M A B, means monoclonal antibody.
4:10
So, it's an antibody uh and antibodies, you know, as we've talked about in the past, are proteins that can be made by our immune system and proteins that bind to a specific target that then tells your immune system to clear that target out of your body.
4:28
So, that's what monoclonal antibodies do.
4:31
And we have been using biological drugs, monoclonal antibody drugs for decades now uh to target specific cells or specific proteins in our body um that we can then remove from our body and that can reverse or change, you know, human health in very significant ways.
4:46
So, this is a um you know, a class of drugs that is very efficacious for having specific outcomes across many disease states.
4:53
And so, years ago researchers at the University of Zurich were looking at people with Alzheimer's that were having slowly progressive dementia and they looked at antibodies that they could find in their brain.
5:05
And they found this antibody that they saw was binding to amyloid plaque.
5:09
And amyloid plaque is one of the theorized mechanisms by which Alzheimer's progresses.
5:13
That is amyloid plaque builds up in your brain you know, you start to have dysfunction and inflammation and then the amyloid plaque kind of maybe the driver of Alzheimer's, but that is not proven.
5:24
So, they then, you know, ultimately gave it to a company called Neurimmune who licensed it to Biogen and Biogen started testing it.
5:31
And they took this antibody um that they discovered and they turned it into a a you know, an antibody you can now get injected into your body, goes into your brain.
5:40
It The idea is it binds to amyloid plaque and removes it from your brain.
5:44
And so, theoretically this should slow down or stop Alzheimer's.
5:46
But it turns out that as they ran this test across thousands of patients it didn't have as much of an effect.
5:52
And in fact, the data across many many patients showed that it didn't really off of a placebo baseline, meaning people that didn't get the drug versus people that did get the drug, that it wasn't really that different in terms of cognitive scores and tests and all this other stuff.
6:07
So, they abandoned it a few years ago.
6:09
They kind of got this They stopped the trial.
6:10
They had this kind of negative outcome and, you know, Biogen got beat up for it.
6:15
And then all of a sudden they refiled about 9 months later with the FDA saying, "Well, look.
6:18
When we look at the patients with the highest dosage of the drug," cuz they gave it in three different doses, so the the people that got the most antibodies, "this particular group of people had a 23% decline in the progression of their Alzheimer's."
6:32
Which is kind of one way of slicing the data.
6:34
And and as a result, they went back to the FDA and people were like, "Well, you know, some of the tests don't really show that still."
6:42
There were some cognitive test results that didn't show that that was the case.
6:45
And they fought back against and so some people were pushing back against it.
6:48
And we're not sure No one knows for sure how it all kind of came together at the end, but the FDA ultimately approved this drug.
6:56
And here's what's challenging about this.
6:57
You basically will go in, you'll get an injection of this this antibody, just like you do with many other antibody-based therapies.
7:02
It costs roughly $5 to make antibody therapies, just to be clear.
7:06
So, when you make them, five bucks roughly is the cost and they're charging $56,000 for this treatment.
7:12
So, that's problem one in the pharmaceutical kind of debate is should we be charging the you know, the quality of life premium?
7:18
And then number two Yeah, it and then part you know, the kind of second issue is like should this thing have been approved when it wasn't really that efficacious and you could slice the data slightly.
7:28
And now all payers, you know, meaning all people who are insured or the government or whoever it is that's responsible for insurance payments is ultimately bearing the cost of everyone with Alzheimer's and there's 15 million people in the United States with Alzheimer's.
7:40
They're going to raise their hand and say, "Oh my god.
7:41
Anything that gives me any chance or any hope, I want to get."
7:45
But if it costs $56,000, is it really the responsibility of the insurance company and all the payers to give everyone a hope even if the drug may not work.
7:53
Now, the downside and the side effect is negligible.
7:54
There's no risk to taking this drug.
7:56
So, it's all about the cost and the upside.
7:58
And that that that that is the big philosophical debate right now is like, first of all, should we approve drugs like this?
8:04
Should we allow pharma companies to charge whatever they want even when the efficacy is very low and the cost is very low to make this stuff?
8:10
And how do we ultimately decide what we approve and what we pay? risk-reward.
8:14
Chamath, how do you look at this on a financial basis?
8:16
Yeah, let me let me let me give you sort of like a a market investing kind of view on this.
8:22
Um look, I've been taking biotech pretty seriously over the last 18 months just trying to learn because I think basically Friedberg in you know, incepted me with uh this idea that you you have to know it.
8:36
Um so, here's what's interesting in the setup for what I've learned and putting a little bit of my knowledge together, which is dangerous, but the setup for Alzheimer's is really scary.
8:45
If you're black you're 20% more likely to get it.
8:50
If you look at the distribution of all patients, 60% and upwards of you know, 64 65% um are women.
8:55
So, if you think about the distribution of this disease, it's it's the disease of minorities and it's the disease of women.
9:06
Now, that's problematic in and of itself because if you want to have any form of equality, it seems like this is something that we have to tackle.
9:13
The second interesting thing as a as a setup to this is every single Alzheimer's drug that's ever gone through the FDA has been rejected and has failed.
9:21
And what's interesting in the the the more social science around this is this is also where two of the more infamous insider trading events ever happened was around failed Alzheimer's drug.
9:32
Um the first, which is less known, but inside baseball is what happened at SAC, which was a huge hedge fund.
9:39
But the second that's very well known is Martha Stewart and why she went to jail was around an the speculation and the insider trading of the phase three results of an Alzheimer's drug, which ultimately turned out to fail.
9:50
It was almost the surest money on Wall Street, which is every time some one one drugs came to market, you just bet against it and it would turn out that these stocks would collapse.
9:58
So, there's the social and market setup.
10:00
I am super torn, but I think there are some positive points to make on this thing.
10:05
So, but let me give you the negative case.
10:06
The negative case is what is the FDA doing approving a drug where there's no clear evidence that it leads to clinical benefits and it could give families sense of false hope.
10:18
What are you doing in terms of process if you have a unanimous vote against approval?
10:21
So, why do you even bother having an FDA advisory committee of outside experts if they're just going to do what you want?
10:27
And it could set a precedent where companies um can get drugs approved on limited evidence.
10:31
Now, here's the positive point, which is they may be taking a long-term view and what they could be really doing is creating a market that ultimately incentivizes other folks to come in where then ultimately those people are the ones that find the solution, right?
10:48
Because this Biogen drug Biogen came out and basically said we think this is a $100 billion market.
10:55
So, now all of a sudden you must believe capitalism is going to take hold and a lot of young startups will say, well, I should be going after this market as well.
11:03
And so, by going after that, after Biogen, then maybe you actually do get to the solution.
11:08
And just a kind of a a little bit of trivia, it turns out that the acting FDA commissioner in 2016, this woman Janet Woodcock, she was the one that approved a different form of drug in the exact same setup.
11:20
That one for us ataluren, which is basically for Duchenne muscular dystrophy.
11:27
It had a negative panel vote.
11:27
She basically said, "No, we're going with this."
11:30
The scientific community reacted similarly back then, but she basically took the view that, you know, you're doing no harm, exactly what you said Frieburgh, cuz the safety says it's fine.
11:40
You're doing no harm to the patients by approving this drug and maybe it might turn out to work in the end.
11:43
And in that specific case for Duchenne muscular dystrophy, what we see 4 years later is that now there are a lot more companies focused on finding a solution and they're pouring a ton of money into R&D and maybe one of those things will break through.
11:57
So, I think she could just be running the same playbook here in Alzheimer's, which is important enough uh that somebody needs to do something.
12:04
You're saying the economic incentive could drive further innovation in the space that ultimately could benefit patients more truly than this current drug.
12:12
I think so and I think like, you know, what look a lot of like I think drugs that that are potential solutions, in many ways I think what the FDA is doing are two things which I think are really positive.
12:26
The first is that they're accelerating their approval timelines, right?
12:29
So, you can have breakthrough approval and innovations.
12:32
And so, you can get to market much, much faster.
12:34
The best example is what we've seen in these vaccines.
12:35
But the second thing is if you have a well-structured safety study that says that these things are not harmful to humans, then yeah, David, it's it's basically saying sell a $56,000 drug, there's a $10,000 copay.
12:49
Now, we should talk about that because that shows how broken Medicare Plan B is, uh Part B, sorry.
12:53
Um but yeah, they're creating a $100 billion market out of nothing.
12:57
Yeah, but should should should that be the case, Chamath, or should it be regulated?
13:02
Because ultimately if the regulators are approving the drug and enabling the commercial opportunity, shouldn't the regulators also say, "You know what?
13:08
You can have this commercial opportunity, but you can only charge X because we're not going to have the taxpayer pay the Y uh or pay you know Frieburgh, let me ask a a really basic question here.
13:20
Why is there no you know, document put out by the FDA saying, "Here's how we came to this decision in plain English?" Or is there?
13:29
Cuz I looked for that, couldn't find it.
13:31
In other words, you know, the same way there was a vote, they could say, "Hey, listen, we understand the vote, we're overruling it for this reason."
13:35
And why isn't there an interim step?
13:37
The FDA's not the FDA's not your doctor, right?
13:41
So, I I think the way things are set up is your doctor is meant to be informed about the panels review of drugs and they and there are labels that doctors need to be able to read and understand and then the doctor's job is to make a decision on treatment for their patients and make a recommendation to their patients.
13:56
So, ultimately the FDA is not a consumer organization.
13:58
The labels that get approved, what the pharmaceutical companies have to say about their drug, all of that stuff is overseen by the regulators at the FDA.
14:05
And then that is then used by the doctors to make treatment decisions and and ultimately translate back and say, "Listen No, Jason.
14:13
But couldn't they kick it back and say, "We want you to do one more trial or some bridge step here, hey, you can do 10,000 people over the next 3 years." They do that.
14:19
And and by the way, and and they are going to do continuing studies on aducanumab as it goes into market.
14:24
They always do that and they always ask for more data and they do this continuous review.
14:27
The FDA is a really strong body and a really strong regulatory body and we should all feel kind of pretty well, you know, safe and secure.
14:36
But but the issue is really I think the economic question on the other end, which is they could approve 100 drugs tomorrow and then what happens to the economics of health care if everyone's allowed to charge any price they want for any care if it has even the slightest range of efficacy, we're not going to be able to afford anything, you know.
14:51
So, just so this is where like, you know, regulatory bodies run into each other because the FDA Alzheimer's Alzheimer's is a drug of the old. All right?
15:01
Healthcare expenses are covered by Medicare.
15:05
And in Medicare there's a section called Medicare Part B, which effectively is a way for these drugs to go to market.
15:11
Just so you guys know, under Medicare Part B plan, a physician gets a 6% kickback of the price of the drug.
15:20
Your doctor gets 6% of that $57,000.
15:24
That's a terrible incentive.
15:24
It's a it's an incredibly bad incentive.
15:26
And so, you know, $3,000 every time you put somebody on this. It's quite a spiff. It is.
15:31
And and so, and so, you know, Medicare Part B has been this mechanism that people have wanted to undo for a long time.
15:37
Now, if you're sitting in the FDA, you can't change that because that's covered by CMS.
15:41
Yeah, that's not your that's not your jurisdiction.
15:43
I think it's like this weird intergovernmental agency warfare, push and pull and trying to move the incentives.
15:50
This all goes back to if Congress can't act, then all these folks have all of these other random tools, they just have to throw this spaghetti against the wall and this is the kind of stuff that happens because Congress should actually be fixing this in a more substantive, holistic way and until they do it, this is what's going to happen.
16:06
This is no different than what we saw during the pandemic where we had health regulators coming in, local health regulators, public health officials saying everything shut down because their incentive is to save lives.
16:16
Their incentive is not to balance the trade-off between saving lives and protecting the people versus the economic damage and the fallout and the cost of it.
16:24
And there are two different agencies and ultimately the synthesis of these decisions isn't being managed by a leader anywhere or by a leading organization anywhere and that's where things inflate and get ugly and get nasty over time.
16:36
Okay, uh Sachs, as a free as a free market monster, what do you think, Sachs?
16:39
How would you approach releasing these drugs as a No, but you're for less regulation.
16:44
When you see this regulatory mess of spaghetti and you know, costs and and price gouging, you know, if we take the most cynical look at it because 15 million people times $55,000 a year I'm no genius at math, I but I my SATs tell me enough that that's going to be this drug's going to make what, 10 billion a year, 20 billion a year, something in that range?
17:05
If they just get a fraction of those people.
17:06
So, I mean, I I I agree with Frieburgh and Chamath that we shouldn't give doctors an incentive to choose one treatment or another, right?
17:14
I mean, that just seems totally warped.
17:16
But going to the sort of larger issue of FDA approval, um I would make it a little bit easier to to get drugs approved.
17:25
I mean, look, I I think that, you know, double-blind test is the gold standard.
17:28
If the drug clearly doesn't work, you don't approve it, but this is a case where the evidence is a little bit inconclusive.
17:37
And in a situation like that where it's a drug that might help people who are facing a deadly disease and you know, Alzheimer's is one of the worst, it's not only, you know, when the prognosis is terminal, but it also is deteriorative and it's devastating for patients and their families.
17:51
These people have nothing to lose and so, I would let the drug through, I think, and then watch how it performs over the next couple of years.
17:59
They could always revoke the approval in 2 years.
18:02
You know, in other words, almost consider the usage of the drug over the next couple of years as a stage four trial.
18:10
You know, the the one group who's not complaining about this are patients.
18:12
I mean, Alzheimer's patients want the ability to test this and generally speaking, I think we should give people who are facing again a terminal prognosis the ability to try these drugs.
18:26
Yeah, and and Frieburgh, correct me if I'm wrong, the reason or maybe Chamath, you're better for this, but just looking at the economics of this, taking care of somebody with Alzheimer's and if you and it starts to hit people at 65 and people start living to 78, 85 years old, they need to have care.
18:40
A person with Alzheimer's, the issue is not their ongoing uh maintenance in terms of their brain, it's their day-to-day life.
18:48
They cannot be left alone.
18:50
So, they have to be either institutionalized or have home care.
18:53
And then you're talking about $100,000 a year and and I think Medicare and some other people pay for that.
18:57
So, 55K if the person can take care of themselves That's how pricing is done, Jason. That's exactly right. how they do it?
19:04
So, pricing is typically done based on the long-term cost-benefit of the of the drug, of the to the to the paying system.
19:12
So, you know, they'll take a look at like, "Hey, here's how much we're going to benefit people or benefit the paying system, therefore we can charge X dollars for getting this drug."
19:21
That's why today you can go get a um a CAR T therapy or something, you know, some sort of therapy that that that is going to be highly efficacious and they'll charge you a million dollars or genetic um there there there's a few that are getting approved now uh for genetic diseases and that, you know, million-dollar one-time fee cuz you get you get the treatment once, it costs, you know, technically nothing, the COGS are zero to make this stuff.
19:43
You get that treatment, they charge you a million dollars because the long-term care of the progression of that disease is so high that they can economically rationalize that.
19:50
Um and so uh Is that ethical or moral?
19:53
On the pricing cuz cuz clarify one thing.
19:55
So we're we're talking about it at $56,000 a year.
19:59
That is true, but it's basically $4,800 per shot.
20:01
You get a shot once per month and that costs $4,800.
20:05
And so you multiply that by 12 and you get to $56,000 number.
20:10
Now, is $4,800 to get this monthly shot an outrageous amount of money for what could be a breakthrough Alzheimer's treatment?
20:17
I don't necessarily think so.
20:19
I mean, that is the sticker price.
20:21
That's not what the patient is going to pay, right?
20:23
The patient's going to pay the $10,000 copay, but divide that by 12, you're going to pay about $850 per month for what could be a breakthrough treatment.
20:34
I mean, to me the real issue is whether it works and since this since there are some positive indications, but it's inconclusive inconclusive, I would say tie goes to the runner here.
20:44
Meaning, you can try it and let's revisit it in 2 years and see if it works.
20:49
But but it wasn't a tie as far as scientists were concerned.
20:51
So what is the disconnect there, Chamath?
20:55
Because I think what they were looking for They were No, but they were looking for a causal link and the problem is at some point along the way over the last few years, we started with the hypothesis that amyloid plaque was causal of Alzheimer's and then we moved to a place where there was some correlation and then we moved to a place where we said, "Actually, it may not do much of anything."
21:16
But I actually agree with Sachs.
21:16
I think the FDA did something really novel here, which is that they applied an extremely aggressive free market approach to a market that has been completely bereft of solutions.
21:29
And so if you can create a $100 billion market overnight, I think it stands to reason that a lot of people will look at the increase in Biogen's market cap and the profits that Biogen can make over the next 10 or 15 years and say, "I will attack that and do that cheaper, faster, better."
21:47
It happens in every other market.
21:50
I think the point here is that it probably shouldn't have been the FDA's role to create competition, but for whatever reason, whether it's how the capital markets in biotechnology are structured or the way that, you know, Medicare Part B kind of works and creates these odd incentives, we are where we are.
22:06
And so I tend to think that it's probably better that this drug was approved.
22:10
I also agree with Sachs that in general, I think as long as you have a reasonably defensible safety study, we should probably be in the business of getting more drugs approved faster.
22:24
And the reason is that it allows smart, clever, hardworking people to connect the dots in ways that right now we don't know anything about.
22:32
Like just like, you know, a a random factoid to prove this point.
22:36
Like when you look inside, for example, of who wins a Nobel Prize, right?
22:41
Particularly in the fields of biology and chemistry, etc.
22:42
You have people that are in their 60s and 70s that win awards for research done in their 20s and 30s.
22:51
So clearly, people at some point when they are somewhat less jaded, you know, and somewhat more naive maybe, have the ability to really transform the world for all of us.
23:02
And if you can marry that to economic incentives, so folks that understand the markets can also be along for that ride, that in my mind, I think is generally better than a nanny state of babysitters. I agree with that point.
23:12
I think I I think that let me frame this to you in a question for you.
23:17
Of those scientists on that board who voted against this, if their parent or spouse, God forbid, were suffering from Alzheimer's, how many of them would take the drug out of the 10?
23:26
is my point is and and it's the point I was going to make, which is everyone wants that lottery ticket.
23:30
There's no downside and only upside because you're not paying for the lottery ticket.
23:33
And so um the way the system works in terms of paying right now, as a patient and as a doctor, I have no incentive to manage cost down, right?
23:44
All I have is opportunity in front of me.
23:47
And so as we add more opportunity, as we give everyone the ability to have a lottery ticket that potentially could cure their disease or could or, you know, make them kind of live forever or have a healthier state of being, uh you know, we are going to see this proliferation of approvals that end up costing all of us so much that the inflation that we've already experienced in terms of paying costs for healthcare continues to climb.
24:10
So the challenge is like, you know, if we are going to continue to operate a socialized model of medicine or even partially socialized where the government's paying some amount of of the uh of the premium or employers are paying part of the premium, where the individual that's getting the treatment doesn't bear the cost, you're going to end up seeing everything inflate because you're creating this incentive now.
24:30
Companies are going to rush in, they're going to try and get 10 things approved.
24:33
Everyone's going to be taking an Alzheimer's drug in a couple of years because there's going to be so many available on the market and none of them may actually be curing Alzheimer's.
24:40
Maybe 10% of people get cured, 90% don't, but the cost is going to be millions of dollars, you know, per person for these treatments and everyone pays it.
24:48
I'm not saying that's necessarily a bad thing.
24:49
You know, we need to have a proliferation of innovation, certainly.
24:52
The challenge is in the interim period, the inflation we've already experienced in healthcare, which is just extraordinary, will continue to climb um if, you know, we don't regulate uh the actual market for pricing on these things um and on the other side, we pay all the bills or there's some socialized uh pool to pay all the bills.
25:10
Uh you can't have it both ways.
25:12
I'll give you the other side of the argument as well, which um is the reason why this could be so valuable.
25:19
Again, if you look back to what Janet Woodcock did um With Was it muscular muscular dystro- yeah.
25:24
In Duchenne muscular dystrophy, you know, for or Janet Janet Woodcock, sorry, pardon me. Janet Woodcock.
25:30
Um, but if you if you know anybody whose child has Duchenne muscular dystrophy, my gosh, what an incredibly debilitating disease.
25:38
You would not want anybody in the world to have it.
25:41
And again, by approving that drug, what she did, I think, is something pretty incredible because now there are of the the number of companies that have again come after that market opportunity because she helped define a market.
25:55
Four of them are already public.
25:55
Just to give you a sense of it and there you know, and so the odds, at least numerically, are greater today than they were 4 years ago and that was a you know, potentially non-efficacious drug that that frankly though had a had a legitimate safety study.
26:12
To your guess, Chamath and Friedberg, 10 out of 10 of those people on the FDA board would have a spouse or loved one take it cuz there's no downside.
26:21
If you look at Biogen's market cap, just to wrap up here, uh they added $20 billion in market cap in the 5 days since, you know, this announcement happened.
26:29
So in terms of incentives, you got to think every other drug company is saying, "Hey, I've got something that kind of sort of works and it's really expensive.
26:36
Can I get a free ticket now?
26:38
Can I do this compassionate thing?"
26:40
Hopefully it's just the former thing, kind of sort of works and then, you know, Yeah. They go from there. All right.
26:44
Moving on to our uh next topic.
26:46
Bezos has decided that he will be the first billionaire in space.
26:49
Uh three people are going to be going to space in quotes on an 11-minute flight on July 20th, 2021.
26:59
Uh Jeff Bezos in a promotional video on his Instagram uh sprung this on his best friend, his bestie, his brother Mark, who agreed to go with him and there's bidding of $3 million, I guess, to to 4. 8, Jay. Oh my god, 4. 8 now.
27:11
Uh on Blue Origin site uh and uh just doing back of the envelope math, which I which I did uh last week when I heard this announcement, 600 people or so have gone to space.
27:24
Some of them have gone multiple times.
27:25
Blue Origin's done 20 some odd flights, two of which went south and probably would have resulted in death.
27:31
So I think 5 to 10% of Blue Origin's flights would have killed uh uh sadly Bezos if he had been on them, but obviously they've made progress since then.
27:40
Two of the 120 plus flights that SpaceX have done, but none in the last 6 years um have had an accident uh and obviously uh Virgin Galactic had one tragic accident as well.
27:52
So is this a wise idea and where would we put the percentage risk of ruin {slash} fatality I just I just want to I just want to do statistics for a second, Jason. Sure. Yeah.
28:02
Just because there were Blue Origin accidents in the past doesn't necessarily mean that it has any bearing in predicting the future likelihood of there being an accident because the data from the past is from different machines and different techniques and different processes.
28:18
So I don't I don't think, you know, to your tweet and the controversy with your tweet and, you know, your your point now, I don't think you can necessarily look at the past.
28:24
This is much more of a kind of deterministic conversation about like, "Hey, look, here are the things we have done with our systems and here's why we have a high confidence in this thing, you know, kind of working."
28:34
Which is obviously why people don't go on the first 50 rockets or first 20 rockets, whatever it happens to be.
28:38
But statistically, it's it's non-zero.
28:42
So I guess the question is, is this a a wise move and where would you actually put the odds at?
28:45
Well, it could it could very well be zero now. Could Yeah. You don't know, right?
28:49
We don't know how well their safety systems have been developed.
28:52
I mean, we don't know how, you know, the I I don't know anything about this, but I'm pretty sure that if Bezos is go He's a pretty smart guy.
28:57
He's not going in anything that's going to have some high some some even nominal likelihood of of death, right?
29:00
Like And he knows probabilities and he's been there in the last 15 test flights and he's seen the data and he's probably seen a string of nominal flights and at some point you just feel like, you know, okay, this is this is really dialed in here.
29:16
My prediction is Bezos is going to come back and he's going to announce that he's going to be the CEO of Blue Origin.
29:20
I think this is what he No, he's going all in on Blue Origin.
29:23
this is what he wants to do with the rest of his life.
29:24
I think it's been pretty clear that this is such a passion for him and like, you know, he's he's got the the world's greatest money machine ever. It's a flywheel.
29:30
It'll run as a monopoly for decades.
29:32
He can do whatever he wants to do now.
29:34
And so when he takes a look at this, what's greater after you've conquered Earth than leaving Earth and moving on?
29:39
So to to me, this seems to be so intellectually interesting to him and um and so kind of existentially interesting, my guess is he goes in full-time on Blue Origin now that he's kind of transitioned to the chairman role and he's kind of been pretty public about it.
29:52
100% 100% David All right.
29:56
You're conservative and typically very scared of anything dangerous.
29:57
Go ahead, tell me your prediction.
30:01
Well, I'll give Bezos credit for dogfooding his own product, but um, to to be honest, I would take a contrarian view overall.
30:07
Um you know, I think sometimes people get so rich and so powerful that there's nobody around them to tell them when they have a bad idea.
30:14
And quite frankly, I think this is a brain fart that the people around him are telling him smells like perfume.
30:21
And they should be telling him, "Dude, what are you thinking?"
30:24
You know, if if J Cal said to me he was going up on a rocket, I'd be like, "Dude, you got at least 30 good years here.
30:33
You know, Bezos Don't screw up the podcast. We need the host.
30:38
We we need you down here.
30:38
Like, what are you thinking?
30:40
Bezos has got like 170 billion after the divorce.
30:43
He's you know, still a young guy and he's going to risk it to go up in space for like 3 minutes.
30:50
Um I mean now, yeah, they this is the they they have sent the crash test dummy up there successfully 15 times, but this is the first man flight, the first flight with humans on it.
31:02
He's determined to be on it.
31:03
If I were his advisor, I would say, "Put a GoPro on the head of the crash test dummy and experience it in virtual reality."
31:13
Yeah, put a VR headset on it. No risk of ruin. Exactly. What are you thinking?
31:18
Yeah, I mean, if this was a stunt that, you know, um, uh, Richard Branson did early in his career, remember he did the ballooning things and he was trying to become a billionaire and trying to get excitement around his brand, but I I think this is totally unnecessary and it is not a the risk of ruin here is not zero.
31:36
It might be close to zero, but it's definitely not zero.
31:38
I mean Well, now Branson's trying to beat Bezos into space.
31:41
So, he's announced he's going to go up, too.
31:45
And, you know, so these guys are both um, being daredevils a little bit.
31:49
up on the um, uh, Galactic uh, Chamath?
31:51
What's he How's he going up to space?
31:56
Is that a Virgin Galactic flight? Chamath, you there?
31:59
What do you want me to tell you?
31:59
Of course I I'm I'm Of course I'm here.
32:01
I'm also chairman of the board.
32:02
What do you want me to tell you?
32:03
YOU HAVE A COMPANY YOU'RE ON the board of that does space flight.
32:07
know if it wasn't public.
32:07
Is it You're saying Sorry, did you say it was a public thing?
32:11
No, I said it Virgin Galactic is a public company of which I'm chairman of said board of directors.
32:15
I'm not saying anything about anything.
32:16
Branson is is trying to beat Bezos into space by going up before him.
32:21
There is now a space race going on.
32:23
And you have to wonder and then meanwhile, Elon I I wonder how much of this is because of Bezos' pride because Elon tweeted that Bezos couldn't get it up because his rocket Bezos' rocket is only go to actual space.
32:40
Yeah, it goes to like suborbital like lower earth orbit.
32:42
You know, I mean, he gets halfway halfway up.
32:46
I think he's somewhere in the 50 to 70 range.
32:48
I think if he if he had a little blue pill, Blue Origin, if he got the little blue Origin pill, he might get to 100%.
32:56
How great is this space race, by the way?
32:57
This is so freaking cool, right?
32:57
I mean, like the government comes in and I mean, the government creates all these great contract incentives.
33:03
This is a This is a good role for government, right?
33:05
They come in and they create all these contract incentives.
33:06
SpaceX has been making all this money from the US government.
33:09
And then they take that money and they invest in creating the space race, this industry that, you know, could absolutely transform humanity for the centuries to come.
33:18
Uh, it it really speaks to kind of like how semiconductors and computing came out of the space race of the mid-20th century and we could see this kind of like next industrial age arrive for the space industrial age uh, because of these incentives that have been created by the government.
33:33
It seems to me like there's a good role here that government's played and this is super super cool, man.
33:38
this in stark contrast to the government doing the space shuttle program, which if you look at the fatalities, there've been about 30 fatalities in going to space, 14 of which were on the two shuttles, one that tragically blew up on the way up and one that disintegrated on the way down in our childhoods in the '80s, I believe. Um, for most of us.
33:56
was also incredibly expensive.
33:56
Look, this is privatization for the win, right?
34:00
Instead of having the government doing all the R&D and the government is good at some things, but R&D is not one of them.
34:07
So, you you let the private sector do the R&D and then NASA's contracting with these private sector companies.
34:14
The government is a phenomenal balance sheet.
34:15
Yeah, Sachs, how do you feel about the government funding this work, right?
34:19
Because they're not doing the work, but it's the taxpayers' money that's going to SpaceX and others for contract services that ultimately fuels this innovation engine.
34:28
Do you feel like this is a good role for government spending?
34:30
Is to kind of Well, the question the question for government as a policy matter is whether we want to go to space.
34:36
And then the question is how do we get there?
34:38
I definitely believe that if we believe it's important to have a space station, to get to space, to kind of advance the frontiers of you know, humankind Yeah.
34:49
then then then it's a it's a worthy program to fund.
34:51
And then the question is, well, how do you get there?
34:53
And I think, you know, funding SpaceX and these or it's not funding, it's contracts with SpaceX to deliver the product is a much better idea than having the government try to develop it itself.
35:04
Yeah, because those are milestone-based with some level of competition, even if people might complain about the bidding process, etc.
35:13
, the contract is for a duration of time and for deliverables.
35:15
If the deliverables are not met or the contract expires, then we start the whole process over again.
35:21
And this, correct me if I'm wrong, is a must-do for us because we cannot let the communists and authoritarians own space.
35:27
We have no choice being the democratic West of owning space and getting there before them and dominating space.
35:35
Nobody can own space, but I think the United States is an incredible balance sheet. Nobody can own space?
35:42
I mean, are you kidding me?
35:42
What What if somebody gets up there who decides to put nuclear missiles up there and decides anybody else who puts satellites up there, we're going to just nuke them and laser them?
35:53
You're not going to own it.
35:53
You don't even need a nuke, quite frankly.
35:54
You could drop a tungsten rod from space, okay?
36:00
Just a like a giant steel rod.
36:00
And by the time it hits the ground, it's going so fast that it basically can blow up or assassinate anybody.
36:07
What the hell are the two of you talking I mean, have the two of you become No, this is real.
36:12
Like the two of you like that like Bea Arthur and the Golden Girls. What Jesus Christ.
36:19
in the Muppets on the Room of the Planet of the Cannibals and Bea Arthur here blathering on.
36:23
No, there's the military applications of space are very important.
36:24
Have you not seen the South China not seen the Chinese putting rockets over Taiwan in military exercises?
36:29
These people are not playing games. Jason, I understand.
36:33
Nobody All I'm saying is there's no owning it, okay? It's too vast.
36:38
It's effectively infinite. You can't own it, okay?
36:40
You can have certain areas where maybe You can't Yes, you can dominate space.
36:47
Of course you can dominate space.
36:48
You think they're and they don't play by the rules.
36:51
I mean, did you guys not see what happened with Hitler in Europe?
36:52
He dominated Europe for a number of years. Jason, listen.
36:58
Of all parts of space that you can dominate, maybe the one planet is Uranus.
37:06
You guys are so naive about the intentions of Russia and China. It is phenomenal.
37:11
They have 100-year plans to dominate humanity and they are willing to put millions of people into concentration camps.
37:19
They have no problem going to space and deciding we're going to own the satellites and we're going to knock other satellites out of the I can't believe I can't believe you were so anti-Trump and and and and the things you say.
37:28
It's just you're you're so incredible. You're so funny.
37:32
Can I just say one thing?
37:32
I think I think back to what we said before, the US is an incredible balance sheet and what Friedberg said is so true, which is like coming out of the Apollo program, we really created so much technological innovation.
37:43
It propelled the US forward.
37:45
We unfortunately gave a lot of it up, but hopefully this time around we can do it again.
37:49
And by the way, just last week, I guess it was I guess it was last week.
37:53
Um, or a month ago, you know, we're we we got that CHIPS Act in play, which is a quarter trillion dollars, you know, for semiconductors and other things.
38:02
Um, so we're slowly getting there, but this is where the US can do a lot of good, which is just to act as a funding source.
38:07
And then let private markets kind of take over the rest.
38:09
By the way, we've talked about this on the past couple podcasts, but there is I think $90 billion earmarked in this new bill for enabling American manufacturing progress.
38:18
And so, it it will be through a similar sort of funding mechanism, it looks like, as what we're seeing here.
38:24
It could be a a fantastic boon for innovation and um, and infrastructure.
38:28
to say, what other categories should we model this after, Sachs?
38:30
Should we do this for nuclear?
38:31
Should we do it for education? For housing?
38:33
Before we move on, I mean, look, J Cal, I want to come to your defense on this point because I think it's it's um because I think it's just wrong to say that there aren't like vast and important military applications of space.
38:46
Um, the fact of the matter is, you look at the history of warfare, it's critical to have the high ground.
38:52
Whoever has the high ground ultimately wins the war.
38:54
This is why the first thing we do uh, the Greeks the Greeks had the high ground. says the guy that's 5'3. Says the guy that's 5'3.
39:03
You haven't seen me with a spear.
39:05
You haven't seen me with a spear and a shield or a mace. Let me finish the point.
39:09
The first thing we do in a in a war or a conflict is establish total air superiority.
39:14
It's the reason why our infantry doesn't take massive losses.
39:18
Um, it's, you know, we want to establish, you know, artillery um, that that sort of protects the infantry.
39:25
Look, the future artillery is going to be from space.
39:27
It is the ultimate high ground.
39:28
Uh, it is I agree with J Cal, it's naive to think that the other side that the other powers are not pursuing military applications.
39:36
We have to have the ability to defend ourselves against space-based attacks and to have those those abilities ourselves, those capabilities.
39:45
And so that is part of what's factoring in here with the space race. it. I get it.
39:51
I know what you guys want. A giant laser.
39:53
You want a giant laser in space?
39:56
I don't I don't think it has to be a laser.
39:58
I think it can be low-tech, you know.
40:00
Well, I mean, just if you just literally shot ball bearings at other satellites, it would rip through them, right?
40:06
I mean The tungsten rod program is an actual program, right, Sach? I Yeah. Yeah.
40:10
Yeah, it's a funded military program. Oh my god.
40:11
By the time you if you drop something from space, it hits the ground at like Mach 35.
40:17
Phil Hellmuth has invaded our podcast and taken the body of David Sacks.
40:22
No, but in all seriousness, this um program that we're seeing great success with inspiring the greatest, you know, entrepreneurs of our time to go after big prizes like this, could we not do this with nuclear energy, housing, and education?
40:35
Or are is that kind of out of the question because of unions?
40:38
Let me just point out, by the way, the things you just pointed out are the things that are now most regulated.
40:45
And it's the regulatory burden, which ultimately stifles innovation, whereas in this case, we're enabling innovation without putting a lot of regulatory burden on space at this stage, right?
40:56
And so as soon as ITAR, which is one of these regulatory bodies, starts to step in and maybe we start to limit things that can be done in space and so on and so forth, you may see things kind of get damaged like nuclear energy got damaged because the fear of the downside ends up you know, kind of counterbalancing the opportunity of the upside.
41:11
And it's something we've seen time and time again with every innovation cycle in every industry.
41:18
Um and it you know, you're right.
41:18
Right now we're in this opportunistic moment in the space race, but as soon as kind of the regulatory burden becomes heavy, you're you're going to see the same thing that happened with housing, the same thing that happened with nuclear energy, and all the other kind of innovation cycles that that that kind of got stifled not just in the US, but globally. Yeah.
41:34
So we don't think for nuclear we'll see this happening anytime soon.
41:39
Man, that would be an incredible uh Nobody wants nuclear if there's a huge NIMBY problem with nuclear, right?
41:43
Which is who really wants a nuclear power plant in their backyard?
41:46
I mean, not going to happen.
41:48
I don't think it's realistic.
41:49
It's is one of these ideas that you know, sounds great in theory, but then in practice, no one's willing to raise their hand and say, "I want that in my city." easy solution for that.
41:59
Why don't you just make anybody who has to live within X zone of a nuclear power plant have a tax credit of a million dollars a year?
42:06
They still don't want it.
42:06
Look, I think the future of alternative energy is solar.
42:12
It's it's an inexhaustible supply.
42:12
The cost of solar panels Hold on.
42:15
The cost of solar panels keeps going down exponentially.
42:20
The cost curve is going down exponentially.
42:21
And look, ultimately all life on this planet is solar powered, right?
42:25
Because fossil fuels come from the remains of dead dinosaurs who were ate plants and plants are solar powered.
42:32
So ultimately, the sun is the ultimate source of energy, not wind, not nuclear, not windmills. What geothermal? It's going to be solar.
42:41
Geothermal capacity is still like a hundred billion years based on our current consumption rate, but there's limited research relative to the opportunity in geothermal.
42:53
But yeah, totally agree with you, Sach.
42:55
In a microcosm of you know, the reopening of the pandemic, we've been at record low case loads and deaths are so low now from COVID-19 in the low hundreds that it's probably hard to know for you, Barg, you tell me if I'm wrong or right, if people are of those three or four hundred people dying a day, that's with COVID, from COVID, etc.
43:17
But anybody I think it's intellectually correct to say that anybody who over the age of 12 who wants a vaccine could get it and anybody who's in a high-risk group certainly now has had over six months to to get a vaccine.
43:30
So we're basically done and now the question becomes what happens to society?
43:33
Are we going to go back to work?
43:34
Apple employees wrote a letter um about Apple's uh demand, I'm using air quotes here, uh that people come back to work three days a week.
43:46
Um Amazon just adjusted their return to work policy backing off their claim of uh in March that they're going to return to an office-centric culture.
43:56
They announced that employees can do two days remote, three days in the office.
43:59
That seems to be the three for two um Google has a similar policy.
44:05
Um they're expecting people to return to the office three days a week in September.
44:08
Twitter said you can work from home forever cuz Jack uh is an introvert and doesn't want to come back to work, I guess.
44:13
Uh Facebook employees either need approval to continue work from home full-time or they will need to be back in the office 50% of the time, but Zuckerberg personally uh said that he is embracing remote work.
44:24
Here's the quote, "I found that working remotely has given me more space for long-term thinking and helped me spend more time with my family, which has made me happier and more productive at work."
44:35
Which I guess is either devastating for real estate or this is a great negotiation that's going on.
44:39
You had some choice quotes about Apple employees doing three um uh letter/ uh petitions in three weeks. Yeah. Yeah.
44:52
So look, I I I don't have a problem with the work from home policy.
44:56
My my problem is with the fact that the Apple employees um keep doing what they do, which is sign these petitions.
45:03
And of course, the it's all this snowflake language around, "We're not being listened to. We're not being heard." you know?
45:08
And then they want to dictate to management uh the way that the company should work.
45:13
And so they have circulated petitions to get other employees fired.
45:16
They circulated petitions to make Tim Cook take a stance against Israel.
45:20
Now they're circulating petition on work from home.
45:22
And of course, that is what Apple employees do and Apple management uh is doing what it seems to do, which is cave to these petitions every time.
45:31
And so they're in an infinite loop where the employees have realized they can run the company by forming these these sort of boycotts and petition mobs and it's working.
45:39
Now my again, my objection is not to work from home.
45:43
Most of my portfolio companies are now working from home or fully distributed.
45:48
They're hiring employees everywhere.
45:49
It's been very liberating for them to be able to hire talent anywhere in the world.
45:53
And so I think the work from home question the the reason why these big companies are struggling with it, I think quite frankly, is is because it's about their ability to supervise their employees.
46:03
I think that work from home makes the best employees better, but it allows the worst employees to hide.
46:10
And I think what this really comes down to is a fear on the part of Apple and Google and Facebook.
46:16
They've got thousands of employees who aren't really working and are going to be able to completely hide. Mhm.
46:22
And and I think that's what this policy comes down to.
46:25
of management or just the nature of work from home?
46:28
the nature of these gigantic companies where they've got so many employees that they're trying to figure out how to supervise them all and make sure they're actually doing work.
46:34
There's this funny tweet that's going around.
46:36
I don't know if it's true or not, but it got retweeted about somebody saying that I've gotten six jobs during the pandemic.
46:42
They're all work from home and I'm waiting to get fired from them for you know, people realizing I'm not doing anything.
46:48
And so I think this work from home controversy ultimately is about the ability of these large companies to supervise a workforce that they don't know what they're doing, if anything.
47:00
Oh my god, what a brilliant idea.
47:00
The big unsolved problem in the pandemic with respect to work from home is how do you onboard new people?
47:08
In my opinion, like if you have an established company with established people where everybody knows each other, it seems like all positive to be able to work from home because there's trust, there's decorum, there's social norms, there's all these things that were established together.
47:24
But what happens when all of a sudden you introduce one, two, three, four, five, five hundred new people into the mix?
47:29
How do you onboard these folks?
47:29
How do you get And I think that's not a solved problem.
47:32
And until you do that, I'm not sure that work from home will be as effective as it can be because I think you'll just get a lot of people that that languish a little bit as they switch jobs.
47:40
Now maybe what that means is they'll switch jobs less because they'll just say, "Actually, this is net better.
47:46
My crappy job got a little bit better, so there's no reason to move."
47:51
The on your point of commercial real estate, J Cal, I actually think it just brings the utilization down, but I'm not sure it destroys it because I think people need the physical plant.
47:59
Now maybe over time they'll get much smarter about getting smaller spaces and having flex spaces, so like things like WeWork do better.
48:08
Um because then you use that for overflow space or that's how you how you actually have a primary outfit.
48:12
Um but yeah, those are my thoughts. Freeberg, any thoughts?
48:17
I think it's going to be hard to what I'm hearing, I don't know if you guys have talked to a lot of CEOs, but I I just hear it's kind of a little bit tough right now to find the balance of the rules around when to be in work because people have meetings um in the off they'll have a meeting.
48:35
80% of the people will show up to the meeting, 20% will be remote, and then it's a huge headache for everyone to be like, "Okay, we're all in the room.
48:40
We're all having a conversation.
48:40
Now we got to zoom the people in that aren't here.
48:43
And this person decided not to show up today."
48:45
And it's kind of become a little bit of a a weird faux de pas or what what's the the right word? Faux pas.
48:51
To come in to to like right to to not come in to work while everyone else is meeting in person, and it's just becoming a little bit of a conflict across the organization right now.
49:00
Um there's it's going to be sticky for a while.
49:02
I'm not sure there's going to be a great um solution, and it's going to vary by company.
49:05
Also, it's very different.
49:08
As you guys know, when you know, when I was single in my early 20s working at Google Uh-oh, here it comes. Uh-oh.
49:14
Well, no, it was like it was it was going to work was like, it's cool.
49:19
Here's there's like No, it was like it was cool.
49:23
Like it was a it was great to go to campus every day.
49:26
Now that I'm married with kids, you know, like being with being around your kids more often, you got obligations at home.
49:32
It's very different, right? Your priorities change.
49:33
And so when you have a diversity in the workforce of people with different home lives and so on.
49:39
What if you're married, but you don't know and you have kids, but you can't remember their names.
49:42
David over to you, Sachs.
49:47
I mean, but at that moment in time, correct me if I'm wrong, Friedberg, you know, Google was taking people out of Stanford, Harvard, MIT, whatever, and they were basically giving them another four years in college with this like college campus experience. You got great food. It was fun.
50:02
a freaking barista made your coffees anytime you wanted a coffee, walk over to a counter and there's a barista, he makes you whatever you want.
50:07
You get all these amazing snacks and you go you go down the slide to your meeting.
50:13
When you say it was great experience, do you mean that it was like fun for the employees, like it was like a fun life experience or do you mean they actually got good work experience? Fun life experience. Yeah.
50:24
Yeah, it was a it it it was it was like useless.
50:26
It was useless from like a skills or like resume like from a from building your career, it was useless, right?
50:34
Well, the Well, the work itself was useful.
50:35
At least for me, at least at that era at Google when it was a private company. I loved that work.
50:39
It was an incredible experience for me.
50:40
I made a lot of friends and and built incredible career experience working at Google when it was a private company. Um But what about now?
50:47
I mean, Google has this reputation that there's thousands of employees not doing anything.
50:51
It was satirized by by the employees on sitting on the roof of the show Silicon Valley Hulu. Yeah, exactly.
50:58
Hulu Hulu Hulu Hulu Hulu Hulu Hulu. Yeah.
51:00
So look, I mean, instead of sitting on the roof, they're going to be sitting on their couch at home, you know.
51:04
I guess I guess it's I guess it's an improvement.
51:08
But I think that's really what it comes down to.
51:09
What what Facebook said in its statement was kind of interesting.
51:11
There was a a part in there where they kind of implied that work from home would be like a perk, you know, and that high performers would get it and then low performers would have to come into the office more.
51:22
And that probably is the right approach because in order to let people work from home, you have to trust them to be much more self-motivated to get their work done and quite frankly, the employees who want to hide, you got to make those people come into the office, you can see what they're doing.
51:38
in jail where the good inmates get their own cell. Totally. Yeah, exactly.
51:40
You get you get time in the yard, you get visits, conjugal visits.
51:45
If you were running a 500 to 1,000 employee SaaS company based in Silicon Valley with offices around the country or whatever, what would you do right now?
51:53
What would your your work from home policy be today?
51:58
Well, most of my companies that are in that position are going fully remote, fully distributed.
52:03
And it is and there're going to be some challenges to be sure, but I just think it's inevitable.
52:09
Now, some of them I I I do think there is a strong cultural advantage.
52:10
We've talked about this before.
52:12
Chamath has made this point around having everyone in the same office or at least having hubs.
52:17
So I am a fan of developing hubs.
52:20
You might have like an engineering hub somewhere that, you know, and then you've got some remote engineers.
52:24
You might have like a customer service hub.
52:27
Um I I I I do think that like call centers, for example, you're much better off having everybody work from the same Totally.
52:35
call center uh because that that is like a total productivity job where it's about like how many units of work can you do within a certain amount of time.
52:43
It's way easier to measure and manage that work um when it's all happening in one place.
52:47
And and those call centers tend to be in locations that aren't as expensive as as the Bay Area.
52:51
At Metromile, we have a big customer service and claims center in Tempe, Arizona and um we have gone fully remote uh since the pandemic and productivity per unit uh per per employee has gone up uh since going distributed because it turns out that you know, I'm not I'm not going to opine too deeply on this, but um you know, the the the throughput increases when people are kind of maybe not being distracted in the office or something.
53:16
So Ah, that's interesting.
53:17
you can actually track it and and that's a very measurable job, right?
53:19
So the throughput and everything can be measured.
53:22
Um so I I would kind of make a counterpoint there that maybe we're seeing something different happen.
53:26
Yeah, I mean, look, you you maybe you maybe right about that.
53:28
I mean, it all comes down to do you have the ability do you have systems that can manage the the sort of sprawl?
53:33
And if you do, I mean, and you can really measure the output and you can ensure the employees are delivering results, that's that's a win-win.
53:42
I I created a a super lightweight version of this um where since Slack is so dominant, I just tell people you need to have a start and end to the day so you can like get on with your personal life.
53:54
Just at the start of the day, do an SOD uh in Slack in the general channel.
53:57
You just say two or three bullet points of what you're working on today.
54:00
And then at the end of the day, reply to that same one with your EOD.
54:04
Just what you got done today and then inform your employees and then you don't need to be managed.
54:10
So if you can do that for five minutes at the start of the day and just five minutes end of the day and then on Friday before you leave for the and close up the week, give me an EOW of what you got done this week.
54:19
And then on Saturdays, like today when we're taping this, I go through, have a cup of coffee, read all the EOWs and I give feedback.
54:27
And it has made it so clear who's a contributor in the company and who's not.
54:32
And when I I instituted this pre-pandemic and I had two people quit cuz they were like, I don't want to do it.
54:38
And it turned out that those people were the lowest performers.
54:40
I think you should call it a TPS report.
54:44
It you know, I I would you could frame it as such, like micromanaging, and I said, you can either frame this as micromanaging or you're setting an intention of what you're going to do in your workout and then you record what you did in your workout.
54:57
Since I started using the Tonal system and since I started using Hydra, I'm not advertising them here, but they both have measurements and I I did 6,500 lbs on the Tonal and I'm like, I want to break that record this weekend. I want to do 7,000 lbs.
55:11
I want to do five exercises.
55:13
And I went from doing three exercises three reps to five exercises four reps and and that just makes me want to measure it.
55:18
If I if I do {slash} apple slices into Slack, do I get apple slices? Absolutely.
55:24
They will bring you You can also pick milk or chocolate milk or strawberry milk.
55:29
What do you What did you guys think of that press release that Salesforce sent out which said something to the effect of like they are becoming an entirely Slack-centric company.
55:37
They're going to rebuild, I guess, the entire architecture of SFDC around or Salesforce around we predicted that on the show.
55:43
Slack is going to be the They're going to rename Salesforce Slack.
55:47
No, but I don't really understand what that meant other than the actual headline of the statement.
55:51
I'm wondering if you guys understand what it means.
55:53
Well, I I think I understand what Benioff is getting at, which I saw an interview that he did recently um where he talked about their quarterly results, which I guess were their best ever.
56:01
It was like a fabulous quarter for them.
56:02
Um what he talked about, Benioff is very good at connecting his products to larger societal trends and the big trend that he's kind of hooking on to is this distributed work trend.
56:12
And the way he described it is is, you know, basically this is the future.
56:18
Companies are trying to figure it out, but they need a saddle because I guess this this is a trend that could sort of buck them off the horse.
56:24
And he's trying to say that Slack is going to be the thing that anchors your company now for this new era of remote distributed work.
56:29
I think it's kind of brilliant marketing. Brilliant. Absolutely.
56:34
I mean, there has to be a there there.
56:36
He's absolutely brilliant.
56:38
He has built such an incredible organization.
56:39
I mean, the scale of Salesforce over these last 20 years, my gosh, he is he is a star. Star of stars.
56:49
I mean, and I sent you guys in the Slack the or I sent you guys in the chat this socket site.
56:53
com, which is a cool real estate site for San Francisco that's been around for two decades, I think. Um It's hilarious.
56:59
They calculate how much open office space by how many Salesforce towers are empty in uh and it's 16 million of square feet of vacant office space now spread across uh San Francisco.
57:10
That's This seems to me at the same time we're having a crazy housing crisis.
57:13
I don't know if you're monitoring this, but it turns out that banks and hedge funds and now Redfin and, you know, uh OpenDoor and all these companies are buying homes.
57:22
Homes are getting bid up at the same time mortgage uh mortgages are at an all-time low and people are moving around and we're not constructing.
57:31
So I think we had a 60 or 70% decline in new housing uh being released into the market and now we've got a a full-blown housing crisis in the country.
57:40
I'm going to go back uh out on a limb and put up my uh 10-year break even.
57:45
I think this whole inflation thing is a head fake.
57:50
And I think that um the right now we're in this weird position where the the home builders are not necessarily sure whether they're going to rip in the capital necessary to build a bunch of homes.
58:01
The reason they would slow down is if they think that inflation is coming, rates go up, mortgage rates go up and then demand falls off.
58:10
But if it turns out to be a head fake, the builders will then actually build what's necessary and they have the capital capacity to do it, but I don't think that they've had the the economic justification and the courage to do it.
58:21
And and in fairness to them, it's because the 10-year break even has gone straight up since the depths of the pandemic.
58:26
Which is essentially again just to you know, get everybody up to speed, it's it's how the market thinks about the future forward inflation rate.
58:34
Anyways, over the last three or four months or three or four weeks, sorry, since we talked about it, it's kind of steadily started to fall off and I think there's a prevailing sentiment that, you know, we're going to see some short-term spikes.
58:44
We saw it this past week in CPI.
58:46
Energy went bananas, right?
58:48
The cost of energy, the cost of certain things.
58:53
But then we're going to get back to normal.
58:54
And when we get back to normal, inflation will be okay.
58:56
And I think, Jason, that's probably a solution because if it gets, you know, if that if that boogeyman is actually not real and um we put it away, then um uh the builders will be back in size and and they'll greenlight a lot of projects and I think you'll see housing supply kick back up really aggressively. That'll be good for us.
59:17
Yeah, two two points there, I think.
59:19
One, it's so I I hope Chamath is right about the long-term inflation prognosis.
59:22
Um it's been, you know, it's it's it's very important for investment in growth companies, growth stocks, and high-tech companies that the inflation, the long-term interest rate remains low. So, I hope you're right.
59:37
I think that ultimately, what's happening is there's a battle going on between sort of fiscal and monetary policy coming out of Washington, which is highly inflationary, and then technological deflation.
59:49
So, for the last 25 years, because we've had this explosion of productivity around technology, it's driven down the prices of pretty much everything that's not where where the prices aren't set by the government.
1:00:01
So, healthcare, uh universities, things like that, the prices have gone up because the government's paying for it.
1:00:06
Everything else, the prices have come down massively.
1:00:08
So, we've we were kind of in this battle between sort of um government inflation and technological deflation.
1:00:15
I don't know which one's going to win.
1:00:16
Um I do think that the sort of the the the policies we're seeing creating a lot of government debt and uh the Fed continuing on this never-ending QE are are pretty scary.
1:00:29
But, in any event, I hope you're right about where this ends up.
1:00:30
I think on the the other point was um was Sorry, where were we we were on um We're talking about the housing and Yeah, the housing.
1:00:37
So, this is a really interesting sort of populist narrative that's evolving where you've got I mean, it's I think both the left and the right can agree that it's a pretty scary thing that you now have major hedge funds buying up huge stocks of housing in the US, driving up prices, so first-time homebuyers can't buy a home.
1:00:58
I mean, that is a very uh scary It's a nightmare.
1:01:02
It's a nightmare trend, and I think you're seeing a reaction to it on the left that California now proposed some new policy where they want the state of California to pay for 50% of first-time homebuyers' houses, which just seems insane to me.
1:01:16
But, you know, and then on the on the right, um Tucker just did a segment coming down attacking uh BlackRock and these big hedge funds for for basically for for for driving up the prices.
1:01:24
So, I think you're going to see a unanimity on the populist left and right in reaction to these hedge funds.
1:01:32
But, the thing that no one's really talking about that they need to be talking about is the NIMBYism.
1:01:37
I mean, Jason, you mentioned it.
1:01:39
The reason why we don't have enough housing is because it's too hard to build.
1:01:43
And Chamath is right that the builders could get the capital for it, but it is too hard to get these projects approved.
1:01:49
That is the thing we've got to uh that that is the change we've got to make.
1:01:53
To build on that, I think what's happening now becomes the catalyst to break the NIMBYism.
1:01:59
If you all these BlackRocks are buying up all the homes, if young people and young families can't buy a home despite mortgage rates being ridiculously low, and despite them having the money to do it, and the desire to do it, then that's going to create a massive societal upheaval, I believe.
1:02:15
And then that's going to either drive people to other states, like Texas is benefiting because they're pro-development, it's going to catalyze the massive movement of people out of New York, out of California, whatever states are are giving too much red tape.
1:02:30
It's going to drive people to those states because that's where the housing people it's going to be built, or those states are going to crack under the pressure and say, "You know what?
1:02:35
We're we're going to let you build in Sacramento."
1:02:38
Uh and you know, you guys know I'm I'm I have a a housing company in my portfolio, and they are they are getting absolutely deluged with people begging them to do affordable housing in different locations.
1:02:51
And the biggest problem they're having is sorting through all the projects, and what are we going to do?
1:02:55
Uh but, the great news is technology exists now to build modular homes in factories like Tesla does cars, and ship them to site, and take 6 months to a year out of the construction process.
1:03:05
So, then it just becomes a matter of regulations, and which state decides that they're going to let people buy a home for the first time.
1:03:12
And if California doesn't let people buy a home for a first time, who's going to pay taxes here?
1:03:17
Where's the growth going to come from?
1:03:19
This is going to be This is a stall moment, I think.
1:03:21
Just just so you know, then the the other the other really terrible thing about home ownership is that it is where the preponderance of wealth creation for average Americans comes from.
1:03:30
And so, when you lock people out of home ownership, you're essentially ripping away 60 to 70% of how they're ever going to make real wealth.
1:03:39
And so, yet again, you exacerbate, Jason, to your point, the inequality that we have where a few folks make all the money, and then everybody else, they're kind of shut up from the equity market, they're shut up from private investing, and then they're shut up from owning a home, and no wonder people are pissed because it's like you throw your hands in the air and it's creating a revolution.
1:03:58
You pulled up three ladders at once.
1:03:59
You can't invest You can't invest in private companies.
1:04:03
Tell me how I can just earn some money so that I can pay for my kids to go to college, take a vacation, and have a nice life whenever.
1:04:08
Tell me how to do it, then.
1:04:10
Yeah, cuz look, just just to summarize, government doesn't have a good answer.
1:04:14
You You We're pulling up the ladder of home ownership.
1:04:15
We've pulled up the ladder with the credit evasion, you can't invest in private companies.
1:04:18
We've made higher education far too expensive, we pulled up that ladder.
1:04:22
I mean, what's left for the average citizen to to to grow their wealth? This is the crazy thing.
1:04:29
We pull up the ladder, and then in response, government creates a program to subsidize people and bail them out at the end.
1:04:34
I mean, it doesn't make any sense.
1:04:35
I mean, Mike Solana had a Mike Solana had a really funny tweet about the the California uh program, which was it's amazing the lengths to which people will go to avoid building new housing, you know, new supply.
1:04:46
It's like we subsidize homebuyers for this artificial price increase we've caused by limiting the supply.
1:04:53
This is like eliminating people's uh student loans.
1:04:56
Just allow supply and demand.
1:04:56
Yeah, just make more colleges, and make them cheaper.
1:05:00
What do you guys think about this whole ProPublica Speaking of wealth inequality, this ProPublica leak of tax records.
1:05:05
Somebody inside the IRS, or it was hacked, we don't know.
1:05:07
Yeah, this is clearly Got a hold Got a hold of basically 3,000 uh the the tax records, many going back many years of 3,000 of the wealthiest Americans.
1:05:17
And ProPublica has slowly started to digest and and issue um news reports about them, and it shows that, you know, in some years, guys like Bezos um paid no tax um whatsoever, were able to take huge deductions.
1:05:31
You know, at one point, actually Bezos, in a year where he made, you know, kind of like billion dollars, was able to essentially didn't uh claim he made nothing, and then made so little, or made negative dollars that he got a $4,000 tax credit that's typically reserved for people you know, people people who who are for your kids, yeah.
1:05:52
It's It's It's not meant for billionaires, essentially.
1:05:55
But, you know, they this was a lot that I think the big story here is the leak more than uh capital gains, how capital gains works.
1:06:04
We all know how capital gains work.
1:06:05
ProPublica has got an agenda, obviously.
1:06:07
This is a left-leaning uh investigative journalism uh funded by the left uh and donations.
1:06:12
And uh they do a great job with investigations, but in this case, they're just telling everybody what we already know, which is if you have giant holdings, you can get a loan against them.
1:06:22
Whether it's you own a home, and you can get a mortgage against it, or equity line, or if you own a bunch of stock, you can get a margin loan.
1:06:29
I mean, it's not really news.
1:06:31
I think this is like stirring the pot.
1:06:33
And the big news is who who released this data?
1:06:35
And then, you know, there are some countries, I believe Sweden is one of them, where tax records are public published top level.
1:06:41
Yeah, they have to be published.
1:06:43
And so, I think the way the United States is going is we're going to force people to publish their tax records, and we're going to force some sort of minimum uh for people with holdings, aka a wealth tax.
1:06:53
I And I'm not saying I agree with either of those, but I think that this is the way it's going.
1:06:56
And I Somebody posted to our I'd be in favor publishing 7,000 more IRS agents are coming online?
1:07:02
I'd be in favor of publishing tax returns.
1:07:04
I I have no I I I I think that that's a really good idea. As a flat mostly? Oh, no, no.
1:07:07
Like I I think it's a I think it's a really smart thing to do.
1:07:11
I think like you would see a lot less shady behavior if you had to publish the stuff.
1:07:14
When you publish your tax return, uh Chamath, would you do a shirtless holding up your tax return in a mirror and take a selfie, and then that's how you would publish it, or Listen, yeah, more like more like a one tear one tear rolling down my cheek.
1:07:29
It should just be a picture of you with a wheelbarrow of cash, just you dumping it into a furnace.
1:07:34
I think I think I think one thing I'll say is I think these stories have highlighted just an incredible um uh ability to to shift the narrative and create a different kind of uh dialogue around taxation because, as we all know, the principle of taxation in the United
1:07:50
States is that you are taxed on income, and income is a recognized gain, meaning when you sell an asset for cash, or for some other asset, or you do a job, or you do a job, and then you get paid, you get that cash that you can now go use to go buy something, or to uh to do whatever you want to do with. That is
1:08:07
That is the transaction moment that you get taxed on.
1:08:10
And everyone's saying, "Well, this guy's a billionaire.
1:08:12
He has these billions of dollars. He paid no taxes."
1:08:16
He didn't necessarily make billions of dollars of income that year.
1:08:18
His stock value may have gone up billions of dollars, but if we all taxed each other when our stock values went up each year, and we didn't get a rebate when our stocks went down, people would feel pretty upset.
1:08:30
The average person would probably feel pretty upset if they got taxed every time their their stock portfolio went up, and then they didn't get to have a rebate when their stock portfolio went down.
1:08:38
So, the principle of taxation is such that when you sell those shares, and you ultimately generate income, that's when you get taxed.
1:08:45
But, the narrative is very quickly shifting where people are like, "Oh, this guy's a billionaire."
1:08:49
state stated, you know, "He didn't pay any taxes."
1:08:53
They don't say anything about how much income he actually made.
1:08:54
And a lot of these guys don't need income Yeah, they have a dollar salary.
1:08:57
They pick like, you know, Well, they effectively have a credit card.
1:09:00
One way to think about it is wealthy people have a credit card, as Chamath pointed out, because they can buy everything on loan, they can buy everything they want on credit, because down the road, everyone knows you guys have billions of dollars.
1:09:11
When you eventually taxes on those?
1:09:13
So, if they do take the billion dollar loan, and you buy houses, you're paying consumption To be To be honest, it's it's even more It's actually even more uh perverted.
1:09:19
So, if you take a loan, and then you use that loan to to invest, the United States tax law says that all that interest you pay is deductible as well.
1:09:30
And so the arbitrage that you find yourself in is if you have Yeah, it's like you have these assets, you go to a bank, they'll they'll lend it against because they want to you know, what is the bank's job?
1:09:43
A bank's job is to generate interest, right?
1:09:44
So, you know, they want you to fishes customers. Right.
1:09:47
And so and then and then part of the tax code is that it's tax deductible.
1:09:52
And so it's one of these things that I think structurally gets people very confused about what's right or wrong, but it happens and it happens it happens to any common sense solution, Sachs?
1:10:00
Well, I was going to say, just keep in mind that when somebody lives on a credit card, like one day that credit card comes due.
1:10:07
And it's not a problem for Bezos because Amazon's stocks just keeps going up and up and up, but you will occasionally hear about some rich person going broke.
1:10:15
And the reason is always that they took on too much debt and then their stock price went down and all of a sudden they owe more than the value of the collateral and then they're just done.
1:10:26
I mean, they get liquidated. Yeah, exactly.
1:10:28
So, you do take a big risk.
1:10:30
When you live on margin, you are taking a big risk.
1:10:32
Most people don't do that.
1:10:34
Most people who have gains will eventually cash out.
1:10:36
They'll do that by selling their company or they'll sell a piece of their stock.
1:10:40
They'll have a stock selling plan and then they pay tax. Exactly.
1:10:43
And I I feel I so I feel like it's really unfair how I look, I don't want to say it's unfair because people get really riled up when rich people aren't paying taxes.
1:10:51
But it's interesting to me how the narrative has been kind of very quickly reframed without the specificity of the income that was generated by these individuals and they're just saying, "Look, this person has all this wealth.
1:11:05
They didn't pay any taxes."
1:11:06
without actually recognizing that this person may have had an income generating event earlier in their life which they did pay taxes on or they will have an income generating event later in their life which they will pay taxes on.
1:11:18
And so the the the truth is a little bit more nuanced than I think, you know, the very quick kind of sound bite-y press stories kind of indicate.
1:11:23
And it's it's just really it's been it's been really interesting to watch how many people get so riled up and frothy about this moment.
1:11:30
And I I get that we all you know, everyone kind of dislikes wealthy people.
1:11:34
You know, I certainly did when when you know, I was I had no money and I felt like I was getting screwed by the system.
1:11:40
did when we started this podcast and that to be honest, Sachs.
1:11:43
Yeah, but but but I think Friedberg raises a great point which is that with Bezos take for example.
1:11:49
And look, by the way, maybe he should be paying more tax in other ways, but with respect to his Amazon stock, he built this machine called Amazon.
1:11:55
It's this machine that makes all of our lives better for for the most part in terms of the delivery of goods and services.
1:12:03
You know, you press a button, something shows up the next day.
1:12:06
So, he builds this incredible machine. He owns a piece of it.
1:12:10
He's merely holding on to his ownership in that machine.
1:12:13
But the way that the public market is valuing that machine keeps going up and up and up.
1:12:20
But to Friedberg's point, he hasn't recognized more income.
1:12:21
He doesn't have more cash in his bank account.
1:12:23
And so should he be paying taxes every the thing.
1:12:29
If you change the Hold on.
1:12:29
If you change the rule, Chamath, correct me if I'm wrong here and you said you have to pay on the gain, then somebody who bought a house in 1980 and it appreciated 100x in California by the time they were 70 and they bought it in their 30s, they would get caught up in this wealth tax or paying for it as they go, the appreciation. This mechanism exists.
1:12:48
Now, Jason, you said a key thing.
1:12:51
This mechanism exists at all parts of the tax code.
1:12:53
So, yes, a billionaire can basically go to JP Morgan or Goldman Sachs or Morgan Stanley, you know, get a margin loan on their stock and live their life.
1:13:02
But individual folks who are not billionaires can do that via a HELOC on their home.
1:13:07
And a lot of people do that as well.
1:13:09
They take home equity lines of credit and they use that to forward finance things as well.
1:13:14
The difference is that because the quantums are so much bigger, you have this ability for rich people to accelerate their wealth creation in a way that normal folks don't.
1:13:21
So, I'll give you another example.
1:13:22
So, one example that I just spoke about is you basically take a loan instead of selling things, right?
1:13:30
You use that to make investments.
1:13:30
All of that interest is tax deductible. Number one.
1:13:34
Number two is even if you don't need to do that, you can just take a loan on a small percentage of your capital, reinvest that, again, pay the interest and now you're running implicitly a little bit of leverage.
1:13:50
And just to give you a sense of it, there's a really great study by AQR, I think is the name of the hedge fund.
1:13:55
And um they reverse engineered Buffett's returns.
1:14:00
And what they saw was that Buffett ran about 20 to 30% levered his entire career.
1:14:07
And the way he did that was synthetically by the float of GEICO.
1:14:11
The point I'm trying to make is even the best investors in the world prove that a small amount of margin and leverage is the key between being average and being the best in the world.
1:14:22
And if that if he needed that, let's be honest, we all need that.
1:14:24
And again, we all can't have that.
1:14:27
It's only available to a few.
1:14:29
And so I'm not saying that the rules are wrong, but the rules do stifle the ability to basically move up and move down that curve.
1:14:36
It's clear how often people move down. People get stopped out. They get margined out. Happens all the time.
1:14:44
It's very hard to see examples of people moving up.
1:14:46
It's because it's harder and harder to get that first little bit of capital that then you can go and run with.
1:14:52
Yeah, and see I think the great the great reconciliation is what we need to work on as a society.
1:14:56
And if you look at what the great reconciliation would be, it's can I get a great education, can I get great health care, and can I have a nice home?
1:15:03
And if you just said we're going to have health care for everybody in the United States, very easy to pay.
1:15:08
And if you just said we're going to allow the building of single family homes, two or three bedroom homes, and you cannot stop them and any state that tries to stop them is not going to get whatever amount of federal funding.
1:15:19
And then finally we said all trade schools are free.
1:15:22
Those are three very simple things.
1:15:24
That's a great idea, by the way.
1:15:26
What a fabulous idea, Jason. I love it. I Wow.
1:15:29
reconciliation And and charter schools and charter schools and school choice for everybody. Yeah.
1:15:33
Because that is the number one thing to create equality of opportunity in this country.
1:15:38
And those are incredibly ideas, guys.
1:15:40
And safe communities because the number one thing kids need is a great education and a safe household and you cannot have that when guns and health care you can't have that when gun violence is exploding across the country.
1:15:54
Our communities are no longer safe.
1:15:56
We have to fix that problem. All right, listen. We're at 75 minutes.
1:15:58
Do we want to talk about toxic Bitcoin insanity in Miami?
1:16:02
Yeah, what the hell is going on over there?
1:16:04
What are these guys doing?
1:16:04
All right, so very simple.
1:16:05
There was a Bitcoin conference in Miami.
1:16:07
If you go to that conference, you have to agree to not mention other cryptocurrencies.
1:16:12
There is a we all have heard of Bitcoin maximalization or being a Bitcoin maximalist.
1:16:17
This means you believe that Bitcoin is the one true cryptocurrency.
1:16:21
All other cryptocurrencies do not exist.
1:16:24
This conference has codified that to the point at which people are jumping on stage like maniacs, ripping off their clothes to reveal Dogecoin shirts, and then people are saying Bitcoin maximalism now has evolved into Bitcoin toxicity which is a subset of the Bitcoin movement.
1:16:40
What Bitcoin toxicity says is in order for Bitcoin to become the one true currency and the reserve currency, we must attack anybody who attacks it.
1:16:50
In other words, cult-like behavior.
1:16:51
Either accept Muhammad, Jesus, Moses, whoever, Hindi Hindu God, Zeus for the Greeks, you have to accept our God or else we're going to attack you.
1:17:03
So, you can actually see this in practice.
1:17:05
I tweeted, "If a if Bitcoin was replaced by technology, what would that look like?"
1:17:09
And you get massively ratioed on Twitter which means more comments than likes.
1:17:13
I'll take I'll take the other side of this if you want. Yeah. Go ahead.
1:17:17
Well, anyway, so Bitcoin toxicity is now a thing and it's actually I believe making the movement toxic to people and people are not going to want to participate.
1:17:26
So, it's actually collapsing the project.
1:17:27
People do not want to be involved in toxicity and people think that there's many ways to win in crypto.
1:17:33
So, the crypto community because of the recent loss of 50%, I think now is in a debt spiral of toxicity. Go, Sachs.
1:17:42
Well, I think this is a a fake moral panic on your part.
1:17:44
Um Look, if toxicity means that you think that all these cryptocurrencies are a scam, then Jason, you are guilty of toxicity, too, because you think I believe in Bitcoin. I believe in Bitcoin.
1:17:58
I own seven figures worth.
1:17:59
Nobody has been on Twitter more saying that all these cryptocurrencies are a scam.
1:18:02
The only disagreement that you and the Bitcoin maximalists have is with respect to Bitcoin.
1:18:06
But you both agree both sides agree that you and the maximalists believe that all these other cryptocurrencies No, I believe it's a real technology.
1:18:14
I do believe that there are scammers in it, to be clear.
1:18:18
You've contributed to the toxicity by basically Absolutely not. I did not.
1:18:22
by constantly denouncing every crypto I denounce ICOs and scams.
1:18:25
I believe technology it's a real technology.
1:18:28
But anyway, it's it's it's just gross and I think it's that in general, if I had to summarize what I see, I I see like there's a vein of young men basically who are super super frustrated.
1:18:42
And um incels And well, I don't know if they're incels or not, but like, you know, I think that they they basically I think like ran the race the way they were told.
1:18:56
They checked all the boxes.
1:18:56
They went to the schools. They got the jobs. They did the thing. They did the that.
1:18:59
And it's kind of not working.
1:19:01
And so whenever they find a thing that's new, I think they find acceptance in the community.
1:19:08
And then man, do they get really rigid about it?
1:19:09
And they in some ways just stop thinking for themselves. And that's a shame. Call it a cult. Yeah. Can I quote something?
1:19:16
We've all been raised on television to believe that one day we'd all be millionaires and movie gods and rock stars, but we won't.
1:19:21
And we're slowly learning that fact and we're very very pissed off. Is that Fight Club? That's Fight Club. THAT'S A GREAT QUOTE. It's so true. It's so true.
1:19:31
That basically summarizes Twitter.
1:19:34
I feel like Instagram is Instagram.
1:19:36
Instagram made it a hundred times worse.
1:19:38
You could see everyday people suddenly becoming rich and famous or at least the perception that they are rich.
1:19:43
using filters to look better.
1:19:43
And then everyone feels like they're being left out or everyone feels like they want something that they don't have and then you're left in this constant state of want and desire and this constant state of unhappiness.
1:19:52
So this isn't new by the way, you know, these are Buddhist principles that dog out of this source of unhappiness is really about desire and if you can let go of and we create more desire. yourself to others. Yeah.
1:20:06
I think there's a different answer to to the Fight Club nihilism than just sort of giving up all desire.
1:20:11
I understand the sort of Buddhist approach.
1:20:15
I actually wrote in 1999 when I joined PayPal, I wrote an article called Silicon Valley's Fight Clubs in which I basically said that startups were the answer to this sort of you got to remember Fight Club came out in 1999 and so you had this sort of nihilism associated with this empty materialism.
1:20:34
People wanted all these materialistic things, but it didn't really make them happy.
1:20:37
But I think that creating something great and being part of creating something great is the answer to this and it's about it's about creation, it's about purpose, it's having meaning. Mastery.
1:20:48
Mastery and we are robbing people of having that experience when we do stuff like Universal Basic Income or tell them they don't need to work, you know.
1:20:58
We should be encouraging them to have these great experiences and this is why I kind of react to these like Apple snowflakes who don't want to come into their billion dollar spaceship campus.
1:21:07
It's like you know, they're just punching a time clock.
1:21:11
You know, they're not really getting any meaning out of their work and that's the thing I sort of react to that's so um it's it's so awful.
1:21:18
Rather than find another place where they can actually find purpose and mastery rather than be at Apple, be mad. Right position. Contribute.
1:21:26
Could the iPhone have been created by a remote team? It could let's be clear.
1:21:31
The iPhone would never have happened had it not been for Steve Jobs. Okay. Period end of story.
1:21:35
You need to have the founder.
1:21:37
Yeah, you need to have the founder.
1:21:39
You just needed to have him.
1:21:40
I mean, he could have been anybody, but he himself if him with a remote team, could they have made the iPhone? No, I don't think so. I don't think so.
1:21:48
I think I think Apple would probably be a different company if Steve were still here. Who knows?
1:21:52
Which is why I think they want people to come back.
1:21:53
And I think what's happening here, I mean, I hate to be super cynical is I think a lot of people left the Bay Area, didn't tell Apple because you're supposed to tell them if you relocate and they're just trying to extend their tenure at Apple because there is no way to come in three days a week if you're living, you know, in Tahoe or further out.
1:22:11
I mean, what are you supposed to do?
1:22:12
Get a hotel for two nights a week and then drive back to Tahoe or Phoenix?
1:22:16
I mean, these people have left.
1:22:16
If Steve were still around, those Apple employees be racing back to the office because they'd be so excited about what they're working on.
1:22:25
They'd be working on new products and if they didn't if they didn't have that passion, Steve would have weeded them out in two seconds.
1:22:30
At the end of the day, all you have is what happened to snowflake by the way?
1:22:35
You mentioned snowflake although you said Apple snowflakes, but The founder of snowflake said in a CNBC episode essentially we care about diversity, but we care first and foremost about being a high performing organization.
1:22:47
I'm paraphrasing that services our customers and our shareholders and so while diversity is important, we're going to fill a role with the best person we can find and so now the grand debate that has started is and I think it's related to what happened at Coinbase and Shopify with, you know, no more political speech at work is meritocracy and can meritocracy live alongside equity and equality and diversification or diversity.
1:23:18
So diversity and meritocracy in the same organization, which wins?
1:23:22
Moritz wrote this pretty fabulous essay.
1:23:25
I think it was in the Financial Times a couple of years ago.
1:23:26
He got in a little bit of heat for doing it.
1:23:27
But essentially what he said was, you know, while we are all talking about the things that we think are important, there's an entire cadre of engineer in China that are coding 24/7. 996 996 exactly. 9:00 a. m. to 9:00 p. m.
1:23:41
six days a week and they use the same tea bag three times and he used that to illustrate he no, he used it to illustrate their commitment to excellence and what he used to see in Silicon Valley where people on the weekends the parking lots were full. Keep going Chamath.
1:23:55
Um but I I just bring this up because it's like we've lost the ability to have both things be true meaning it's it's maybe like at the end of the day Frank Slootman is a representative and a spokesperson for the values of a company that's a hundred billion dollar company that's came out of nowhere and built something fabulous for people in a matter of a few years.
1:24:20
I doubt that he speaks for himself only.
1:24:24
No, he specifically said in this comment Chamath that he was speaking for other people who were too scared to talk about it.
1:24:29
Okay, but I'm saying but I'm saying he also he's but he's I don't care about other companies. He speaks for snowflake.
1:24:37
So to the extent he says that as the CEO of snowflake, why can't we respect that an entire company has decided to do something?
1:24:45
For example, you know, the other opposite end of this, do you remember this bakery I think it was in Colorado that like, you know, refused to make a cake.
1:24:52
Yeah, refused to make a cake for lesbian couple.
1:24:54
It went all the way to the Supreme Court and they said that they this guy had the right to deny that them that making the cake.
1:25:03
To me it it makes my blood boil.
1:25:06
But at least I live in a country where he has the right to have that opinion and it's in within a legal boundary of reasonableness, I guess.
1:25:12
Now, I learn from that and I say, okay, that's a legal boundary of reasonableness.
1:25:17
Um and until that law is overturned, that's what it is.
1:25:19
This is so much less than that and we can't, you know, let this guy actually just go about his day without an issuing an apology.
1:25:27
Meanwhile, there were engineers that are working 996 in China eating our lunch everyday.
1:25:35
Yeah, I mean, in America today the script.
1:25:36
You have to you have to agree example.
1:25:39
I'll give you another example.
1:25:40
You have to capitulate and agree to the diversity Jason, let me give you let me give you another example.
1:25:46
There is a massive um play right now going on in the uranium market.
1:25:53
It was brought to my attention.
1:25:53
I was like, let me just go look at this.
1:25:55
I don't know anything about this, but I just was curious about what's going on and effectively what it is there was a fund that was trying to basically corner uranium and drive the price up.
1:26:04
And the entire thing about uranium which was interesting is okay, what is it used for?
1:26:08
It's used for nuclear reactors.
1:26:10
Well, then you spend a little time understanding nuclear reactors and I was shocked to learn how clean how safe Yeah.
1:26:18
how reliable, how repeatable.
1:26:21
I had all these stupid cobwebs in my head based on a random couple of press releases, Three Mile Island, Fukushima, etc.
1:26:29
So when I cleared all of that bias away and I learned about it, then I'm like, why aren't nuclear reactors everywhere?
1:26:38
Because it is the fastest way for us to get to carbon neutral and then I find out the same people who want carbon neutral i. e.
1:26:46
Greenpeace is the one of the largest advocates against nuclear.
1:26:51
And I thought, how do we not again be in a position to actually hold two thoughts that are slightly divergent at the same time.
1:26:58
We want nuclear energy because it actually supports something that's even more important to the sustainable ecosystem that Greenpeace is there to protect in the first place. And you can't have it.
1:27:10
And to me I find so I find all of this stuff again ad nauseam in this list of while we're all navel gazing on this China's 996. China's 996. Right.
1:27:22
We have to have forward progress and by the way Slootman he put out a release.
1:27:26
Comments I made during a media review of last week may have led some to infer that I believe that diversity and merit are mutually exclusive when it comes to recruitment, hiring and promotion.
1:27:34
I do not believe this and I want to personally apologize to anyone who may have been hurt or offended by my comments.
1:27:39
Slootman added said in a statement posted Monday, I accept full personal responsibility for the lack of clarity in my comments.
1:27:46
I think Slootman's apology actually only buttresses the original point he was making which is that CEOs are afraid to say what they really think. Yes.
1:27:54
He came out, he had the bravery and courage to say what he really thought.
1:27:58
He then got piled on on Twitter and now he's apologizing for it and walking it back.
1:28:03
It's really kind of a shame to Chamath's point.
1:28:05
How can we have honest conversations when people are just afraid to say what they think?
1:28:10
Whether I agree with Frank Slootman or not is not the point.
1:28:12
The point is that if his entire company and his employees and his executive team have made a specific decision that they view merit as, you know, incredibly important and then they they layered diversity in as a result, who am I to cherry pick those words and all of a sudden I have a wording issue with that because I don't even understand the hiring criteria.
1:28:32
It's not as if he published those stuff.
1:28:34
So it's not of not like anybody on the outside had any shred of ability to know the details. Right.
1:28:40
And and I agree and and here's my problem with all the people who attacked Frank on Twitter is, you know, have any of those people said one word about school choice or charter schools, the need to release the stranglehold that the education unions have on our kids.
1:28:56
They're running these schools for the benefit of the unions, not for the benefit of the kids.
1:29:03
They're abolishing advanced math and how many of the people attacking Frank have said one word about that?
1:29:07
Because if we want to achieve if we want to achieve equality of opportunity in our society, we have to fix the schools.
1:29:13
And so it's so easy to attack Frank, but they're unwilling to say one word about school choice because the unions are political allies and it's inconvenient for them to do so.
1:29:25
What about again going and actually understanding the cleanliness and safety of nuclear and you know being able to tell folks on the environmental left that actually this is a path to sustainable energy and a better ecology and biodiversity in the shortest path possible.
1:29:43
They just want to shut down the conversation.
1:29:44
They don't want there to be any real conversation or debate.
1:29:47
down to be really honest with you words and we're shutting down rather superficial conversations and nobody ends up addressing the root cause issues of anything. That's the shame.
1:29:56
I just think that we are screaming at each other about things that none of us really understand without taking the time to understand each other. Meanwhile, China is 996. I just can't say it.
1:30:09
Meanwhile to Now you agree Chamath, we have to win space. Meanwhile, China is 996.
1:30:17
They're 996 and they're going to win space and put that are born in a collectivist system against against holistically defined goals over multi-decade period of time.
1:30:30
They're The only by the way the going back to where we started just to end maybe the podcast, biotech is the last bastion where America is completely dominant. Uh software too. Not really.
1:30:42
There are incredible advances that it's it's been American biotechnological ingenuity through and through.
1:30:47
And the question there is going to be how do we make sure we wrap our arms around this category and continue to do great things because in the absence of it and if we get again if we lose the script, some other country is going to 996 that market from us as well.
1:31:05
Yeah, I think you know what you're pointing out is we're in this generational competition sort of sort of cold war type conflict with with China.
1:31:13
I think our foreign policy is starting to realign around that.
1:31:15
You're seeing both Democrats and Republicans really get on the same page now about the the threat that China represents, but our domestic policy is not realigned around that.
1:31:24
If we really want to win this cold war against China, we have to be competitive and we keep doing things to our schools, our kids and other parts of our system and our economy that are anti-competitive.
1:31:36
We need more Friedbergs, you know, and if you get rid of like the advanced programs, we have no Friedbergs.
1:31:43
We need to clone Friedberg.
1:31:43
Friedberg What's the chances we could just clone you and have like uh 2,000 more Friedbergs to solve this biotech problem?
1:31:50
Would you be open to that?
1:31:50
Can we can we start the clone wars with you?
1:31:53
you would get along with your clone or would you want to destroy your clone? Destroy. That's that's mimetic.
1:31:59
Oh my god, I want 10 clones of myself. Are you kidding me?
1:32:00
Can you imagine the round table?
1:32:02
You know Rene Girard wrote about this very eloquently many many decades ago.
1:32:05
This goes in one place which is you know, it goes it goes into it goes into a capital murder.
1:32:13
I want a clone army of myself. Exactly.
1:32:15
Would you like to just sit down and play chess with your clone all day?
1:32:18
Not chess, but you'd like to do something else. OH NO. WOW. NO.
1:32:22
THAT'S NOT AN IMAGE I WANTED. Oh no.
1:32:27
You're going to have a threesome with yourself? No, nothing sexual. No, no, no, no, stop.
1:32:31
That's sort of what you were saying. I'd be cool with clones.
1:32:32
I'd I'd create a bunch of clones of myself.
1:32:34
I feel like there's all these different things I want to do in my life that you know, different careers or whatever and I could send one Sachs out to be Different lifestyles?
1:32:42
One Sachs could be an architect and one could be a director and one could be One Chamath would be a lawyer.
1:32:47
Do you guys want to have your mind blown for a second? Yes, please.
1:32:51
Okay, so there's a concept capability called induced pluripotent stem cells where you could basically take any cell in your body and apply a bunch of chemicals to it and effectively get that cell to convert into a stem cell.
1:33:05
Once it converts into a cell and so the the the copy of the cell becomes a stem cell and this was these guys Yamanaka factors they they won the Nobel Prize for this.
1:33:13
Now, you could take that stem cell and turn it into an ova cell, turn it into a effectively a an egg cell. Of a fetus.
1:33:23
And then you could induce that fetus to start dividing based on a discovery that was made recently which hasn't been done in mammals yet, but effectively get it to start dividing without being fertilized and grow up and it would effectively grow a clone.
1:33:33
So this has been done in plants.
1:33:35
It has not been done in animals.
1:33:36
So in theory in the next decade or two, we could take any any hair cell from our own body, convert it into a stem cell.
1:33:44
This is totally sci-fi by the way. It's not proven.
1:33:46
There's no There's a bunch of There's a bunch of discoveries that have been made research that's been done that points to this trajectory that you could then take that stem cell from take a cell from your body, turn it into a stem cell, turn it into a egg cell, induce it to start growing and turn it into effectively a clone.
1:34:00
say as you've been saying this, I've been shaking my head. Jason has no reaction.
1:34:04
Sachs is grinning from ear to ear.
1:34:08
I mean he can always Exactly. Sign me up.
1:34:11
I'm going to be like Saddam Hussein with like 12 clones of myself.
1:34:16
You're going to have these matches with clones of yourself in them.
1:34:20
Just think of the possibilities. I love you besties.
1:34:24
Four, the queen of quinoa, Rain Man himself and the dictator.
1:34:29
I'm J Cal and this has been a double episode of the All-In podcast.
1:34:34
We'll see you all next time. Bye-bye. Let your winners ride. Rain Man David Sachs.
1:34:45
And I said we open sourced it to the fans and they've just gone crazy with it. Love you besties. I queen of quinoa. Let your winners ride. Besties are back.
1:35:01
That is my dog taking a in your driveway, Sachs. Oh man.
1:35:09
We should all just get a room and just have it one big huge orgy because they're all just useless.
1:35:12
It's like this like sexual tension that we just need to release somehow. Wet your feet. Wet your feet. Wet your feet.
1:35:18
Wet We need to get merch. Besties are back. I'm going all in.