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.

E49: Coinbase CEO reflects on controversial blog, state of the markets, 1000 unicorns, tax reform & more

E49: Coinbase CEO reflects on controversial blog, state of the markets, 1000 unicorns, tax reform & more

Sat, 02 Oct 2021 02:49

Show Notes:

0:00 Brian Armstrong follows up on his one-year old blog post "Coinbase is a mission focused company"

19:27 Authoritarianism on the left

33:04 Newsom's new vaccine mandate, NBA vaccine coverage, Merck COVID pill

45:51 Golden Age of VC, 1000 unicorns & the impact on private/public markets

57:45 Corporate tax reform, Roth IRAs & the "Peter Thiel Provision"

1:06:36 Chances of a VC bubble, why notable VCs are retiring, building a modern venture firm

1:23:51 All-In summit planning

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Guys, my ******* dog. The gel. Jokers in jail. Joker got in jail again. OK, so he's been jailed in Italy. He was jailed in Palo Alto. When will that dog learn? I've spent quality with that dog. He's out of control. Why did you get jailed? Because he's a runner. He went to. He's a runner. He's a runner. He's a track star. He the the we he we we sent him to like a, you know, like the dog Walker where he goes and runs around and they come pick him up. But then they the guy opened the van door. He took off. Anyways, he gets found. They they're trying to call me because I guess my number is on the thing which I hadn't realized. You don't pick up. Can't reach me. Well, I'm in. I'm in DC in New York and they put them in the kennel and we get this picture. And Nick, you can post the picture, but you know, because I sent it to you. Poor, poor joker and dog jail. He's a great dog the but he is he is he back? Did you guys back? We got him back, but he's back. He's out of jail again. Honestly, he's only going to learn. If he goes to. You should get a little tag for him. Those little remote tracking poll. That's not. I mean it's great, but it doesn't stop him from escaping that dog. There's something wrong with that dog. That's game over, yeah. It was like growing it. Punched in the corner like it's the only dog that doesn't like me. I mean, every other dog, every other dog in the world loves, trained in. No, he's not being trained. He's not been trained. We have to trade him. I mean, I I I get it. He hasn't betrayed, but he's so cute. Did you train that dog to hate white people? No. That dog is a little racist. I'll say it. Let your winners ride. Man David. We open sources to the fans and they've just gone crazy. Queen. Alright everybody, welcome to another episode of all in the podcast that you've been listening to for 48 episodes. Here we are on the precipice of greatness. 49 episodes in with us again today. The Queen of Quinoa, your science ambassador, David Friedberg. Also on the pod. The Rain Man himself, definitely his dad lets him drive in the driveway. David Sacks and. Batting cleanup, the dictator himself to mouth Polly Hypatia. What did we all think of last week's pod with biology? I felt they got cut off too soon. I was getting into a groove with biology and I'm trying to figure out how to pick that up with him because I thought they were getting into some pretty interesting discussion towards the end and we obviously ran out of time. Chamath had to hop off. So it would have been great to keep that conversation going with apology. I really do think there's a big question mark unlike how does the decentralized web or decentralized social networks in particular work with respect to kind of that you know recommendation application layer, which is effectively what search solved on the Internet. And so I'm, I'm, I'm curious to keep the conversation going and seeing you know, what this means. I made the decision to end the pod because Chamath had to go, Sachs had to go. There was a hard stop and I was like, I I don't want to. Keep this going without the other besties. And people were very upset. They thought I shut it down abruptly, but we had a certain amount of time and we could always have them back. So everybody relaxed. But I did look at the stats. We each came in with our, you know, whatever percent pro rata and he had double, so he had 40% and we all had base, which is right for a guest. I think I felt right, didn't feel right. I think it's important to hear what when folks come on, what they have to say. He's a really smart guy and you know, you can kind of just let him go and rift for a while. And then just react to him. So I think it's it's lovely to hear such a deep thinker. Think out loud. Quite honestly, yeah. And even if you don't agree with him, I don't agree with him on a lot of his points about, you know, decentralized everything. I think centralized works for, you know, many things better. I'm curious, sacks, you know, looking back on it, where there are moments that you felt maybe you disagreed with him more or agree with him more and wanted to lean into a conversation. Obviously it's very hard to have five people in a pod and only get a certain amount of airtime, etcetera. Well, look, I think, I think biology is a great guest to have on once in a while. I mean, it does kind of turn the pot a little bit more into a Ted talk. Definitely have that vibe, but the the fans liked it and I mean policy should have his own show. I mean, he can go for a while. And he's got to stay for hours and he has, he has and and I think he should do his own show because there's definitely a huge fan base for it. And and if people want more biology, I interviewed him for about an hour on purple pills, which is kind of the. The I don't know if you were called Solo pod, solo show that I do, where I occasionally interview people on calling download. Call in and go check out purple pills. So yeah, you know, I gave apology, a little pep talk coming in saying, hey, listen, it's a round table discussion and I've interviewed you before and you can kind of tip into the monologuing and explaining very big picture things. So just try to pass the ball a little bit here and and I think he he did adjust his game a little bit, but it's, you know it's hard to have somebody like that on. I think you pointed it out sacks, that it's more like a Ted talk for him. We're having a conversation and he's used to being interviewed and I think that is a that's a transition. But you know. It was fine. Let's move on. Yeah, OK. So I think we'll start off with. Something we talked about on Episode 9, which was Coinbase CEO Brian Armstrong wrote a very controlable block, very, very controversial blog post exactly a year ago. Coinbase is a mission focused company. At the time he was dealing with a never ending debate inside his own company about Black Lives Matter, about social justice and any number of issues. And he said, listen, the company is mission focused. Our mission is to, you know, make people more financially independent, literate. Etcetera. And we're going to ban any discussions on our electronic communications. You can do things on your own time, and it was quite controversial in the time. We had a good discussion. I relistened to our discussion, I relistened to our discussion on that pod, and we all universally felt like it was the right move. Well, he went ahead. And picked up the Hornets nest. He did not have to talk about this ever again. Everybody had forgotten about it and he grabbed the Hornets nest, ran into the end zone and spiked it. Jason, can you well before you do that, can you say? How many people left as a result of his blog post and all? Do you know those stats? Because I think those are those stats Andy. But it was it was it was 5% ended up leaving. There was a big article about it. You got this. This was I I think I think it was worth him doing a follow up post. This was the one year anniversary of his blog post and he was kind of giving us a status update and what he basically said is that the policy had worked so you got. So first of all, should we just review what the policy was? The policy was that they were going to declare the workplace. To be politically neutral, that people would leave their politics to the door. They would not have sort of extraneous political conversations at work. That doesn't mean you couldn't support whatever causes you wanted on your own time, or tweet whatever you want on your own time. But while you're at work, they would declare it to be sort of a political DMZ, like a Demilitarized Zone. Basically all he was doing was reasserting the old center, the old etiquette of, hey, when you go to work you you're not engaged in. Yeah, you're paid to work. You're not there to engage in political activism. So that was the policy and of course the, the, the, the woke mob became completely hysterical about it as it turns. And so then what happened is that Brian offered everyone a very generous severance policy if they didn't want to stick around for the policy. Policy, yes, extremely generous. They made it really sturdy then. Generous, right. They made it really easy for people to check out if they want to check out. Well, only 5% took the policy. 60 people. Yes. And then on the heels of that there was a gigantic New York Times hit piece against the company. The usual. Disinformation and slanders against the company. And then now we have this follow up piece and I think what Brian basically reported is that today Coinbase is a more aligned company because everyone who's there wants to be there for the mission. That's what they focus on when they go to work. He talked about how they had hired top talent away from other companies. I mean basically he put out the BAT signal and people came running because you know we have they wanted neutrality, they did not want it. People are voting with their feet to come there. They're fed up with the politics and distraction and and I think the employees were secretly relieved that he declared this policy. Basically, he took the heat on himself for the larger benefit of all the employees who just wanted to be there and work and not have to wonder whether they're doing something right or wrong because they're on the wrong side of a political issue. Freeberg nailed it when he said in our episode 9, which you go back to Freeburg, you may not remember your comments, but you said, what about the employees who just want to come to work and don't want to engage in political speech? Now you're infringing on them to force them to be participate in these discussions and they don't have a choice because they need to feed their families to go to work. And so freeberg. Going to take a little victory lap there, he says in this tweet storm. I'll just read the third part of it. One of the biggest concerns around our stance was that it would impact our diversity numbers. Since my post we've grown our headcount about 110%, doubled it, while our diversity numbers have remained the same or even improved in some metrics. So all of the hand wringing and Pearl clutching that this would have a negative effect on the company has turned out to be wrong. Go ahead, chamath and then freeberg. I mean, if you want it's like. I think it's important to set the context for what this is, there is a. A productivity war going on inside of institutions around the world. And what's happening is that people's personal beliefs are bumping up against what the mission and goals, operational goals of a company are or a university or all these other places. And so this is probably the first big example. This is what is a fifty $60 billion public company. $50 billion public company that basically said enough is enough. This is our mission. Everybody else basically just needs to shut the **** **. And I think that that's very important. Now, if they then go off and actually crush their goals, that's the one missing piece in all of this. Because when that happens, then you can write a through line through all of this and say, OK, this is in part what allowed them to do it. So I think that the. The the the folks that you know were really up in arms still have one small straw in the fight, which is that if these guys don't achieve their goals, they'll point to this as one of the reasons why. But if, Brian, diversity is strength for, you know, like, yeah, you're suppressing free speech. You know that argument. But I think if Brian then goes and delivers a couple of knockout quarters and a couple of knockout years, then you know what he will be able to say definitively, which no one can refute is we leave our politics at the door, we define our OKR and then we go and we build things that people need as a company and then you go off and you can do whatever you want. And I think that that's very powerful for many companies and institutions. Friedberg, you heard my recap of what you said last, I'm not sure if you remembered I relistened what are your thoughts today? I think it's. It's worth just noting less about the particularities of what was said and the particular issue at hand here. And I would look more to kind of Brian's leadership style as an excellent example of defining and creating strong culture. Culture in an organization can give that organization what it needs to succeed. It puts everyone aligned in a specific way on how we make decisions, how we operate. It doesn't matter what his particular beliefs and opinions or what to exclude. To include in the dialogue of the discourse and the model for discourse within the organization, I think what matters is that he put a line in the sand and he said this is what we're going to do. This is what's in and this is what's out. And organizations that do that and do that effectively generally win. They win more, they do better. The teams are aligned, the teams are are more unified. And I think that definition may sometimes be controversial. And you'll notice that as companies get bigger, go public, they're larger. They bring in professional managers and the founder and CEO steps out. They generally don't do that. Right. They they generally try to not do that definitional work because they're trying to minimize loss and not kind of take the bet on maximizing long term gain and doing the things that they think culturally defined or will enable success long term. So I I think it's a great example of leadership generally on how you kind of can can be very vocal about defining a strong culture. Elon calls it, I think Elon calls it Corpo speak. You grab that happens like meaning most companies when they get bigger they gravitate towards Corpo speak and then what happens is some cohort of employees who are really good. Just feel trapped in this kind of morass of mediocrity. And by the way, look at Elon's, you know, call it attrition rate, right. By the typical large scale public company corporate metric of like, how many people are leaving per year, you'd say, Oh my gosh, something's up with that organization. But it really speaks to a strong culture. There's a company that's famous for this called Bridgewater Associates, you know, run by Ray Dalio $100 billion hedge fund, one of the best performing investment vehicles of all time. And they have incredible culture. I've talked about Ray Dalio's book principles before and some of the work he's done on this. Where he is so adamant about getting culture right within the organization, how you operate, that they almost have I think a 30% attrition rate after the first year of people that come in. Because they not only try and screen for these elements of what they consider to be the right cultural fit for their organization up front, but then they also screen people the heck out of the door if they're not a good fit. And, and I think Elon has a similar sort of model. And you know, I think Brian, the way he speaks about the organization is a similar model and it's about defining the lines. It's about being very crystal clear about what's in and what's not, whatever. As a CEO and a founder, whatever you believe, you need to believe in it strongly and you communicate it clearly and then communicate it and then let people vote. They vote with their feet. They don't get to vote whether to change it, they just get to vote, whether they get to stay or whether they go. And I think that that's a really smart. I think that's well said. I think there's one other issue here, Jake. Jake Allen, this goes back to your point about why did Brian have to bring this back up? Was it unnecessary? Did he spike the harness in the end zone? Here's why I think it was necessary if you go to a .7 and eight. His tweet storm, he says it was the most positive reaction I've gotten from any change I've made in the history of the company, which is saying something. How could something be so negative in the press that turned out to be incredibly, incredibly positive? With every stakeholder, 95% of of employees, privately all the investors are telling him it was a great thing. And then what he says is the only sense I can make of it is there's a huge mismatch right now between people stated and revealed preferences, and we're operating in an environment of virtue signaling and fear of speaking up. So to me, this is the point. Of this tweet storm and bringing up now is without people like Brian standing up and saying what the truth is that, look, everybody wants this. They're just afraid to articulate the principle that we we keep, we keep encouraging this climate of fear. And you know, the alternative to Coinbase, you know, one of the other companies we've talked about is Apple. I mean, you could basically choose to be Coinbase or Apple. What is Apple done? They booted out Antonio Garcia Martinez because of a passage. This book that they knew about. And ever since then the company has been roiled by boycotts and petition writing from the employees about some new calls every couple of weeks. And eventually that'll show up in the operating results of the business. It's just a matter of time, right. And so, so why, why does that go on? I mean, I'm sure most employees at Apple don't want to be, you know, constantly roiled by these, like petition campaigns. But they have to put up with it because everyone so afraid to speak up. And that's why it's important that what Brian did. We have to basically recognize that this woke. Mob who's cowed everyone to silence is maybe 5% of these companies. And if everybody just acts like Brian, the problem will be over. Well, we know, we know what the trail of bread crumbs is right now, and I think we should probably, you know, shine a light on it, which is that that 5% is exactly the same as Donald Trump. They just exist on the left, you know, and there's a, there's more and more research that shows that just as much as we thought they were. Right, authoritarians. They're also left authoritarians. And this is what we're seeing, that that the craziness that, you know, everybody decries on the right actually also exists on the left. And they just put a button on that before we we pivot to the next story. Armstrong was very clear that the mission is about global wealth inequality. So staying focused on that, in his mind is the the high order bit and will result in the most great change. So paradoxically or ironically, you know, all these woke people attacking Coinbase. Coinbase might do more for wealth inequality and justice in the world if they stay focused. Then if they try to tackle everything and you know, this is a road to nowhere for Apple. I think, sacks, you pointed this out about how if you were running Apple, you would fire anybody who does the petition. Because I'll tell you where Apple is about to to to basically land. By enabling all of this woke mob inside their own company, by coddling them, addressing them, and not keeping them focused, they will eventually get. 2. The fact that China is, you know, has 3,000,000 Uighurs in a concentration camp and those Uighurs are. Proven to be providing through slave labor, equipment, and components to companies that eventually make their way to Apple products. Ergo, Apple supports slavery and that's what the employees will eventually get to and that will cause chaos. But there's something even closer, more closer to home, that that's probably true or could be true. I don't know it is true, but you know the fact that Apple had the the most important security leak in their entire software career. Just a few months ago. Is also quite important. Like you had a because why is it important? So you had a 0. So the IIS 14.8 exists because of. Why? Because a researcher or a set of researchers in Toronto discovered that there was a zero click exploit. In iOS, that allowed you to basically turn on the microphone, turn on the camera, you know, grab anything you needed from iPhones. It was the most secure device until two months ago when it turned out it was actually the most insecure device. So you're trying to think. I tend to think those kinds of technical mistakes happen when people take their eye off the ball, and I think people take their eye off the ball because they're demoralized with dealing with distractions sacks. Yeah. I mean I think it's the, whether it's the Uighurs or the security issue, it's a good example of the employees at Apple see the spec in somebody else's eye, but not the log in their own. I mean that's that's the the principle and and they would be much better off focusing on dealing with their own internal issues. But but let's go, can we go back to that article that Jamath referenced about the authoritarianism. Anything. You got anything else on this issue? Do you want to. I thought, this is a really great article. Do you want to explain to Jacob? Yeah, I'll just give you a quick overview and then you can just dive right in. Since you put it on the docket psychiatrist and author Sally Satel. Hopefully I'm pronouncing that correct, wrote an article for the Atlantic entitled the Experts somehow overlooked authoritarians on the left. The main point here is that Trump's presidency sparked a ton of research and coverage of authoritarianism on the right, but mostly ignored the left, with some researchers even suggesting that the left wing that wet left wing authoritarianism isn't real. In an e-mail to Sitel, a social psychologist from Rutger said the following. For 70 years the law, the law in the social sciences has been that authoritarianism has been found exclusively on the political right. Why is that? One reason left wing authoritarian authoritarianism barely showed up in social psychology research is that most academic experts in the field are based that institutions for prevailing attitudes are far to the left of society as a whole. Sex well, actually put this on the docket. So do you want to introduce what you liked about it? The reason I saw this and I thought it was so interesting was basically yet an entire body of research trying to understand why some folks are attracted to these authoritarian figures like Trump. And overwhelmingly all the research at the time said they only exist on the right and you know you. And all of this started. After Hitler. And so there was all this research around the, you know, social and attitudinal reactions to Hitler and how he came to power, and then all of the iterations of folks like him on the right afterwards. And so people put Trump in that category, and then they said it can only exist there. But as it turns out, when this person did this research and she surveyed 7000 people, and all of this data was very well summarized in this Atlantic article, which I'm sure we can post in the show notes that folks should read, lo and behold, that actually exists on both sides. So as it turns out, the extreme right and the extreme left are exactly the same. Their moral absolutists, they believe in themselves and themselves only. And they believe anybody else that outside of where they are is fundamentally in the wrong. And if you actually look at that and see how Trump behaved in his presidency and now how you see how the left's names and shames, you factually find a lot of commonality. So the the reason I found that article interesting is that it actually says again what we've been saying, which is? Coming down the middle and finding, you know, reasonable compromise is the only way forward because the minute you start moving in either direction you are the same and that person is an ugly person that we don't want her out. Let me give the money quote and then get your feedback freeberg the similarities in the study included quote similarities between authoritarianism on both sides, left and right. Preference for social uniformity? Check. Prejudice toward different different others, willingness to wheel, group authority to coerce behavior. Cognitive rigidity, aggression, and punitiveness toward perceived enemies outsize concern for hierarchy. And, as Chamath pointed out, moral absolutism freeberg I think authoritarian figures resolve when. A population feels insecure. So, I mean, we talked about this last pod, but I do think that, you know, the notion of freedom emerges after the comfort of security has been provided. And I think the absence of security drives people away from the drive towards freedom. Like when you have a feeling of insecurity with respect to kind of your ability to get a job. I mean, remember Hitler rose to power when unemployment? You know, post Weimar Republic was skyrocketing. People, you know, couldn't get jobs. They couldn't afford food. And the authoritarian figure was going to provide the security needed, I think, to resolve the concerns that the population had. And then, you know, people latch on to that. So, you know, there are moments in time when I think authoritarianism can emerge with different forms of resolution. It doesn't necessarily mean that the authoritarian actor needs to take a a left or a right point of view. They're just going to give you a path to security when you're feeling insecure. If you don't feel insecure, you're going to say that's ridiculous. So countries that are wealthy, countries that are. Privileged with the opportunities that maybe the United States has are less likely and less inclined to fall in, in, you know, in favor of authoritarian. Leaders and then as we slip backwards economically, unemployment wise, etcetera, we're more likely to be to be in favor of of of those sorts of actors. And so I think that you know, we'll see them emerge. Don't. But don't you think it's crazy that we actually didn't think it could exist in one end of the political spectrum and now it does. You have a point in that or no, I never really understood the whole like Hitler's purely a right wing guy. I like he was a, you know, a socialist and he was trying to enable like you know, socialized services and socialized systems for people. You know, in in a lot of political circles that would be argued as being a very kind of left point of view. And so I don't know if it. Yeah, I let's go beyond, let's go beyond Hitler. You're right. The the Nazi Party was a National Socialist Party. That's what. That's what the name of the party was. But there's also Stalin, Pol Pot, Mao. I mean, if you're paying attention to history, you know that there's been authoritarianism on the left, not just the the right and so but, you know, in the universities and in the media, they only want to focus on the right. Version of it. And I think what this study does is it upends 70 years of dogma that that, you know, authoritarian authoritarianism is only to be found on the political right. I mean, it's obviously can be found on the political left as well. And you can see that in cancel culture, in speech restrictions, in these very aggressive COVID mandates that are now happening. You can see it in the the sort of the, the, the ghoulishness anytime somebody in the right, you know, dies from COVID. I mean, there's, there's always some chortling on the part of the left about this, the harsh penalties for noncompliance. I mean, right now rigidity is the one that stands out for me. Like there is just on the left. They make a decision. Amazon is bad and they cannot move off of that. Right, David? Like, well, what about what about willingness to wheel group authority to coerce behavior? What about aggression and punitiveness towards perceived enhance culture that would be contacted me is yes, it begs a good question, which is what? Socialist? Regimes have come to power without an authoritarian figure. Has there just none. They're all revolutionaries, right? Actually the the study has a really good point about this, which is they they say that the researchers describe what they called anti hierarchical aggression. So one of the traits of authoritarianism is is they call it an outsized concern for hierarchy. But, you know, leftists think that they don't believe in hierarchy, but actually they do. They believe in an anti hierarchical hierarchy, which is they want to turn upside down the social hierarchy and they're willing to justify. The the, the ends justify the means. In other words, if you can turn the hierarchy upside down, they'll let you do anything. And it's actually pretty scary. That's where this sort of the revolution comes from. Here's a practical thing, jakel, about what you said, which illustrates this point even further. Right now, we have a 3 1/2 trillion dollar bill kind of meandering through Congress. And, you know, it's very much a question mark about whether it gets passed or not. And one of the elements that's in there is free Community College. Now when it passes, if it passes, there's a lot of support that that's something that the government should do. It's a good thing. But if you're a private company like Amazon who just announced that they will give you free college, they're still a bad company. And, and this is the example of this intellectual rigidity that doesn't actually see the forest from the trees. What do you really want? Do you want the process where you control and you meter out progress or do you actually want the outcome where somebody can get a job where they make 15 or $20.00 an hour and also now get college paid for? Yes, I personally want the latter. Yeah, we much better if the government didn't have to provide. I'd love, I'd love it if the government could pay for it, but I'm really glad that Amazon is in a position to pay for it as well. But if you start to become absolutist, then say, well no. If this needs to be top down and metered out this way, and any private organization that wants to try to do it is still bad, I think that's where that rigidity holds us all back. It's unnecessary. Here's where I see the rigidity moth is they keep saying gig workers are bad, nobody should be allowed to be a gig worker. And David had a great interview with the ride sharing guy on call in and in which they talked about the fact. And this is somebody who is super pro advocate of drivers, said, listen, 80% of people do not want to do shift work. They do not want the government dictating how they work. And I talked anecdotally with an Uber driver said he's making like 70 bucks an hour. During peak hours they were fighting to get minimum wage for drivers. Now drivers are making 20-30 forty $50.00 an hour. Uber rides have gone and Lyft rides have gone. Missing is a massive competition. Free market works. Well, and and they can't take the win. They they still are so rigid on the left that they're demanding whatever that woman's name is. Who is, you know, in the pocket of the Lorena Gonzalez. Lorena Gonzalez in the pocket of the the unions. How cynical are they? The victory is upon them. People are getting paid five times more, three times more than minimum wage, and they still want to screw them. The take away for a lot of people should be that your Spidey senses should go up when folks present solutions as a choice of one source. Only you know when things when things can only happen in one way, and it's the way that I feel the most comfortable. Your Spidey sense should go up and you should think to yourself. Really that? Is that really the only way? Like can't we have choice? Can't we have different ways of solving this? Can't we could run an experiment and see what happens. Go ahead. Sex. Well, I think your spices should also go up whenever somebody is basically saying that speech needs to be censored for some higher purpose. You know, that that that whatever people are trying to abridge and take away our rights and our sort of long held values, our freedoms, you have to start getting concerned. And there's always a reason why they want to do it. In this study, the quote that the the left wing authoritarians agreed with was getting rid of inequality is more important than protecting the so-called right to free speech. So there's always some higher reason the means always justify the the ends always justify the means. But but that's that's what you have to look out for is when they're taking away your right to speech to another fun proof point. Fun because it's Dave Chappelle that you can listen to or watch to see a flavor of this left wing authoritarianism is called redemption song. Which is a little clip he put out recently, and the entire clip is more about him getting his body of work back from Comedy Central. But the part in the beginning talks about folks on the left that really tried to dunk on him when he got COVID. And, uh, you should just listen to his reaction and how he frames it because I think it's pretty powerful. And it again, it explains that extremism on both sides, they actually end up looking the same. Yeah, aggression and punitiveness towards perceived enemies. And I think that applies to anyone who. Yeah, anyone who defies the, the, the, whatever. The conventional wisdom is on COVID. There's another another example in the study of that that the people who the left wing authoritarians agreed with the statement. I cannot imagine myself becoming friends with a political conservative. So, you know, you've got these social groups that are completely uniform. And by the way, there's been like studies for a long time showing that liberals are twice as likely as conservatives to be upset if their son or daughter were to marry someone of the opposite party. So this has been a this has been turned up in polls for a while, but. This, and you've seen it on universities and college campuses, right? But there's this idea that, you know, anybody of the other political side is just suspect. You know, morally suspect needs to be shunned, needs to be expelled. Like those are the people you have to be concerned about. Yeah. You can't be friends. I can't be friends with you, sacks, because you voted for Trump. It's just ridiculous. People have this. No, but it's, I think it's the derangement. To to give the other side of this, I think Trump was so extreme and so trolling and so great. I mean, if you think about his superpower, it was to troll the left and put them into such a deranged mindset that they did actually become that which they hated most, right. But he he did. He did troll the left. But, but here's, but here's The thing is that we only hear in the media about the authoritarianism of the Trump administration. How many times were they screaming? Fascism during the Trump years and and now today and and of course you know, if you go to MSNBC, it's it's January 6, all day, all the time. That's all they want to talk about. But you there's a total blind spot with respect to the authoritarian tendencies of the left, which we see right now in COVID policy. I mean it is getting so extreme right now and I mean freeberg, you posted a, the breaking news that just announced via press press conference, Gavin Newsom is now implementing mandated COVID vaccines for all public K through 12. Schools in California starting this fall. Wait these students. Yeah, all, all eligible kids in All in all public schools, public schools. In order to go to school in California, you have to have a vaccine, kindergarten, kindergarten. Well, I mean, they're not eligible yet if it's when they're eligible. Going to be eligible very soon. I mean look, I, I so. So we have a 13 year old, an 11 year old and a 5 year old. The 13 year old got vaccinated. She wanted to, we supported at the 11 year old wasn't eligible. She didn't get a vaccine. She got COVID. For me it was a mild case and our five year old isn't eligible for the vaccine. He never got COVID. Now if, if and when a new vaccine comes out that our five year olds eligible, I don't think he needs it. I mean I'm not anti VAX. I mean I'm glad I got the vaccine. I'm glad you know he going to school by 13 year old. Yeah. He goes, just the question is, do you, if it is safe, do you want them going to school, catching it, spreading it? And do you want them to not have to wear a mask because you say conclusively, what safer, A5 or 6 year old? At this point, it's a little hard. Their bodies are developing and yeah, you need some time. Do we really need to mandate this? I mean, why, why can't parents make up their own decision because of other people in society who would be impacted is, I mean you. You also see this. You know, look, I, I think, I think vaccines maybe are a complicated debate because vaccines do actually provide protection. Let's talk about these mass mandates, which I support at the beginning of the pandemic, because it's all we had to fight it. But you take an example like San Francisco still has these stringent mask mandates. The Mayor London breed was caught out at dancing, singing and screaming. But in fairness to her, it was Tony, Tony, Tony. And yeah, I mean, that's when she stopped her defense. She was like, she was basically like, it's Tony, Tony, Tony. Guys, what do you want me to do? I'll risk the COVID, which is proud. I had to give her that one. I had to give you one risk if you want to play poker. Or see your favorite artist. I mean, I mean what do you wanna do? What do you want her to do? You think about, let let let me ask this question. What she said when she got caught was actually correct, which is we should be out supporting restaurants, we should be out supporting nightlife, adults should be able to make their own decision about the risks are willing to take. The problem is she's not willing to give the rest of us that choice and we can all make our own choice. And by the way, look the idea that the covid's not going to get you. Well, you know, once you take off your mask, when you get to the table, you know we've talked about this, right? Yeah. You you wear the mask in the mater D stands to the table, then you take it off to eat and drink and the COVID somehow not going to get in. Saying she was like, I listen, I they were like, you weren't eating, we have you on video, you weren't drinking. She's like, it's unrealistic for an adult to put the mask on and off in between sips and bites. And I was on a flight and I was flying coach as opposed to a business class recently. And when I was in business class, I was eating and drinking. There was no entire foreign language so far you're speaking. What are you saying? Next to me anyway, most people pay for a plane ticket and then they get on an aeroplane. So but the the interesting thing was when I was in business class I was eating my meal, I was drinking, no issues. I had the mask off for whatever 20 minutes I was eating and drinking. When I was in coach, same situation. The flight attendant was going up and down the aisle and while people were eating and drinking, if they have the mask on she was kind of being like a a whole monitor saying please put your mask on in between bites. And I was like, OK yeah. And when we supported this mask mandate way at the beginning of the vaccine, we all thought the government is going to distribute N 99 or at least 95 high quality 3M masks, right. You never got those. You never got that. People think it's. I know. And people, people are like walking around wearing these cloth mat, these loose fitting cloth masks. It's ridiculous. It's the the COVID goes, you know, through the bottom, over the top, through the site. Go right through it. I mean, like, it doesn't do anything. And there's a Lone Ranger. Yeah. How's that work? And I look, if you wear a high quality like, you know, PPE type mask, I think it might be helpful. But, you know, it's a marginal benefit once we have vaccines. Oh, by the way, just as we end this, what do we think of? Andrew Wiggins, well, you can't comment on this, maybe because you're an owner on the team, but. A number of NBA players, high profile ones in fact in New York and California where you're not allowed in the arena if you're not vaccinated, are now deciding to sit out their home games. So Kyrie Irving being the highest profile one, is refusing to get the vaccine and he will be getting paid. He's got a $200 million contract Max player, I think he gets 4050 million a year. He's going to give up half of his salary to not 20 million a year to not get the vaccine at least. And leave his team to not play with them in home games. What are our thoughts on mandating NBA players who are playing inside an arena to be vaccinated? DC Draymond's interview I did. What did what did they have to say about this? He said. He's so ******* strong, isn't he? Yeah, he was like, this is ridiculous that we don't like respect each other. It's like we've made this so political and it's all like antagonistic as opposed to recognizing that there are differences and people have differences of opinion and respecting them and embracing each other for those differences rather than. Like attacking each other and finding fault in each other and forcing them and it's a great point, but. I don't know. I mean, I don't think that this point is any different than the point about, you know, mandating a vaccine for anything, any workplace, any school. I mean, if you're going to mandate, if you're going to mandate vaccines for workplaces and mandate vaccines for schools, you know, the NBA is going to, you know, not be kind of excluded here. It's what it is. It just happens to be a bigger paycheck and a higher profile stage. I think as a matter of policy, the the right policy here is to let private employers decide whether they're going to require vaccination or not. I think, I think private organizations have the right to do that. If, you know, if a restaurant tour wants to say that we are going to be in all VAX restaurant, you wanna, you know, they're only going to take clientele who are VAX. That should be their right to do it. If another restaurant says we don't care, people can go to that restaurant if they want. You know, I think that the free market can sort of sort this out. I don't know that we need the government imposing it. If the NBA decides this is what they want to do, they can. It has decided. What do you think of that decision? Well, I mean what I wonder about is how necessary it is. I mean given the fact that, you know, all the players are young and healthy. And if they want the vaccine, they can get the vaccine. Look, I'm really glad I got it, you know, I think it. But but I just, you know, if it given that everybody is vaccinated now who wants it? I just you know what is the point of forcing that last 10% of holdouts to do something they don't want to do. I mean this is where I think the authoritarian, I would resist the authoritarian impulse freeberg is there a new pill that's coming out? I saw a story today about this. I don't know if I want to cover that or go to unicorns first. Merck published some results on this basically. Antiviral pill it it effectively inhibits RNA replication in viruses and it's kind of it was designed to be kind of broadly applicable. It was, you know, discovered at Emory University years ago and they were testing it for influenza and then even pre pre COVID they were testing it on other kind of coronaviruses, SARS and MERS. And so the the the data that they just published shows that there is a 50% reduction in hospitalizations. 50% in hospitalizations, water for people that are that test positive for SARS Co V2 infection and then they start the pill within some number of hours. You take a few of these pills, I think they said five days, right? Yeah. Within five, I think they, well, they did the test on like it was effectively, yeah, four or five days. That's right. And you end up reducing the number, the percentage of people that end up in the hospital by 50%. Now, you know, so the idea is that for countries that don't have access to vaccines, you could very cheaply make this chemistry. It's a cheap molecule that you could theoretically produce at scale and you could ship it all over the world. And countries that don't have, you know, broad scale vaccination programs, they can make these pills available quickly and cheaply. And then, you know, people get infected with SARS Co V2. They just pick up this pill, you know, put it in every pharmacy. Go grab a couple. And then the hospitalization rate goes down. We don't yet know if it reduces the transmission rate. So there's a lot of question Marks and like, does this actually solve the problem of the pandemic? It's certainly another instrument to blunt the, you know, the impact, pronounce the name of it. It's mold. All new pair the government and by the way there wasn't a lot of people in the study no one that took the pill died. People that didn't take the pill did die in the in the infection in the infected population because they split them, right. They gave some people a placebo and some people the pill. The people that had the placebo, they were deaths. No one in the group that had the pill, the actual pill died. And so you know so so theoretically we don't yet have enough data to know but there's also a big question on the side effects typically these anti. Viral, the RNA kind of blocking drugs have other side effects. They're usually pretty mild, but, you know, so, so there'll be a little bit more studying, but generally people view this as a super big positive. It's another instrument I'm going to make. I'm going to make a prediction. Here we go. I think that the combination of vaccines and what is equivalently Tamiflu for COVID, which is effectively what this is, is the one two punch we need so that this basically is rendered. You're missing, you're missing a key piece there, the testing. You must have testing to know that you have to take this. But I I think that that's a I think like the testing is, it's not efficient, but the solutions exist. My point is, if you have a combination of all these things, this is like a flu, which means that there'll be. Less ability for folks to not show up to work, which means that most of the economy will get back going. And I think then we can get back to really addressing what did all that 10 or $12 trillion. How does it show up in the economy? That's where the inflation comes from. That's where all this other stuff. So I'm, I'm pretty excited by what I read today. But now my mindset is going to 18 months from now, midterm inflation, I think that's going to be what it's all about. We ordered 1.7 million courses of this, I'll call it's a. We just call it basically this is the equivalent of a Z pack so-called as the MPAC. If this hits and I've taken probably 1.7 million Z packs, a million, that's just on the way back from Vegas. Hey Umm, so I mean this feels like the end game and they are going for emergency use, so let's keep our fingers crossed. This would mean the stock markets going to rip your mouth. No, I think the stock market is in a little bit of precarious position because if you have to, if you have to reposition yourself. For inflation, there's a lot of tech stocks that will get just absolutely obliterated. Like. Well, when when you when you when you have inflation, so the the order of operations. Inflation means prices go up. The The government sees prices going up and they say, how do we control that? They raise interest rates so that the cost of borrowing goes up so that then less money is being spent, right, so that we become a little bit more restrained when you do that. Then all of a sudden, people have to think about how much money you're going to make in the future, because if you're not investing as much in the future, you won't make as much in the future. And when you discount all those dollars back, there's less of them. And so all of a sudden you start to think about, Oh my gosh, well I want dollars today not dollars ten years from now. That really puts a lot of pressure on tech stocks because we trade on multi year valuations in the future. So inflation is very bad for technology stocks. Inflation tends to be good for companies that make money today. Why? Because if I get a dollar today I can put it in this in the you know bond markets or I put it into a savings account and I can get more interest than I would have otherwise. And then separately, you also want to own things that are physical and real because those have more value. So all of that has to then get worked out into the economy and we have to make a bunch of economic decisions. So we so now the solution for that in all of those cases though is still if you're a hyper growth company, you'll be OK. So if you're growing more than 5060% a year, you're fine. But if you're growing 20 or 30% in, you're kind of a middling business and rates are going up and inflation is going up. You're in a very, very, very precarious spot and sacks, what do you think? OK. Well, I think there was, there was a great article in the Wall Street Journal over the past week called University Endowment Mint billions in the Golden era. Venture capital is basically talking about, I mean these, these university endowments are are like gaining 50% year over year. There's been like nothing like it before. There's so many unicorns being created. There's and there's a separate article and I think pitch book as well about the rate of Unicorn or crunch base. Yeah that the rate of Unicorn creation. I think last year it was like 1 every few days. Now it's it's more than one a day. Bonkers. And so, you know, we're getting multiple unicorns now, created every day this year. It's just this golden era VC, this engine of wealth and prosperity, creation. So that's a good news. And, and to connect this to a point we were talking about earlier, if the the radicals on the left would just allow the Golden goose to keep laying golden eggs, we're going to have enough wealth and prosperity to pay for all these progressive programs in the long run. But they're not willing to wait. And so you have in Washington. For example, I think a political program that really could upset the apple cart. I mean, you're talking about a 3 1/2 trillion dollar reconciliation bill. It'll probably get brought down to somewhere between one and a half and two. Then you got a $1.2 trillion infrastructure bill. They've already spent 1.9 trillion on a COVID relief bill. This is after the six trillion. What would last year would you advise should be the amount spent? Well, OK, good question. So last year the federal government generated record. Tax receipts, the most revenue it's ever raised, and it was about 19 1/2% of GDP. When Bill Clinton left office, he Bross boasted about the fact that government spending was only 18 1/2% of GDP. Last year it was about 30% of GDP. My theory on this is that if you have government spending as a, you know, share of the economy at around 20% from a tax and spending standpoint, things basically work. OK, but as you try to go up to 25 and 30%, it starts to break. You have too much deficits and debt, too much money printing, too much taxation, too much inflation. You become more brittle and you start to you basically are, you know, unhealthy. You're killing the golden goose. And so, you know, all we have to do is let the economy keep ripping. 20% of it is going to is going to be government share. And you'll be able to fund more and more progressive programs over time as society gets richer. And by the way, this this prosperity that's being created in the tech ecosystem, it's available to everybody who has a good idea. I mean, this is not so, so, as we all know. So it's not just government that's creating advancement and economic opportunity for disadvantaged people. The tech economy is creating it as well. And what I worry about is, is why are we taking so much risk in upending this whole system that is working quite well? Well, the other thing is, this is all in the face of there being 11 million open jobs. There's 1.4 jobs for everybody who's unemployed. So the idea that in some way society is broken and people can't be employed now, these might not be the greatest job. There's only four million. There's only four million people looking for work. There's 11 million outstanding jobs. Yeah, I mean, it is bonkers. Freedberg, do you think this is sustainable? What are your thoughts on spending and turning over the apple cart as sex is saying? The longer you guys have me on this podcast, the more likely it is you guys are going to unmask me. As a diehard libertarian, I will not let my tendencies, you know, come out in full force. The spending is ridiculous and there's a lot of waste, so, I mean, I'll just leave it at that. What I think is interesting though, is this Unicorn creation system, this Unicorn creation machine. You know it's worth highlighting because I think that that crunch based article showed that these. Unicorns and aggregate were worth like, what, 1 1/2 trillion dollars or something? And so those are all private companies. $3.4 trillion. Three trillion. So is that the amount of both bills? 3.4 trillion is the total market cap of all the private unicorns, not just in the US, but at the world. And right now in Washington, they're talking about 3 1/2 trillion dollar reconciliation bill, same size. Can you imagine government spending basically the entire value of the tech ecosystem in one year? It's bonkers. Right. And so this, but by the way, I mean like I think that that 3.5 trillion, you can kind of think about that as being the future economy of the future global economy, right. So the entire, I just pulled up the latest quarterly stat, but the entire market cap of public U.S. companies today stands at $47 trillion. The top 500 are about $38 trillion. So you know these private companies that are kind of the emerging tech companies are, you know, call it 10% or you know 8%. Of today, all public today, of all public companies today. And you know, it used to be the technology company started in Silicon Valley, sole technology to traditional industries. What's happening in Silicon Valley today and over the last ten years or so is that technology, quote UN quote companies are becoming the next industrial companies. They are replacing the traditional insurance. And so this is like what we saw, you know, Airbnb is a hotel chain without hotels. Uber is. You know, a transportation company without vehicles. DoorDash. DoorDash. But but even more importantly there's an entire emergent class of life sciences companies of of novel hardware companies. And these businesses are leveraging their core technology competence to create an advantage in replacing an old model of doing industry. They're not selling it to the old school council. I think that the, you know and and people are freaking out about you know some of these big investors like Tiger Global coming in and writing crazy checks if you take an index of the 3 1/2. Trillion dollars today and said, you know what? These guys today are going to be worth more than the $46 trillion market cap of all the other public companies. That said today, in the next 20 or 30 years that's a pretty good way to kind of place your money over a 30 year horizon. I'm going to go ahead and put as much money as I can into the index of the private companies and expect that they're going to be worth more than 46 trillion in 30 years. I'm going to make a 10 bagger. That's a retirement fund for my family and so it makes a ton of sense. I think that these, you know, these unicorns. Given the advantages that are involved, you know, kind of evolving from software and life sciences and so on, do you end up kind of playing out? It's gonna be ugly and that what will, what will happen is you'll end up seeing the asymmetry. You'll see the like, Oh my gosh, there's something that's 1000 X, you know, 100X return. It'll become $100 billion public company or $2 billion public company. And there'll be a bunch of them. They're going to die. And people are going to focus on the depths and say this was overhyped. The bubble is over. But the reality is the index of companies today, I would be willing to bet 20 to 30 years from now is worth more than the $46 million of all the public companies. So chamath one of the things we're seeing here, and you're playing a small part in it or a large part depending on who you talk to. We now have over 6000 publicly traded companies on US exchange. We have less than 4000. We have about 3800. OK, uh, no. We had 3600 and 2016 according to the research I have here, according to MarketWatch 6000. Public trading companies in US exchanges. So what's the number counting the pink sheets and over the counter stock, which is we're seeing dramatically more publicly traded companies? Many speculative ones or ones where you're getting to buy in and you're 4-5 or six, obviously you're part of that with, you know, all the different ioas through. What are you up to now? What's the. Yeah, we have six tech specs. We have 4 biotech specs. You know, I mean I've started our invested in a bunch of others that have gone public. So let's look at this through the lens of the the public markets as well. My macro view is exactly what Friedberg said. We are much better off with as many technology companies being birthed. And being viable because over the long arc of time, those companies will rebuild things that are today inefficient and broken in a better way, and the world becomes better. The question is, for a lot of people, well, what if the wealth isn't better because it's only, you know, a fraction of the number of people with a very specific skill set that bend the other people don't have? That, I think, is a valid argument, but then there's a different way to attack this problem, which is you could actually do something really meaningful. Around corporate interest rates and corporate tax policy that would then get it right. So like even if those. Those thousand companies, if you assume that that $3.4 trillion.10 X's, that's 34 trillion of eventual market cap, right? That's going to be supported by trillions of dollars of earnings. But maybe those things only have a million or two million employees, but there's 8 billion eight. You know, odd people in the world. Well, the way you get the money into the government's coffers so that they can reallocate it to everybody that doesn't work at those thousand companies is through sensible tax policy that goes after the companies, because those companies will still do the job. But it's not like you're gonna choose to not work at a, you know, world beating startup in a mission that you care about because of the corporate tax rate. Nobody's going to do that, right? So I think this is where, like if you, if you, if you actually take a step back and think of the bigger picture, the answer is right in front of us. We just choose not to listen. This is why, you know, again, what Trump did was kind of stupid. You know, he focused on corporate tax policy. Cutting it unnecessarily. And now what we're doing is we're fighting over tax policy and part of the reason why this bill isn't going to get passed is because of corporate tax policy and trying to raise it again. But really, what we should do is actually raise it, leave personal rates roughly where they are, you know? Elon even said when, when asked by Kara Swisher this week, he's like, I pay 53% taxes. What about you? Going to 57 and you know, 535761, who cares? Sure, whatever I'm saying he has to. The point he made was listen the Pro Publica article was. Really disingenuous. They said he got a tax refund and they didn't. They never explained. Well, that's because he overpaid his taxes massively the year before. So they're selectively pulling information. And the fact is he said I will be the first money into SpaceX and Tesla, I'll be the last money out. That is something we want more founders to do, which is never sell their shares and be have more skin in the game. Sorry, I I I'm sorry. I disagree with that. I think that that's a that's a bunch of ******* malarkey. If you choose to not sell, so be it. OK, but look at the good that Bill Gates has done by selling down Microsoft. So I mean, you shouldn't exist. The Bill Gates Foundation shouldn't exist. No, no, no. The reproductive it had to be paid some. He did that when he hits his 60 years old, I'm sure. When or you know other. No. He started to do it when he was 40 years old. Jason and are you on, are you on? Sold PayPal and he was able to use that money to, to reinvest in Tesla. And I do think it's putting all the money back into two companies that are solving 2 major issues for humanity. He he wouldn't have been able to do that if he hadn't sold in the first month. We might might. My point is let's not. Inflate the problem. If you generate wealth. I think that you should be bound, morally bound by society, to put the money back to work. He chooses to put the money back to work by reinvesting so aggressively into the things that he's doing. That's laudable. Yeah, I think that's virtuous. Yeah, I agree. But it's not the only way Bill Gates took a different path, which is to basically take all those profits, sell it down, to then be able to go and put it into the Gates Foundation. People will take multiple paths. The point that's the same among all these people is there's a moral obligation they feel to do the right thing. The future when we're in agreement. So let's just celebrate that, not some tactical thing about buying and selling suit. One other point. I'd make them up like you. You said that, you know, we should tax the the the wealth creation and distribute it. There's another way to get that redistribution of wealth, which is to enable access to the investments earlier by public pension funds, by the endowments, by the places where people, by the retirement funds, where, you know, a broader swath of the population, you know, have savings sitting. Change the accreditation we've we've historically kind of forced the narrative that everyone in the United States needs to have a home and have 8090% of their wealth tied up in a piece of real estate and then we end up with these massive kind of inflationary bubbles to keep that value, that book value kind of growing for them. The reality is if that money was put more productively into building businesses via retirement funds that had access to venture capital, the public pension funds already do, but they should, they probably under allocate the venture capital today relative to where they're putting. We talked about the endowments we're looking at, look at that. Turned away. By the way, if that was the model, you wouldn't need to tax right you you could either way. What one of the brilliant provisions in this reconciliation bill is, they're actually disallowing retirement funds to invest in alternative assets, including startups and and venture capital funds. That is so wrong. So wrong. That's in there taking pension funds and saying you can't. They have access to them. You as an individual through a 401K or IRA cannot invest in alternative assets, right? Yes, partly. In response to that, well, they should just make it a cap, don't you think they should cap Peter Thiel's? Why? Why cap anything? Who's who's because it was against the spirit of it. The spirit of the Roth was let's let's discuss this specific issue. I'll see you after you, sax. Peter Thiel put his Facebook stock in his Roth and yeah, you're supposed to get that tax free so you can have a great retirement. He did that as an end run around paying taxes on the Facebook investment that became worth billions of dollars, reportedly. So now they're saying you can have a Roth, but anything above 50 billion you got to pay tax on because the goal here isn't for you. You use it as a shelter against some massive venture gains. Sacks I I don't have a huge problem with them putting a cap on the benefit of these accounts. However, my my issue with what's in the bill, there's a couple of issues. One is, like we said, they're disallowing investments and alternatives, which I just think is bad for savers. Why would you want to do that? Second is the treatment of what happens when you exceed the CAP. And right now what they're saying is you have to distribute out all of those funds and then subject. Subject them to immediate taxation at ordinary income rates, which is confiscatory because you could have made the investment outside the retirement account and paid locked long long term cap gains rate if you do go over shipping. Yeah. Long term tax, of course, yeah. And and furthermore, it's even worse than that because what they're saying is, let's say that you do have an alternative, like an investment in a startup or a venture fund. You have to distribute it out and pay tax on that, even though that investment is not liquid, right? So you should be able to take it out and just be treated. Normal cap gains and not have to liquidate it, do you think? Well, what what it's going to do is, is it's going to get, it's going to give people an incentive, it's going to warp the incentives for saving because what it's going to say to people is you want to do well, but not too well, right. Because if you hit the cap, you're now subject to a confiscation, you get penalized. Yes, it should be, should be neutral. Yeah, exactly. I think it should work is you have a CAP at any distribution above that, you basically that becomes the basis for future taxation. Summarize more simply, I think that we have unfortunately gotten so confused that we've decided to fix the finish line and stagger the starting line, right. Because all of this still doesn't apply to rich people. No, this is vindictive rich people. Rich people can do all of these different things. They can set up these out of state trust. They can set up generation skipping trust. They can be, you know, qualified investors. They can have QSBS deductions. And So what this will do. Unfortunately is entrenched the kind of wealth gains that Peter Thiel was able to generate in a very visible way that will just **** everybody off. And I think instead you got to go back to a different tool, the different litmus test. So I, Jason, you have been the strongest advocate for letting people participate in the economy. I have always agreed with that. We need to figure out how we can make sure that that it that it isn't abused. But that's the best way is to educate. Well, to national literacy so that they can actually be a part of it. Even the starting line. Let everybody be able to put stuff into this stuff and learn about it. I mean what Peter did essentially was put lottery tickets into his, you know, non tax retirement fund. Lottery tickets being buying stocks in private companies early. But regular Americans aren't allowed to do that. So rather than retroactively try to penalize Peter because you disagree with his politics or because he did it too well. I think it's better that everybody be allowed to be an accredited investor and do what Peter did, which is everybody should be able to take their 401K or their Roth and be able to buy the next LinkedIn Uber. So if you were a civilian and you took an Uber or you use LinkedIn to hire somebody in year 2 and you had an opportunity to buy those shares, you should be allowed to buy it because you're a human resources person or Uber driver and you realize this is a great service that will change the world. Doesn't take a genius to figure that out. Freeberg. Yeah, look, I mean the the downside is, you see speculative. Concentrated bets that white people out and that's the reason the protective provisions are in there. So I think there are probably sensible ways of managing that, you know, around, you know, qualifying, you know, pools of these investments in a way, creating indexes against them, et cetera. And maybe that's the right way to provide access. But, you know, giving individuals that maybe, you know, don't have the right kind of point of view on a particular investment the ability to put all of their capital. Into that investment. Generally, I would say go for it. The problem is we've socialized. You know protection, right? So and this is the same with healthcare. In a model for governing or model for a state where you provide socialized care for people through healthcare, socialized healthcare, or you provide socialized support for people through, you know, this, the Social Security system and other services like that. It's difficult to say, OK, the government's gonna be your backstop and it's gonna provide the support for you. And we're also going to let you take risky behavior. And that's where I think the two have to go hand in hand. If you want to get rid of one, you got to get rid of the other. And so because otherwise we all end up paying the cost of the person that takes the, you know, outsized risk and then we all end up having to foot the bill for that person taking that risk. So if we're all going to be there to protect that person, we have to tell them you can't take unnecessary risks. OK, Hey SAX, let me ask you a conspiracy theory here. Peter Thiel supported. Trump. When Trump was teetering on the Access Hollywood tape and he went to bathroom, he gave him a big donation at that time, then obviously did the Republican National Convention and was a key intellectual influencer in his election plan. Now the Democrats are in, and suddenly the focus becomes this one outsized Roth IRA, and we're going to rewrite. The law so that Peter Thiel has to take $5 billion or so is one of the estimates that I saw online on CNBC out of his IRA. Do you think this is specific vindictiveness on the part of the Democrats to try to attack specifically Peter Thiel? I know he's your best. He does feel, and I'm not. I'm not a Peter Thiel apologist, but this feels vindictive and personal. So yes and no. OK, So what I would say is there have been proposals over the last, I think, going back to maybe even 2014 on providing some restrictions or caps on the, you know, these, these IRAS and the Roth IRAS. However, there's never been a proposal as punitive and retroactive and confiscatory. That's what they're doing here. And specifically, it's the fact that they're going to force Peter to distribute out everything above the cap and then tax it is ordinary income. I mean that that's just changing the rules. That part, I think, is directed at Peter. And I've actually heard that staffers on Capitol Hill are calling this the Peter Thiel provision. So let me just confirm that part for you. So what I would say is I think there is a sensible way to provide some restrictions on these retirement accounts, but the way they're doing it is so punitive. I think it is motivated by political revenge against Peter Chamath. What do we think of the number of unicorns being created in the private markets? Obviously when a company hits Unicorn status, I think they're gonna start buzzing around and maybe knocking on your door and spacks and boards might start thinking about that. These companies sometimes have $10 million, thirty $1,000,000 in revenue, 50 million in revenue and becoming worth a billion dollars. Do these valuations make sense writ large and are you concerned that this is a bubble? I don't think there's a bubble. OK, explain why there's not a bubble in early stage private companies. Well, I think it's because of what we just talked about, which is that these companies by and large are growing at incredibly fast rates and they are replacing legacy incumbents that are growing very slowly or not at all. With and who who have basically won for a long time with inferior products. And so as these superior products with more nimble organizations get capitalized to go to market, they're just going to win. And so I think what we're seeing is a wholesale replacement of the economy from the old to the new. And so that's why these companies will do well. And I think it's going to be a a really powerful force in the world because like the world should be a little bit more efficient and fairer when you have all this modern technology working on your behalf. So I'm a real supporter of all of this. I think there's going to be even more. And I think, you know, the, the, the thing that we have to be comfortable with is whenever something goes from a fringe thing, which is what venture capital was, Jason, when all of us were, you know, first in Silicon Valley 20 years ago. To, you know, today, in 2021, we're sitting here, this is going to become a fundamental part of the economy. And when that happens, there'll be more and more money, the returns won't be as good. That'll be OK, but there'll be a lot of progress. And so, you know, we're going through the same transition that private equity did in the 80s and 90s, that venture, that hedge funds you see all the different venture capitalists who are retiring, Bijan from Spark. The kid from lightspeed. Bunch of other folks, obviously. Our friend, Bill Gurley. Stepping back, why did you call Jeremy? Jeremy? Jeremy lifty? He's 50. Yeah, like, am I doing something wrong here? I'm, like, busy creating a venture firm. At age almost 50, people return alongside of this distribution. You know what? What do we think's behind the state? Just made too much money in their money? Or is it because it's too competitive now? It's too hard. They're moving to Wyoming. I would say it's slightly different than this. I don't know. I don't know. I mean, I know all of those guys. But I don't know what their motivation is. But what I would say is I tend to think. That the mindset of venture has a relatively short half-life and I think it's about 15 years and I think that there is A and because you know company building is roughly A10 year arc. You know like when you get into something early and so I I I think that there is like a a newness whenever you start. I don't think it matters what your age is and then there is this. Sort of like. Death March that sets in by year 8 or 9. And then you try to see it through to returning the capital and making sure all the employees and and founders you've been invested with land the ship and and I think what these guys did was get to that place and say, OK, I've had this 15 year beautiful arc. Do I want to do another 15 year arc? And for a lot of people it won't make much sense. And then also I think your patience to do it goes away right because it's like you you guys know what it is exhausting. It's exhausting. Amount of drama I'm dealing with right now in My Portfolio is bonkers. The the the bet. I don't know if you're seeing the sex, but the amount of shenanigans, bad behavior, fraud, a lying backstabbing is at an all time high. That would be your portfolio, Jacob. It's like, no, no, it's it's literally three companies. I'm literally dealing with three companies with drama out of 350. I think it's one out of 100 is probably fine, but I am seeing all kinds of shenanigans. Even in the diligence phase I'm seeing something more tactical, which is like for example, you know, yesterday we're we're starting something really ambitious in batteries and I have to sit there for an hour and we have to go through ordering the equipment, setting up the lab, getting the, you know, human resource. And there's only so much of that that you have the energy. Do after a certain amount of time. It's important work. You have to do it right, but it feels a little low leverage now for that CEO. It's everything. And so you have to be on top of your game to help that person. And I think this is where I appreciate their honesty in basically saying, guys, I don't have that level of detailed focus in me anymore and that's important because in the next generation of folks who want to put in that 15 year journey can be somebody committed. You need somebody who's super committed. Yeah. And I do think there's a difference between being a partner in a large partnership where you kind of have your portfolio of companies and you know to Tomas Point, you're going to be on that arc with them. And then kind of building a firm from scratch where like quite frankly I would go crazy the way that, you know, you're dealing with Jason and Jamath is saying I would get burned out if I didn't have a team. So we now have like a pretty big team. Well, just on the investment team I think we've got about. About 15 people. And and then we now have a bunch of operating partners. So, you know, we were looking at what injuries and Horowitz has done with services. You know, we had this big debate in the venture community for a long time about whether venture firms should operate. It should offer services and operating partners. And Andreessen, you know, went hog wild with that. They got like 200 people doing it. And I think they've proven that it works in the sense I don't. You know, it's not totally clear how much value they're delivering, but it clearly works in the sense that founders would like the services if they can get them. It's great marketing, but it may not be. It's great. It's great marketing. You're if you're a great founder, when you were a great founder, you wouldn't wanting Dreesen Horowitz telling you how to run your HR, doing your marketing for you Yammer, right. But So what we've done is what we've done is focus on bringing on not 200 people but an expert in every functional area that a SaaS company might need. Because you do want access to an expert when you're saying the department you want to go talk to the digital marketing person or the legal person or you know or you know we have an executive briefing center now. So we do believe that there is a version of the services model that makes a lot of sense and we are building. That if I had to do all of that value add myself, yeah, I would, I would burn out. Yeah. I mean I think it's a very good point. I literally last week launched the, the SAS Syndicate just for the same reason. So I can build a group of individuals who are focused just on that and who have that domain expertise, but they're the great founders do not want you up in their business. So I I, I'm concerned with like that that that's why we have like kind of we call it a teach him how to fish model where we don't want to do the work. We want to give them an expert. The resource who can meet with them, show them, show them some best practices and then they will, they're coming to you expecting you to do the work because that's what I thought happened sometimes. Is there like, although, can you find us a developer? And I'm like, no, but I could talk to you about finding developers, but I don't have a recruiter on staff. Do you have a recruiter? We actually do now we have 3 recruiters on staff. So. So you're paying a half $1,000,000 a year to recruit for your companies. That's basically, basically that's a big advantage. Is it working? Are you actually landing developers? Yeah. I mean, look, we can't Freeburg and I don't. Chuck, about any of this. Anyway, This Is Us in the weeds. So you wanna talk about some? OK, well, just a couple of little for a second. I, I just wanna go back to this like golden era point when we're talking about venture capital because look, obviously in the weeds we're going to talk about our problems. But I really think that what's happening here with 1000 new unicorns being minted every year is just unbelievable. If you look at the number of billionaires in the US, I just googled this. There were 614 billionaires in the US as of October 2020. Now there's probably. More, I don't know, let's say there's a thousand. Well, if you're mincing 1000 new unicorns every year, how many billionaires does that creating? I mean, how many millionaires? More importantly, how many people who are making 50 to $250,000 a year before they joined the ecosystem and now are worth millions, will buy homes, hire people starting the next. Let me just give you guys the, the counterpoint to that, which I'm not necessarily arguing, but this is what I think the narrative is, which is that those businesses that are kind of, you know, accumulating wealth and accumulating revenue are effectively destroying the old. Economy and shutting down companies and shutting and it's eleven million job openings. That's ********. I don't, I don't, I don't believe it's a 0 sum game. Yeah, I think there's it's it's creative destruction, but it is disruptive, right. So there is a, there is kind of a temporal flux and there's a flux of people across from the old economy to the new economy. And it's that flux that I think creates the great uncertainty and the great, yes heartache that everyone's trying to solve. Ringing. That's the hanging. This is, This is why it is so important to get corporate taxation right because if you're going to replace GDP dollar for dollar. Don't focus on the fewer employees that work there. Focus on the largest number possible, which is the revenue that these employees are helping to generate for these companies. So if you had much, much higher corporate taxation, you can play around with all the personal taxation you want. But if a lot of people do get shut out of the economy, you're not going to make nearly as much for the government as you would by taxing companies more chamath should there be a backstop? Because we know tax law is so sophisticated, and if you're intelligent, you could. Make it seem like you didn't make any money because you're investing, you're distributing, yadda yadda. Should there just be a hey, listen, whatever you want to do your taxes is fine, but X percent of your top line revenue is your base tax, and you cannot get around that. Should there be something like that? There's a couple things that this tax bill attempted to do, which could be really powerful if it does get passed. I think that corporations should pay a large tax. I think that they should be forced to spend a certain percentage on R&D, and I think they should be forced to spend a certain percentage on basically benefits for their employees. And I think that would do a lot to level the playing field. Then I do think that you can have much higher individual taxation, but you need to make it simpler because there's too many easy ways, like that Pro Publica article showed for you to play games for individuals to not pay taxes. And so you gotta simplify all of this stuff because it's too complicated. So if you're rich enough to hire A fleet of lawyers. You will work go your way around it. Yes. And they and they repealed it as part of the the AMT was for corporations was repealed as part of the tax Cuts and JOBS Act I think. I don't know where that stands but it does seem like a lot of companies because I don't know how that makes sense. Jackal, I mean like some businesses run high margin, some are low margins, some are losing money, some are over investing complicated. I don't have the solution that's why I'm sort of saying well one of the, I think one of the optics issues here is you know people are like that company didn't pay any taxes. That company sells this many iPhones. That company sells this many because they're they're doing what tax laws were designed to do, which is to encourage investment. So how do you fix it? Give me a solution for your. I don't. I think that once businesses are mature and they start dividend in cash and making distributions and their profitable, that might be the time to tax them. I'm not sure why would they ever do that if they had a army of people saying, hey you don't have to, you don't want to point. If they're investing in growth, they're creating jobs and they're growing the economy and that's totally the status quo is fine. I don't think they're creating as many jobs as you think, but they are growing the economy. That's why you have to tax the corporation, because that's the effective proxy for taxing GDP. Yeah, look, I, I would be all about, let me just. I'll wear my libertarian hat again for a second. But like, I would be all about taxation if I felt like my dollars had a positive ROI where they ended up. And the problem right now is like, government spending is set up in such a way that it's effectively been gamified and people extract capital from the government, and my dollars are not getting a positive ROI for me or for society. I would rather have them sit. Which is why you left. Let's be honest. That's why you left. Francisco, I mean, it's just they're spending more. Let's, Cisco, I've got a family and I and I need a backyard. So that's a little bit, but isn't part of it that you are? San Francisco is a separate degree of incompetence, like, but yes, you're spending more than ever and you're and it's getting worse. San Francisco is a whole nother, a whole another nightmare. Jake out. Well, like I'm just speaking in California writ large in general. Yeah. Right now, whether it's the state level or the federal level, it feels to me and I think it feels to a lot of people that dollars aren't being spent in a way that's generating a return for the taxpayer. And I think we all feel that way. And I think that's what's frustrating. It's not about how much one's being taxed. It's about how are those tax dollars being spent and are they being spent in a way that secures the future of our nation, of our people, of our livelihoods, etcetera. And making, you know, giving everyone access to opportunity. What's what's happened? What's happened is we've created things like student loan programs and you know, housing programs and infrastructure programs that are literally just giving away money to private companies that are profiteering off of government spending, right. And it's crony. They feel good. As our favorite professor Scott Galloway says, it's one thing I really do agree with his politics. It is it is that there is this notion of crony capitalism where the United States and state governments, even local governments have seen in San Francisco, CA all the way to the federal level are spending money in a way that I think we all feel is benefiting some disproportionately to most. Now. If there was a high degree of taxation and everyone was benefited in a meaningful way and those programs were well managed and capital flowed meaningfully to to support everything we want to support. Great. I think everyone would raise their hand, raise two hands and say tax the heck out of me, let's make that happen. But that's not what happens. And I think that's the primary aversion to high taxation. Actually get the final word? Yeah. I mean, look, I what I'm worried about is taxes are going up big time. No matter what happens in Washington, spending is going up big time. We now have peacetime deficits that are the biggest that they've ever been. The deaths that the national debt, the peacetime national debts, the highest has ever been. We have a looming debt crisis in China. We have supply chain shortages. I mean, you know what there, there's a lot of things here that could upset the apple cart. And I what I'm afraid of is we're gonna look back at, at this year, the 1000 unicorns being minted and say that really was the golden era and everything happened and after that we really screwed up. You sound like the old guy at Starbucks that says that every generation and complains about the last generation or golden era and it's all down. How much does music stock today normally? Normally I will say how impressive it is that 10 years ago none of those unicorns existed and it is likely the case that $3 trillion of value was created via private funding and private companies over the last 10 years. So. All these entrepreneurs, all these employees, anyone working at these businesses, anyone involved in these businesses should be thrilled about the fact that you, from zero, created 3 1/2 trillion dollars of value in 10 years. That's extraordinary. Yeah, I'm not. I'm not. I'm not trying to create a nostalgia about the past. I'm talking about the present and trying to preserve it because I'm seeing some storm clouds on the horizon. Yeah. I would like to play the Best Song from Tony. Tony. Tony is really. Yeah. OK, everybody, we're heading out. This one's for you. London breed. State, State approved entertainment. You can take off your mask for this entertainment at so good and you guys watch us quit game. Anybody watch quit game? No. We have lives. Nobody watched the game. OK? My, my kid, my kids been talking about that. Should I be letting them watch squad game or is it? No, it's the most violent Korean horror dystopian. Show ever watch? They're gonna be scarred for life. I love sex. Hey, sex. As a follow up, did you did you stop your kids from from Tik T.O.K? Did you take your kids off? Tick tock. They told. Yeah, I went in there. I'm like kids. What are you watching? I'll tell you in a second. Yeah. So did you take your kids off Tik T.O.K? Yeah. I went in there. I was like, kids. What are you watching? They're like, get the hell out of here. Tell us our names. And he was like, OK, I'll be right back. Jack, you. If you could tell me to turn off to talk by my name, I'll do it, David. Like, see you later. Question was what are you guys watching on tick Tock? I hear it's all sex and drugs that are like, no, watching dance isn't. OK, go ahead. I trust you. The dance videos are literally like absolutely sex and drug based. Every single one of them. It is so deviant. Insane. Stop. It is not that you're so exaggerating. It's so not exaggerating. Literally the if you listen, take the most obscene lyric to obscene hook to any rap song. That's what trends. Oh my God, it's so true. Guys, every generation says the same about the next. It's unbelievable, right? No, but it is like explicit. I listen, whatever. I mean, like, you know, I just want to Pearl Jam and, you know, all the way back to The Beach Boys like Elvis and shaking his hips. Yeah, exactly. Yeah. But I mean, no, this when I say it's explicit, it is literally expressive. You just don't get the youth jakal you don't understand them. I I think I understand it a little bit too well. Anyway, so you do not do you, do you? Do you? Do you? Listen, I oh, hey, guys. Are we going to do the all in? Someone or not, I went to the code conference and I was like, this was amazing. To get back out, you got to stop talking about ideas and actually just doing them. What are you talking about? We created this spot. I'm just trying to get by in Jason go. Just do it. OK? Alright, I need your buy in. We, we have a voting system here. We're all in. Miami. Miami. OK, first year, second year. Italy, not Rome. Alright, we'll do first year Miami. Second year Italy. Somewhat. Make it somewhat accessible. I think we do. Domestic. You have a cane so you can't get there, you old ******* *******. So here's how it's gonna work. 250 tickets, 200 for purchase, 50 for scholarship. All in summit. Three days. Miami Sacks and I are off to. The races will be in this. Make it more people, bro. Why do you have to keep it so exclusive? You're just so exclusionary. I want to. I want to. What is it I want to invert the top down hierarchy to what? I want to be a left wing authoritarian person that I have to believe that is what you are, a left wing authoritarian. Gonna be rich and powerful to what party I am. I just want money, status and power. Yeah, let me tell you, let me tell you why I like this idea is because to the points we're talking about with Coinbase earlier, we, you know, we have these conferences in the tech industry and they're frankly run by people who hate tech and the tech industry and people who are successful, right? Exactly. And so the I see these tech founders going up on these stages as subjecting themselves these interrogations by people who hate them. And I'm like, what are they doing? Like, it makes it a sense. I'm putting up a form. I'm gonna let people take deposits. I'm gonna pick a month and we're gonna go. How many people went to the conference? Guys you went to this week? I the code conference, I think was probably 3 or 400 by design. It was a third or half of the tickets. I didn't actually buy a ticket because I didn't want to be in the conference itself, because I was concerned about a breakthrough virus. But I did host the poker game with Sky and Brooke. Tickets I think are 8000 for code and I think Ted is up to 10 or 15. So maybe how much are we charging? They made like 2075 hundred, 7500. We're charging 7500, so 210 degrees and then 50 scholarships for people who wouldn't be able to afford it. So the the gross revenue here, so one 1.5 million and what's our cost going to be? Cost will be a million. So wait, so we're so we're making profit on this. You know I'm making a profit because I'm going to. We need to be very clear, expand what we expand, what we make I. And buying the wine and you will shut the **** **. OK. So then it's going to be, it's going to cost 2,000,000 so it's going to make 1.5. No, no, no, no. It's gonna cost you. I want I want a wine budget so that everybody that comes is it feels like they've had an exceptional food and beverage experience is going to spend half $1,000,000 on wine. No jokes. So then it has to be 10K ticket. But you know the people who are coming can afford it. They don't take out. We're not privileging you with some profiteering. I'm not profiteering off of it, honestly, the reason I want to do it most. Is I want to play poker for three days and I want to have us, the four of us, interview the most iconoclastic, interesting people. And I want to do it for the fans so that some number of fans get to come who wouldn't normally be able to come to a conference at this level. And I'd say it would be a blast. It would be fun to get together. OK, stop talking about it and do it. We're all OK. I'll do it. Alright. I just wanna make sure everybody bought in. I mean, sorry to get you ******* on. Set a date. I'll set a date. OK? Not not the first week of February, because I think I have a I'm thinking March, April, March, April. Also not the third week of February because I think I'm skiing in Europe. Can you just give us? Can you give us the dates? You're not gallivanting around Europe and other places? I'm. I'm grinding everyday here. You see what I'm doing? It's like I'm ******* working hard too. I mean, it's crazy right now. It's like I've never seen the market like this. I mean, it is bonkers. Enjoy while us. What's that? Enjoy while us. Exactly. All right, everybody, we'll see you next time. For the dictator Chamath Polly. Hypatia. For the Rain Man, David Sacks and the Queen of quinoa, David Friedberg. I'm Jackal. And we'll see you on episode 50. Bye, bye. Your winners ride Rain Man, David Saxon. We open sources to the fans and they've just gone crazy with it. Besties? My dog kicking your driveway? Man. We should all just get a room and just have one big huge order because they're almost useless. It's like this, like sexual tension that they just need to release stuff out there. B. Where did you get merchants?