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Where were you on Thursday?
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Were you up here or were you in LA? I was at home.
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I I got I got family to do. What family? Have you You met them? What were they like?
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Are they everything you expected?
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I had to meet I had to meet the new kid. He's 19. What What's his major?
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Hey everybody, welcome to another episode of the All-In podcast.
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Yes, we made it to episode 47 in three episodes it'll be episode 50.
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No plans to do anything other than just try to record this every week for you, the loyal audience.
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With us again, coming off an amazing event, a live event on Monday, uh Tuesday, and I don't know if it went into Wednesday, but David Friedberg's, the Production Board event.
1:03
We uh recorded our first live All-In.
1:07
It seems like it went uh well on an AV basis and the audience seemed to enjoy it.
1:11
What was the feedback, Friedberg?
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So, you know, half the room were scientists who had never heard of this podcast before and they were like, "What the hell did we just show up to?"
1:21
It's like, "Who are these Who are these four guys on stage drinking this wine, talking about politics for an hour and a half?"
1:27
Um but And And dropping F bombs.
1:27
And dropping F bombs and uh there was a little bit uh of uh kind of seasoning we had to do afterwards to get everyone kind of comfortable, but no, actually it was it was fantastic. People loved it.
1:37
You guys were the highlight.
1:39
Um and I thought it was super fun to do that in person.
1:41
I don't know what you guys thought. It's cool energy. It's super cool energy.
1:46
And with us again, of course, uh David Sacks, the Rain Man himself, and the dictator, Chamath Palihapitiya.
1:53
What did you think uh uh Sacks of the live event format.
1:55
Uh obviously half the audience were fans of the show, half weren't. Mhm.
2:02
Which is I better than putting people randomly into it, but I I I'm glad that the people who are not fans of or have never heard of the show didn't walk out.
2:08
We didn't have walk out, so that was good. Sacks.
2:13
Yeah, I mean, look, we were slightly more palatable to them than Andrew Dice Clay or something like that. But uh yeah.
2:43
It was a good change of pace.
2:43
I mean, I think some people commented that the lighting, the production values weren't that great.
2:48
They seemed fine to us at the time.
2:50
But uh so we're going to have to do better on that next time.
2:52
And other people speculated that we took we were easier on each other in terms of debating topics because we were in person.
2:58
I didn't feel that while sitting there, but you guys tell me if you think that was true.
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I thought I I thought we got a better read on each other in person and we had more dialogue than we normally would over a Zoom.
3:10
I don't know if you guys felt the same. I I I I I I think so.
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And then I I kind of like the evening podcast, the glass of wine.
3:16
I think there's something about it like you're just like a little Yeah, you're coming in for a landing.
3:20
Yeah, you're coming in for a nice evening, the playing a little cards after. It could be a thing.
3:23
It could definitely be a thing.
3:27
I could definitely make Harlan 2012 a a regular part of taping this pod.
3:30
The problem is we tape too early on a Friday, right?
3:33
If we could change that taping to like happy hour or something like that, it might work better.
3:37
Oh my god, that is A Harlan 2012 uh what is it That's a good bottle of wine. Oh my god. Even J Cal knows that.
3:45
Look at him pretending pretending to be having a good time with other people.
3:49
It's the one with the round label. I know it. I know.
3:51
I'm looking at it right now.
3:53
Oh my lord, some of those go up in value.
3:56
Those things were looks like it's a high as think we could do a pod where we like record after playing poker for 2 hours?
4:02
So, you're 2 hours into the wine and poker and then you record. Wouldn't work. No. No way. No way. It'd be too chaotic. Poker no. Yeah.
4:10
I think for first time the audio was great.
4:13
So, that's you know job one is to get the audio Sounded great.
4:16
It's 99% Conception happens that way.
4:19
To do it right of light in Friedberg's face. That was great.
4:22
They were commenting for all commenting on Friedberg.
4:25
it was my wife who actually got up and fixed that.
4:26
Like no one else of the crew, you know the dozens of people working there, didn't do anything about it.
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My wife stood up and fixed the curtain.
4:32
Dude, without Al you would be nowhere. Be nowhere in life.
4:35
She's She's a great person.
4:37
And what what what what was what was the empty seat about between me and Chamath?
4:40
I mean there was an That was if we wanted to bring up a guest.
4:41
So, Unfortunately, all the people's names that were written on that piece of paper are quote unquote besties did not show up on time. Yeah, right. Exactly.
4:48
No Bill Gurley, Bill Gurley, Sky Dayton didn't come in.
4:52
They all showed up at like 9:00.
4:54
Yeah, there may be a reason for that.
4:57
Yeah, I heard actually was the back channel.
4:59
Sky Dayton the back channel was Sky Dayton and somebody else waited outside cuz they knew they might get pulled up.
5:05
I got that from I got that from to you're going to have to bleep his name out.
5:07
Yeah, the first time saying his name on the Sky Dayton He's not going to want No, he's not going to want his name mentioned on the pod. Are you kidding me? He's been on my podcast.
5:15
He's been on This Week in Startups.
5:15
He's one of the first 10 guests.
5:16
That was the last press appearance he did was 11 years ago.
5:19
He He literally does not I mean everybody knows who Sky Dayton is.
5:22
Earthlink founder, Boingo founder.
5:25
Everybody of our generation, but it's amazing how you know quickly the tech the tech crowd you know moves on. So true.
5:31
There's a There's a famous story actually when when Marc Andreessen met Mark Zuckerberg for the first time.
5:38
Zuckerberg didn't know that you know Andreessen had created Netscape.
5:43
I'm not even sure he knew what Netscape was.
5:44
No, I think he said something like I created Mosaic and he's like, "What's that?" Oh, right, right. Mosaic, yeah. Yeah.
5:51
So, that's like what Yeah, look, in the tech industry we're all concerned about the future.
5:54
No one pays a lot of attention to history.
5:57
Do you guys feel like last generations entrepreneurs and investors at this point?
6:04
Well, some of us are still currently creating things, Freeberg.
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I can't mention the name of the app as per our anti-promotion rules, but I have recently launched A NEW PRODUCT.
6:25
BUT, THERE'S NOT THERE'S NOT THERE'S NOT A LOT OF THERE'S NOT a lot of kind of long careers in Silicon Valley, right?
6:28
A lot of people kind of have cuz you know products.
6:33
Well, you have to kind of if you have asymmetric success, right?
6:35
You have these kind of like big bursts and then, you know, it's a it's a different kind of life.
6:40
You don't go kind of push again for the next hard entrepreneurial project, typically. Not everyone, obviously. Mhm.
6:45
Uh and then you end up seeing like a a generation kind of die out like, you know, web 1. 0 and web 2.
6:49
0 and then, you know, you don't see them again. I think 90% of them.
6:55
I mean, some people venture, yeah.
6:56
I think I think there's a lot of truth to that that um and I worry about this with my own kids that I think deprivation creates motivation, especially to do something as hard as create a company, create a startup. Yeah. Motivation.
7:11
Welcome to David Sacks's infomercial. No, no.
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I mean, look, I think you know Thank you for coming to my Ted Talk.
7:17
That leads to fornication.
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You know, BEEP BEEP UH OUR FRIEND, BEEP.
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HAS A HAS A SAYING that that sort of became famous when Elon then repeated it, which is that uh creating a startup is like staring into the abyss and eating glass.
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And it is really hard to create these companies when they're successful.
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And so, not a lot of people want to do it again once they've reached that point and um you know, it does take a certain amount of um like I said deprivation, you know, to to do this stuff which is which is why giving everybody the participation trophy and trying to make people's lives as easy as possible.
7:53
I mean yes, you want you don't want to deprive people on the one hand, but on the other hand, it does often lead to to good things. Totally agree.
8:04
We're seeing a bit of a dry run of this if people believe that you know, they have UBI or the government's going to take care of them.
8:10
I would be fine with UBI, you know, everybody getting a little bit of money and if it was a safety net, the only thing I worry about is it seems like a little bit of money if you're clever means you could never work.
8:23
And then what happens to those people in society, right?
8:25
Like Well, I just I think it's anti-compassionate because what you do is you kick out the the bottom rungs of the ladder of economic success when you basically pay able-bodied people not to work.
8:33
I mean, they need those entry-level jobs that may not pay much better than the UBI are an important stepping stone to where they get to next in their career and I think it's it's demotivating.
8:45
We've already seen in California we've been doing this UBI UBI's not going to pay you to go to college, but Amazon will as an example.
8:52
So, you're absolutely right.
8:52
There's a the the GI Bill, you know, there's all kinds of examples where in history we've used you know, entry-level jobs as exactly as they're meant to be an entry-level opportunity, an on-ramp to work your ass off and to make something of yourself.
9:07
If you if you all of a sudden let people opt out of it, then it's going to be a very um it's what they're not going to realize is by the time they get old enough where they will want to have some kind of purpose, it'll be too late because then activating yourself in your 40s and 50s to essentially start your life is really hard.
9:27
I'll give you an example of this like you know, right now I you know, I I would say I'm like fairly fluent in Italian.
9:32
Um That's pretty impressive.
9:35
But I uh but started uh taking Italian lessons and you know, the last four or five percent of a language is brutalizing, right?
9:44
Because it's like it's every little grammatical thing that you want to get it completely right.
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And it's very um demotivating for me sometimes because I'm like, "God, why the [ __ ] am I doing this? Um I don't have to.
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I can get it by just speak it."
9:56
But, I've made a commitment to myself.
9:58
Uh same thing in biotech, you know, I got introduced to it by Friedberg and and obviously that and and now I'm trying to learn and it is a it is a grind and I think it's so easy to quit.
10:08
Now, you take that to the extreme and some random person that doesn't have necessarily the ability to fall back on the success that, you know, so we've all collectively had and you have to start from scratch.
10:22
My god, it's it's really tough. It's really tough.
10:24
At at our age, it is just hard.
10:26
Kids are screaming in the background, you're trying to manage all this stuff, it's impossible.
10:29
So, You think it's easier when you're in your early 20s? Yeah.
10:34
Be careful what you wish for.
10:34
But, why is it easier when you're in your early 20s?
10:37
Isn't it always a grind to learn something and push yourself to develop yourself?
10:41
I mean, Well, you have nothing.
10:43
So, you the theory is you have some motivation to get something, right?
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Because you can you're going to climb up the mountain because like staying at the shore means you can get washed out to sea or something. The tide's coming in.
10:52
There's something chasing Hours and hours and hours.
10:55
In my 20s and 30s, like it was like 10 to 16-hour days.
11:00
I couldn't leave I wouldn't leave the office. Is that different today? Yeah.
11:04
I I don't work in the same way I did before because I I'm trying to do a different job.
11:09
Um but, I've earned the right and I've now put myself under pressure to do it differently because I have a different job to do. Right.
11:16
But, when I was in my 20s and I was a PM, you know, grinding out a product or, you know, writing a feature spec or, you know, building a model and trying to put all these things together, uh it was so much thankless work.
11:27
I learned a ton uh and it was all worth it.
11:33
I was about to ask you, do you regret it or not? Yeah.
11:35
No, look, this is the thing about This is the thing about work-life balance that the people are always complaining about, people who are working too hard don't realize is that yeah, you you want to think about work-life balance, but but across your entire life.
11:46
I mean, one of the things you'll do in your 20s is work much harder to set yourself up to where you want to be in your 50s.
11:52
And so, Chamath doesn't have to work as hard in his 50s because he worked much harder earlier in his life.
11:59
Now, he's got the skill set where he can delegate more.
12:00
Um so, I yeah, I think we're you know, we really shortchange people when we tell them as young people that they don't need to work hard or in the extreme case of UBI that we're actually paying people not to work.
12:14
Um that's not developing the right habits that are going to make them successful later on.
12:18
And in fairness, though, if you look at minimum wage and you look at entry-level jobs, many of them paid too little historically.
12:23
These companies like McDonald's, I know it's a free market, but we're paying very little.
12:27
We're talking $7, an hour.
12:28
And no benefits, and you know, this is kind of unnecessary greed in my mind, and I think that's what we're seeing right now. I made $4. 55 an hour. Yeah, I made $4. 25 an hour 1996.
12:40
That was my first job, cleaning cleaning a pool. Yeah. $2.
12:42
50 for me when I worked at Fordham's uh Fordham's computer center.
12:49
I think it was four two No, three $3 it had gone to.
12:51
But when I started in the workforce in '88, it was $2. 50 was the minimum wage.
12:55
What was the minimum wage where you were, David?
12:59
What was it like in the 19th century? It sucked. Yeah, tell us.
13:03
When I When I When I When I was working at When you tilled the fields?
13:05
No, I I remember when I was in college, I worked at a bar.
13:10
Um and uh I mean, I was there drinking so much, I finally was like, "Why don't you just give me a job?"
13:13
So, I might as well make some money while I'm while I'm sitting here.
13:17
And they paid me seven bucks an hour.
13:19
That's what I did my senior year. That's pretty good. Pretty good.
13:21
That's a pretty well-paying job, seven bucks an hour.
13:24
One of the other problems But one of the other problems of UBI that Larry Summers has been He's the former US Secretary of Treasury.
13:29
He's been on the record about is the inflationary effect.
13:32
So, you know, there are pretty smart economists like himself who kind of highlight that if you give people everyone, you know, $10,000 a year.
13:40
First of all, it's going to cost $10 trillion or whatever the estimate is to kind of fund that sort of program.
13:47
Um and, you know, suddenly the cost of a burger goes from $0. 49 to $0. 99 or $0. 99 to $1.
13:52
99 because there's, uh, you know, much greater demand on that kind of area of the economy uh for consumption.
14:00
And so, you see an inflationary effect which trickles its way through.
14:02
And so, what ends up happening ultimately is by pumping more of that money in for free without productivity coming out of it, you effectively see inflation.
14:09
And so, it wipes itself out.
14:13
Um and so, this is kind of one economic theory on UBI is that it can actually just end up being within 10 years completely useless and pointless because then the basic cost of living climb so much that you need to raise the UBI again to give people basic living expenses.
14:28
Um and so, it becomes this kind of nasty runaway effect.
14:29
So, it's not really sustainable is one argument that's made against UBI.
14:35
But, you know, obviously different point than what we were kind of saying a moment ago. Anyway.
14:41
I think people I think I think people don't know what they want.
14:42
And if they get it, they're going to Um I think a look, a form of a form of UBI does make sense and I do think we need to subsidize folks.
14:50
But, you know, I think maybe it's probably just a fancier word for welfare.
14:53
I grew up on welfare and I can tell you that I don't think our family benefited from it um psychologically.
14:59
We benefited from it socioeconomically cuz we needed it to not starve.
15:03
Um but the the knock-on effects of you know, when you're in that loop of again being in your 30s, 40s, and 50s not finding purpose, you know, which my parents had to struggle through, uh coping, you cope with alcohol, you cope with depression, the knock-on effects your kids.
15:20
I don't think we want to see that.
15:22
And so, when people think about UBI, I think they need to understand that, you know, we've run a long experiment in this thing called welfare.
15:30
You know what welfare does.
15:30
Um a lot of us have felt it.
15:33
And uh there needs to be a better way.
15:35
Because if you just let people opt out, I don't think you really understand what happens over long durations of time when you're not doing anything.
15:44
Yeah, it's getting really weird right now, right?
15:45
I mean, the fact that restaurants are closing that have customers, but they can't operate.
15:49
And so, we're we're starting to actually see the effect of it, you know, in some service open jobs stat right now?
15:55
It's like 9 million open jobs in the US?
15:57
It's been bouncing from 8 to 10 million, yeah.
16:00
There's more unfilled jobs than there are unemployed people, right? Yeah.
16:02
Or unemployment's unemployment is high, but uh unfilled jobs is even higher. Yeah.
16:11
We've We've somehow moved away from a political consensus we had in the 1990s that I think made a lot of sense when Bill Clinton passed welfare reform with, you know, a lot of Republican support is So, look, we need to have a welfare system.
16:23
We need to take care of people who either can't work or can't find a job for for a good reason.
16:28
Uh there needs to be a social safety net.
16:32
But if you're an able-bodied person who can find a job, you should be working.
16:36
And um and that that that welfare reform they passed in the '90s did lead to a lot of people finding meaningful work, which I think resulted in happier lives.
16:44
And somehow we've moved off that political consensus um that everyone kind of agrees, yes, social safety net, but but able-bodied people should work.
16:53
To now, we have this elite It's really an elite ideology of UBI, which is, look, we're going to pay people not to work, um which I just think is sort of like un-American.
17:04
And isn't it also like a little insulting being like, you know what?
17:07
Don't even bother working.
17:07
You're making too little money.
17:09
We'll just give you money.
17:10
It's It's Yeah, it's like It feels insulting to people's dignity. I'll be honest.
17:13
Like I wouldn't want to take it.
17:15
I would rather go out and be I was a waiter or bus boy.
17:17
I'll go be a waiter or bus boy and make enough money to pay my rent and Yeah, one of the things you I don't want it for free.
17:23
Yeah, one of the things you hear is well, your job's going to be replaced by a machine anyway.
17:26
It's not productive work.
17:28
So, why don't we just pay you to sit back and you know, take yourself out of the economy.
17:32
Well, I like you said the unfilled jobs number shows that even with all the automation that's happening in the economy and that's a trend that will continue.
17:40
There's still a need for you know, human labor and I think they're always will be and um and it's a little bit too soon to be throwing in the towel on the idea that entire groups of people can't productively work. Mhm.
17:56
Uh does everybody believe able-bodied people should work and not get free money?
18:01
It's not that it should or shouldn't.
18:02
I think the question is what's uh what's in folks' best interests.
18:05
Well, that's what I mean. Yeah, but yeah.
18:09
So, is it in best people's best interests?
18:11
I'll phrase it the way you're saying.
18:12
Is it in people's best interests?
18:13
I think the I think the point where we're going to go wrong is when we couple UBI with um actually having to work or not work and I don't think that's the right idea.
18:24
I think we have to do a decent job of letting people find the things that they want to work on because everybody can find something that they want to work on.
18:31
And that shouldn't exclude you or disqualify you from getting UBI so that all that does is then just raise the general standard of living.
18:38
I think that idea is better.
18:40
The problem is when we talk about UBI, what we are talking about it is in the exact way Jason that you said, which is letting people opt out. So.
18:51
I mean, think about how privileged that is to There are places in the world where there's not enough jobs and people are like, wait a second.
18:56
An American has to be fulfilled with their job selection in addition to getting a job?
19:01
It That just seems like the height of entitlement.
19:05
It's like sometimes you just need a job cuz you need money to pay your bills, right?
19:10
But you're saying if you get product if you get job job candidate, you know, citizen fit, you the uptick will be better. UBI is a benefit.
19:16
It's like universal health care.
19:18
We don't we don't make a decision about universal health care based on who does or does not have a job.
19:24
And so UBI should basically be about evening, you know, the bottom few rungs of economic viability so that everybody has a reasonable ability to have a decent life. That's a nice idea.
19:35
I think that makes a ton of sense.
19:37
But coupling it to having to work or not work where some people say, "Oh great, I can take this money and not work."
19:42
is the wrong way to figure this up.
19:44
If we're talking politics, why don't why don't we shift to the the recall? Yeah. All right.
19:48
So postmortem on the Newsom recall.
19:53
He uh Secretary of State says the recall cost over 300 million.
19:57
Obviously um Gavin Newsom won in a bit of a landslide. on. The 300 million point.
20:03
Let me just take care of this real quick.
20:05
Okay, because I saw this all day on social media. You know what?
20:09
Yeah, it did cost 300 million dollars, but all the people crying about that, clutching their pearls about the 300 million, never said a word about the 30 billion, the 100 times greater EDD fraud that was perpetrated by our state and by our one-party rule of this state.
20:25
And the recall process and the ballot initiative process is the only check we have on elected leadership in a one-party state.
20:33
So listen, I'll start clutching my pearls about the 300 million when they start talking about the 30 billion.
20:37
But look, look, look, let's shift to to the result of this.
20:42
What are you Wait, what are you referring to?
20:43
I'm not sure I I know enough about This is the This is the EDD fraud where 30 billion basically went to anyone claiming unemployment insurance and 30 billion in in fake claims were paid out.
20:57
The process was so poorly administered.
21:01
So I mean people were just creating fake addresses.
21:02
They were just sending in claims from anywhere and and 30 billion went out.
21:07
So so look, I mean, that's the kind of incompetence and corruption that we have in California.
21:13
So in fact, your point is that because it's a single-party state where the state where the Democrats have supermajority in the assembly, and obviously have the the governorship, that the only mechanism for the minority, the Republican Party, is to kind of run recall.
21:26
Not even not the Republicans, just just us as citizens.
21:28
I mean, look, let's remember how the how the recall on the ballot initiative uh came to be that process.
21:35
It actually came from progressives early in the 20th century who said, "We need the people to have some direct democracy because special interests might usurp the uh the the electoral process and and and get control over all these elected representatives."
21:53
And frankly, that's exactly what's happened in the state of California.
21:56
But the people who, you know, have that power are progressives, and so they want to amend or abolish the the recall process.
22:03
But So So look, I think 300 million once every 20 years to put the fear of God into politicians is not is money well spent in my view, even if this particular recall wasn't close.
22:16
There are much greater examples of waste, fraud, and abuse that the people complaining about this should be wanting to tackle.
22:22
And I'll believe them about the 300 million when they complain about the 30 billion.
22:26
But look, this was a a total shellacking for supporters of the recall, and I I do think that whenever you suffer a defeat, I think it's important for you to think about what went wrong, you know?
22:37
And and certainly as a supporter of the recall, I think it's worth doing a postmortem.
22:42
Um I think, you know, any political party when it loses needs to do some some introspection. And So what went wrong?
22:49
Well, I think a couple of things, okay?
22:51
So if you if you go back to the polls a month ago or so, it was a dead heat.
22:53
We even had that shock poll that Newsom was down by 10. And then what happened?
22:59
Well, the Republican Party basically consolidated their support around Larry Elder.
23:03
Prior to that, you kind of had this amorphous blob of five different candidates who didn't have a lot of name recognition.
23:11
They were pretty moderate.
23:11
They were a hard target for for Newsom to shoot at.
23:15
Once the Republican Party consolidated around Elder, it provided a very convenient and rich target for for Newsom to shoot at.
23:24
And so you'd have to say that tactically, the Republican Party made a made a mistake there.
23:29
Now, I understand why they did it. I mean, Elder is smart. He's charismatic. He appeals to that base.
23:38
Uh but he's not the moderate candidate that like a Schwarzenegger was or that I, you know, Chamath I wanted you to run.
23:43
And so Falconer was sort of that candidate.
23:45
And so you kind of had a choice on the Republican side between a moderate candidate who wasn't very charismatic, which was Falconer, and a very charismatic candidate who wasn't moderate.
23:54
And it really played into Newsom's hands.
23:56
And he was then able to nationalize the election in in the wake of that.
24:01
So he branded, I think somewhat unfairly, he branded Elder as a as a Trumper.
24:05
And he ran against Trumpism.
24:08
And even Biden came to California to denounce Elder as a Trump clone.
24:10
Which look, there's a lot of things you may not like about Larry Elder.
24:14
I don't think it's fair to call him a Trump clone.
24:17
But that's what they did.
24:17
And so they demonized him.
24:19
And so if you look at the issues that Newsom ran on, they were all national issues.
24:26
He was you know, talking about what was happening in Texas with abortion.
24:30
And he and he talked about COVID.
24:30
We should come back to that one cuz I think that is a state issue, too. We should talk about it.
24:34
But he started talking about issues that were really more national issues.
24:38
And and so they the recall moved away from the issues that had galvanized supporters in the poll just one polls just one month ago, which were homelessness, crime, schools, and school closures and lockdowns.
24:52
And Newsom was able to very effectively change the subject.
24:55
Well, he got everybody back to school, right?
24:57
If people didn't go back to school, could have been a different Well, I I think the recall was very helpful in that in in that.
25:04
I mean, if you remember Do you think policy has shifted because of the recall sacks at this point and doesn't that ultimately kind of benefit the issues you were most kind of concerned about?
25:12
Look, the 300 million was worth it just to get businesses open and just to send a message to the the education unions that they could not keep schools closed for another year.
25:20
I, you know, if you look at when Newsom relaxed the lockdowns, it was at every step of the recall process when when the recall finally got enough signatures to get put over the top, he all of a sudden started liberalizing the lockdowns.
25:32
He knew they were very unpopular and he gave up on that issue and he got the education unions to stand down on the issue of school reopenings.
25:39
I think because he was facing this recall.
25:41
So, look, I think that the recall was worth it just just for that, but um Do you think things could have been different if there was a fringe candidate, like I don't know, a Sri Lankan billionaire that was, you know, not kind of this this hard-end Republican that they could charge and target against?
25:59
I blame I blame Chamath for this.
25:59
I think I think a candidate like Chamath could have won, okay? A democratic centrist. Obviously, I'm joking.
26:06
I don't I don't blame you, Chamath.
26:06
I understand why you wouldn't want to run, but but I'm saying a candidate like Chamath, which is who I supported, or a candidate like Schwarzenegger.
26:13
Remember, Schwarzenegger, when he ran in the early 2000s, he was pro-choice and pro-gay gay marriage at a time that gay marriage was not very popular.
26:21
He was socially very liberal.
26:24
You have to take those issues off the table because California is not going to vote He was pro-gay.
26:28
I think he was pro-gay marriage before the Clintons.
26:32
Yes, he was very early on the on that.
26:34
He was he was socially very liberal and very tolerant.
26:36
And you got to be in California.
26:38
In general, do you think the unions in California, you know, which is an issue that's been talked about a lot on this pod, have been weakened because of the recall and the voice that kind of rose up during this period of time?
26:48
Or do you think the nothing's really changed kind long term?
26:53
I I think it's I I I I think it's a long-term project for to get the public to see that the education unions are like any special interest, which is that they will pursue their interest at the expense of the general interest, and they have to be controlled again like any special interest.
27:09
I think because teachers are rightfully very popular, people haven't realized what the union bosses are up to.
27:15
I think that that has been exposed because of COVID and the school closures to a much much greater degree, and I think that's that's a good thing.
27:24
Well, I mean, if you look at the recalls happening locally, too, with Chesa Boudin and the San Francisco school board, it seems like now the citizenship is saying, "Oh, we do have a recourse.
27:33
It's called doing a recall and stating our opinion very strongly and then attempting to removing people."
27:38
And yeah, I think that does change people's behavior.
27:42
You can be sure Chesa Boudin is thinking about outcomes a little bit more now.
27:46
The implications of this recall, I think, are really important.
27:50
And I think it plays out in who runs in 2 years when Newsom is up for re-election, and absolutely it'll change who runs on the Democratic side in 4 years assuming Newsom wins.
28:05
You have to remember, there have been massive degradation in the quality of life.
28:12
The most popular state in America, which represents the fifth largest economy in the world, under one-party control. Right?
28:21
So, there is not a single law that cannot be passed.
28:26
There's not a single program that cannot be implemented.
28:28
There's not a single idea that can't be pursued.
28:32
Yet, we have had absolute decline in quality of life under that rubric.
28:36
And so, when people really come to terms with that, that's I think when there's a sea change, and I hope the sea change is not necessarily a a Democrat or Republican thing.
28:46
It's back to centrism and I think it's checking special interests, exactly what Sachs says, and realizing that just because you use a different name like union or something else, you're still a special interest and you need to actually be uh focus on the interest of the general public, our kids, the environment, water quality.
29:08
And if you can't walk into a state where everybody up and other ticket is on your same team and get [ __ ] done, it's a really tough uh report card. Yeah.
29:19
I'm just super uninspired by these guys.
29:21
Like, where is their audacious plan for California?
29:23
Has anybody stated like an audacious, like, here's what this state is possible. Here's what's possible.
29:29
We could be the best economy with the greatest education system and we can build a million units of housing.
29:36
be Should that be the role of the state government?
29:37
I mean, like, you know, should or should the free in competition.
29:40
They are They're in competition with with Florida and Texas.
29:44
They have to compete for business and citizens.
29:46
And if it's not done at the state level, we're going to have to rely on the federal level and we know that that doesn't work because we have 50 states that are increasingly more diverse every day.
29:56
So, the whole idea with the Constitution and the Founding Fathers was like, we have this incredible startup, but over time, I think we've decided that, you know, this startup is an umbrella organization of 50 other startups. It's a holding company.
30:09
And and there'll be these small little, you know, rules and differences amongst these 50 states and that'll allow us collectively to thrive.
30:17
So, Sachs, you put out a tweet I'm sorry, go ahead.
30:18
No, I just want to I think we want to believe in that idea.
30:21
Like, there is no savior. You know what I mean?
30:24
There's no savior for 350 people and there's barely a savior for the 60 million people in California, but it's not going to happen by just throwing your hands up in the air and expecting some president to come around because that's just too hard of a problem.
30:37
has to act like the citizens and be, you know, just rugged individualists who are self-sustaining uh and resourceful.
30:43
And this state is not self-sustaining, resourceful, or ambitious.
30:48
And it's falling behind Texas and Florida and other competitors.
30:50
So, Sachs, you you you you you put out a tweet saying off to Miami are you are you in the active transition phase or where are you at? Well, I don't know. I mean, we'll see.
31:02
I think the trend line in California is not good.
31:03
I think what what you've already seen in the days since the recall is that Gavin Newsom has now laid out the strategy for all progressives uh in like even from San Francisco to anywhere in the country of how they're going to run.
31:16
And what they're going to do is this, that no matter how bad things get in terms of crime, in terms of homelessness, in terms of quality of schools, in cities and states that they have complete control over, they're always going to campaign against Trump and Trumpism.
31:30
And they're going to demonize and otherwise whoever the candidate is on the other side as a Trumpist whether they are or not.
31:37
That's going to be the playbook from now on.
31:41
And this is where I think the attacks against Larry Elder were very unfair is before he even had a chance to define what he was about, you had publications like the LA Times calling him the new face of white supremacy.
31:50
I mean, it was it was like unbelievable. But Black Klansman.
31:54
Yeah, they they basically tried to make him out to be a black which look, he is not, okay?
31:57
Larry Elder is a libertarian.
31:59
Maybe his politics are not in the mainstream in California, but he's not a black Klansman.
32:04
But look, this is what the progressive playbook is going to be for the next two decades which is to demonize anybody who stands up to them as basically being a a Trumpist.
32:14
And and the irony of it will be that they will have total control over over the the problems that people really can care about, crime, schools, homelessness.
32:25
And um and somehow, you know, they what what Newsom proved is that you can whip people up into you can stir their their partisan political tribalism when you do that, right?
32:39
That's why it's effective is he gets people just to see blue and um and he gets a free pass on these issues that just a month ago people were very dissatisfied with.
32:48
Now, I I do think it's very very important that our Republican Party not play into this and there was a very good editorial I think that's what I was about to say.
32:58
How come the Republicans are still pursuing a Trumpian you know, framework? Cuz they're stupid. They are. They look stupid.
33:04
They're It's It's a really stupid strategy and there's two things they got to fix right away, okay?
33:10
So, number one, Rich Lowry from National Review had a piece a piece in Politico where he said that this election the stolen election myth has become an albatross for Republicans.
33:21
They have to get off that.
33:24
Um I think it it's it's ridiculous.
33:27
That's going to bring him down in 2022.
33:28
And the other thing is this anti-vax stuff.
33:30
I mean, you know, voters completely forgot about the way that Newsom locked down this state and then broke his own lockdowns. Why?
33:40
Because he's pro-vax even to the point of vaccine mandates, whereas uh the Republicans were not.
33:45
And frankly, I think Chamath, your instincts on this were were right on, which is people given a choice between vaccine mandates or an anti-vax position, they will take the the um the vax mandates.
33:58
Speaking of instincts, uh you want to go to the uh this week in Facebook's dumpster fire? Sure. Sure.
34:07
Uh so, I I mean, where to begin?
34:07
Uh This all started um on Tuesday.
34:14
at the Stanford Graduate School of Business.
34:16
Okay, well, we'll get to your victory lap in a moment, but just to queue up this past week, on Tuesday the Wall Street Journal reported that Facebook conducted in-depth research on the impacts of Instagram on children's mental health from 2018 to 2020, but they never made the research public, nor did they make it available to academics or lawmakers who requested it.
34:35
Uh you will remember that uh last year uh or earlier this year, Facebook started floating the idea of Instagram for kids.
34:44
Uh so, in addition to having this research, which they didn't share, and here is the slide from a presentation.
34:50
It seems like the Wall Street Journal has uh somebody inside of Facebook giving them everything, literally.
34:56
But, here is the quote uh from presentation slides from 2019 internal Facebook presentation slides.
35:00
We make body image issues worse for one in three teen girls.
35:05
Teens blame Instagram for increases in the rate of anxiety uh and depression.
35:12
Uh this reaction was unprompted and consistent across all groups, according to the Wall Street Journal.
35:15
Uh and uh Instagram, obviously, is a juggernaut, over a billion monthly active users, and over 40% of them are under the age of 22.
35:26
This is a really interesting issue because we are This is probably the first example of a broad-based public policy public health issue that tech has created, not necessarily amplified, right?
35:41
Or exacerbated, but actually created, and now we're going to have to deal with this.
35:45
I before I I want to give you guys What How would you define that issue?
35:50
Well, I think it is a public health issue if you have a large percentage of a cohort of our population subject to mental health issues and eating disorders.
35:59
That's not a good place to be, right?
36:00
I don't think that's what we want as a healthy society in a healthy society.
36:03
Our daughters and It's probably, by the way, it's probably not more than just our daughters.
36:07
It's probably our sons and daughters that are going through these issues.
36:11
The question is uh now about, you know, is it really a public health issue?
36:14
If you know about it, what responsibility do you have to do something?
36:18
And before I opine, I just want to give you guys uh a little bit of data and just get your reaction.
36:22
I actually want to go back to what's called the tobacco master settlement agreement.
36:29
And the tobacco master settlement agreement was entered in November of 1998 originally between the four largest US tobacco companies, Philip Morris, R. J.
36:40
Reynolds, Brown and Williamson, and Lorillard, okay?
36:44
And the attorney generals of 46 states.
36:47
And essentially, it was an agreement that basically said, "Okay, we're going to net all these Medicaid lawsuits together.
36:52
We're going to hold these folks responsible for the downstream implications of the product that they've been selling our kids and our, you know, adults population without the proper disclosures, etc. etc. etc."
37:04
The the the what happened before this tobacco MSA and big tobacco though was there was about eight or 900 private claims that were filed from the mid-50s all the way to the mid-90s.
37:16
Now, David knows all this because he he made a movie about this.
37:19
The reason why I think this is interesting is that whether it happens in the United States or someplace else, when I read that article, my immediate thought went to the tobacco MSA cuz I was like, "Well, okay, there's a public health issue that may or may not have been covered up here."
37:32
It may or may not have been covered up.
37:33
There could be criminal liability.
37:35
There's probably civil liability.
37:39
If you're, you know, a mother or father who's lost their kid to an eating disorder or to Suicide.
37:43
anxiety, bullying, Suicide.
37:48
And I think like I think the article in the Wall Street Journal yesterday was about like human trafficking.
37:51
I mean, these are some Gnarly.
37:54
horribly complicated gnarly issues.
37:58
To me, that's how I connect the dots.
38:00
So, I'm I just love to hear your thoughts.
38:01
mean, who's the Jeffrey Wigand in this case?
38:03
I mean, this is literally the movie The Insider.
38:04
Like, somebody's leaking these documents out.
38:06
There's a deep throat that's inside of Facebook. Yeah. Well, yeah.
38:10
And and that's what the Brown and Williamson was really about is that somebody had the studies from the '70s of when, correct me if I'm wrong, David, when the tobacco industry knew and did nothing and covered it up and then they had the whistleblower.
38:22
So, do you feel this is exactly analogous, Sachs, or how close to analogous?
38:27
Are we taking too big of a jump here?
38:30
Well, that this this idea that social media is as bad for you as cigarettes has been around for several years now and I've always wondered whether that was a hyperbolic claim.
38:38
I mean, it can it really be the case that using Facebook is as bad for you as lighting something on fire and sucking its carbonized ash into your lungs?
38:47
I mean, I just think you know, I yes, I think there's like a kernel of truth here in terms of yes, it does exacerbate body image issues, but I don't believe that Facebook or social media created those issues.
39:02
Um, I mean, these issues existed before and um, what Facebook does is connect people in a more intense way than they were connected.
39:10
And so, it might intensify some of the social dynamics that already existed, but I don't know that it created them.
39:16
And if you're going to blame Facebook for this, there's a lot of other places you could blame, too.
39:20
I mean, why don't we be why don't we blame the Met Gala, you know?
39:25
Like, um, you know, look at all those beautiful people actually blame on the fashion industry for making unrealistic body types and the magazines and they sell like the Yeah, my my my kids can't wear the full body stocking to school that Kim Kardashian wore to the Met Gala or whatever.
39:39
I mean, and they're upset about that.
39:41
So, should we ban the Met Gala?
39:43
Or I mean, let's look at all advertising.
39:45
I mean, all advertising just about focuses on unrealistically beautiful people.
39:49
And what about TV and movies?
39:51
I mean, Hollywood tends to cast people who are better looking or even the people reading the news off teleprompters.
39:57
I mean, so this like body image and self-esteem issue is everywhere in our society.
40:01
And I think what social media does, as it does in so many of these cases, is really just hold up a mirror to our society.
40:09
And it's it's not and yes, there's a lot of bad stuff happening on social media, but that's because there's a lot of bad stuff happening in our society.
40:17
Well, let me I you know, here's one thing, David.
40:21
The I There There have been other industries that have influenced this, but I don't think that they were as pernicious and as frequent in their use of as social media.
40:30
You know, when reading a fashion magazine or watching TV, like slightly different than an interactive version of that that you might use for 5 hours a day like Tik Tok or Instagram.
40:38
And I just dropped in an an image into uh the the Zoom chat there about suicide rates in the United States.
40:45
And this chart you'll see goes up to 2018.
40:46
And right around 2006 when we were at 11% uh 11 suicides, I think, per 10,000 per 100,000.
40:54
Uh you'll see from 2006 to 2008 we go from, you know, 10 or 11 basically suicides per 100,000 Americans all the way up to 14. A 40% increase.
41:07
But what's your evidence directly with social media becoming part of what we're doing here.
41:10
But what's your connection to what's hap- I mean, is that among teens?
41:13
I mean, what what is the This is overall suicide rate.
41:15
So, I just think social media and the anxiety it produced could be actually having it. I'm open-minded to that.
41:22
Can I clear up one thing, Sachs?
41:22
I think that um your argument would be reasonable if the first part of your argument uh made more sense, and to me it doesn't.
41:31
And when you don't think that smoking and looking at your screen for an hour a day are the same, let me just in from my perspective explain to you why they are the same.
41:42
Whether or not you're ingesting something into your lungs or whether or not it's your eyes, at the end of the day, you're still activating physiological pathways. Okay?
41:51
There are specific chemicals that are being created through smoking, specific chemicals that are created through how your brain and your mind is reacting.
41:59
And all of these things, when you're bathed in these chemicals for long periods of time, have known deleterious consequences.
42:05
Some manifest in tumors, which then result in cancer, you die, lung cancer, cigarettes.
42:10
But what we're learning is some of these things result in long-term imbalances of these critical hormones and chemicals you need in your brain to stay healthy.
42:18
And that results in anxiety or the propensity to overeat or the propensity to then throw stuff up.
42:25
And so, I would be careful about not assuming they're not physiologically the same.
42:30
I actually think they're more similar than different at a core physiological level.
42:36
It's just that we're not used to the fact that something that that is equivalent to looking at a screen could actually do that to you.
42:41
I guess the question is what's the what's the what's the threshold for regulatory intervention?
42:48
If um if someone did this at the scale, let's say there was a social network that was had 100,000 users and people were actively using the social network every day and having body issues or whatever the you know the the consequences out. claim might be. We're about to find out.
43:03
You know, are we going to end up creating kind of a regulatory framework across all of these things?
43:05
And I think that this goes also to the point of scale because um at the end of the day, if you end up starting a business and you're not successful, you don't really kind of find yourself in the sort of framing of well, what are you doing wrong?
43:17
All of the the companies that scale, the assumption is they did something wrong in order to get to that scale.
43:22
You know, Roll up both the Sachs's former colleague and and obviously famed investor at now at Sequoia Capital um said that uh he always he only invests in businesses that pursue one of the seven deadly sins.
43:38
Because those are ultimately the things that consumers kind of increment their consumption of.
43:43
They there have to be a a seven deadly sin driver uh you know, underscoring the success of any business um that sells to consumers.
43:49
And if that is actually true, people aren't making kind of altruistic purchasing and consumption decisions.
43:56
They're making decisions based on envy and based on greed and based on gluttony.
43:59
And all of those drivers, we kind of you know, are effectively Chamath kind of related back to these physiological drivers, right? And so like like Yeah.
44:08
No, two things can be right.
44:11
What you said can be right, but I think what also can be right is are we really willing to bet that now there are not 50 individually ambitious, politically ambitious state AGs licking their chops reading this stuff wondering how many kids in their state may have suffered from an eating disorder or anxiety and blame it on one of these apps? Of course they are.
44:32
are we are we convinced that not a single lawsuit will get filed?
44:33
Are we convinced that there's not going to be any class action?
44:36
And by the way, that's just the United States.
44:38
What is somebody that's sitting around a, you know, around a table of politicians' desks in, you know, Germany, Belgium, uh, France, Thailand, uh, they're going to find their issue in this treasure trove of content that's being you know, continuously drip-fed out to the public.
44:56
I guess my point is that this is today's issue.
44:58
And business success ultimately over time in consumer markets will always ultimately be driven by products that have at scale deleterious effects on the consumer market.
45:09
And those deleterious effects will be a result of some sort of kind of addictive or negative kind of consequence that arises when folks use these things frequently, and the market figures out how to optimize the utilization of products to increase revenue, to increase profit, and that's what a free market does.
45:23
And I'm not saying it's right or wrong, I'm just pointing out that there isn't, in my opinion, something unique here.
45:28
I mean, you know, Coca-Cola's the largest beverage company in the world, they sell 40 g of sugar in 12 oz of water.
45:33
And everyone buys that and they feel great from that and the sugar creates this addictive problem.
45:38
Now we've got an obesity epidemic and I'm not blaming Coca-Cola, but that's the general trend in CPG over the last 50 years, increasing sugar, increasing salt, I think the difference the difference is that this is not sugar, which is a generic compound.
45:50
This is, for example, no different than when Purdue Pharma started to make fentanyl.
45:55
It's a really great drug.
45:57
It has incredibly superior advantages.
46:00
It's used for a lot of very important things.
46:04
When that spilled over knowingly to a level of abuse, and I don't think it was a lot of abuse, but there was enough that essentially was overlooked in the in the building of a business, it started with state AGs who stepped in, and then it basically ultimately drove a federal agreement, state's agreements, a master settlement agreement around fentanyl, and then Purdue essentially disgorging all the profits that they made. So, you're right.
46:29
Free markets should act in however way they're going to act, but when those free market operators themselves are producing data that shows that oh [ __ ] hold on, something could be going wrong here, um then I do think that politicians will step in, regulators could step in.
46:45
I mean, what's crazy here is you know, the FDA could actually act.
46:50
Like, if the FDA's willing to act on Jewel, what is the difference if the FDA says they feel like let's just assume that somebody in the FDA says we feel like we should have a responsibility to think about mental health and eating disorders.
47:03
But that's the slippery slope, right?
47:05
What's the threshold, right?
47:05
At what point do they say no, we're not touching this, and at what point do they say yes, we are touching this?
47:09
Because at the end of the day, any successful consumer product will have some degree of deleterious effect.
47:14
And and and well, and this is why we have to have some perspective about it.
47:17
So, in preparation for the segment, I asked my 11-year-old uh girl daughter, um I know J Cal, you don't think I talk to my kids, but actually I made no joke. Made joke, no joke.
47:30
I was thinking of three or four fun things to ask her.
47:33
Did she ask you if you were the Fed?
47:33
SHE WAS LIKE, WHO ARE YOU? WHY ARE YOU IN MY ROOM? SECURITY! SECURITY!
47:41
SO, the first thing she said is, who are you?
47:43
And the second and after I said I'm your dad.
47:44
And then the second thing she said is the second thing she said is, I don't use Instagram.
47:48
I'm like, okay, well, what do you use? She said TikTok.
47:50
I'm like, well So, I'm like, what do you what do you use TikTok for?
47:55
And she said, well, I watched uh dance videos.
47:57
And I'm like, well, the I've been reading press articles that say that the only thing on Tik Tok is um sex and drugs.
48:02
And that it's, you know, it's it's bringing you into a vortex of that.
48:08
And she said, I don't I don't watch that. I watch dance videos.
48:11
And then, smart as a whip, she said, the only people who end up watching that are the ones who keep indicating She didn't use the word preference, but she basically said that they keep getting that stuff because they like it and they keep getting fed more of what they're watching.
48:22
So, look, I think we have to have a sense of perspective about this.
48:26
At the end of the day, products like Facebook and Instagram are ways for people to share content and consume content for people they follow.
48:35
I mean, that's basically it.
48:36
Now, is there a lot of bad [ __ ] on there?
48:38
Yeah, because there's a lot of bad [ __ ] in the world.
48:41
And should Facebook be trying to control this stuff? Absolutely.
48:43
Um but I don't, at the end of the day, think it's it's uh it it's cigarettes.
48:50
If they banned kids from using Tik Tok and Instagram until they were 16 years old, would you be opposed to that?
48:56
Because I don't let my kids use it.
48:56
And I have an 11-year-old daughter.
48:58
I wouldn't let her anywhere near We have a complete moratorium on that.
49:01
No social media's our rule.
49:03
I can't believe you let your kids use social media.
49:04
I mean, I'm not passing judgment, but are you crazy?
49:08
like, all they use it for is to watch dance videos.
49:09
So, um But I think Sachs's point is an interesting one, which is, you know, based on what your daughter said, that that is effectively what's going on.
49:15
It it creates an acceleration of the natural evolution of these markets that historically may have taken, call it 50 years for everyone to want to watch, you know, MTV didn't emerge for 60 years until, you know, there there was kind of radio um and television broadcast signals.
49:31
And then everyone said, you know what, I want to watch rockers dancing on stage and going nuts.
49:34
And whatever the kind of consumer demand was, it eventually evolved there.
49:37
What's happening in social media is within seconds, you make evolutionary votes on kind of what you want in the media cycle.
49:44
And then all of a sudden, a few hours later, you're getting exactly what you want over and over again. And you can't say no.
49:49
And that that that's effectively what digital media generally, social media in particular has some nuances to it, but digital media generally has enabled is an acceleration of the natural consumption trend that we see with humans, which is they eventually want to go to one of the seven deadly sins and that's what they kind of get stuck with.
50:06
We've definitely talked about the danger of getting trapped in in an information bubble and and a feedback loop.
50:09
And I do think that is a danger of these products, but so is cable news.
50:14
I mean, you know, you look at Twitter, it's an outrage machine and people get trapped in a cycle and they only want to they either follow people to get outraged by them or just because they want to kind of self-indoctrinate themselves, but that is basically why people watch cable news as well.
50:30
I mean, it is an outrage machine. Your friend Tucker.
50:34
Or Rachel Maddow on MSNBC, they're both feeding different variations of of outrage.
50:39
And so so my point is, look, I don't think these problems are unique to social media.
50:44
I think they pervade Hollywood and the entertainment industry and even the news industry.
50:51
Um maybe look, maybe we should put warning labels on them.
50:53
At the end of the day, we don't prohibit cigarettes.
50:56
We have an assumption of risk argument, we put warning labels on them.
50:57
Maybe we need warning labels on these Instagram influencers. than that, right?
51:02
You put it you put it behind a counter and there's a strict prohibition on people under the age of 18 being able to use them.
51:07
And when it looks like, you know, companies like Jewel were trying to circumvent those things or make it appear more valuable basically to hook kids at a younger and younger age when they weren't capable of making those decisions, they were held liable.
51:23
So, Okay, so there's a really interesting topic there, which is should people under the age of say 16 or 18 be prohibited from using these products? Yes. 100%. 100%.
51:37
Look, if you if you think about 16 or 18? 16 or 18?
51:39
Let's 16 100%, 18 16 100% and then there needs to be a way of opting out because I think 16-year-olds are quite sophisticated. But, here's the thing.
51:49
We are living longer and longer than ever.
51:51
It is very likely that we're all going to generally live to our hundreds.
51:56
It's not the end of the world for these kids to have to wait an extra two or three years until their literal physiology is a little bit better formed, so that they have better antibodies to this [ __ ] And I think that if we as a adult population aren't necessarily going to take responsibility for these kids, I think we're doing them a huge disservice.
52:14
You don't let your kids run around wherever they want.
52:16
You don't let them hold guns whenever they want.
52:18
You don't let them do a whole bunch of things that they may think is okay, but you know could have really bad consequences.
52:27
And so, if you know that this stuff is happening, I think it's very different to look at a 22-year-old and tell them what to do or not to do.
52:34
That's not what we're debating.
52:35
But, what that data was about was about long-term systemic health issues to a large percentage of girls. That's really [ __ ] up. Yeah.
52:47
And and a lot of the research that's come out, I dropped a couple links in the chat.
52:50
Uh you know, I haven't read the studies, but um they're starting to show a correlation between suicide rates and depression in young kids with social media, and it does skew towards females.
53:00
The theory is uh females are uh more adapt or more frequently in uh dynamic or complex social uh situations.
53:10
In other words, cyberbullying type situations, where people use the social media to It's kind of bully each other.
53:16
The whole I mean, look, I I think you guys have a real point with respect to ages 13 to 16, cuz I don't think you're allowed to use social media.
53:22
At least the terms of use prohibit it under age 13. all know that's a joke.
53:25
You and I have have both had to build pri- products that have to, you know, abide by COPPA laws, and we always just kind of laugh at it, cuz they're [ __ ] Right. Okay, fair fair enough.
53:33
But, but what I'm saying is I think you guys have a real issue that needs to be explored around what's the usage uh for ages 13 to 16.
53:42
But, look, what I worry about with these things is you're always playing whack-a-mole, right?
53:45
I mean, you basically ban social media and all of a sudden these kids, cuz they're very tech-savvy, are going to find themselves on text groups and text chats and they'll be in signal and you won't even be able to see what they're doing.
53:55
I mean, at least on social media you can see them.
53:58
that the whole point of that though, that makes sense to me, because I remember when I was growing up and we all wanted to smoke, it was a pain in the ass to get cigarettes, so most of us just said, "Well, it's not worth it."
54:08
But yet, you're right, a handful of people found a way to get the cigarettes, to sneak behind the school, to smoke them. That's fine.
54:13
But that's very different than Jewel walking into the middle of the lunch room and passing out berry flavored vape pens. Yeah. Coconut, peanut, wow.
54:21
That's what you're essentially saying. Well, that's crazy.
54:26
Obviously, that shouldn't be allowed.
54:27
packaging If you look at the packaging of Jewel, it's very appealing.
54:30
around Jewel and berry flavored vape pens and not this?
54:33
Look, why do you care about Jewel or why should we generally care about Jewel and not care about soda companies making 40 grams per 12 oz of sugar, which is truly dangerous and damaging to the health?
54:45
been drinking soda for a long time and we've already accepted it.
54:47
So we've allowed ourselves to accept it.
54:49
We We smoked cigarettes for a long time and then we had this kind of, you know, tobacco moratorium that's now kind of, you know, shut shut out shut out smoking.
54:56
But Freeberg, if you said if you said right now, "COVID is a disease of the old and the obese." You would be canceled.
55:04
Like, somebody tried to say that recently.
55:09
No, but the point is you're talking about like people are very sensitive about this obesity thing and the second you say like, "We need to monitor for you."
55:17
It's what they need to make 40% of Americans with type 2 diabetes or whatever the statistic is.
55:22
personal freedom and do you want to drink a Coke Zero or water or And so, if you have personal freedom, why should some regulator tell you what social media tool you should or shouldn't use? debating that. Right.
55:32
The cover-up is what we're talking about.
55:34
If If we're talking about minors, if we're talking about minors do with a 13-year-old to 16-year-old?
55:40
What are you going to do with the And And Freeberg like 11-year-old.
55:42
That's the best part of your argument.
55:43
That's the best part of your argument is when we're dealing with minors.
55:45
I could I could see the argument for more restrictions and and potentially support them depending on what they are.
55:50
I think that's something What about What about Freeberg's point?
55:53
What about minors not being able to drink soda?
55:54
You have to be 16 to be allowed to drink soda.
55:57
mean, that's actually That's where most diabetes and obesity is rooted in this country is children drinking soda.
56:00
I actually am open-minded to that position, actually.
56:03
I know it sounds crazy, but No, I think that that that makes an equal amount of sense.
56:07
makes no sense if we have a crazy obesity.
56:09
If we can actually show that.
56:12
So, let's ask the question then.
56:14
So, let me ask let me ask a let me ask a second-order question about this, which is Freeberg is right that drinking sodas for 13-year-olds has got to be as harmful or or more than using Facebook, okay?
56:24
So, why do we never hear about that?
56:26
I would argue that there's something else going on here with this massive amount of attacks on social networking companies.
56:33
There's a lot of people who hate social networking in the traditional legacy media because they've been disrupted by Facebook, by these social media companies, and so they're looking They took their money, and they're looking to publicize any article about the negative effects of these companies, which they're not threatened by Coca-Cola, so they're not going to publish those kinds of studies.
56:52
So, I just think that there's an argument that perhaps I I'm not saying you're wrong.
56:57
I think there's absolutely truth in what you're saying.
57:01
It's all a matter of degree, though, and perspective, and I do think that the traditional media has an incentive to blow this out of proportion a little bit.
57:09
Because they have an agenda, is what you're saying, essentially. Yeah, absolutely.
57:11
And I think I think people in power Look, I think there's a positive thing about social networking.
57:16
I mean, cuz we haven't said one positive thing about it, okay?
57:19
Social networking overall it enables us to stay in touch with people we care about, friends, family, and allows us to receive information from people we want to follow, okay?
57:28
We never talk about those positives.
57:30
I find it an incredibly convenient way to consume news.
57:35
Okay, so we we never talk about that, but but here but here's why is because social media is fundamentally a democratizing force, right?
57:42
It enables people to coordinate in a much more democratized way than they ever had been able to before.
57:48
I do think that is threatening to people in power and given the chance they would like to suppress it.
57:54
Um Zuckerberg gave a speech a few years ago about social networks being the I think called the fourth estate with the third estate being the press.
58:01
And in the same way that that there are people who want us in power who want to censor the press, I do believe that there are people in power who want to censor social networks because they don't like the disruptive democratizing force that it represents and there is a lot of positive to that in the world.
58:17
You're I think you're mixing up a lot of things there. So, yeah, you're right.
58:21
And I don't think any of us are saying cancel these companies and remove them from the internet.
58:25
I think what we're saying is there are very specific ways in which certain features are built that they are expressed in features that are now apparently according to their own work and exploration are linked to mental health issues.
58:41
So, I I think the point is people should now decide whether to your point we should ignore it because the good vastly outweighs, you know, what's a third of girls?
58:51
Who the [ __ ] cares, right?
58:51
I mean, they're chicks, so whatever.
58:55
Uh or you say, uh actually this is a really big problem and so let's step up and fix it because somebody needs to protect these people and when you're 16 or 17 or 18, do whatever you want like we let people do today.
59:06
You want to drink a Coca-Cola every day, get diabetes, you can do that.
59:09
Nobody tries to stop you, right?
59:12
You want to smoke a pack of smokes a day, you can do that. Nobody stops you.
59:15
But we do a lot of other things to try to help kids.
59:21
I think I think if we're only talking about ages if we're talking about the minors, the the kids, I think you and I can find agreement on this issue.
59:26
I think but but I do think that the demonization of social media goes well beyond that.
59:31
But look, I think you've got a great point with respect to the kids.
59:34
Do you guys believe and this is a theory that's been growing that TikTok, run by the Chinese government, is trying to reprogram ethics, morals, and doing psych psych ops basically?
59:45
something psych ops on our children.
59:47
No, Jay, there's big something bigger than that.
59:48
I mean, I think all of you guys probably upgraded to 14. 8 iOS this week.
59:53
I hope if you haven't then everybody listening, if you haven't, please go upgrade it.
59:55
But, you know, the Israeli spy firm NSO had apparently created a a zero-click exploit for the iPhone where you could turn on the camera and the microphone and basically spy on folks completely unaware.
1:00:12
And, you know, Jason and I were talking about this and and and I think Jason, you were the one that said it, you're like, "Yeah, we've been living with that with TikTok for years.
1:00:17
It's not as if, you know, NSO just licensed it randomly to the Saudi government."
1:00:21
I mean, this tool has been available for a while. So, two point.
1:00:24
But, do we think that the Chinese government, TikTok, are trying to program our children to be more deviant and to create social unrest and No.
1:00:35
You don't think that they're trying to steer them with the algorithm towards bad results because they're not letting their kids play video games and if you look at that Wall Street Did you see the Wall Street Journal article that I just sent to you guys?
1:00:44
Wall Street Journal article basically created a bunch of kids' accounts and then did searches or what started to go down a rabbit hole and just with one keyword search you know, these kids went into deep, you know, kink, BDSM sort of results.
1:01:00
is a this is a pretty straightforward way to tree algorithm, okay?
1:01:01
So, like, when you start on a branch of a tree and you keep clicking on those things, that's what you will get.
1:01:07
This is no different than how Facebook's algorithm works, how Google search algorithm works for you.
1:01:12
Once you start behaving with clicks or swipes or likes, they use that as a feedback loop and they wait basically weigh the next set of results.
1:01:21
So, David's daughter is right.
1:01:21
If you click on sex, drugs, and rock and roll, that's it's not all you're going to get, but it's going to be a large percentage of what you get because the algorithm in a blunt way assumes that that's what you like. Yeah.
1:01:32
So, I don't I'm not sure that this is repeating anything that's so you know, it it's pretty obvious that that's how it should work if they want to have maximum utilization.
1:01:43
Well, you know, the thing that's slightly different about TikTok is, you know, in Facebook or Instagram you build your feed and Twitter and then it serves it, you know, algorithmically.
1:01:49
On TikTok it uses the entire corpus.
1:01:52
So, if you do one search for a keyword, now you it's not just a subset of what your friends posted in some ranked order, it's the entire corpus of like long tail.
1:02:00
And so, what they show in this TikTok is like how quickly a child who just types in one keyword can be have their feed be 90% drug use and, you know, sadomasochistic, whatever you're into, uh, sex, I don't know. Um. I have crazy stuff.
1:02:21
if if if the the content is obscene, then it should be taken down to begin with, okay?
1:02:25
And, um, look, I my takeaway from this conversation is that uh, we need to do something different for kids.
1:02:32
I don't know if it's a it's a it's a flat-out prohibition or what, but but but yeah, but look, so so the TikTok algorithm thing, if you want to keep seeing more and more content related to something, fine.
1:02:43
The algorithm's going to give you more and more of what you want as a consumer, but maybe for kids there needs to be some guardrails around that.
1:02:49
And we don't direct we don't direct kids towards certain kinds of content around, you know, sex or drugs or violence.
1:02:55
I have to constantly remind parents like YouTube kids should not use YouTube cuz it goes really to crazy dark places. Oh.
1:03:02
And there's kids YouTube.
1:03:04
And kids YouTube they add each and every video.
1:03:07
Now, you still get some of that consumption and unboxing of things and your kids will ask you to buy a bunch of stuff, but you're not going to get straight-up sex, violence, and you know, everything else that you're into.
1:03:16
tell you what does happen in my I put kids YouTube on my kids my four year olds iPad.
1:03:22
And then the other day she said she saw some like scary horror thing on there and she couldn't sleep and she woke up in the middle of the night cuz you know if we're not doing our job as parents curating the content and curating what our kids are doing and we're leaving it to this app we're totally effed.
1:03:33
And and that that that's what I realized I did my laziness and like just thinking like oh there was something she wanted to watch so I put the app on there and didn't pay attention for a few weeks and all of a sudden she had gone down the rabbit hole and found something scary.
1:03:47
It's kind of like I don't know if you guys use this but I use an app called Custodio it's with a Q Q U S T U D I O and you can kind of like lock down all these devices and then at the end of every week it gives you an email of all the app usage and all the links that these that my kids clicked on or just my oldest one cuz he's the only one that has a phone.
1:04:09
But that's nice and you had a discussion with him about that like hey Yeah and the rules and like this and Yeah.
1:04:12
But I I agree it's still super super hard but this is why I think you need to have some blunt force instruments right now and my blunt force instruments are you're not allowed to have um well the the ones that we've we we're they're not allowed to have Tik Tok Snapchat Facebook Instagram Twitter. Yeah it's hard now.
1:04:32
And the the only reason we allow YouTube is because a lot of the school links are to videos inside of YouTube and so you can't lock it down but that's why I use this Custodio app to see what they're watching on YouTube.
1:04:43
Even then though it's not perfect.
1:04:45
By the way this thing that just came from the Pentagon is a total Friday news drop.
1:04:48
I mean talk about a Friday news drop.
1:04:50
I don't know what we don't know what you're talking about.
1:04:53
US military acknowledges Kabul drone strike killed 10 civilians including seven children.
1:04:59
We knew this they're just confirming something that had been exposed New York Times did excellent reporting on this.
1:05:04
Excellent reporting by the New York Times that was incredible journalism.
1:05:08
I mean did you guys see that they were like watching frame for frame of like a video then they were like going to Google Maps, they were comparing colors of cars, they were looking at sides of buildings.
1:05:18
Uh incredible reporting by the New York Times.
1:05:20
It was really the I mean it's obviously a tragedy.
1:05:22
It was the final debacle of our Afghanistan involvement.
1:05:27
This was a foreign aid worker who actually uh he was there as an aid worker and um they they had him on video loading up his car with uh plastic jugs of water and somehow they thought these were explosives or something like that.
1:05:41
And he was doing his errands and then he comes home and they hit the the car with, you know, a massive uh missile from one of these Reaper drones and it kills him as well as um you know, it's basically 10 members of his extended family including seven children.
1:05:59
Now, the I mean I I I think I understand why this Well, we don't exactly know why why this happened and I think it needs to be investigated.
1:06:08
Obviously, the military in Kabul was on high alert because we had just had that bombing at the airport and it was the bloodiest day for America in Afghanistan.
1:06:17
I think we had three 13 soldiers killed uh a few days before this, but but it just shows the kind of mistakes that we can make even fighting drone warfare.
1:06:27
You know, the idea was that casualties of war exists for a reason.
1:06:31
Like this is how war works.
1:06:31
You cannot do it perfectly. It's messy.
1:06:34
Everybody innocent people dies.
1:06:36
This is why war is the worst thing in the world.
1:06:39
how did we ever think we were be the last resort. Right.
1:06:41
And how did we ever think we're going to win hearts and minds in this country by, you know, like we we we made too many mistakes.
1:06:47
they're they're not interested in democracy like in the way we want them to be and the West wants them to be.
1:06:51
We us forcing it down their throats is not going to work.
1:06:56
We we we could have maintained a base there.
1:06:57
There were better ways to exit, but let's fix the schools in California first.
1:07:02
Yeah, I think that's I think that'll ultimately I think people are going to forget those images of people on planes and just think thank god that's over.
1:07:10
I think now that there hasn't been 20, you know, and hopefully there's not another 9/11.
1:07:14
All right, let's wrap with Ellen Pao wrote a piece for the New York Times op-ed section section on sexism in tech using the Elizabeth Holmes trial as the main example.
1:07:30
Um She was also on Tech Check, the NBC show, and discussed her op-ed.
1:07:32
Uh quote Holmes should be held accountable for her actions as chief executive of Theranos.
1:07:41
And it can be sexist to hold her accountable for alleged very serious wrongdoing and not hold an array of men accountable for reports of wrongdoing and bad judgment.
1:07:52
She uses Travis Kalanick and Adam Neumann as examples of men who have engaged in questionable, unethical, even dangerous behavior in tech without much legal penalty.
1:08:03
And that they both went on to start new companies.
1:08:05
Her main example, however, of bias is tech executive Kevin Burns, who is the former CEO of Juul, J U U L, who helped the e-cigarette vaping company raise $12 billion, but he left Juul amidst a lot of legal blowback.
1:08:21
And just this past week bunch of with a bunch of cash.
1:08:24
With a bunch Yeah, I mean, of course you get the secure the bag on the way out. Adam Neumann, too.
1:08:30
And uh Don't drop the bag. Don't drop the bag. You have one job to do. Don't drop the bag. Yes.
1:08:35
Run, um but don't do not drop the bag.
1:08:41
So uh she she men- she mentioned other stories like Juicero.
1:08:43
If you guys remember this company, um couple years ago they raised $100 million pre-launch, right?
1:08:48
It was a juicer that, you know, was supposed to I enjoyed my juice from my Juicero.
1:08:53
Yeah, but the claim the claim that they made was that inside of the packets was like fresh vegetables, and this thing squeezed the fresh vegetables, and fresh juice juice came out.
1:09:02
And it turns out that the bag was just filled with juice.
1:09:06
And so you can No, no, I think the bag was filled with shaved vegetables or whatever, but you can squeeze the bag.
1:09:10
What it did was squeeze the bag.
1:09:12
So that it was already pre-juiced is what um you know, uh Olivia Zalesky, who's now uh Olivia Peterson, it was uh she basically put they she she she kind of made a whole video and put put it on Bloomberg.
1:09:23
They had juice in these packets and they were selling people what they thought were like Yeah, like yeah.
1:09:28
So you could have opened the jar me Sorry, sorry, sorry.
1:09:32
could have put it into a machine and paid $7.
1:09:34
the juice, then took that juice, put it in a bag Yeah.
1:09:37
that was supposed to be fresh vegetables, sold that as fresh vegetables to then get juiced. To get juiced.
1:09:43
And they charged $8 a bag for this stuff.
1:09:46
Um and there was Who invested in that? Who invested in that?
1:09:48
Who wrote the $100 million check?
1:09:51
And anyway, a lot of people invested in this thing.
1:09:52
It was a huge It was a huge like, you know, better for the planet story, but it turns out that the hardware didn't work and then they ended up kind of faking it until you make it.
1:10:00
It was very similar to Theranos in the sense that there was a piece of hardware that made a claim that wasn't necessarily true.
1:10:04
And granted, no lives were at risk in this particular case, but some might argue lives were at risk in the case of Juul.
1:10:11
But I think, you know, you see this a lot more in these kind of hardware and particularly in life sciences companies, um you know, there's a business like like Zymergen is a good example, right?
1:10:21
It's very hard tech, very deep tech.
1:10:21
Uh Josh Hoffman did an incredible job fundraising, raised a $400 million round from SoftBank, took the company public.
1:10:29
Then they go public and a few weeks later they're like, "Oh wait, sorry, we don't actually have any product or any revenue."
1:10:34
And we talked about this a few months ago or few weeks ago and the stock completely collapsed.
1:10:37
There's another company called Berkeley Lights, which went public.
1:10:41
And uh yesterday Scorpion Capital, one of these short sellers, put out a 160-page report on these guys showing that Berkeley Lights' product actually It's a hardware life sciences hardware that costs $2 million.
1:10:53
They've sold it into all the pharma companies.
1:10:55
And Scorpion's saying, "Look, this thing doesn't work. It's a total fraud.
1:10:58
Like there's no machine doesn't do what they claim it does.
1:11:03
Okay, but so to Alan Pao's point, is there a double standard or not? Right.
1:11:08
And so these were all run by male CEOs and nothing happened to them.
1:11:09
And um Are they all white as well? Um yeah. Yeah, they're all white. All right.
1:11:17
First of all, let's take it easy on the white guys, Chamath.
1:11:19
UM THERE'S THREE OTHER WHITE GUYS on the pod.
1:11:23
I'm asking a qualifying I'm asking a qualifying question. It is.
1:11:25
Um so here's what I'll ask is um is this a surprise that white dudes will get a hall pass?
1:11:31
I don't think that's a shocker to you.
1:11:33
it's considered it's considered entrepreneurial failure, but when it comes to the woman that everyone I think was excited about seeing succeed because she was a woman, it becomes fraud.
1:11:40
And I think Alan, Well, there's two different things Yeah. Go ahead.
1:11:44
Is it freeber isn't there two different things between you know, where she obviously misled people in a premeditated way and lied to them like taking their blood sample and then putting it in a fake machine, then doing it in the back on an Abbott machine and then bringing the results back and making it on her Theranos Edison machine.
1:12:03
I mean, this is literal wire fraud and securities fraud.
1:12:06
In these other cases, is it people who are ambitious if you look at the Juicero, it's kind of like this is a stupid idea that got overfunded.
1:12:15
He put He put juice in a packet and told you it was vegetables.
1:12:18
He put chef shaved vegetables in the packet and then used hydraulics, which is an actual real thing.
1:12:21
That's That's actually not correct.
1:12:23
Watch the video that Olivia put on Bloomberg a few years ago, which destroyed the thing. of it.
1:12:28
I mean, maybe there's a different one that I'm looking what they showed is that it was already squeezed.
1:12:32
Yes, there was shavings in there, but it was already squeezed. All right.
1:12:35
Well, that guy should go to jail. Like take it all back.
1:12:37
I mean, it was like It was like a crazy story when this came out and everyone's like, oh my god.
1:12:41
Like it was a standard like hardware is really difficult.
1:12:43
You know, novel hardware technology is really difficult.
1:12:47
So you fake it till you make it.
1:12:47
In some cases, you launch a product that doesn't even work.
1:12:51
Um you know, and and there's just And this isn't just in hardware, it's also in life sciences.
1:12:54
You see this a lot where you you ship a product that I would probably say that if if regulators believe that those CEOs tried to commit fraud, they would have done charges, right?
1:13:07
They would have They They Maybe they still will.
1:13:07
They should follow up with those folks as well.
1:13:11
do you think they went after Elizabeth Holmes, Chamath?
1:13:12
I mean, Because it was actually there was a legal case.
1:13:14
I think there's I think there's one really important There are two things at play in Theranos, which is different.
1:13:21
Number one is the kinds of investors that were involved here um are extremely powerful folks.
1:13:30
Um not necessarily, you know, technology capable, but very very well-known, highly uh connected uh people in the establishment.
1:13:39
And the second was that they were operating in a regulated market, which has very strict laws.
1:13:46
Look, I've tried to build competing products to Theranos for years.
1:13:48
I've been pretty public about this.
1:13:50
I've tried five or six times.
1:13:51
They failed every single time.
1:13:54
I couldn't even get out of the starting line.
1:13:55
You know, the these tests would never work without with a single drop of blood.
1:13:59
It just didn't make any sense.
1:14:01
The only version of this problem that has been solved well is the ability to detect cell-free uh cancer DNA in blood, right?
1:14:07
Using a very small quantum of blood.
1:14:10
Um companies like Guardant and Grail have actually done and built a great business out of it.
1:14:16
But it requires extremely sophisticated machinery sold to them by Illumina and others.
1:14:20
So, if you're operating in a regulated market, the bar is higher.
1:14:27
Um there is a lot more scrutiny.
1:14:30
And then on top of that, I think she compounded it by including folks and raising capital from folks that may not have actually known and been able to diligence.
1:14:37
And so, that's the cycle of fraud that may or may not have occurred there.
1:14:41
And she has to or they have There's a burden to prove that.
1:14:46
It's very different, I think, over here in an unregulated market where you can just kind of build whatever you want.
1:14:51
And if smart investors look Nick just put in the group chat.
1:14:54
So, um the investors in Juicero were Google Ventures, Kleiner Perkins, Thrive Capital.
1:15:00
I mean, these are all very sophisticated folks that um you know, made a decision and um you know, it's probably not the case that they were lied to.
1:15:09
I understand why they made the Juicero mistake because at the time fresh pressed juice using hydraulics was a thing.
1:15:15
And this guy said that's what I'm going to do.
1:15:17
I'm going to use hydraulics.
1:15:17
I'm going to squeeze the vegetables so you get the best stuff out of it.
1:15:21
I understand why they fell for it cuz my wife was buying that press What the [ __ ] are you talking about?
1:15:25
Jay, my wife Jay was buying that press juicery juice in LA. You remember this trend? Pure sugar.
1:15:29
That stuff was pure sugar.
1:15:31
Well, it's vegetable juice, too, but it would cost like $11 because they would use so much vegetables.
1:15:34
And I saw these presses they used.
1:15:35
It's incredibly inefficient, but the juice tastes really great.
1:15:40
But the thing I have a problem with with Ellen Pao's story is she brings up you know, uh the uh harassment stuff and uh you know, this is an issue of gender, etc.
1:15:50
But on This Week in Startups I've been covering fraud after fraud.
1:15:53
I don't know if you saw App Annie got an SEC fine yesterday.
1:15:59
ha- What happened, Jason?
1:15:59
Cuz I saw you Annie, they told people who are using their analytics products, building apps, there's like 8 million people, that they would never sell their data except in aggregate.
1:16:07
And then they went to Wall Street people and said, "Here's actually we'll sell you the data um and you can trade on it." And so Oh. Yeah. Yeah.
1:16:14
So, I don't think that's like insider trading exactly, but it might be.
1:16:19
But anyway, they got a fine of $10 million.
1:16:21
That's like that's the whole point of That that's the whole point of Reg FD.
1:16:24
The whole point is if somebody knows something, if you're a financial actor, Jason, and you know something, so like if if all of us were sitting around a table, um you know, and somebody said something about a random public company, if that's not public information, if that's not known, two things have to happen.
1:16:40
Number one is I, when I receive it, must not do anything with it.
1:16:43
And that second that person who disclosed it needs to then file an 8K and say, "Oops, I accidentally said this." Right.
1:16:51
So, there's Now, what where does this is an end around around things like Reg FD?
1:16:55
I think that's a really big deal.
1:16:56
Well, and then I guess the question is like what happens with people who use Planet Labs or whatever to, you know, to satellite images of the target parking lot or put people as spotters outside of Starbucks and count the people coming in and out.
1:17:08
Is that public information? That's public it.
1:17:10
But if if you have a terms of service that says one thing Yes.
1:17:13
and you're violating that, but then you may also be violating Reg FD.
1:17:15
So, they haven't gone after people for on the other side of the trade for securities fraud, but they charged him with securities fraud.
1:17:21
He pays 10 million bucks.
1:17:23
I think he's in the penalty box, can't be you know, run a be a public officer for 3 years. Then we had Headspin.
1:17:27
I don't know if you saw that SAS company.
1:17:32
But Headspin was involved in just basically straight-up lying about their SAS software.
1:17:37
Then you have Tether, the stablecoin.
1:17:38
They've been banned from New York by the DOJ.
1:17:40
They've been banned by the Canadian regulators for the first two crypto exchanges there.
1:17:44
And supposedly the DOJ's investigating them.
1:17:47
And then there's about five ICOs in New York that have been prosecuted already.
1:17:51
So, I know Ellen's saying like they're not prosecuting men, but I'm seeing them all the time.
1:17:54
Yeah, they're just not The press is not obsessed with them because let's face it.
1:18:00
They're not interesting than Elizabeth Holmes, yeah. She was weird.
1:18:01
I mean, the voice There's a lot of peculiar things about her that you don't see in other folks who are boring. Right.
1:18:10
By the way, what you just said is is part of the sexist claim that Ellen made, which is that we talked about her dress and how she dressed and how she talked.
1:18:17
We don't talk about that kind of stuff when it comes to other entrepreneurs and that Of course they did.
1:18:22
Adam Neumann, they were talking about him being a hippy, walking around with bare feet, being 6'7".
1:18:25
Every profile She's She's wrong in that case.
1:18:29
Every profile of Adam Neumann talked about his personal life and his wife is married to What's her name's?
1:18:33
No, Gwyneth Paltrow's cousin. Gwyneth Paltrow.
1:18:37
So, Ellen's 100% wrong on that one.
1:18:39
Yeah, and did it did didn't Elizabeth Holmes make it relevant by dressing deliberately styling herself in the fashion of Steve Jobs with the black turtleneck and the glasses?
1:18:49
I mean, you know, she she portrayed herself as the next Steve Jobs.
1:18:51
I mean, it was part of the grift. It was a setup. Yeah, exactly.
1:18:54
Now, did gender play into it?
1:18:57
Yeah, but I think not necessarily in the way that Ellen Pao thinks.
1:19:00
In this sense, that the media wanted to believe so badly that the next Steve Jobs was going to be a woman that they kind of looked past what should have been staring them in the face.
1:19:11
I mean, look, if a man had gone out there wearing the black turtleneck and the John Lennon glasses or whatever, they would have said, "Who is this clown?"
1:19:18
I mean, yeah, exactly, but they suspended They suspended Freeberg, you have to dress up as Steve Jobs in the next episode, Freeberg. You can make it work. Can we all do it?
1:19:28
Can we see who looks OH, LET'S DO A HALLOWEEN EPISODE where we all show up.
1:19:31
I'll do Elizabeth Holmes for Halloween episode.
1:19:32
Well, no, but that's like a nested Steve Jobs.
1:19:34
So, like you're going to be Elizabeth Holmes as Steve Jobs. Elizabeth as Steve Jobs.
1:19:39
I I I think Sachs, you're entirely right.
1:19:41
I think I think this is the way that gender has played into it is that there's a lot of people who really wanted the Elizabeth Holmes story to be true, and frankly she used that uh in order to perpetuate her fraud.
1:19:54
may not have used it, but she was definitely influenced.
1:19:57
Or she benefited from it. used it. She definitely used it.
1:19:59
I want to ask you guys kind of a controversial question.
1:20:01
Um you know, cuz this story made me think a lot about some of what's gone on in businesses that I know of and where I know that there is to some degree fraud and misrepresentation happening by the CEO and founder.
1:20:16
And this is a little-known secret in Silicon Valley or a little spoken of secret um uh which is that, you know, more often than not, if you know about fraud at a company in Silicon Valley, you're encouraged to keep your mouth shut.
1:20:28
Because the idea is at the end of the day, if they're gaining lots of capital, and you know, more capital floats all boats, and more money will rush into that market.
1:20:35
And so, if there's businesses that you're competing with that are committing fraud, rather than raise your hand, which then people say, "Hey, look, if you're going to raise your hand and claim fraud and talk negatively about another company, people are going to start doing that about you, and they're going to start doing that about your portfolio.
1:20:49
Um and so, you guys know this, right?
1:20:51
Like, you're discouraged from calling out these sorts of moments when you see them in Silicon Valley, because there is the perceived kind of, "Look, we're all in the club together.
1:20:58
We're all in it together.
1:20:59
You got to be careful not to talk smack, cuz then capital will stop coming in.
1:21:02
People will come after you, and we're much more of kind of a supportive open community."
1:21:06
Have you guys experienced that?
1:21:10
I have with at least two companies in the last year, and you know, I've kept my mouth shut because And by the way, I don't think that there's necessarily harm going on, but I know of misrepresentation, but the investors are like, "Look, we'd love to see these guys succeed, because that would be good for you in this way, cuz then you would do be more money flowing in, and yada yada."
1:21:24
And there's always a narrative around why you don't want to do this, you know, why you don't want to call these things out.
1:21:28
I called it out, and I've still got a crazy founder denouncing me years later.
1:21:31
I mean, look, I I hate Who has an SEC enforcement against them? Yeah, exactly. A sanction.
1:21:37
Um so, yeah, I mean, look, I you're you're right, Freeberg, that there's very little upshot to doing it.
1:21:45
Um but but look, I I hate But we have to distinguish between fraud and sort of uh puffing, okay?
1:21:52
Here's the thing that I think, you know, Ellen Pao's kind of missing is when she criticizes all these founders who are visionary and evangelical and and promoting something that ends up not working. That is not fraud.
1:22:05
I mean, every startup, we ask the founder, "How you going to change the world? What is your big idea? What is the big dream?"
1:22:11
And then they lay out this really pretty unrealistic set of things.
1:22:16
Unrealistic in the sense that it comes true maybe one out of a thousand times, right?
1:22:18
Every startup, their founding mission is a bit of an overpromise.
1:22:22
And just because it doesn't come true, doesn't make it fraud.
1:22:25
I think that a lot of people out in the non-Silicon Valley investing world would interpret that as fraud because a founder told them something that ends up not happening, not ends up being true. 100% correct.
1:22:37
And this is why you really it's very dangerous to take money outside of Silicon Valley because people don't really understand this distinction, okay?
1:22:43
Just because it doesn't work out and what you said ended up not being true does not make it fraud.
1:22:48
What is fraud is when you lie about like I said before, when you lie about the past.
1:22:52
And what Elizabeth Holmes is accused of doing by these prosecutors is again lying about the present day capabilities of a product and actually falsifying documents.
1:23:00
She actually falsified documents. That is the fraud.
1:23:05
That is the line you cannot cross.
1:23:07
They changed blood test results.
1:23:07
Listen, said another way Sachs, Elizabeth Holmes' vision of taking less blood and letting and doing more tests with that and being more efficient is a completely valid thing to pursue.
1:23:17
Chamath just said he pursued it five times and failed five times. Completely failed.
1:23:22
lying, completely failed.
1:23:24
Tens of millions of dollars burned in a pile.
1:23:26
But what we all buy into here is what if it does work one in a thousand times.
1:23:31
What would we What Elizabeth Holmes did was she lied about the results.
1:23:32
And she How did she lie about the results?
1:23:35
She lied about real people's blood test results. Like actual civilians.
1:23:39
Well, I have some empathy for Elizabeth Jobs in the following way.
1:23:43
When I was told When I was When I was told When I was told No, hold on.
1:23:49
When I was told uh I think I told this story.
1:23:51
I was asking an investor, "Hey, what's the hottest company around?"
1:23:55
This is in you know, 2013 or 14. He said, "Theranos."
1:24:01
And there was no way to get connected to the company.
1:24:03
So then I was like, you know, I had heard just the the bullet point, one drop of blood, full characterization of your, you know, be able to do a blood test, etc.
1:24:12
I thought this is an incredible idea.
1:24:15
But because I had no way of getting connected, now thank God that turned out to be a good thing, I was like, "Well, [ __ ] it.
1:24:20
I'll just start my own version.
1:24:22
I'll figure out how to do this."
1:24:22
And And And Jason, as you said, it turned out to be much, much harder than I thought.
1:24:25
And five different iterations, five different teams, and you know, PhDs from MIT, Stanford, everything.
1:24:31
We couldn't Caltech, we couldn't figure it out.
1:24:36
So, it's not wrong to want to believe that something is possible, and it's not illegal to do that.
1:24:41
Uh but as David said, the minute that you try to you tell lies about the past in order to basically then change the future in a way that shouldn't happen.
1:24:48
That's real That's really unfair. Yeah, yeah.
1:24:51
It It's uh what do you think of the defense that Balwani uh the Svengali defense?
1:24:57
I saw Kara Swisher and some New York Times reporters and other reporters were basically not buying it.
1:25:06
Um and talked about this last time, didn't we? Yeah.
1:25:10
Yeah, I'm just curious if you're have been following the trial.
1:25:14
I I I I think it's hard for somebody who in the moment took credit for every decision, for every piece of press, for claim to be the Jobsy and micromanager, to all of a sudden now turn around and say, "No, that wasn't me making decisions.
1:25:26
I was under the spell of somebody else."
1:25:28
I think that's a tough argument to make.
1:25:32
Yeah, also I think uh you know, this is going to come out, but she actually fired Balwani.
1:25:36
So, if she fired him, how was she you know, it's a harder to do the Svengali defense, I think. Wait a minute.
1:25:45
Well, maybe they're both guilty, you know.
1:25:47
Maybe they're both guilty.
1:25:47
It could be an and not an or. Gali, Sven Sven Gali. Sven Gali.
1:25:51
All right, listen, we'll close on this.
1:25:52
Mailchimp has sold to Intuit for $12 billion in the largest bootstrapped acquisition ever.
1:25:59
Uh we all know Mailchimp and we all know QuickBooks. It's a huge deal.
1:26:05
I have one issue with this, and I don't know if it's true or not, but apparently none of the employees have any equity.
1:26:11
Yes, and that was what I was about to get to.
1:26:13
Employees didn't have equity.
1:26:14
However, um and I've known Mailchimp for a while uh for over a decade been using the product and know the founder and had him on the podcast before.
1:26:20
Have they been a sponsor of your pod?
1:26:21
They sponsored in the first year, I think, or two.
1:26:25
Um, and Were you an angel investor? I was not.
1:26:27
I tried to be and he said we're never going to ever raise money. And, um, so I tried.
1:26:33
said he was never ever going to sell.
1:26:35
And he was also never going to sell.
1:26:35
I I They gave billion reasons to change his mind. Exactly.
1:26:40
They gave him, uh, the 20% my understanding was employees got a 20% cash bonus and they were amongst the highest paid, uh, you know, in the industry.
1:26:50
So, their plan was instead of giving people some big reward at the end, they They were just distributing cash, basically.
1:26:57
They were just distributing cash.
1:26:57
So, if you had a If you were a 150k developer, you got 30k on top.
1:27:02
That's not an unreasonable way to run a business that has no outside investors, that, you know, and employees know that going in.
1:27:08
They didn't go in with the expectation of equity.
1:27:09
They went in with the expectation of a high salary and a big bonus and they got it.
1:27:14
I do that in my Few companies, few companies that I own, I do that, but what I also do is I let them buy into the company every year.
1:27:22
I just think that it's a good principle to have like an ownership in the business.
1:27:24
I think you should be paying a lot of money and we should pay cash bonuses for for achieving results.
1:27:29
We do that, but then what we also say is if you want to buy equity, come in and buy it.
1:27:32
But you're probably right from a performance perspective, Chamath.
1:27:35
I don't I don't think it's necessarily a moral obligation to do that, right?
1:27:38
How this guy wants to run his business, up to him, you know.
1:27:40
I mean Up to him and people Yeah, people made the choice. People voted.
1:27:42
Yeah, I mean, people that work at your house, you don't give them equity in your house, right?
1:27:46
I mean, you own the house, you give them cash.
1:27:48
Or people who play for a basketball team are not allowed to get equity in the team, but in other countries, right?
1:27:53
I think in soccer, you can.
1:27:55
Yes, but I think one of the best things about Silicon Valley is the fact that there's a there's a practice of giving broad-based options to everybody in the company and there's all those great stories about the chef at Google who got rich and the secretaries at Microsoft who got rich and that is a beautiful thing about the tech ecosystem. It's wonderful.
1:28:13
And you never and you never hear about that when all the press is doing is writing stories about greedy VCs and all that kind of stuff.
1:28:18
They They talk about VC, but they don't bring up the point that in these non-VC companies the employees never end up with anything.
1:28:25
Someone who came from nothing can afford a beautiful home and have their life taken care of forever because they worked really hard at a great company that worked out.
1:28:33
And that that's that's the most common story and it's never reported, but Yeah.
1:28:36
And by the way, look, there's there's nothing wrong with bootstrapping your company, so congrats to this Mailchimp founder for doing it.
1:28:42
I mean, certainly, you know, like as a investor, I have no desire what Just explain what bootstrapping is, Sachs.
1:28:49
Bootstrapping is just when you don't raise outside money and he did it himself and he basically Funded by profits.
1:28:55
Yeah, he funded the company with the profits, which is just amazing.
1:28:58
But But But here Here's the thing about that is he did this He started the company back in 2001 at the nadir after the dot-com crash and there was very little money going into new startups back then and he managed to create this.
1:29:10
So, kudos to him, but the environment now is very different.
1:29:12
If you look at the amount of funding that goes into startups, I mean, it's now in the hundreds of billions every year.
1:29:16
And so, if you have this mentality of I'm going to bootstrap it, you're you're probably going to lose to a competitor who's simply willing to raise money and pursue that same idea with more funding.
1:29:26
Now, look, I'm not in the business of pushing money on people who don't want it.
1:29:30
I'm just saying realistically the times are different now.
1:29:33
If you can bootstrap a business, great, go for it.
1:29:35
But I do think that if you're in competition with someone who can raise VC money, you're going to be at a disadvantage.
1:29:41
Hard to compete yourself. Yeah.
1:29:41
What about AOC, what she wore to the Met Gala?
1:29:47
Tax the rich, she wrote She wrote a Tax the Rich dress to the Met Gala.
1:29:50
D- Dave Portnoy Dave Portnoy had the best tweet about this, which is she's about to go have the best night of her life partying her ass off with all these rich people and she's wearing this Tax the Tax the Rich. It's total hypocrisy.
1:30:03
Uh this is classic socialism where they do this uh virtue signaling while being friends and hanging out with the the people the owners of capital they're purporting to deride.
1:30:12
And frankly, it's just like the mask things.
1:30:14
I mean, you've got the servant class working at the Met Gala wearing masks while every while all the guests of the the gala are don't have to wear a mask.
1:30:24
I mean, it's completely absurd. over again.
1:30:26
It's Nüshu all over again.
1:30:27
she she also dropped some merch.
1:30:27
You can buy a tax the rich There's an official AOC team shop.
1:30:32
I can't believe that that's true.
1:30:33
That's what makes it the most loathsome.
1:30:35
goes to the thing and now she's selling $58 sweaters. sweatshirt.
1:30:38
A $58 sweatshirt, a $28 dad hat, a $10 sticker pack, $27 tote bag, and $27 mug. a dad hat?
1:30:48
It's like a hat for dads, like for us, you know.
1:30:52
Oh, yeah, tax the rich dad hat. Tax the rich, yeah.
1:30:53
Wow, I didn't know dad hat was a category.
1:30:55
I know dad jokes and dad bods.
1:30:57
I've never heard dad hat. Dad hat. Fantastic. Fantastic.
1:30:59
Yeah, I thought it was kind of gross.
1:31:01
Is it wrong to buy some of this say I think that this kind of cool, actually.
1:31:08
I mean, the tax the rich hat is pretty funny.
1:31:09
If you had a COOL OH MY GOD, IF YOU WERE A TAX hat The sweatshirt, I think if the best thing is if I bought this sweatshirt and wore it around. Wear it on CNBC.
1:31:15
Do it your next If you wear a tax the rich hat on CNBC, that would be peak Chamath.
1:31:20
I think that would be peak. That'd be great.
1:31:26
Get it signed by All right, anybody got any plugs? Anybody have plugs?
1:31:29
The the craziest thing about that Dave Portnoy tweet was that it got fact checked. Can you believe that? It got fact checked.
1:31:35
I mean, it was just mind-blowing that this is what When you say fact check, they put a fact checking warning They put a warning label on it. Oh god.
1:31:44
So, another warning Warning. Warning.
1:31:46
Liberals and socialists at Twitter don't agree with this tweet. Right. No, exactly.
1:31:51
Warning, somebody in the out crowd, Dave Portnoy, is criticizing somebody in the in crowd.
1:31:55
That by definition definitely gets a seat at All-in Summit, right?
1:32:00
He definitely gets a seat.
1:32:00
It's the the Ivermectin fake story from Rachel Maddow?
1:32:06
Is that fact-checked or no? No.
1:32:09
She posted some update or other, but but grudgingly presenting other information, but I mean the story should have been completely retracted and it wasn't.
1:32:17
No, no, I'm just curious whether there's a fact-check double standard.
1:32:20
No, there's absolutely there is no fact-check on that.
1:32:21
For some reason, the Rachel Maddow tweets went unfact-checked.
1:32:25
As far as I know, they're still unfact-checked. You know what?
1:32:29
You should wear the the rich hat and then get your buy the Hamptons shirt.
1:32:34
I'm going to wear those on your next season. what a great combo. the rich.
1:32:38
Can I Can I show you guys a great piece of merch?
1:32:40
Hold on a second, I'll be back in a second. Yeah. Oh, he's got merch.
1:32:43
But can I just say I don't look good in hats.
1:32:45
It's It's merch for the app.
1:32:47
I don't I don't look good in hats. No, you don't. No. No.
1:32:50
I wanted to wear a hat for a long time, but I just It just doesn't look good on me. Let's see his merch.
1:32:56
This is my favorite piece of merch. Merch.
1:32:59
Which is somebody made a hoodie. Like besties. Like besties. That's fabulous.
1:33:03
Absolutely great, besties.
1:33:05
Wait, can we just say by the way, there's a person that did make a besties merch site?
1:33:08
None of us knows who he is, but there's an incredible thing that he tweeted at us, right, J Cal?
1:33:12
Which is he's paying his way through college.
1:33:15
Yeah, he puts a note into it.
1:33:15
He He told me he made like five grand over the summer.
1:33:19
And so, you know, he's probably making like 30 grand a year off of merch.
1:33:23
any anybody's interested in some besties merch, we don't make a single dime from it, but there's a young hardworking dude paying paying his way through school. I don't know. It's a bestie apparel.
1:33:32
He's bestie apparel, right? Bestie apparel. bestieapparel. com.
1:33:34
We don't really want to encourage too many people to go crazy doing this, but this is our guy, I guess, and uh I mean, good for him.
1:33:42
He's paying his way through school. Good for him.
1:33:43
Yeah, and I think they did um you know, the they the shirts that people wore on their All In bar crawl came from that.
1:33:49
Um but I really want to do the I want to do the All In bar crawl.
1:33:53
I'm buying this tax the rich sweatshirt, boys, and the T-shirt, and the sticker pack. I'm going for all of it. You got me AOC. You got me on the hook.
1:34:01
Do they have a a men's bikini with tax the rich on the backside? Oh my god.
1:34:04
I would for when we're in Italy. I would buy that.
1:34:08
We can How about we get matching speedos? won't let me.
1:34:10
She won't let I always threaten to buy a speedo.
1:34:11
She always says, Well, we have to buy speedos next time we're in Italy and we have to do our bestie walk from pier to pier on the beaches of Italy in a speedo.
1:34:20
Can you imagine if that image got leaked of us in speedos?
1:34:23
I did I did a bestie walk with Sachs. All right, boys. I got to go. I got to eat lunch. All right. Love you besties. Love you guys. Take care. Let your winners ride.
1:34:35
Rain Man David Sachs And I said, "We open sourced it to the fans and they've just gone crazy with it." Love you bestie.
1:34:43
My queen of quinoa Let let your winners ride. Besties are balling.
1:34:55
That is my dog taking it out on the short driveway.
1:35:03
We should all just get a room and just have a one big huge orgy cuz they're all just useless.
1:35:06
It's like this like sexual tension that they just need to release somehow.
1:35:11
Let your big feet Let your Let your feet. big feet What? We need to get merch. Besties are balling.