All-In with Chamath, Jason, Sacks & Friedberg

Industry veterans, degenerate gamblers & besties Chamath Palihapitiya, Jason Calacanis, David Sacks & David Friedberg cover all things economic, tech, political, social & poker.

#AIS: Bestie AMA with Valor's Antonio Gracias

#AIS: Bestie AMA with Valor's Antonio Gracias

Tue, 07 Jun 2022 19:13

This talk was recorded LIVE at the All-In Summit in Miami and included slides. To watch on YouTube, check out our All-In Summit playlist:

0:00 Antonio Gracias joins to talk: Tesla's early days, investing in Elon, macroeconomic outlook, ROIC, importance of energy independence, future of manufacturing, financial-ization of the P&L & more

22:35 Q: How has the poker game influenced your decision making in business and life?

29:33 Q: What was the scariest step of becoming a first-time fund manager?

32:34 Q: Crypto market unwinding & how it relates to the money supply

35:57 Q: Current pre-seed / seed valuations & metrics

38:58 Q: When investing in early-stage SaaS companies, how to find outliers?

42:11 Q: What would you do if dropped in the middle of Kansas at age 25 with no resources?

44:46 Q: Where will the next disruptions in industrial automation come from & how will the US hit economies of scale in semiconductor manufacturing

47:02 Q: Any plans for All-In Media?

50:02 Q: US strategy in the Russia/Ukraine War

54:19 Q: How have your first impressions changed as you've matured in your career, and whose first impressions have stood out to you the most?

58:29 Q: Are you interested in crypto micropayments?

1:00:55 Q: Biggest mistakes of your career that you've learned the most from?

1:09:54 Q: What impact could tech have on political discourse? What does a viable path forward look like?

1:15:36 Q: Are remote / distributed startup systems viable coming out of the pandemic?

1:19:41 Q: Advice for non-technical people trying to get into the startup world?

1:24:44 Q: Thoughts on the potential consumer credit crisis?

1:26:17 Lightning round: What problem do you most want to solve right now? All-In consortium? Can SMBs democratize their own labor supply? How to get more investors interested in hardware? Will this be a relatively short recession?

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What's going on? Let your winners ride. Rain Man, Davidson. We open source it to the fans and they've just gone crazy with it. Antonio Elon had a moment of reflection and he was talking about 2008, he was talking about the imminent collapse, as he felt it, of SpaceX and Tesla at the same time in December 25th. And he said there were just a handful of people who came out there and and put their careers on the line for him at yourself and Steve Jurvetson specifically mentioned anyway and. Era, and it was a particularly poignant moment for him. He was getting a little choked up about it. Tell us about that that you made in 2008 and the potentially career ending bet for you to bet in an electric car company at that moment. Take us back. To that decision, yeah. But before I do that, I just want to say that I left my wallet it backstage because the last time I was with the four of you, I lost a lot of money. And I realized that I better leave. I better leave all the cash somewhere where you can't get it. And then and you also made me cry so I don't. I I think I might. I might cry again. Now of Joy, I mean. No, no. It was more like a humiliation. Yeah, but we're playing poker. Yeah, we're playing poker. Alright. You pulled up Palmer lucky. Yeah, no. So if I, if I, if I cry again, this time it will be from from a sense of. Just gratitude for those moments that we got to share. So the for us in particular because you know our strategy to operational. I was there working on supply chain in the factory and on sales and those in that. Along with my partner Tim Watkins and three or four of our supply chain people and we had a major problem in supply chain. The cost for weight control and you know you was doing engineering is very expensive parts. We were doing the the I called the B parts, they have the parts. And man, it was brutal, but it was very clear to us that I remember it was also the middle of financial crisis, right. So we had a treasure portfolio. We had to decide we didn't have a lot of capital time. These were tiny funds, 123 million funds, where our capital go, where our people would go. More importantly, we're operating people go and where I would go. And we decided to focus on Tesla because first we really did believe in Elon when most people didn't. And we saw in him something very special, which I think you probably saw her yesterday that not only is he is a brilliant, brilliant engineer, you know, one in 100 year kind of engineer, he's a man of deep conviction and deep passion and deep compassion. What he is doing is really trying to bend the arc of humanity for all of us because he really cares. And that came through to us and we wanted to be on that mission with him. And so we were privileged enough to be there in a moment time that it mattered. And it was really hard, man. I mean, we had clients. I actually had a client said to me, how do I know this isn't Dorian? And I said, look, I can tell you for a fact, we are not selling cocaine out of the back of the factory in the cars. There's DeLorean being the famous back to the future car, exactly where the owner was trafficking cocaine to underwrite the car. Exactly. I may live in Miami, Ben Antonio. Gracias. We're not selling cocaine for sure. That I'm sure. Yeah, but no, it was it was a it was a it was a crew betting event for us. And it turned out right. It was right thing to do. But yeah, for me it was. I'm just deeply grateful to these experiences. I mean, you really doubled down because you didn't just do Tesla. You also were there in some really critical moments at SpaceX. As well we were, although I, I tell you, you know, we doubled down at the time and tells we put more money to test on the financial crisis and then help lead to convert around there. That was really tough for us to do and then put money in SpaceX. But I tell you operationally, like in terms of capital stack, I think there were other people around and and SpaceX is also running out of money and we put money into SpaceX. Operation where this basis over the years, but it was never as existential in terms of the operations. So it was a Tesla. I mean, Tesla was truly, I think, truly existential. And because we were operating guys and I myself have been a factory manager, I worked in auto parts and auto parts factory. I'd run industrial facilities myself. We could kind of uniquely add value there in the rocket factory. You know, we were just less valuable. But yeah, both these companies were going down at the same time. And, you know, the amount of stress we were all under was extraordinary. But, you know, looking back on it, it's one of the greatest moments of my career. I mean, this sense of fellowship, you know, one of the, I think the great thing about being in our business, the business we are all in, is that we get to back amazing people are trying to change the world. And in these dark, dark, dark, deep moments, we get to go to war for them. And it in those moments, I call them these moments of fellowship where you just care deeply about someone and and passionate about the mission and you get to make a huge difference. Like, these are the highlights of my career. And if you ask my partners, they tell you the same thing. These are the best moments. We've had some together. Three of us have had some together, actually. We had some together. You're on the stage. We had to fight for something he believed in, and it's it's a privilege, man, to do it. It's a privilege in that situation. It's a privilege to be Elon. It's been a privilege to be there with with all of you at different moments in my career, and I'm very grateful for it. How? Do you do you feel like you come off of a high after having huge successes like that like how do you stay grounded and motivated to try to find the next one? If in the back of your mind there must be a little piece that says it's never going to be as good as this guy or those two things. I mean you know it is it's interesting question to both. I think that there's a couple of things in play for US1 is we keep going because we believe in making world better. We invest in companies that we believe make a difference with people with respect and revise, lined with and that's the that's the ethos of our firm right so. Whether it's large or small, we may never find something as important as its SpaceX again, but we will find more great people. We will help them, you know two of our companies here, I mean we invest in and roll with Palmer, we have a a small investment flex port, which should have been one of the biggest mistakes the last 10 years of my career is not putting more money in Flipboard. Yeah no, we we we we had we actually it's kind of a funny story about we had, you know that's kind of a soft handshake on a term sheet at sale price of X and in SoftBank came in like 2 years later and made it 2X and I had too much price memory to keep going and Co lead it. You know, there's an error, but you you had you have two people on the stage here. They're extraordinary. Entrepreneurs are trying to make the world better. Both, both these companies are really are really great and and making the world much more pretty now post COVID and in times of war, making it much safer for all of us. There are people like that out there. There's more of them. They may not be alone, you know, it was right one, Elon, in our generation, but there's lots of great people, and I'm very optimistic about what's happening on the economy. We're seeing incredible, incredible innovation with tremendous entrepreneurs in our pipeline. So maybe there's another one. I don't know. Antonio, how do you think about the in the business as you guys invest in, there can sometimes be a very long capital deployment cycle before you see any real return. And in terms of, you know, business value, whether it's farming, you've done Farma some of these hardware companies where there's a big build cycle. How much do you need to kind of think about and see a customer and revenue show up before you're willing to say, hey, let's build the big rocket ship to go to the friggin moon? And how do you judge and value that business and back a team? It's really the question I need to it depends on the on the sector run, yeah. And it depends on how we look at the world ship probabilistically. And we're looking for companies that we call Pro and Triber. They get in, the world gets worse. So in in the case of pharma or something like SpaceX, we'll think about like what is our problem was our probability tree here, which probably lost, probably have 3X5 X 10X100X. And then we'll think about when the capital goes in, what is the actual return on capital. And I was watching the talk you guys had with with Ryan about what happens to the public markets. The reality is that. When a business is a machine, you put capital on one side and out the other side comes return the ROI, the return invested capital really matters. And if you're a climate classically trained investor the way I am, we think about that a lot. So you know we may be putting a lot of capital in. The question is what's the margin in the back end. A company like SpaceX, a lot of couples going in, but we know that if it works, we believe it will work. We're ultimately have a company that's tremendous margins even in the industrial sector because of the industry structure it's in, it lives in an oligopoly inside the US and outside the US so it's like. Building sterling, same thing capital going in but we know that the the the margins and the profitability that business on the back end will be very, very high and so the ROI will be very good. Just to just are you backing a lot of deep tech startups like companies founder shows up with a PowerPoint they like I need 50 million bucks to make our prototype. I mean what happens there it depends on the business. So as an example you know we have passed on things that are our view going to have margins that are ultimately committed to a low, a low level, right. And you know, there are, I don't wanna give examples here, but there are lots of examples of people that are doing things in, you know, I call it electric aircraft vitals, etcetera. We look at this and say this is going to be a highly competitive market. These are not ending of 1, SpaceX is an end of 1. If you compare that to someone making electric vehicle that say electric airplane or electric VTOL, that will not be an end of 1. It will be end of many and in end of many business, you're ultimately going to have margin competition that's going to make it that return on capital goes down to basic industrial margins. You know, like it won't be that much better than building RC. Or airbuses RC, because those will be ultimate competitors. You you set it a little too, I think superficially. So let me just double click. And I think Antonio brings up, I think one of the most important principles of investing that is so utterly poorly understood, which is ROI C ROIC, return on invested capital. Most people don't even know what it means. How to calculate it, no pat over your weighted average cost of capital. These are enormously fundamental principles when you're running a business, especially in a moment like this, because when the rubber meets the road and you need a lot of money and you run into somebody sophisticated as him, he's already worked from first principles to understand it. It's really. Really, really important to know these things because these are the core foundations of valuation, you know? So obviously DCF's are one framework, but roik is incredibly, incredibly important, especially when you make real things and you need to spend CapEx. Yeah, and look in the world and in the last 10 years where money's free, nobody thinks about this very much. We always have thought about it, which informs our investment model. But yeah, Jim's right. I mean, in today's world, if you're an entrepreneur and you can show up and say, listen, I have a fifty 6070% return on capital, every dollar you give me will yield a 78% return on the back end. Even though we're losing money along the way, that's a very compelling case. Well, today we're losing a bunch of money always gonna happen, which will we hear a lot. This this also builds on the question from yesterday, which is how do you present yourself as, you know, a young emerging company and cut through all the noise and understanding of these things? And about future value creation in a moment like this becomes really important as well. Even if people will debate whether it's right, people will give you credit for the intellectual honesty of actually going there and understanding these things. You see it a lot where companies slip away from first principle. So you know the first principles on a high margin enterprise software business. You can define AR and assume some and then people say some multiple of RR is your valuation comp, like your you know your multiple and then another company shows up and the margins are different, the growth profile is different, the revenue retention is different, it's a services business and they try and use a similar sort of comp and all of a sudden everyone's thinking about valuation as a function of some industry standard comp as opposed to going back to understanding. How did that come get created in the 1st place and what's the nature of the business from which that comp arose? And people are doing things like calling revenue, AR, you know it's not even subscription revenue and so on. And I think that happens considerably more. And then then that investing cycle just becomes, you know, hey well the next round will be this multiple and you know that's how we'll get our increment and valuation and everyone just misses the the core you know proposition of building a valuable business that can generate what's your look through into the economy just from your portfolio companies? Look we, we think I think on our session, I mean I don't know. Already said this but we're in our session. We're in our session and this will be like my I don't know 100 cycle or something. I'm pretty old like the rest of us here. We've seen it. We've seen over and over again and you know I see David's tweets about go race 2 years of money. This is correct. I mean you're gonna you need enough capital to get through the problem. But the good news about this recession and you know there are there are some good news here which is to me if you look at the the macro picture here it looks like if you can look at the model federal debt the the state of the consumer and kind of what's having this information it actually looks a little like post World War Two. In that in in the World War, in the World War Two period we had the last massive mobilization or demobilization America economy occurred in World War Two, right. That happened again in COVID when we change in in this case it's like a mini version of remobilization that we're we're restarting the economy. We thought of the system with with money to get the to kind of buffer the problem and restart the economy and now we have inflation, but we also have lots of business formation and we have new ways of doing work, which is what happened after War Two. So I'm I'm I'm. Very optimistic because most of these recessions you know to really get inflation down we have to reduce consumer demand and or change oil prices. So for sure we jumping on this country, I know it's controversial, but that's important to lower oil prices to get inflation down. But the reality is underneath the the the numbers there's a lot of innovation happening and that's what happened kind of post World War Two. So I would say we're in a bit of a mini retooling. It's going to be a rough year or two. Hang on. It will be a rough year or two, but the consumers are in pretty good shape which they're not over levered. We should come out, OK. And the US economy is so resilient, man. Like, you know, we are all either one generation from being friends or immigrants here. I think most of us, right. It's the best place in the world to live with the most innovative economy in the world. I'm super optimistic what's happening here because there's so much innovation, so many smart people working so hard to make things better. I think it's going to be great. I think we get the next couple of years is going to be great. Talk about this pumping more oil situation. Obviously Russia is involved in A and we talked about it earlier today, had a debate about Ukraine and then you have maybe. There are some folks in the Middle East not pumping as much oil as we might like them to. And then Europe decided, well, we don't wanna frack here. We want you to do that over there. And and then we stopped here and none of us want to see environmental damage done to the planet. But we also don't want to see dictators take over the planet or the economy come to a halt. What? What's a reasonable proposal for America and American sovereignty in terms of green and renewables? And maybe pumping some oil. So look, I we were the first institutional investors as a motorist. So I think I have enough confidence to say this. I believe in green technology, OK, absolutely 100%. But energy and in the same fund we did Tesla, we actually had fracking assets because energy independence is a that's incredible really in the same fund, same fund because then as it is today, energy independence is a national security issue. This is not a partisan issue, extremely important to understand this. Stream pointers on this. It's not about Democrats, Republicans. It's about wars in the Middle East. And the reality is that the Saudis are not pumping, OPEC is not pumping. This is terrible for America and they know it. They're squeezing their economy the way in the 70s and it's absolutely being done on purpose. So the answer to that and my mind is twofold. One, we should have an we industrial policy in this country, but the first we should have is a energy policy. Energy policy look like this. We take all of the background subsidies, literally make them equal and we give let's say 500 billion total, 250 billion in low cost loans to energy patch. For drilling in places like Texas, Louisiana and an equal amount to green energy and we Sprint to a green future. At the same time, we ensure that this country is safe and we have energy security in this country for all the people out there being hurt behind inflation. It's a security problem. What do you you guys invest heavily in manufacturing. What do you see in terms of the future of manufacturing, the opportunity for onshoring manufacturing. Are there technologies that you guys are excited about that create an advantage for the United States to build manufacturing capacity to service industry here? And yeah look I think this thing about we we outsource the entire our entire manufacturing base in China because it was cheaper. But the reality is that the if we have been our the the product divisions between the kind of US and China right now is about 8:00 to 1:00. So a US workers. 8 times more productive than a Chinese worker. We found in in cases like Tesla where we actually helped read in terms of GDP per worker. Yes. OK and we helped to insource the supply chain of Tesla. Why is Tesla flooding rated? Because I got news for you. You actually can make stuff in America and it's made well shocking. OK let me tell you when you put what is that? Why do we have this narrative that it can't be done and then we go to Giga factory and you see let me tell you having been done, let me tell you why. And boy, I mean here's the I probably get. Sorry for saying this, but great companies are built by engineers like Elon Musk. That's a reality of it. And they know they want to control their manufacturing. We do it here so we can iterate faster and make the product better. And the products good enough, you'll sell it for a great margin. They optimized by marketing people and destroyed by the CFO when you put the finance guy in charge and he's like, oh, hey, we can get a lower peace part part by sending it to China, but he isn't understanding iteration cycle of making that product. That guy destroys the company. And that's what happened in America. Encounters. Yeah, we put the CFO in charge, for God's sake. Don't do that. **** these bean counters. I mean can I say that, well, no enemy say that more engineers, let me say that if you if you if you calculate return on invested capital and you think about this carefully, what happens is these long supply chains to Asia, they have huge capital deployed, but capital is cheap. You do that because the peace part price is cheaper. But you calculate what happened at 10 in particular when you calculate the overall cost and capital wasn't frequently didn't get any, it was actually much smarter to bring it back, right. So the long term cycle you make more money, the short term cycle you make less money. In the short term cycle you make more money. I mean is that another way to think about it? You optimize for short term outcomes. You you you improve the you you improve the income statement because you might improve properly in the short term, but you actually hurt the balance sheet because you sell this capital on the water over to China. You're bringing it back and your iteration cycle goes down because you you've got. So what you're saying is the products less innovative for sure it is, it is. But he's saying something really important which is that it's the financialization of the P&L that in some ways led to the decline of American manufacturing in part meaning if you're a CEO of a business and. You construct your employment agreement and it's based on a certain kind of earnings in a certain. A certain earnings per share. The incentive to then drive financialization goes up. Now the perfect example of this is if you compare it, for example, and you did this. The comp package that you gave Elon in 2018 first is the comp package that any other CEO in America got. It was completely black and white. It was, it was, it was it was opposite land. Yes. And you basically completely said you get nothing. Now let's set these extreme goals and then if you can hit it, you'll get compensated so much so that, you know, when you had glass, Lewis and ISS. All right. The the IRS customer said no, but they used it. Those things. And we're being sued for it to be careful what I say about it, but yeah, we had a a comp package fully voiced on equity appreciation, right, that required creation of new products. And look, I'm gonna, I'll pick on Apple here. Apple is the first stock I ever bought. I was 12 years old. My mom actually went to a camp bank and bought me a few years ago, but I still have it in my account. Remind me what it takes every company. Steve Jobs dies terrible. And look, then, you know Tim Cook takes over. Tim could supply chain Guy. I mean, they've really optimized profitability. It's unbelievable. You know, don't know $2 trillion mark or something now, but man, when's the last time the new product Airpods. Airpods, yeah. I mean pretty great. Great, great product, great product. But I mean it's not change the world. Incredible free cash flow. Yeah. Think aggressively buy back their stock. Yes, it's in the financialization of that company. Yeah. Has attracted, I mean like if you look at a, if you can look at a the largest shareholder is the most sophisticated financial asset owner in the world. Berkshire. Berkshire doesn't buy technology companies. They buy incredibly well run financial assets and it is. Look, look, look at how ducks getting lambasted for the VR investment. Some might say that strategically it's not a great investment, but he's saying, **** it, I'm going to spend $10 billion a year. No, no, no. He he said it for 1/4 and then he had to take it back and cancel it. Oh, you said that they took it back. Yeah. But that's what he wanted to do. And so to your point, like, it's very hard to really build things now. Yes, but it can be done. And look, I think one of the I am what's happening in the world today geopolitically is tragic. The war we experience Ukraine is absolutely tragic. But from all tragedies come some some good things. There's always a silver lining. And one of the Silver Linings here, I think, should be the acceleration of reshoring of all these products into America to rebuild our industrial base because we actually can do it. I can tell you I am starting my career basically as a factory manager in California. It can be done. There are Americans who want to make stuff between here, Mexico, Canada. We can make pharma. We can make high tech products. Yes, the price might be a little higher, but I got to tell you iteration would be better and your value will be better. If the product is better, people will pay for it and resiliency and resilient listen for 100 percent, 100%. All right, we are setting up a couple of microphones here. Antonio has been gracious enough to join us for some Q&A. The audience is filled with entrepreneurs, capital allocators, artists and builders. So we're gonna put a couple of microphones out there. Hopefully some lights on the microphones if I could see them line up and remember the rule. We don't need to know about your company. Just a tight, concise question. Anybody does any marketing or promotion, we're all going to groan. Let's practice a groan 3 to grow. No guards. You could you could say your name. You could say your favorite pastime. Also. Wait before we start. Yeah, if Chris is Chris Malloy. OK, everybody. You guys may want to just know Chris, whenever you're in Vegas, Chris is the guy at Carbone in Las Vegas, which is the most, you know, best, hardest restaurant, restaurant reservation to get. But Chris bought a bottle of wine for us that we can open now and drink while we do the AMA. Yeah, well, bring up a bottle of wine anyways. Let's say hi to him, get his number and text him. If you're ever in Las Vegas and wanna go there. I mean, only chamath would bring the captain of Carbone to our event. Keep the drink, let's drink some wine. That's fantastic. Yeah, nice to meet you. Alright, first question, tell us your favorite bestie. And then yeah, we're still doing favorite besties, right? Favorite bestie. OK, quick, tight question go. Alright, favorite bestie. J Cal point guard of the century to this team, so hats off to you. So my question is, first of all, we've been here all week in the last three days watching these cards fall from the sky. Yeah, and we all know that you guys center around this poker table, this beautiful game. My question is how is that game influenced both your relationships and decision making in business and your personal lives? Great question, Chamath start us off and you can go to the back and next person queue up. I was poker influence a friendship our lives? How is the poker game itself had an impact? On our lives, OK, I think I really do believe this, but I think it's the most incredible game and training ground for business. Because in any given moment, you are forced to deal with the spectrum of good information, to moderate information to bad information, good outcomes, moderate outcomes, bad outcomes. You're taking risk, you're learning information, you're adjusting your style, and the most important thing is you're forced to anchor. To your core values or not, how you behave at the table is how you behave in life. You know you can take these poor little Helmuth. Yeah. You can take these winds poorly. You can take these wins well, you can take the losses poorly. You can take the loss as well. I would encourage all of you to learn to play the game with your friends. It's it's a beautiful, beautiful start. A weekly game. Sax. Tomas House is how I got to be friends with smooth, right? I mean, I'm just saying this. You guys tell you why you stay up all night playing? Because I've been there with you guys. Yeah. It's pretty freaking generous. Yeah, we're all holding him. Exactly. Talking about baby, it's training. It's training for business. No, I'm kidding you, but I've been there. I've been there, I've been, I've seen the drinking of the food, too. It is travel business. We're not degenerates. But that's actually. Well, I was just saying. I mean, didn't you invest in the Yammer after I started playing in your. Weekly poker game. Yeah. And it it it was actually so degenerate. What really happened after that was I was in Las Vegas in 2011. I had just left Facebook, I moved to Vegas. And I was on the phone with sax in between playing tournaments and he like let me in, invest in Yammer, literally like, and you know, you did me an incredible solid because I put money in and you know what this is like. Nine months later he sells to Microsoft and I returned 1/3 of my first fund, Yum Yum. And it really solidified my reputation. So, I mean, I owe you a big one for that. About this help so David Sacks, I know David for 25 years he did Yammer. I want to put money in it. He said no because if. There's a two-story is true story, he said. No, he said. He said no because if this fails, you are my backup plan. Ohh, great job. Yes, we did offer me a I don't offer me a job. I wanted David to come join me. I'm just like. I was so afraid of losing everyone's money when I founded a company, you know? You know, it took a little like for me. I wanted to have, like, one friend who's my dad and I didn't lose. But, you know, that was the wrong way of thinking about it. We should have, we should. Free burger. I mean, how is the game? Well, before tomorrow. Are you leaving? No, I'm great. No, no, wait. Come, come. Come back for a second. OK. He'll get glasses. He's getting one. I'll. I'll tell you guys one thing. Jamath is one of the most generous people you will ever meet. Unbelievable. He is unbelievable. Unbelievable. And for all of his, for all of his bluster about his frigging mink coats and **** like Chinchilla, in Chinchilla he has brought together a group and he largely is the reason that I think the game grows and goes on and you saw some of the amazing people that we've had on stage here, some of our friends are here that we play our game with, that really, that that network has been built and solidified because of Chamath and his generosity and friendship. That's it's it's really something I've learned to appreciate. Life and you know, thank you. Thanks. Yeah. Yeah. I mean, it's yeah, it's a tremendous group and yeah. Amazing people like amazing people and. Yeah. Consistency of it has been amazing. From the generic group Chamath had this like little tiny $2,000,000 house with like a 1 1/2 car garage when he was at Facebook. And we we would play in the garage. That little tiny place you had, remember, you know, before you bought the two houses next door and knocked them down and gentrify. But true story, Sacks said, hey, you know you're doing these conferences, you should invest in the companies. And this is when I put the fix in for him to win TechCrunch 58 Yammer with the Yammer. He said I have to win. And then he, his wife told my wife he has to win. So then I basically got the whole jury to to vote for him with the Yammer. He wins and he goes, hey schmuck, all of my success is due to jakal you guys. That's a good, that's a good fix. I put the fix in for him, but he said, listen, I want to thank you for this and you should start a fund instead of doing all this work at the conference. Why don't you just invest in the companies? I'll put 250K into your fund. I'll be the anchor. I said that's incredible, really? And he said, yeah. And then I went to the poker table. I told the story. And then Dave Goldberg, rest in peace, one of our great friends and and certainly the the best amongst us. Thank you. He, he said I'll put money into it. Thank you. And he put money in and then Billy said I'll put money in. And everybody said they put money in free break said I'll take a pass. Which was? But, you know, we'll put that aside anyway. And it was all locked up and other stuff. Yeah, he's like, I got a quinoa farm. I've got to take care. Take care. OK, alright, let me take out. Scholarship. And this is true. This is a true story. Bill Lees there. He couldn't make it to here, but he's one of our great friends and and and one of Elon's best friends in the world. And he said of course I'm in. Would you mind if I if I tell our billionaire friend the the cofounder of eBay, Jeff Skoll, and he tells them, Jake, how's doing? Fine, you should do it. I meet Jeff Scholl's money manager and Yan and I I said, hey, here's what I'm doing. I'm the first time fund manager. I don't the ****. Doing I'm a former journalist and he said how much is the fund I sent 10 million, he said I'll take half and I said. I'm sorry. And he said I'll take 5,000,000 and that was the biggest check I ever got. And it was because of Billy. And literally that first fund was raised around the poker table in one night and that changed the trajectory of my career. And that really is the fellowship. And it started with David and you hosting and I remember it like yesterday. And I I think maybe also a good moment to just maybe cheers to, to Goldie, Dave Goldberg's no longer with us and Tony Shea who played in the game as well. Two incredible men. Next question hey name is bobbin favorite? Bestie is chamath. Great to thank you boss night. By the way, Antonio is also our people too. Alright, listen, we know Chamaca best equipped with the question, let's go. Yeah, my main question is like when you guys actually decided to manage capital for people, like what really was the scariest step in taking that leap and taking that risk? I know a lot of you are GP, solo GP, so. I mean, Zack, you made a big leap. Well, it's the scariest step. Well, I mean, even as a founder, like I mentioned before, I was like, so worried about losing people's money. I mean, that was like, I mean, I don't know if, like, founders today even care that much that this seems, but it it seems like, oh, coming didn't work. Move on to the next one. I mean, maybe that'll change now that the environment is not gonna be as free flowing. But I was always, like, really worried I was gonna lose people's money. And, you know, something like when I started social capital, I. Think I was playing, I was either playing golf or I had dinner with Chase Coleman in New York. And Chase has to me, I'll tell you, the one piece of advice Julian gave me when I started, I grew up. I said, what was that this in 2011? He said. This is a death sentence. And I was like, well, what does that mean? And he said, you are the only person that's going to live with this because you're responsible, especially based on who your lips are for folks that if you really think about who they are, it's just going to create this thing there. And it's like, you know, I was, I was lucky in that moment because we were, we were able to get like the Knight Foundation and Mayo Clinic and these folks that are doing these good works, but then you're representing their capital. It's heavy. It's heavy because you make this decision and if it's wrong. You just feel literally like you're derelict and you're taking money away from sick children or, you know, free speech. I mean, it's it was a that's a brutally stressful thing, to lose money on behalf of people. By the way, I'll, I'll recommend, if any, as a founder, if you raise money, raise money from your friends, too, and it'll really change how you operate. Yeah. I mean, I I raised the first fund for my friends. And I tell you, I took every single deal very seriously. And I did my diligence and I was very thoughtful about it. How about you, Antonio? Oh, man. Our first. On that, there are two fears I had. The first one was raised from I live in Chicago, from my friends in Chicago, and I literally said to one of my partners at the time, if this doesn't work, I have to move, I'll have to ability to Chicago because in Chicago you might get killed if you'd like looking back. I mean the weather. No, no, no. I mean these guys use money. Witness protection. Exactly. These guys use your money people kind of like, ohh, I'm sad about it. Chicago like break your legs. They burn your house down. It's all different. Hold everything. Alright, let's take another question. Ohh, sorry. No, keep going. No, the second thing, I mean honestly, the worst thing for me, the most scary thing for me was just the people I had. I had three or four guys that work with building comes before that and I knew that. I just felt if I disappointed them, if we failed, I would have felt terrible. Yeah, yeah. It certainly makes you focus on the game. It's like being staked in poker. You play better. Sir, I have a question for the 17th most important person from PayPal. OK, I'm just kidding. David. Obviously Friedberg is my favorite bestie. Alright, fine, let's go out. We've been let's go. Marriage. Unbelievable. The free bird love. Alright, three birds soak it in. You've been talking about how all this increased money supply has been sending the asset prices up and now it's unwinding. I don't think we've heard you talked about crypto specifically. Bitcoin has obviously come down but it's still over three times where it was pre pandemic. Curious what you think will happen in that world as this unwinds. You want me to address that? Sure or most important. So the the thing, the thing about the crypto market to understand is that it's like a liquidity sponge the more. Liquidity there is out there. The more people feel empowered to make speculative investments and crypto is like the most speculative. Now that's not to say, you know, it's not real. I actually do believe in Bitcoin. I think there'll be a number of other sort of alt currencies that work, but probably the vast majority will not. And there's been a tremendous amount of speculation and inflation there. And so that space is in the process of correcting. You know, I've never been able to say. Like what the right price levels for any of this stuff are. Let's say you believe in Bitcoin long term, let's say you believe it's going to be the first non Fiat currency. What price should that be today? You know, it's it's there's no like discounted cash flow analysis you can apply to it. So it's always been very hard to know what the prices of these things should be. And so in practice the price is a function of how much liquidity is in the system and when you go through a period of liquidity getting destroyed, it's no surprise that crypto. Wrong with it. Antonio, have you touched, I mean, you you were so into physical assets and building real things like spaceships and rocket ships. When you watch this crypto bubble, you know, grow and burst and grow and burst, and now it's burst again. What's your take? Well, first I want to tell you, I bought my first crypto, I mean, I think in 2017 because David Sacks and Bill Lee were pushing the Ponzi scheme on me. So they were like they were. I was at a birthday party. I think you probably were there too. Yeah, and they were like, they were, they were hacking Bitcoin. So I I bought. Nobody had heard of it at that point I bought something like this. I think it was like 800 bucks. So here's my general view. I actually think, I think that Bitcoin in particular is a bet on rising political risk and on political freedom. Economic freedom is is closer to political freedom. And last time I looked, Ukrainians are the third largest holders of Bitcoin. And if I were saying in Taiwan today, I would have 1050% masses Bitcoin. So this this removes the ability to control currency capital, controls from governments. I think this is very important and it should survive price levels. I don't know. I do have a, you know, a reason why a Bitcoin is a hedge to political risk globally. And that's how we think about it. We have invested in infrastructure assets in and around a blockchain. With Dave, we have a couple of assets because we believe that blockchain itself is a platform shift and the technology of tracking assets. This was a real thing and it's going to happen. It's going to change the way we do finance. So we invest in infrastructure. Got it. Let's take another question. Ted is right over there. Oh, I'm sorry. Gonna take one from here. We'll alternate. So tight is right. Yeah. Hi, car Mantra, CEO of Credo. I have to say I'm a science nerd. Freedberg. But Jay Cal, it's been awesome today. I and I wanna say you guys like your courage and bravery to do what you've done with the pod and watching this today like. Thank you. Thank you. Yeah, you've talked a lot about later stage. I'm wondering if you could like tune in a little bit more on on pre seed and seed and kind of what you're seeing in terms of valuations and metrics that that you've got to hit in, in the earlier stages. It's very simple. You know I invested in Uber, thumbtack and com for $15 million combined. That was their combined valuation post money, post money and those all three companies had products in the market. And then what we saw over the last five years is people wanting credit for a White Paper, a prototype and MVP to the tune of 15 to $50 million. And we did sit out some of those and said, listen, when the product is ready, let's take a look at the product and talk to the first two or three customers. To David's point about zero to 1 customers is the really hard hurdle and now it's back down to 6 to 15 million for a company that has a product in market and maybe 50 to 100. Times yearly revenue for evaluation. So to the extent you can get to 200K and yearly revenue, you can get you know, a 10 to $20 million valuation. So I'd say halfway back to normal and perhaps a permanent, you know, livable reset because the outcomes have been pretty fantastic. So the early stage should go up. The only thing you really need to raise money is to build a world class product and just get a couple of customers who are absolutely blown away by what you've built. That's all you need. But everybody gets concerned with the theatrics and the performative stuff and their network and nonsense and who you are and where you came from. None of it matters. Build a world class product that two or three people are obsessed with and you'll get to see. Check. Focus. Yeah, I think, right. Yeah, Brad Gerstner had. Sorry, interrupt your applause, jakal. I know that's important to you. I'll take one little I can get. So I think Brad Cursor made a really important point on this which is the new normal is going to look like the old normal meaning the pre COVID normal we had the the the abnormal. Was this two year COVID. Where 10 trillion of liquidity is pumped into the system. Things are going back to what they look like before all that happened and maybe before the Fed started with this zero interest rate policy. So we're actually getting back to normal understand that the the environment we're entering now. Is is the normality. The abnormal. Was the inflation we saw in assets over the past couple of years. That's the like. Reset that everyone's gonna have to like, wrap their heads around. Sacks, you're my boy. Finally, finally. 1%. I I think there may be some preference falsification around this because people don't get their conservative. All the polling, all the polling shows this. So. But anyway, thank you, Sir. And your second favorite bestie is Tucker go. For early stage Sass investors, which most of you are in an increasingly digital world, where are there are large SAS solutions for nearly everything. How do you think about selecting companies and founders in the early stage that are coming to market with a small amount of utility and how do you think about they compete with companies with already established customer distribution? Yeah. So I think, you know, one of the things I really like about Sass, which is your software as a service, basically B2B software, it's business software, OK, that's sold as a subscription is that the world's never going to run out of new ideas for business software. Business keeps changing. So therefore the software that businesses need will keep changing and there will always be an opportunity there for new companies, new verticals, new new niches. They'll always be, you know, new new ideas. And so I've never. Worried about running out in terms of how we evaluate the actual idea. You know we've actually been super transparent around the metrics that we need to see. It really does start with a company hitting the metrics hurdle that we need to see for for example a Series A you know it's a call it you're roughly more or less $1,000,000 of R you want to be growing 15% month over month, certain net dollar retention, certain capital efficiency. We've all we've published it you know on our website and our blog so. It's it starts with that and then once we know that like our thresholds have been hit, then we get into more qualitative or subjective factors like, you know, what do we think about this founder in this market? But one thing I like about it is just it's it's very well defined like what we're looking for. And so, you know, just go to our blog, you'll see, we'll tell you exactly. There's no mystery outside of Productivity Tools though. There's not a single company that can stay in one category and become. Pretty big. What does that mean? There's not a single public company that doesn't have now an entire strategy that says we sell it SMB, mid market and enterprise. And so the thing for SaaS businesses, unless you're like a really powerful productivity tool like a slack or an Atlassian, your valuation capped in the mid to high single digit billions as as it currently stands today. That's just the law of the math in the public markets on how you're rewarded though. How do you grow out of it? You have to embrace the strategy that actually does. Or where you become a system of record. So good example is like a Zen desk. They hit an upper bound. You know, there are many of these examples. And so if you're building a SaaS business or you're investing in this business, the other thing to think about is in the absence of being a productivity tool. Of which again, there are few. Everything else has to find a way of being applicable to larger bodies. Overtime, in order to maintain valuation, we're going to try and move faster so we can get more people. The question here? Hi there guys. Favorite besties? Probably 4 way tie, but maybe chamath edges out just a bit. OK, not a tie. I guess that your mom quick question tight is right, so. You know, you guys done incredibly well. So what what would you do if you're dropped in the middle of, say, Kansas, take away the resource, take away the network and take you back to age 25? What would you do and why? Antonio, take it. I'm actually from Michigan. I got dropped in the middle of there with no resources and not allowed to do. I wasn't 25. I was merely 20s. I would. I would find a way to make it work, man. You should get. You should actually whatever scale you want to start at whatever job you have. I would try and start a little company. There's always people and they listen to place. Grams, Michigan man. You could cut grass. I little computer company I was 12 years old doing like networking for people in the old days. I mean there's always something to do if you had a valuable skill build a skill, start a company and just get started, start moving and make good decisions along the way. One good decision compounds on top of the other and all four of these guys, what they have done in their careers is made very good decisions and they've kept moving when they've had problems. You start early. Yeah, you gotta start early and I start early. They may. I just want to tell you this, they may look like super successful guys now and AR, but it wasn't easy and it wasn't linear. They've all had ups and downs. They've all had problems and they all. And they also do what they what they do. And I have great respect for all four of them. I know them all well. They keep making good decisions. They're highly resilient and they just keep going and I will tell you the same thing. To that is to keep is to keep learning. I'm getting suppose yeah yeah yeah go. I haven't had any man any. I just got here. But I would just say keep learning as well. Like one of the biggest advantages I've had in my career is that I try to always learn as new stuff as as often as I can. And whenever I find an area of interest, I pursue it in terms of deepening my understanding of it. And and that's always created opportunities for me that I wouldn't have just stumbled across or walked my way into. It's such a great opportunity to have you here and Tony, when I asked you to do this you had never been on a podcast before. I've never done this kind of thing. I've never done this kind of thing. And no, it's awesome. Thanks. I'm only doing it because it's a four of you. And I am usually very private, but I'm enjoying incredible voice. You know, he's like very, like, very NPR. It's very public radio. Yeah. It's like, hey, everybody, you're listening to the political culture. But I'm Antonio gracia. People tell me I have a voice for radio and ***********. Yeah. Yeah. It works pretty well. Go hey guys, I'm Samantha, favorite bestie is Friedberg. I run the factory automation team for a large semiconductor manufacturer in the United States, really unimpressed with the innovation in industrial automation. And so I'm really interested to hear your thoughts on where you see the next disruptions in automation. And also maybe a question for Antonio, where do you see the disruptor specifically and how we get not only the. Technology, but the economies of scale for these really capital intensive businesses in the US this is your guy. Cancer. Yeah, for sure. And and by the way, you should talk about automation and I don't know if you want to, but sure. Tesla. Yeah. Yeah. I mean we, we know a lot of the nation. One of my partners is like a genius engineer in this area. And you're particularly in the chip business you said, right. Yeah. So you know, TSMC basically took the this idea of outsourcing manufacturing assets that Intel did with TSMC, the beginning that created that business and moved most of our high technology and and chips often offshore into Taiwan. Look, a terrible idea and we, I think we, as I said earlier, industrial policy in this country, I think we need industrial policy to bring two manufacturing back. It's very important. And the problem you have in automation and chip manufacturer kicker is, you know, when you think about where all the great engineers go today, they're automation. They're not going there because their computer SMC. So you have a, you have a couple in fab still in the US, but we have to have some, I think actually going to require industrial policy to force people like Intel, AMD to want to bring stuff back into the US and to really get great talent. Wanna do it. Do you think there's opportunities outside of Greenfield models to kind of reinvigorate and unlock the capacity that we have in some of our older manufacturing here in the US? Yes, I do. I look we at Tesla took over the free. The Fremont factory was a former GM Toyota factory and you know, we retooled it was, it would have been we had to do it because we don't have money and it was free basically. But if you if you took that approach and you got the, you got really great entrepreneurs to focus on this problem through an industrial policy. They need money to do it. I think you'd get great innovation. Look, Invidia is actually here in the US. This is the route. This is a great chip company, and the fabs they use are spread all over the world. But that if you gave in video fabric tube, who knows what happens? It was the right price. Yeah, Jensen's a great CEO. Did you go outside? Favorite bestie Jason. You keep the ship together. You're the glue that keeps it together. My name is Chris. My friend and I started all in talk nine months ago. The fan page for the thank you chair. So, yeah, yeah, it's it's really obviously. I was, I was at the outdoor mall near my house and my dog attacked another dog. And the guy was like, it's OK, I saw you on Tik T.O.K. So that was because of you, but that was I didn't get your channel. That was for his kin Wah channel. It wasn't your channel that was. So my question is in the 222022 predictions episode chamath you talk about all in media idea and starting in all in media channel maybe. And I wonder if you guys have talked about that anymore, your your goals for the future on that because I'm pretty sure everyone would agree here that if you did start one, it would do a whole lot better than CNN plus. So. Well, that that may not be a very high bar. Yeah, very low bar. I think we actually, we actually did get together, the four of us. We sat in Freeburg's office. What a **** show. People started yelling. Two people walked out. The sacks. Sacks just started to do this at the table. Yeah, I'm definitely a good driver. By down that's driving the driveway. It wasn't a productive conversation. It was completely unproductive. Look, it was completely improvised. That was our first and only meeting. But no. But we did take one key. Step, which is that Freeberg said. I'm going to get my team to draft the LLC agreement for the four of us which we refused to sign, but now no one signed it. But it's in our interest. Free bird, but it's in our inbox, so we're one step closer to starting it. But joking aside, I still think that it'll become inevitable, and I think the reason is. The two people the robots non humans that were uncomfortable with human interaction. David David Smith. I'm like lifters. Once, once once we do the the recap of this, I think it'll be they'll. I think these two are probably the most shocked at that. No, no. I'll tell you by the way, my observation. I used to go to Ted. I went to Ted from 2008 to 2019. I stopped going to Ted because I thought the content went to **** and it basically got overtaken with like social justice talks and like used to start at like tech and interesting ideas about where the world is headed. And like, I listened to our speakers this week, the last two days and I'm like man, like really fantastic content. Like this could be the new Ted. So I got really invigorated by that. Like, I really thought I felt like that was really missing. And by the way, I think, I think it's conversations people don't really seem to want to have right. Like and that and those are well, make them really. And let you say you are not the earliest believer in this was going to get pulled off too. I cannot tell you how many times I've considered quitting the pod and not even showing up for this event. And I give Jason props publicly for doing a great job pulling this thing off, so. Go, go. Guys, my name is Sarah and I really love all of you. You got me through a very tough, challenging time. When I started listening to you. I came here over a 16 hour flight from Abu Dhabi, so thank you. We love you. We love you. I have a comment and a question, the comment and maybe David, I have a lot of relatives in Sweden and when the Ukraine war started, this is very amiable, innovative, beautiful. People haven't had a war over 150 years and they were putting gas in their car and supplying cans of goods and got really, really nervous about what's happening. And we're watching closely to see what would be the next step. I think if the US did not stop in there, so there was a lot of reality out there for the US to stay. I don't know, like the savior of the world in a certain way or another. Finnish people felt the same way, Moldovans. So this is a real big reality out in the Western European world, not just Eastern Europe. So that's on my comment. So thank you for the question. And this comes from my husband. If you're sitting on excess liquidity right now and want to invest for a long time. Sorry. Sax is raising a fund was that was that was that a transition from World War Three to investment advice stock tips hot stock tips stock in the market we wanna save that is dynamic range right there. Yeah well done. Well done. You want you've gone from 2 poles you know I mean you had a crime know the ups and downs of my life so yes it is like that why don't we just take the first part because I think it would be good so so on Ukraine I you know I thought it was important to. Have this debate today where we got both sides of the issue and we got two people who are very passionate on both sides. And I tend to agree more with Glenn on it, but but that doesn't mean I don't want to help Ukraine at all. I just think we have to keep a close eye on preventing this thing from escalating into war three, because the Russians have 6000 nuclear weapons and their military doctrine says they can use them if they feel that they're existentially threatened. And so, you know, if our objective here is to help the Ukrainians expel the Russians from an invasion, that's one thing. But if our objective, if we have mission creep into destabilizing the Russian regime and to basically trying to take back Crimea, which they see as theirs. If we're trying to weaken them to the point where they're no longer a great power, we're really playing with fire there. So we have to be really careful, yeah, about our objectives there, and make sure that we don't let this thing spiral out of control. Antonio, what do you what do you have thoughts on Ukraine? And are we being too dovish or hawkish or doing it just right? So I think we are there. There's a lot more going on here than meets the eye. And this question was about Sweden, Finland. And here's what I would say, because I want to focus on that, that if our, our, our friends in particularly in North Western Europe should actually be arming themselves and if they arm themselves, we won't have this problem. That's the reality of it, the reason Ukraine, yes, that's a reality. The time, the time for sitting on the sidelines in central Europe is over. If you care about your country, care about your children, and care about your families, then you should arm yourselves.. In America, we are happy to sell you weapons. No problem. With or without NATO. I think that's true. The reason the Ukrainians are able to defend themselves is because they are. They have actually been buying weapons and they bought. They built their own weapons with the Turks that the the the drones are being used to destroy. The Russian supply lines are not coming to America. Coming from a joint venture with the Turks. This is the reality. So should we be drawn into a warrant to Europe? No. I think could start with three. Should we help these folks defend themselves? Yes, I should. And in your particular part of the world, yeah, for Sure Start buying weapons. One question over here. Yeah, tough to follow, but my name is Joanna's favorite bestie, I think. Freedberg. I think you do a good job of being heard and hearing others equally. So I think that's an important skill. I'm trying to work on it myself. Free bird. Wow. In terms of my question, it's a little more qualitative, but some of us are having an interesting discussion about first impressions last night, and I'm curious to think one in terms of your own first impressions. How has your the way that you introduced yourself to others changed as you've grown and what have you learned about that? And on the other end, what are some of the most notable first impressions others have made on you and why have those stood out to you? It's an interesting question. Well. Seeing as the only two of us have emotions, maybe we can. Yeah, we can chop it up, sure. I'm gonna go to the bathroom. You won't find any emotions there. Turn the mic off, please. The quinoa. Oh my God, my Lord. Well that Baba Ghanoush goes right through you. Continue, Baba ghanoush. I think that when I was younger. I was more insecure, so I had to wear what few labels I had on my sleeve and use them as a weapon before others could use their labels on me. I honestly felt that way, you know, and in Silicon Valley at the time, you know, it it really there is a very monocultural aspect of, you know, folks from a few schools, you know, folks having worked at a few companies. And I had neither, you know, I worked, I went to Waterloo, which is in Canada, and I worked at AOL, so I didn't go to Stanford. And they didn't work at Google or Yahoo and there was a, there was a great lineage and of of where, you know, the really credentialed credible folks came from. And so you, you do what any insecure person does, you kind of throw what few things you have out there very quickly, you know, trying to one up the person in front of you and that's calmed down a lot. So that's probably the biggest thing that's changed has and I think it's a, I have a similar observation I when I was taking that our train into Manhattan. Used to say to myself, Jason Calacanis, editor in Chief, Jason Calacanis millionaire, and I was like literally had a 16 page photocopy magazine called Silicon I reporter and I was trying to convince myself that someday I would be somebody and I I think that narrative was important for me and people. When I would give him the 16 page photocopy, I'd say, here's my magazine. They say there's a photocopy. I'd say no, it's a magazine. It's got a picture on the cover. Because for me that was that. Why it was a magazine. And it eventually became a very large magazine, in fact. 300 pages and today. Thank you. So I think there is something about manifesting stuff and and just you know believing that you're going to get there. But today I I define myself by the things I love to do. So when people do ask me Now, hey what do you do I say I'm a writer and I have a podcast and I Angel invest and I don't say it's the number one podcast or I'm one of the top Angel investor real time. I just I just think about what I don't say that and I don't say you know like it's you know. The book is in 11 languages or whatever. I got $1,000,000 advance. I just there's no ego about it. I just say writer, podcaster, Angel. OK. How did it go in there? OK, David, you're OK. What sort of ants are you getting? $1,000,000. He said $1,000,000 advance. I mean, the books in 12 languages now. Thank you. I'll sign. You have one. I'll sign it. Next question sometime. Sometimes I think Jason's just pimping out all of us to fuel his media career. Yeah, you think sometimes. Hey, David, all honesty, how is the deal flow gone since you got this podcast? I think it's down 50%. Perfect. The intent, that was the intent. More deal flow coming this way, 50 percent, 50%. That's since you went on Tucker go hi. Today the crypto world is focused on decentralization, speculation and stores of value. Who here is excited about micro payments and whoever is most excited, which industries do you think will be most impacted by the new found ability to send payments in as little as 100th of a penny? Oh, favorite bestie. They wanna actually wanna take it. Yeah, good sex. So you know, the this question of micro payments has come up all the way since, you know, back to when I was working on PayPal. And one of the problems with micro payments is, as the name suggests, the amounts are very, very small. So you have to do a lot of them to create enough volume for them to be meaningful. And so there was always sort of this market size problem. Now for crypto, there may be more of an opportunity there because the way that the old. Credit card Rails Network works is there's like a $0.25 charge per transaction and so like a PayPal, it just didn't make sense to facilitate micro payments because the cost of that transaction always exceeded the fee that we could get. So you're right, that or I think what you're suggesting with your question is that there is sort of a crypto opportunity to do this in a different way because you can basically do a cost less instantaneous transfer using a blockchain based currency, so. I'm sure someone's gonna do something interesting with that. And then the question is just how, like, what does that aggregate into? Is it, is it going to be big enough to be? By the way, there's a there's an interim step, which is also pretty obvious, at least to me, which is this idea that, you know, for example, like if Stripe actually took the time to embrace one of these stable coins, there's no reason why Stripe needs to actually run on interchange as well, because like, you can just basically swap that dollar in a Ledger into USD C let's just pick that as an example, not tether, not to tilt you. Running on those rails for free and then basically transfer back and it's it's not it's not obvious why people don't do you need the gas cost to come down so you know like you're running a transaction on Ethereum or certainly Bitcoin theory expensive right now. But other chains yeah yeah you need you need like a chain like a salon or something that's like super cheap and the the cognitive load of the transaction just the person deciding do they want to pay 1/10 of a penny. A penny is sometimes greater than the actual value of the. Money, which then creates almost like friction to them wanting to read the article. Let's take another question. Hi, my name is Kate, and my favorite bestie right now is freedberg, who often plays devil's advocate. And so force is a stepwise conversation. Woo. Free bird. My Lord, how many people did you pay off? Go ahead so that we all admire your successes. But we've also been hearing from Mar, for instance, that we need to be comfortable with failure and we need to become resilient. So when you look back on your careers thus far, what have been the toughest moments, the moments when you've made a mistake that have taught you a lot? I mean, I had, I had two huge Antonio and just have some too. Yeah, mistake. My mistake that you learn the most from man. My biggest mistakes in life have been about people. And I have over the years made errors in in judging people and how honest they were and how good they were. And as I look back on that, it's because I have a a weakness for ideas that are great. And sometimes those come with great people and sometimes they don't. The reality is there are some bad people out there who are acting really great and doing interesting things and we have, we've suffered from that. And I know David and I were to deal together, suffer from that and it it happens. So I I would be. I've learned a lot about that. I've gone deep into neuroscience. I actually have a stat. We have a a woman who's got a PhD in the neuroscience of emotion from Caltech now on staff. That helps us learn, as you said, always learning about how to assess people and how to assess their emotional states. That's the most important thing. I think we've updated in our process and in my own thinking. So you love the idea so much. That you ignored, you ignored the other data that this person was not honorable, truthful. No, I mean, so there are times when there are two kinds of of this errors here. One type of error is we just didn't see it because the person was so good at being bad. They are you know, one of these neuroscientists taught us is that about 5% human population has a brain anomaly that make them actual psychopaths to find as the the middle isn't fire properly when they do something bad, guilt, fear, etcetera. And in our particular industry it's more like 10%. So we raised our baseboard forecast at 10% and it's gotten better. But there's something so good at it you just can't see it. I mean Theranos, Elizabeth Holmes, OK, like lots of smart people running that company. We didn't, but it was it wasn't obvious them obviously and then there are then there are moments earlier on when he had yellow flags who overrode because we were so emotionally committed to the idea that we want. We had a business we did was in the down space was it was Medicaid dental clinics for kids that were black and Hispanic and I'm you know from that demographic and I wanted to make that great and the reality is we overrode yellow lights because we wanted to make it great. And we failed. Jamati, we're going to add some of your features. I had two huge fielders, but they were, they were more personal moments of learning for me. One was, you know, we were in the midst of building a phone and it didn't come to pass. And if I really think about what I thought the problem was, this was when I was at Facebook, what the problem then versus now? Then, you know, I would have said, oh, suck. And I had a huge kind of, you know, thing and blah, blah, blah. Now what I would have said is, you know, I didn't really understand my own limitations and what I was really asking of him and the board in that moment. And then the second is. There were all these moments. That were people decisions. At social capital that ultimately manifested in sub quality financial and investment decisions. And had I had it to do over again, I would not have ignored some of the red flags because I was so desirous to be in the game to, you know, be in it that I probably, you know, looked the other way a little bit on folks that you know, just give you the, the practical example. I remember in a $300 million fund, I put 25 or $30 million into Bitcoin at 50 bucks a coin. And when the thing went to like 150 or something, just the pressure. To distribute was so high. And I had conviction. I had all of these things. I had all the voting control. I had everything to just say no. And I didn't have the courage to understand my role as a leader versus something, you know, my job as a investment partner. And so you learn, you know, you learn what you're good at, and you learn where your strengths are and you try to just get better, try to fix those weaknesses. I mean, at the end of the day, what we're both saying is the same thing, which is ultimately it has nothing to do with anybody else. It's still comes back to you and what your skill set is in your toolbox and whether you're upgrading your toolbox everyday freedberg sacks any mistakes that you're able to access through your CPUs. In your long term storage, well, I think as you get older you learn how to pick your battles better and you just have to decide like what are the occasions that are really worth fighting for, which aren't you know and sometimes you just let it go and others you have to fight. So and and just knowing when you should choose which path. I think it's really important. When you were by the way the guy you really went behind you in a battle is this guy. So phenomenal investor back when I was on the founder side of the table. So good brawler, yeah, for sure. That's why I got him a samurai sword for his birthday. He did? Yes. What did you say? The collection of samurai sword. So my apartment start with David Sacks and Samurai sword Oht. Yeah, thank you, David. Very short too. Kids trying to play with it or something. It was not a toy. Yes, not a toy freedberg anything in that long term storage tape drives of a. I've made a lot of mistakes. It's really hard. I'm very hard on myself. When I was young, I always said. There's no limit and I always believe that and when I hit walls in my life. It was very, very difficult because it it totally countered what I what I felt was possible. I always thought everything was gonna be a success. There's no way I'm gonna let anything ******* fail. There's no way I'm gonna let anything not work. My voice is cracking not because I'm crying, because I'm losing my voice. So we know it's all we need. If you cry now, they're everybody's gonna be pleased now. Everyone Freebirds my favorite paper. It's all for the vote. It's all for the vote. He actually does have a motion. Yeah, C. But I I would say he's smart and kind. Yeah, and a vegan. Yeah. He's perfect. The biggest mistake I've made. He's my dream boyfriend. Maybe coming on the stage with the biggest mistake I've made. Joint in the pot. Ohh man. But I think Antonio's point is right. You know you just have to be willing to to learn and and evolve. It's you know I I now know that my life isn't about everything I do has to work 100% of the time and being so hard on myself cause a lot of like emotional challenges for me over time. But getting getting to this point where I can now be much more calculated and just move forward quickly and learn from it. There's been a big evolution for me. That's just a general statement. But yeah. And I would. Oh, sorry. Well, no, it's OK. I just. I was, I was thinking about it while these guys were being so candid and I was immediately gonna punt and go to the next question, but I thought that would be unfair. You know, I think two things. One, I think a lot of my decision making early on was that a fear, a fear of losing whatever I had gained up until that point. So although I was a risk taker and I was being bold in one way, I was also throttling myself because I was just so. Scared that I would lose whatever gains I had. And it it made me an imperfect manager of people, an imperfect person, maybe on edge a little too much and maybe not picking my battles to David's point. I saw everything as a battle because those wins were so important to me, because they were so hard fought. And then I think later in my life I realized I never actually thought about what I enjoyed. I just thought about winning to an extent that was not healthy. And then after Dave Goldberg died and Tony Shea died. I really took a self-assessment of what I enjoyed doing and I mentioned this yesterday, you know, hanging out with these gentlemen and and to Antonio's way of phrasing it, which is just beautiful. The Fellowship, I thought, that's the joy, you know, my family, my kids, my wife and this fellowship with my friends that I wanted to invest in. And I made a deliberate effort to be a better friend, a better parent, a better husband. And because of all the gains I got from that and the joy that I got from it and and I just thought a little bit, God, I do like those conversations. Like right in the book, do you like throwing the events? I'm just gonna do things I enjoy, which took me 30 years in my career to actually assess what is it that I like and maybe I should enjoy the journey a little bit more. So I think it's a great question. I appreciate it. Let's take one more. Thank you. Enjoy the journey. Hi besties, my name is Aria. I was the 3rd or 4th employee at DoorDash. And my question is regarding, ohh sorry, my favorite bestie. Yeah, that was a joke by the way. My favorite besties, chamath and sax. Although it's honestly Sophie's choice. My questions regarding the positive impact that Silicon Valley could have on the political discourse and politics, which I know you know, there's typically an aversion to in tech. You know, you all have done a fantastic job outlining what those problems are as well as your guests. What I'm wondering is what a viable path forward looks like. You know, chamath, you mentioned that people in DC pay close attention to the podcast. Sachs has recently endorsed Michael Schellenberger, which I really hope can save our home state. And I'm wondering is is the solution? Something akin to a third party like what Andrew Yang is trying to do or some new, I don't know, Silicon Valley techno party or you know is there is, you know, what does that look like? I'm curious. Well, I don't think it's set up to actually have a third party structurally in America. So what you have to do, practically speaking, is field more centrist, normal people on both sides, whether they're Republicans or Democrats. That's a practical thing that we can all do and then we can all show up and vote for those people so that the the majority voice is much clearer than it is today. Because right now the fringe is a little bit get to hijack the process, and so we take things that are that should be common sense and we pervert them in a way that just makes no progress possible. I really do think that we have that impact. I'm not sure how much can be of that can be quantified, but when I spend time in DC, I think it's true what I was told and what I've heard from people, it's basically required listening or viewing. It helps shapes people's opinions, doesn't mean they follow it, but I think it helps people think about things in a more normal way. I think what happened today is like a perfect example, like the way that Glenn Greenwald and Antonio Garcia Martinez debate. Like that's probably for some of you. It's really unsettling. Maybe raise your hand if you were just like, you felt awkward. Honestly, just be honest with you. OK? Well, you shouldn't because that's normal. My point is it helps you make it seem more normal because those guys were not saying to each other that you're worthless and you're not. They were just debating. By the way, we went out for a beer after that. Yeah. And this is my point, the three of us. I was like, OK, we need to, like, go out and get a drink and cool down. So yeah, I'm not chastising you for feeling that way. I'm just saying this is what the culture does to folks. It makes you even afraid to hear people. Debate things and still have respect for each other. The way that he and Palmer kind of dealt with that wasn't, that's incredible, the courage that Palmer had to say what he did and then for him to be the first guy to walk out and then to own that, that's a, I think those are really important moments and you have. You you have 700 more people capable of being that way because of what just happened. So, yeah, I think it's a slow March, but I think we're, we're doing, we're riding a small dent in a small way. 20 years ago, every political show on TV was a debate format like going all the way back to William F Buckley versus Gore Vidal or Pat Buchanan versus Michael Kinsley on Crossfire. I mean, they were all debates now, like none of them are debates. It's all this, their own little echo chambers. I think it's one of the reasons why this pot is successful is we actually can have debates and there is a divergent of views. What do you think Antonio is or is there some have you ever listened to this pod? I I was on one once. Dancing in the background. That's right. Yes. Thank you. The Dancing Bear. Yeah. He did dance behind him. I recorded an episode from his house. Yeah. Well, I mean, you look at politics, any interest there any any any, you know, behind the scenes work you've done and and how do you think about it? Just as we get into. This Gen Xers boomers are going away. I mean we're gonna kind of inherit this whether we like it or not. Yes. I would I would say a couple things. First, whenever you have time. So you look historically and get supporting contextualize this when you have moments of of large technological change you always have political disruption because the means of communication have changed this. The Gutenberg press the tall ship and you go back and look it always leads to light disruption and often to war. And so the question of are those of us who are technologists at the top of the system. Your responsibility to steward this technology responsibly. We absolutely do. I believe we do and I think that has been forgotten. That's #1 #2. I have been involved in campaigns and it's interesting. Right now what I'm doing is supporting any centrist candidate that I think is good on either side of the aisle. I'm a registered Democrat. I've support Democrats for most of my life. But the reality is now all I care about is sensible people that I think are really good and I'm engaging in micro targeting efforts across the spectrum in in primary races. I would encourage all of you, and then you wanna peer who cares about American book system to engage in the primaries? Because the primaries are what determines the quality of the candidates that actually are up for election, and they're actually decided by very few people, like how many of us actually voted in the primary. Like very few of you. Very few of you. OK, so rather than us just complain about the divisiveness of American politics, next time please go vote in a primary and go vote for the centrist candidate. By the way, did I hear a lot of support from Michael Schellenberger out there? Let's have him on the pod maybe. Hi, favorite bus is chamath I I heard you speak with Vinod Khosla. I hacked the north of the University of Waterloo. So my question is marked about these like startup journey systems like Stanford or PayPal. Do you see like over the pandemic? Do you see any like remote or distributed systems that have? Like appeared? Or do you see any like building that are not just centered in one geographical location? Really honest, I'm not a huge believer in this whole decentralized work movement. I don't think any high quality work can get done. On, on, on difficult problems. So I think that there are types of products and types of problems that can be solved in a remote way, certain forms of software for certain kinds of products. But for example, let's just say you're trying to engineer, you know, a pharma drug. I don't believe that unless you're sitting there collaborating, talking, debating, you can do that necessarily over a zoom if you're trying to build something physical. You know, we have a business that 3D prints rockets. Those guys can't do that by just, you know, zooming around and having a couple of calls. That doesn't happen. So I I think it's. Too premature to kind of say working together has no value. I also think there's a huge cultural divide that will get created in America between these companies that come together and the companies that don't. And I think that the ones that come together have a chance of having more empathy in the end, because there are moments where you can actually get to know the people you're working with every day. And I think that that gives you margin for error because everybody sometimes is a little, you know, dealing with their own things in their lives sometimes can be a little rude. And we all have tolerances. Those tolerances are higher when you spend time with people, and they're much, much lower when you're just in a zoom. So I'm, you know, I I'd love to believe that everybody's going to be Airbnb being in a castle and a tent and a ******* tree house, but I'm just not sure that that's realistic to really solve the big problems that America has. You believe in the work from home, Antonio. You have a strong feeling one way or the other. I I'm more Chinese camp than not, but I will say we have some great companies are fully remote. We have come to a coalition example in cyber security. It's fully remote, run by a wonderful CEO under the age of 35 and he's found a way to make it work and I've learned a lot from him. And so I'm trying to be very open algorithm about this and I think there are people make it work, people get member, I can't make it work. I want my people in the office. We invest in pharma, we invest in biotech and we have some biotech companies that have made it work remotely and some that insist on bringing back people back if you're in a lab. Feedback but it I think there'll be a mixed environment and I also think there's an interesting retooling going on in productivity. I think 2 numbers in American that we're seeing today are wrong because they're not capturing what's happening underneath technology because these remote environments. So I don't know yet. I think it's going to depend on the CEO and how good people are and the type of industry you're in. Yeah I'm I'm keeping an open mind towards it. I know that for investing it was so much more efficient. You know people could do 20 minute zooms instead of two hour meeting. But I mean think of the problem that that created. Look at the overhang. And you could raise 10s of billions of dollars over zoom. That turned out to not be a good thing. Well, and but also if you're a capital allocator, being able to meet with three times as many people, you could find more companies. My point? So I talked to a friend of mine who raised billions of dollars over the last couple of years cycle and he said I was able to raise $50 million checks in 30 minute meetings. Now it's spending five hours for a $10 million check. And my reaction to him in the back of my mind was that's probably how it should be. Well, part of that's the code that makes the entire system a little bit healthier. Yeah. I mean, we we raised 1.7, there are funding COVID and it was like all done doing zoom raising new fund now and flying around the world taking meetings. But part of that because people come back to the office and liquidity cycles gotten is reversed on us now, right. So the denominator has gotten, it's got a heartbeat capital. But for sure, I think I agree chamath here like being able to allocate $10 million in a in a venture fund in two years over zoom. And I think that's on just the metrics and not see people. I think that's a bad idea. Yeah, I'm talking about 250 K 500. Actually, it might be OK take another question here. My name is Kenneth Brown the 3rd, and my favorite bestie is Jackal. The charisma is legendary. He's my favorite bestie, too, by the way. He'll be offended. And then my question is, what advice would you give to non-technical people trying to fit into the tech oriented startup venture world? I'm an econ major but this just seems exciting like how do I become a part of it? And Tony, have thoughts. And I I think that the, the best way to do this is to find a company you think is great and get a job. That's a reality. I mean, I would just, I would associate myself with the business I really respect, you respect. And if the job is in the mailroom or the Bob is the job as a janitor, whatever, just figure it out. Because what happens to high growth companies is they need good people. And you'll be surprised how much being the first person in and the last person to leave if there's an office and doing the work that people ask you to do with a smile and a great attitude like those people, they move up fast. So I would just find a way in. And wherever it is, however it is, make it happen and start moving up. I can't you're by the way you're, you're, you're you're not, you're not non-technical, you're not yet technical. And I think that's the opportunity that sits in front of everyone that you can become technical. I had a my cousin who was a music major at UCLA, worked in music and then he came back from COVID and he started learning how to program online, taught himself, spent six months in his parents basement teaching himself. A retool his life and got some contract jobs on Reddit and boards and other stuff. And he got this amazing full time job offer a few weeks ago and it was really amazing that I got to watch him transform himself and his life over the last year and a half just by taking that on himself and he became technical. It wasn't that he had a non-technical degree, it said he just wasn't yet technical and I think everyone has that opportunity. I'll tell you, I'll tell you a great quick story. He's a minority guy. Grew up in Houston, really wanted to work at Tesla. Couldn't get a job, couldn't get a job, couldn't get a job. Finally got a job on the line. He was making 1620 bucks an hour. Worked there, did well transfer, worked there, did well transferred, ends up in the supply chain group. Ends up working in battery supply chain. Ends up basically being 2 layers between him and Elon. Gets into an MBA, goes there for a few years, works on the side. And he ended up raising a bunch of money to start a battery business recently. And this is an example of what he just said, which is, you know, there are these jobs available and then it's just, you know, is your hotspot and your hustle. And he's an example. But it's a very motivating example to me because it just shows it's so possible, you know, and these there are phenomenal organizations that identify talent and will move you up really quickly. And knowledge is literally free. And experience is up to you. Yeah, the, the, the overriding. I think advice you're getting here is that skills are acquirable and my Lord, getting to 5060% proficiency on a skill. Just give him what's on YouTube or MIT open courseware or any number of websites. You can do it in a matter of weeks. And now of course going from 607070 to 80, that that might take months and then eventually years. But startups are looking for generalists. They're looking for people who can say, I need somebody who's going to do the accounting and figure out how to do them an e-mail merge and build a mailing list. And then I need somebody to help with recruiting. If you could just become thirty 4050%, as you know, good at each of those things. At a startup, you know, before people get specialized, eventually you'll have 10 people doing recruiting, but in the beginning it's 1/3 of somebody's job. So I love startups for the sign of a great culture of a company is how little the obvious labels matter once you're inside of it. The best companies, like a Tesla can become a trillion dollar market cap because they find the kid working on the line and then four years later is running the battery supply chain. How does that happen? It happens because you're looking at the quality of the individual and their potential. Where they went to school doesn't matter. Their gender doesn't matter. Their ethnicity doesn't matter. None of it matters because the people don't see it. They see work ethic, they see results they see. Integrity. So that's another litmus test for you, is like in the companies, even if you're a CEO and if you're building, if every other day you're reminding everybody else of like, where people need to have gone to school and where they should have been. That's a road to nowhere. Let's give Antonio a big round of applause. Very nice. Thank you right now. Thank. You're welcome. Thank you. Thank you very much. I appreciate it. Thank you. Thanks, brother. Thank you. Love you. Talk to you soon. Thanks. Thank you. Next question. Thank you. Guys over here. Yeah. And you know, we kept that. Are you here for like 2 hours? I know I feel bad. He's like, he's like, I've never been on a show before the meeting. He's like. All right, we're going to just take 14 to 20. More questions go sunny lampa here. Jamal's my favorite bestie. Yeah, you go, huh? Cause I've had my little guy little dry spell, huh? Cause of him I shop at Laura Piano only. So thank you. So I just got a question for Friedberg. I know that you wanted to talk about this yesterday about this sort of consumer credit crisis on the horizon that you see as potentially like the next shoe to drop. So I think you wanted to mention something yesterday about it. But because of time and stuff, I mean, I don't have anything more to add than what I said on the pod. I'm not like I don't think this is like. A high certainty. I I'm just concerned. There's a lot of loans out there, a lot of buy now, pay later, a lot of stuff that that has floating rates attached to it. If we're going to have a recession, we're going to see job loss. You're going to see these. And by the way, these auto loan portfolios have like crazy outperformed over the last few years and now that these and a lot of those auto loans are floating rate, those asset values are inflated, people are losing jobs. You could see a bunch of these things start to create a bit of a cascading effect over the next couple of quarters depending on how this all goes. So I'm not, I'm not gonna put my foot down on the ground and say, Oh my God, consumer credit bubble, we're totally ******. It's going to lead to the great next Great Recession. But I do think it's going to be pretty kind of surprising. Buy now, pay later. I saw that if you guys saw this this week on how a lot of the people that are going on buying now pay later sites are actually maxed out on their credit cards. And so they're actually fully credited out. And then all the smart algorithms are like, Oh yeah, you have a good credit risk. Like here's, here's, here's $1800 in my Lightning round. Five questions and we're done. Yeah, one bestie will answer each question. Go cool. David Frieberger my favorite bestie. What problem do you most want to solve right now? Ohh, binary lifters, actually edible quinoa? Actually I've been working on the so look I, I've, I've spoken about this publicly. I think it's a big problem. I was going to talk about it in the talk that we scrapped, but I'll, I'll do it another time, which is really the opportunity for biomanufacturing as a way to replace a lot of traditional food systems including all of AG, all of animal agriculture and a lot of the systems that we use to basically make our food. It's a, it's a big infrastructure play you know a couple square miles you know using Elon's analogy you could basically recreate. All the food on Earth you could distribute those systems. And so I think that it can be extremely carbon negative. It sucks carbon out of the atmosphere. It will create incredible jobs. It's an incredible infrastructure opportunity. It would return billions of acres of land back to kind of, you know, whatever form, natural form we want them to be. So that's an area that I'm spending a lot of time in and that I'm particularly excited about. Awesome. Thank you. OK, #2. Hi there. I'm Katie crafts. For you all, imagine a parallel timeline where I say you're all my favorite because it's all true. So I'm curious. Kind of extension of the media question, have you given much thought to forming a consortium or community with the All in podcast and kind of what further applications of that? Because if you think about the force multiplicity of like any number of these mines in the same room working towards the problems we've talked about from education to ensuring energy, it could probably be pretty considerable the impact there because we have such respect for what you guys do and how you're doing it and the discourse you're having that you know we're clearly all die hards here. So I'm just curious. You thought about it? I'm kind of trying to inception you here. You wanna take that? Yeah, I think so. I mean, this is a **** ton of work, but I think it it is. And we all have day jobs, you know, step one was to try to just see and I told. I told the best. Let's just see if we can each make. Getting to the pot each week, a priority and a habit and and that took the first year or so. So now it is a habit we all value doing this. It has had tremendous impact on our lives personally and professionally. It's been very inspiring for each of us. So we had to lock into that first. Doing this, you know, was a ton of work and we'll see if it's sustainable and we have some other ideas we wanted to do a college tour was the other thing we were considering, which would be like 3000 seats or 4000 seats and just an episode of the Potting Q&A. So I think that. Would be the next card to fall. And then maybe hiring Tim Urban and Nate Silver and then having them build a media company to take on CNN. But yeah, we have really given it much thought. But you never know. They were here totally randomly. They were totally. We're not recruiting or anything, but you know, anything's possible. Hi, besties. Again. I'm rejoice. I run a talent marketplace for early entry workers. We use gamification to accelerate their. Just the question is about the great resignation which we believe is the half told narrative. So how can small businesses which are most sole proprietors democratize their own labor supply and demand? Wow. I think that's a very difficult problem to solve. Think again, if as a supporter of capitalism, I think one of the biggest things that we don't get right is how money gets to the right problems. I've said this roughly before, but like money is really just a voting way of deciding what you think is important in the world. And that's why the accumulation of money as just a practical matter. Forget moral or physical. Philosophical is so important because you can vote what you want. The thing is that aggregation happens easily, distribution is terribly broken, and so the ability for folks to solve practical problems is very hard because the ROI isn't obvious. And getting money from capital pools like us to individuals and sole proprietors is a basic is. I think it is a very broken problem. A. Because the systems don't exist, B because the laws don't allow it. And until that gets solved, I'm not exactly sure how a business who can actually like, build for the future well or solve their supply forecasts or demand forecasts can actually get the capital you need. Because the lubricant that allows you to solve that problem is money has always been, will always be. But getting it to those people is legally hard, and it's organizationally impractical. I don't know if you saw the last part. I mentioned this thing. We tried this thing called capital as a service. It doesn't get to the sole proprietor level, but it gets to like small 5 to 10% companies. We would send fifty $100,000 checks. Here's how hard it is, the cost of getting a $50,000 check. We did this fishery in Indonesia, it cost us 125,000 to give them 50,000. We still did it because I just wanted to prove the point. They ended up tripling our money. So we barely kind of like broke even. But it just goes to show you how really complicated in the system. OK, fourth question and then one more after that. Hey, I'm Prem. As a Waterloo poker player favorite, besties to moth, I'm very into next Gen manufacturing. But as a preceed investor, my concern is follow on financing. How do we get more investors interested in investing in the physical world? Because at least in Canada, it seems like most investors only want to invest in software. No, I think, I think this is what I'm saying. I think there's a very broken part of the. Capitalism right now, which is that technology investors by and large, and I don't mean to disparage anyone here, are not well rooted in the principles of math and finance. And I think that that's a real problem because in a moment like this, that is where you can actually make safe investments of capital, you can structure the money in so that you are capital protected. You have assets to back these things. And the reason why folks don't do it is they don't understand how to put together a model to demonstrate it. And then the person that is then receiving that information is unfortunately not as well instructed as they should be to understand how to make a decision from that. That's what we have today. So it's a, it's a little bit of a MIS education. Problem and it's going to affect. The non sexy areas rockets will always get money but like 3D manufacturing as sale at scale may not because of this exact issue because people don't know what roik means. Sir you have the final question. Favorite best is Friedberg and hate in our recession question. Christ but never asking that question again. Why? Why do you guys why? Let me ask why do you guys think it upsets you so much? Like well because you're the biggest pain in the ***. You are the most ******* neurotic person every time we post an episode. Cancel the episode. We ****** everything up again. Why do we keep screwing up? We're gonna destroy the thread this first. Go ahead. Comments and the the downvote rate. I was on YouTube. Somebody sent the keep going but go ahead. The amount of noise we deal with from this one, we're not gonna stop. It's like literally he doesn't. He should not reward him. It's like his inner model are beating crazy. You know? If you had a 2 year old child who you've given too much candy to is can you can you shut him up, please? This is right. If one guy can shut your mouth up, it's Phil Deutch, everyone. Yeah, yeah. Alright. So it seems like a common theme on this stage these last couple days. You all feel like we're in a recession or heading towards a recession. But I get a feeling that you have the confidence that this is going to be a quick recession like a year. So my question would be why do you feel after 13 years of market manipulation by the Fed that is going to be cured in under a year? No, I think you're right. The average recession is measured like if you look back historically is two quarters. The problem is that we've never really figured out what it's going to take with the distortion of money that never should have been in the system. Because if you think of a supply demand imbalance as being a naturally self balancing phenomenon, if you perturb one side of it by an enormous amount, exactly to your point, I think the open question that the world has right now is, is that really a two quarter problem? Well, the Fed has told you that they're going to take three years to get 3 trillion. You've heard from David. 10 trillion was put in. Probably another three or four trillion was productively used. But that still leaves another three trillion of sloshing around money that we don't know. So I think it's an open question. I don't know what you guys freeberg how many months, how many quarters, sacks, how many quarters? If you had to guess, again, I just hate this definition of recession where it's about GDP decline. When we had a lot of the underlyings in those numbers for GDP that I feel were like artificially inflated for a couple of quarters because of a bunch of the structural stuff we've talked about. So I, I don't know, like if you look deeper at economic growth, companies signing up, more customers sell like a lot of technology companies are about increasing productivity. With their tools, with their what they're selling and those businesses are going to continue to do well and to grow and to increase customers, increase revenue. And I don't think that there is necessarily a lot of the structural stuff that we saw with the GFC. The one thing I am concerned about which I've highlighted is this consumer credit risk and besides that it seems like you know things are you know on good footing. So I don't know like the the, the the technical recession definition probably a couple of quarters. Yeah. I you never know and I I think the best way to to look at the future is by doing scenario planning. So we basically we could say this could be a you know short, medium or long recession. Short would be six months, medium might be 18 months and you know long might be 2 years plus and we just say, I don't know say one third, one third, one third probability and that kind of gives you some picture. Exactly. So now what we're telling our portfolio companies is you want to have 2 1/2 years of runway right now because you gotta go raise six months before you run out of cash and you really want to have two years of cushion because things could be choppy for two years. I'm not saying they're going to be, but they could be. You don't want your company to run out of money and die just because of macroeconomic conditions that are no fault of your own. So if you can try to engineer that amount of runway, that's better. I also think that here's the thing about a quick recession is or the prospect for one, we don't know what other shoes are going to drop. Consumer credit is still a shoe that we don't know if it's going to drop. Look, six months ago, did we think we'd be talking about Tiger Global or SoftBank for that matter, potentially teetering on the verge of being wiped out? Yeah, redemptive, out of coin base in Peloton, just withering. Things can change fast. We don't know what systemic risk is in the system. There hasn't been flushed out yet. And I we won't be out of this until it feels like everything's been flushed out. And then the markets back and things are sort of an upward trajectory again, really. Clearly we're not there. Real estate in crypto doesn't feel like that's rushed out yet either. So do we have a clip to play as an outro? I don't know. Is this A was this the clip of the the cut clip before before we go, can you please say thanks to the. Yeah, we're gonna have that works here. Yeah. And the team, Jason, your team at all in incredible. Thanks to everybody. All of you guys have worked so hard and they really put a lot of effort. So that's pretty incredible. I guess this is a lost clip of us from last week. You do not have like a dungeon Dragon sleepovers and Grade 7 and grade 8. I was actually programming Pascal and we made a water birth sterilizer and it was a binary lifter much like the ones you have a tattoo eat. You have made a complete replica of Uncle Owens Water vaporizers on Tatooine and that that took six years, but it was great and that I went hilariously as C3PO. I wanna see 3PO. To our science fair. You should have seen the look on our teachers faces. OK, you guys have your cold open. Let's go. Let your winners ride. Man David. We open sources to the fans and they've just gone crazy with them.