Industry veterans, degenerate gamblers & besties Chamath Palihapitiya, Jason Calacanis, David Sacks & David Friedberg cover all things economic, tech, political, social & poker.
Fri, 27 May 2022 04:58
0:00 Bestie Guestie Brad Gerstner joins the show
1:00 All-In Summit recap and best moments
16:45 State of the markets, $ZM/$SNOW earnings, how much more uncertainty?
29:53 $SNAP drops after miscalculating earnings targets, understanding signs of a true bottom, the end of entitlement
51:10 Down market end game, investor decisions, reasons for optimism, quick reset potential
1:05:17 Sacks explains his concept for "default investable," Besties share thoughts on proactive layoffs and course correction
1:12:27 Addressing Uvalde, legislative disappointment, potential preventative solutions
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Hey everybody, welcome to another episode of the All In podcast. It's been a crazy couple of weeks here. We had the all in summit and boy was it amazing our bestie David Frieberg couldn't make it today. He had some personal things he had to attend to. So joining us again is Brad Gerstner. Welcome back to the 5th bestie on his is this your 4th appearance now, including the All in summit? I think you've been on four Times Now. Very good. All right. That's about 5% of the episodes have a nice nice. I think that's a nice little chip in your in your in your belt there. I mean, unworthy replacement to freedberg, but I do what I can do. But he can replace Freeberg. That is the truth. Don't let your winners ride. Man David. We open sources to the fans and they've just gone crazy. We can. Just going around the horn here, chamath, did you have a a favorite moment on stage? Your favorite moment off stage? Well, what is your general impressions of the all in Summit 2022 I thought? The people I met were really impressive. I really enjoyed meeting people and learning what they did. I also thought you and your team organized really an incredible event and I forgot how good you are at these things, but so I give you a lot of credit. I really enjoyed participating. The only thing that I was nervous about during that whole thing, which probably limited a little bit of my fun. Was my mom was coming. She's 81. And so it was not. I was not super psyched to really be in the throes of all the parties, to be honest, just because I was like. I didn't. I didn't necessarily want to get COVID. And then I didn't want to introduce it to her and got it. Yes, you know, Nat ended up getting really, really sick, but more like a flu and a cold. Yeah, but, you know, I've been fine. My mom's fine. I know a bunch of folks that came out unfortunately tested positive. So that was the only, that's the only downside where I would, I would have. Wanted to be a little bit more carefree, but that was the only thing that was that. But that's not in anybody's control. So yeah, but I think it was. Second I I recall that when I had a Christmas party back in December. Here we go. And Jake's super COVID like a week later he called my Christmas Party a super spreader. Even though I tested everybody at the door, every single person was negative at this. So all in some AIS. So, so my parents went to this conference. They both got COVID my aunt who lives in Miami. He was in her 70s. She got COVID. Ohj they doing? Are they OK, by the way? Are they all good? Yeah. The most important, it's it's, you know, it's Omicron. It was like, you know, it's, like, bad for two days, and then you get better, so they're gonna be fine. Thank God. Hax. Slovik or no. Yeah. One did and one didn't. So my brothers got COVID. And so your brothers got it. Which one? Josh or Josh and Jamie? Both got it. And then Josh's wife got it. So she took the packs. Love. And everybody's great now. But yeah, if you go to my, a lot of people who came to the event. It was their first time out. Like this was for a lot of people I think very emotional and exciting because it was their first venture out and if you go to Miami, to a conference like you're gonna get. Getting a COVID, especially if the event organizer doesn't test anybody. It's impractical to test 850 people. Nobody would come. Like, not if you wanna make a profit, right? No, it wouldn't have actually been that expensive. You could put that on the people. They could just, you know, share their results. But I think at this point, you know, even on the planes going out there, nobody's wearing masks. Don't know if you know. Well, you guys are flying private, but you know, my flight out there, it was all, you know, nobody's wearing masks anymore. But anyway, Jay Cal, I think everybody who went to the conference took the risk upon themselves. Of getting COVID and you know, it's not the end of the world or anything. They're all fine. But I'm just pointing out the hypocrisy. My hypocrisy, yes, exactly. It's like you're like Nancy Pelosi or something where you criticizing you every time a Republican gets COVID, it's their fault. But when you throw a super spreader and I think AIS now stands for all in super Spreader, it's not your fault. It was well beyond your control. It was the virus and in fact it was probably just Florida. It was just saying. The Satisfact I was gonna bring it out on, that stuff works at both of you now. Have thrown super spreader events, yes, but in mine I tested, yeah. It's not even proven that mine was a super spreader. Alright. And in all seriousness, did you have a favorite moment on stage or some reflections on the event? I thought that thing was really good by the way. And then the only thing I'll say is the the Palmer lucky thing was pretty incredible, which will will be, we will be releasing the. I'm excited, excited to see that. I think that that episode is eye opening. Yeah, we don't want to say too much, but I think that you were. Really, I think you handled yourself really well though. Thank you for that. Chamath, what actually happened? I wasn't there for that portion I haven't heard anything about. Give a mini summary here of it. I guess I'll, I'll give you the outside inversion. He gives what I can only describe as an incredibly. Motivating breakdown of American defense and what his company. And you know, you have to remember to put it in context. This is a 29 year old young man. Who has now started 2 multibillion dollar unicorns. So you know this, he's going to be around for a long time doing amazing things. But he talks about Anduril, which is his defense company, really impressive. And then the whole, you know, everybody's kind of like rousing and cheering and applauding. And then he said, you know, I have something else that I want to get off my chest. And I was standing beside Jason backstage. Jason was looking at the monitor. I was looking at the mirror at myself. But. And check out your sweater. And he said, you know, there's a person here that that has been, you know, really hard on me, you know, tried to ruin my life, attack my family. And represents, you know, these really this strain of very influential people in Silicon Valley who have gotten it totally wrong, basically. And he called out cancel culture. And then he called out Jackal. And to Jake's credit, after he was done. Jaco was the first one that walked out on stage. Shook Palmer's hand. And then we all sat down. We talked to him and then the two ended up hugging it out at the end. But there were moments that were very heated in the middle of it. The whole thing was incredible to watch. I got to be honest with you. It's super dramatic. Yeah, incredible. I would. I would say the the most shocking and surprising aspect of the whole thing was that a person as important as Palmer, Lucky, felt the need to get revenge on a person that's unimportant as Jason Calcanis. The part I mentioned when he's like my career was when he's that important people in Silicon Valley, I I initially thought, Oh my God, he's talking about me. What did I say? I that was. I was thrown by that, too, if I'm being honest. He's like my entire career was stopped in its tracks and I had to claw my way back because Jason Calacanis said this and I was like. Umm. No. Actually, no. I'm looking forward to when you were going to be a great episode. It's gonna be coming out next week. Thank you to all the speakers. Yeah. And I, I want to give a shout out to Glenn Greenwald, Matt Taibbi and Antonio Garcia Martinez for appearing. And, you know, we did two different panels. We did one on domestic politics with Glenn and Taibbi and then the we did a debate on Ukraine, which has now been published between Glen and Antonio. And particularly I want to thank Antonio because it did end up being a little bit of A2 on one at the end. Which wasn't my intention, but I have my own views on it too, although I did try to be somewhat restrained and even handed in the moderation. But it's a really good debate. We should have had longer. We only had about 30 minutes, but you can see that online right now. It actually is a great example of actually how to listen to somebody else having a completely diametrically opposed view and still be respectful. I thought those guys were great to listen to. I think it's a new format, sax, and I think, you know, somebody was like, hey, maybe you and Jay could do it. I think you and I moderating like two people with different sides. It could be like a really interesting format. Breast for future events, Brad, did you have a favorite moment on stage, maybe outside of Elon, of course, you can mention, I would say, you know, maybe both on stage and off stage. You know, I think, listen, I think this podcast has taken some shots, and probably appropriately so at times, for being a bunch of men, you know, a little bro culture and the effort made to build authentic community and diversity into that room. I've been to a lot of conferences, whether it's Claire Thielke, Patty Wexler, extraordinary, you know, minds, women, all diverse cultures, economic backgrounds when we walked around the floor. He, you know, Indiana, Kentucky, West Virginia, everywhere. Right. And who are starting companies, having authentic conversations. And frankly, we're grateful for the Community and the advice that they were being given. These were from big startups to very small startups. And so for me that was a a highlight, the effort you made, I don't know, almost 40% women, you know, both economic, I thought, as well as, you know, geographic diversity and then you know. Listen, I had a moment after Bill and I after girly and I got off stage. I was stopped by a group of founders and they said, hey, we need your help. I said what? And they said we are that company you and Bill were just talking about and said was screwed. We raised $100 million last November from from Tiger at 100 * A RR. What do we do? Right. And like, like the fact that that you know that those conversations are going on, of course they're not screwed and it's a very interesting company, but it led to a real conversation that you don't often have at conferences like that. And so I thought it was much more than just a bunch of talking heads on stage. I thought it was a real give and take in the, you know, in the crowd afterwards, the parties, the in Betweens. And so I really enjoyed that. The other big thing that we avoided failing on was putting back the AMA's. I think these AMA's are some of the most interesting parts of that conference. And I think that we should make sure that we probably do an AMA, Jason, like both days if we do a two day conference. The AMA's were awesome. Yeah. And the audience is asking us and and just to explain to people how we were able to, you know, curate the audience we asked people I think. A good playbook for other people. If they want to steal it to they could, they could pick the price they wanted to pay based on their station in life. And so people said, I wanna come, I'll pay 500, I'll pay 1000, I'll pay 2500 instead of the 7500 ticket price, which was like 300 people in the audience. And we just said, hey, what do you love about the show? You know what would be coming to the conference mean to you? And we kind of just sorted that and we look for people who are passionate about the show and then, you know, the thing that stuck out to me and I know Freeberg had a great time as well. Was the passion of the audience and how much they appreciate what we do here every week. And so the love that we got people asking to take selfies, people telling us what the show meant to us, you know, and people coming from all different stations in life, really. It made it not elitist, but it felt like the people who were there were all builders. And that was really an interesting part. What I instructed the team to do was anybody who was like a real estate broker, a money manager, a sales executive of business development person. I said let's not. Have them. They are. No offense to those, you know, critical functions, but a lot of people will come to the events to sell and get customers. But I said anybody who's the builder and artist, they're making something in the world. Let's give them the priority for these the scholarship tickets. So you know when you meet people they were all building something interesting in the world and and no press, I think also created a certain vibe there. We didn't have the media there criticizing every panel and you know, every speaker. And so it it. I think it just yeah made it somewhat natural. Well, I think it really couldn't do it without all you guys and Freeburg and the besties and and Brad you were helping behind the scenes. So couldn't do without everybody and my team. The director turned out surprisingly well, I thought. I mean, I thought the whole thing was a Jackal grift and it actually turned out there has been there some grifting going on for sure we haven't seen an accounting of of exactly where all the money went. So it's it's Jake close. We'll have that accounting any day now, sax, any day now. What could you have done better? What would you change for the next time? You know, I. It's a great question. You know, we, we always do a document with lessons learned right after the event. So I went through my team and I had 26 people from my team, 21 from launching, I think 5 from inside came and, you know, helped staff the event a little more time to to work on the speakers and the agenda. If we had a little more time, I would have teased out of each bestie, you know, maybe 5 or 10 speakers or topics they wanted and worked backwards. So it's just a little more time to to to to experiment with the format. But I took an experimental approach to it. We did have people who did solo dolo like Ted style talks. We then had people come on stage with the besties and do discussions. But having all besties on stage all the time is a little hard for for everybody. I know David likes to focus on maybe a couple of things. Other people like Chamath and I like to be on stage for everything, I think. But the format was experimental and there was a couple of great moments, I think, when we overlapped folks. So I think Nate Silver overlap with Keith Raboy, you and Bill Gurley. Together, Tim, Robert, I'm sorry. Overlapped with Keith Raboy. Those were magical moments, I think. And so I have a a something in my brain about weaving individual talks and data points with the besties and then having the next speaker on the stage, the next speaker, and I would have liked to have more time to. Refine that format, I think. OK. My only question is, was the Palmer Lucky deal, was that a plant? Did you plan that? No. Did you secretly put that in there? I'll tell you the back story is I, you know, I, I I've had invited him on this week and starts before all in. Came out many times. He said **** you. Basically, in so many words, I hate Jake out and then went all in, came out. He's a fan of this show. I think it's particularly a fan of David saxes. And I think David knows a lot of the investors, the investor pools, I think overlap in a lot of different circles of ours. And I said, would you like to come to the summit? And I and I basically said to him, heartfelt, like, listen, I think the work you're doing to protect the country. Most people in Silicon Valley don't believe in building weapon systems, but I kind of am with you on this. So we probably have some common ground here. I think the mission of what you're doing is more important than our disagreement from, you know, the Hillary Clinton versus Trump days. Maybe we could just, you know, put that aside and have you speak. And surprisingly, people were like, yes, I didn't know they were doing yes because he had a plot to dunk on me. But who cares, you know, like, I don't mind being dunked on if I'm wrong about something or I'm right. It's the whole spirit of this show is to, you know, to learn and grow and have great conversations. So with that, maybe we start the show now. Let's do it. All right, let's go. Let me am I. Am I still allowed to do intros, or is it too triggering because I do have intros for this week. Do it. So you do it. OK. I got thumbs. Only if they're nice. Well, yeah, that's the caveat that I cannot guarantee. But anyway, here we go. Getting ready to gallivant across the Italian countryside. He spent 40K at all in summit on food and wine. He took 400 selfies in three hours. Those sweaters, my Lord? They reek of power. They? Dictator himself is back. Chamath Polly. Hypatia. Welcome back to the show. Thank you, Jason. All right. His body looks like he doesn't eat cake. He's got a major stake in Snowflake. You might have heard him earlier in the week. With Bill Gurley. He's the crossover fund manager with that BDE, our fifth bestie. The audience hangs on every word he has to say. The Dark Knight of Namaste. Welcome back to the program, Brad Gerstner. I like it. I like what's BDE? If you don't know, then you don't know. You can look that up. Urban dictionary. He's about to turn 50, but he looks like he's 65. After 72 hours in Miami, we're not sure he's still alive. The Crypt Creeper is jealous of the bags under his eyes. His portfolio has been down for 35 straight days. No surprise. The Rain Man himself is back. David sacks. Too rough on sax? No, it's OK. Is it OK? I felt like I might have gone too rough on sacks. Alright, I guess we start with markets and S&P 500. Down 15% year today. Down. Down 11%. Two stocks of note. That did particularly well during COVID. Zoom and Snowflake reported their earnings this week, and they beat expectations. Of course, that gives them no reprieve. Market cap for. Zoom 31 billion, that almost $6 billion in cash, which was a a prescient move to to cash up, I guess during the boom times. Their stock jumped 18% after the earnings, so great for them. Q1 revenue 20231 billion, 12% year over year. They got an 80% gross margin for that business, pretty impressive. 500 million adjusted free cash flow, 7000 employees. They're at almost 500,000 per employee at this point and stock is still down 43% year to date, but a little bump here. So I I guess we might be bumping along the bottom soon. Just to quickly recap Snowflake and get your comments after that. Snowflake reported their quarterly earnings yesterday $41 billion market cap. They got almost 4 billion in cash. They were down slightly at the taping of this episode today, and they're down 67% from the peak of $409 a share in November. So they're not in the 85% plus club like Coinbase and Peloton, but still they've lost 2/3 of their. Market cap. 422 million in revenue, 85% year over year beat their expectations and. Gross margin is 72%, net retention 174 percent, 70% of growth within their existing customers. To David Sachs's point about why SAS is so great, they got 4000 employees. 6300 total customers. So I guess maybe starting with you, Brad, since you're you're in this in the thick of it. Thoughts on, I know your major snowflake, early supporter's thoughts on what's happening in the market and maybe any indication from these two. Let's face it strong results in the bouncing along the bottom I think is how we'd all describe what's happening right now. Well, I think, listen, what makes investing hard is sometimes you have to hold simultaneous truths, right? And the reality is. There's a lot of cognitive dissonance when you see something down thirty 4050%, but it may be still fair value, right? We were talking about last October. Like, make no mistake about it, just take Snowflake as an example. The move from 400 to 200 was probably just what I would describe as normalization in a world where rates were going back to 2 1/2 or 3%. Right. The market last October had gone too high. We discussed it on this pod, we discussed it on CNBC and so I expected a return to what we call the five year average as we discussed at the summit. What's been surprising to me is the negative reflexivity that's kicked in as a result of the war in Ukraine, uncertainty about hyperinflation, uncertainty about hyper rates. And so now we're seeing software generally all risk assets, growth assets trading now thirty 4050% below the five year average, right. So I don't think it's helpful to say, well, none of that should have happened. No, the reality is normalization meant that all of this stuff was going to be down. 20 to 50% because it was way overvalued last fall. We gaslighted ourselves in many respects. We didn't hedge it perfectly in many respects, but that's, you know, that's what happens in late market cycles. So the question is, where are we today? And for example, like, why is the NASDAQ up 300 basis points today? Right. This, it feels like whiplash. I come in one day and, you know, you have market caps up 10% one day, down to 10% the next. And so I think it's really important to help the people. Listening, understand, you know, like what happened this week and what's going on. It is been kind of a. A A pretty mixed bag this week in fact of of things going down chamath what are you gonna take on this of what we're seeing in the market this week specifically with precipitous drops and then you know the the bouncing up again look we we still had some amount of rate. Uncertainty from the Fed. I think people weren't sure how aggressively they were going to hike, but by early this week it was pretty clear there's going to be 250 point hikes, one in June. And one in July and then effectively a pause because then the Fed funds rate will be at around 2% and everything from there will probably be path and data dependent. OK, that's effectively what they said. Now I think the the markets had actually already started to see that writing on the wall. So if you go back to you know one of our favorite measures which is the 10 year break even, it's effectively rolled over which meant that you know which means that from the highs in sort of late April it started to come down which says that you know they were thinking that you know the inflation was not going to be as bad in the back half of the year. And then the second is that corporate credit, which is really what matters in some ways to the Fed because that's where they can intervene. What is the spread above treasuries that a company can issue debt? When it goes crazy and it goes up, it means, Oh no, the cost of capital is going up. That's going to be hard for companies to raise money they may have to lay people off. They may need to get into cost cutting mode, right? That's what goes through everybody's mind. But that's also now about 35 and 40 days rolled over, which means that the gap has started to shrink, you know, between the US Treasury price and what, you know, decent corporates can can issue debt at. So it looks like. We are set up. For potentially a decent little rally here. The problem is, is it a rally that is sustainable? Or is it a rally that's basically what we call a dead cat bounce or a bear market rally where, you know, you just get some one or two weeks of relief before the thing Spears down again. And we're not going to know. Although tomorrow on Friday, there's going to be a really important set of inflation data that gets released, and I think everybody's going to be sweating these details. So right now we're in a moment of pause. And there is the potential if this data comes back as reasonably good, which means prices are, you know, not escalating as much as we thought, inflation is not going to be as bad, growth is going to be moderate that that gives a lot of ammo for the Fed to kind of take their foot off the off the gas here. And in that case the markets will go boom sacks, the interesting note I think is what we talked about here. Everything was correcting. Except housing and we're wondering when this, you know, the increasing rates would hit mortgage rates, mortgages way above 5% in the last two weeks. I think it's come down a little bit, but the mortgage rate basically doubled and then we finally saw it earlier in this week. What day was, it was two days ago, so we're taping this on Thursday. So I think on Tuesday new home sales 591,000, they expected 749 and I think the last month before that was 763. Is that indicative of? The raising the rates and slowing down inflation has finally occurred and that went maybe we, the Fed maybe steered too much into the turn. How do you interpret that massive because a pretty massive miss in terms of home sales in the estimate? Well, the costs of buying a home are going way up because home loans are now more expensive. So that's going to factor into all sorts of consumer purchases is anything that's financed can be more expensive. You're also seeing companies starting to slow down spending. Are really starting to slam on the brakes we see in startup land. Startups are all slashing costs right now, but that's eventually going to percolate up to big companies, too. You saw Dara's memo basically when he got back from Wall Street memory. Published that a couple weeks ago, saying we need to sharpen our pencils, cut everything. What Wall Street is looking for now is free cash flow. So it seems to me like we're headed into a pretty serious downturn or recession here. I mean, I've been saying we're in a recession for months. The, the, the, the. You know, the tricky thing for the Fed is that they don't have a lot of good options because we have a lot of recession indicators blinking red right now. At the same time, inflation is still high, so they're kind of caught between a rock and a hard place. I think what the Fed should have done is in 2020, hindsight is back last summer we first got that shock CPI print, remember? It was like 5.1%. Seemed to come out of the blue because for years and years we've been talking about deflation. Nobody thought inflation was a problem. All of a sudden we got that 5.1% print. They were until denial about it. They they just dismissed it, saying that inflation was transitory. And, you know, Yellen said the same thing. And so basically everyone just ignored the data for six months. And what they should have done was stop QE right then and there. They could have taken a little bit of time to think out, you know, a rate increase strategy, but they were still. Basically engaging in QE for nine months after that, you know, first inflation warning. And if they had stopped QE there, then we wouldn't have had this asset bubble in the second-half of last year. That's when inflated the most. And we could have had more of a soft landing. Unfortunately, now they let the they they kept inflating. And really until the end of Q1 and they've yanked away the punch bowl so violently that I think the real economy is going to go into recession. So that's where we are right now. I mean, I don't know what that what the right answer is now. Given that we're in this, you know, almost stationary position, let's try and answer that Brad. What is if if we didn't act soon enough if you agree with saxis point, pretty hard to disagree with and we didn't take the medicine a little bit at a time and and now maybe we've overreacted or maybe it's going to get worse. What is the right thing for us to be doing now? Because all these companies doing hiring freezes, layoffs at the same time that the housing market tanks at the same time, crypto tanks at the same time the stock market tanks. This feels like a major shock to the system. Is it time to maybe reconsider some of these? No. You know, for the Fed to reconsider, or just slow and steady wins the race here, what's the best option? First, we should erect statues to Senator Manchin for saving the Republic by vetoing Stemmy 2. That would have been bill devastating. That would have been devastating. So we'll revisit that. Listen, the Fed said two really important things this week. They said #1. Our communications have been helpful in shifting market expectations. What that means the Fed is the air traffic control. They said to the markets at the beginning of the year, you're 90 degrees off runway heading. Get your *** back on runway heading. It was a slap in the face to markets and it was a radical adjustment. Now you hear the Fed in these little statements this week, they said, hey. We're well positioned this year to assess the effects of policy firming in the back half. So they're saying we're going to hit it with 5050 and then we're going to take a look. So now think of it as air traffic control, your 2 degrees to the Left, your 2 degrees to the right. They're steering us on runway heading. I don't think the Fed wants to do anything at this moment to lose credibility and the inflation fight. We're going to get 50, we're going to get another 50. But they're doing what they want to do, which is keeping markets sufficiently tight, right? They wanted to take the crypto market down. They wanted to take all the excessive risks in the stock market down, right, you're absolutely right. The inventory of $350,000 homes spiked from four months to nine months, right. Used car prices are rolling over the last three months. All the things they needed to do, they're doing right. They need to stay the course, however, the hyperventilation. This week by Bill Ackman on Twitter that the Fed needs to be doing radically more that somehow we need to be raising rates to six, seven, 8% in order to to squash inflation. To me seems highly misdirected and totally out of touch with the fact that on layoffs dot FY I they've already announced 750 companies that are announcing layoffs, right? The market is getting the drill. I totally agree with this. I think we're in a we're, we're, we're in a pretty reasonable place here. The real, the real question is now what do you need to take the market lower and this is more of a nuance, but. You know when you look at companies that are now quote UN quote cheap, right? Let's take an example like you. You know what we hear a lot about? Google or Facebook, right? And people will say, my gosh, this is cheap because if you run a screen on it, it's like 10/11/12 times price to earnings. Well, the price, you know, because you can look on the screen, the real question is, are the earnings, right? And the thing that can take the market lower is if you actually think earnings are modelled incorrectly. Right. So we saw this week as well snap. I mean completely just blew themselves 46% down extra day yesterday. I think I just want to say something about this one day. They have the most incredible propensity to self immolate on earnings calls than any other company I've ever seen. There's probably been three times, no less than three times over the last four years. Where I don't know whether it's just poorly scripted or not well rehearsed or the people that are helping Evan get ready for these things, but these are disastrous calls. You know, Facebook's had a couple in this lifetime, but snap consistently. Probably once every 18 months we'll do this. Anyways, the thing just completely implodes. The stock implodes by 48% or something and then it, you know, rolls over to companies like Facebook and Google who then are off 8 or 10%. My point in telling you the story is that if you think Facebook and Google, just as an example again, are cheap at 10 times, well, you better hope that the earnings are right because the earnings are actually wrong. That's actually 27 times in 19 times. You know, I'm making these numbers up to give you the example because the earnings are fundamentally wrong. So that's the risk. Now that's left in the market. In my opinion, that could take it much, much lower is if that, you know, all of this slowdown really contracts spend. And the earnings are actually not accurate. The forecasted earnings will need to be revised over the next two or three quarters. And that's where we will probably see the low. If however growth is muted and the Fed can as Brad said, it's a really good analogy. Now just course correct by degrees, you know a degree here, degree there. We've probably consolidated the lows. So said another way, we look at a company like SNAP or Google, a lot of their expected value has to do with people's ad spend. We now see less homes being sold. So maybe people in real estate stop spending less on ads. There are major advertising category, maybe direct to consumer. People are not buying because the supply chain issues. This stuff is too expensive and we're not going to spend on ads. And so all of this ad revenue, that's some of the first to come out of people's budgets. So, you know, even as great as snaps results actually looked, they were up 38% year over year. They're generating over 100 million of free cash flow. The guide was terrible because what they said was our E right, our earnings right, are not modelled accurately, right. And so that's the risk that you now have to take to every company. You cannot look at a screen in Yahoo Finance or Bloomberg, look at a price to earnings ratio and say, wow, 7 times. That's so cheap. It may not be 7. You have to do your own work. It could actually be much higher than that because your earnings may be at risk. The earnings being at risk, is this contagion that we talked about, I don't know, 6 maybe. It's like we're going on almost a year now, Sachs. We talked about a contagion happening cause we've all experienced it in the last two recessions, twothatthe.com bust and the Great Recession. So what are you seeing in terms of accompanies this contagion risk? Are people cancelling SAS contracts on the margins? Obviously people are doing hiring freezes. Obviously people are laying people off or people go to start renegotiating salaries. You know what? What? What's the next couple of shoes to drop here? Sacks. And that would signal to you a true bottom here. Like have you seen, I thought maybe one would be if somebody offered somebody an investment with a two or three times liquidation preference. Have you seen one of those yet? Have you seen people say we're going to renegotiate salaries? Because that's when it was really dark, right? The last two times that was the true dark. It's gonna take time to get to that point. I mean where you start seeing structure in deal is is in deals is when a founder. Is trying to preserve evaluation they got last year and that can't really be justified, but they don't want to just take the down round. So you try to preserve the optics the last round by building all these preferential terms. We don't like to do deals that way, but you'll start to see them happen later this year when you know companies get more desperate. That's not the first thing that happens though. I think that that to your point about the talent market, it's definitely going to happen. Has it happened yet? No. What has to happen is first all these open Recs get canceled, companies freeze their hiring plans. Then eventually they do layoffs. That's coming and then the talent market pulls down. Those things are here, both are here. So what's the next in talent wars? Well, yeah, I mean, look, but within the next six months, the talent market is not gonna be as hot. And you know, in the same way that startups aren't getting ten term sheets now that maybe they get one or two if they're a good company. Same thing with talent, right? They're not going to have ten job offers. They might have one or two. And that's going to create, that's not going to create the same upward pressure, continuing upward pressure for. For increases in in comp, to your point about like will SAS contracts be cut, I mean? I think software is pretty sticky. I mean if it's a good product. Bill, deal cycles get longer, yes. Will there be more mortality risk in the startup, OSB customer bases of companies? Yes. I think one concept that starts may want to wrap their heads around is what I would call deferred mortality risk, meaning that during the last few years, during the boom times, the graduation rate from C to Series A Series B was very high, perhaps artificially high. So there's a lot of companies that got funded and advance to the next round. We're in more normal times they wouldn't have made it, so got it. Now if those companies haven't really fixed their issues, they've just deferred the mortality. So I think all of us probably have Sassanian need to be modeling out higher logo churn for. For customer bases that are skewed towards startups or Subs and we don't know what those numbers are going to be yet, but that is likely to happen. I think that that's right. I think the other thing is that there are there's a lot of companies that are going to have to get religion on free cash flow conversion ASAP. And I just think that most CEO's, to be very blunt. Are poorly educated and innumerate, so their level of numeracy to even understand this is pretty poor and most board directors are equally. Can you unpack it right now? What does it mean to to get the business to free cash flow? What does it take, why is it important and what are the how do those businesses look differently to the more, spend less? Then you make. OK, hold on. I just want to make sure I got it correct. You make money, but the number of the money you make is higher than the number of the money you spend. Got it. OK. And then there's a delta there. There's some difference between those two numbers and that number is important to some people, is what you're saying. I think increasingly getting that number to be greater than zero is going to be really important. It it allows you again, everybody starts to throw out this whole thing, which is, Oh my God, you can never slow growth and the company will die. And yeah, maybe in a vacuum that that's true. But when every other company is fighting tooth and nail to survive, the only thing that you need to do is actually survive. By surviving, you win. And if you can basically make your cash last as long as possible, even if you cut to the bone and stop growing. If you come out the other end and you're the only company that's left, you will win and run over the market. You may have pushed to the right a few years your plans of world dominance, but they're still available to you. It's the company that foolishly thinks that they can continue to spend money at the same rate or in the same ways that are going to learn this hard lesson because I think that investors are not going to tolerate. Being able to, you know, provide incremental capital to organizations funds who are then, you know, misallocating that capital to basically support a poorly marked portfolio. And I think that is going to be the real come to Jesus that actually makes all of this thing come clean like pension funds, family offices, endowments. All these organizations are smart enough to realize that they're giving good money after bad if what those folks are going to do is not demand portfolio rehabilitation. And instead are just going to basically keep the marks of their old funds because they're just in a in a game of waiting it out. Where the whole taking action greater than, you know blind hope and just going, you know, steady doing what you've been doing. You gotta make some changes. I mean, look, I love Brad's reaction. I think that. Most growth oriented funds are looking at their portfolios and they're trying to balance 2 strategies. Strategy one is get into massive rehabilitation mode. The problem is most of these people have never built to run a company, so they have no idea how to rehabilitate anything. They're, you know, market momentum folks, and in that they were excellent. But in actually helping CEO's build and rebuild a business, I think that they're not as well suited. Doesn't mean they can't do it, but they're not as well suited. That's pafe. But I think that path is very painful and it requires you to take medicine, the bitter medicine, which is to basically mark your portfolio down 50 or 60% just like the public market. Terminal valuations have gone down. The other alternative is to basically raise enough money. To do, for example, unpriced converts into those same companies so that you don't have to remark, so that the auditors will be allowed to carry these fake valuations, you can maybe mark it down 10 or 15%, but I don't have to mark it down 50 or 60% and hope. The market returns to its previous state, but as we've all talked about, that previous state is probably unreliable because it was a moment where we had a global pandemic where we took rates to zero and we printed 9 or $10 trillion of excess liquidity that inflated these things. So I gotta think that, you know, prices in 2019 were a little bit ticking up, 2020 were really ticking up, 2021 was egregious and 2022 is the is, you know, where it all comes home to roost. Brad explained to us we we hear free cash flow, we hear income, net income, EBITDA. We we hear all these terms now free cash flow is what everybody is focused on. I believe that seems to be the predominant. Alien Cry and a lot of public market companies. Now. Can you explain to people what the difference between these things are because people kind of bundle them together. Why? Why would somebody like Dara at Uber just say, hey, you know, we've been talking about Adjusted EBITDA, EBITDA income, net income, all the stuff, but free cash flow is what we want to focus on now. Or is that correct? Yeah. You know, on our friend Bill Gurley, rails on this adjusted, adjusted. And, you know, look to your left, look to your right, adjusted one more time, EBITDA right. Like in markets like this, what people want to know. What's the green stuff I can take out of the business and put under my mattress? Free cash flow? Distributable free cash flow? And not only that, how much per share? I think the single biggest issue growth investors are focused on today is the easy way out for all these companies. They'll tap down a little bit on their hiring, they'll tap down on their spend, but out of the back door they want to give a bunch of free stock to employees to help offset that pain. This is really important to understand because stock is a real expense, right? When a company goes public, the more shares you have, the lower your price. So it is a real expense to everybody, the founders, the employees. The investors, right. And so what's what? I think the single biggest conversation going on in boardrooms in Silicon Valley today is, hey, can we have a little bit more stock this year, whether it's options or whether it's outright RSU's to give to employees because if we don't give it to employees, they tell us they're going to leave. This is a real hard truth. I had a CEO of an incredible company called Me and Say, Listen, we pay our engineers 1,000,000 bucks ahead, but we give them stock that over the last five years. Has been worth another $1,000,000 each year. So they built their lives as though they had $2,000,000 a year in income. They bought a house, they bought cars, they sent their kids to private schools based upon that $2,000,000 and now when we tell them that this upcoming year. The mill, we're not making whole on that million. It can't be when when we win you win and when we when when we lose you win. So the tough conversation is we're not re upping you because the stocks been cut in half. And so now that engineer is saying, yeah, but this year that means I'm only getting paid 1.2 million. And the answer, the tough answer is yes, right. Shared sacrifice. You should have never assumed that that was going to be worth an incremental $1,000,000 a year, but that takes leadership. It takes courage. That takes a board that knows what they're doing to explain that over the full arc of that employment. And the first thing the mercenary employee says is, well, I'll just go work somewhere else. And the right answer for a good leader is OK, if that's your approach to this business, then you need to go work somewhere else. I mean, you just did a great test, right? That's a great filter. You, you you're a mercenary, and, you know, you were with us when we're up, but you're not with us when we have to take some austerity measures. This is the end of entitlement across the board, sacks. I mean, we had an entitlement class. Everybody thought they could raise VC fund. Everybody thought they would have 100% IRR because they would just buy FT's and flip crypto projects that had no released product. And the same with employees. They just thought, I can just keep you know, raising my salary X amount and now it looks like ale said, everybody comes back to work three days a week and we don't see a lot of people quitting Apple because there may not be another option and maybe a lot of the firings that are occurring. I'm thinking of cameo here had top three of their top like 6 or 7 leaders leave. I interpreted that as maybe they had really big comp packages and when they did the layoffs they said, you know what? The number twos in these positions can get the job done. For a third of the price, maybe that's better for the business. So is this the end of austerity, the end of entitlement? I think so, or a lot of it. There was a great article here in well that was that came out recently about Netflix, where Netflix, they're finally getting real about their kind of entitled and they're woke entitled employee problem. And this is in the New York Post, but there are many other newspapers that covered it. Basically it says here Netflix tells woke workers to quit if they're offended if you find it. Hard to support our content breath. Netflix may not be the best place for you, said the memo. So.. Yeah, they're just sick of it. They're just not gonna put up with it anymore. They're sick of being held hostage by their employees who think that they can kind of muscle the leaders of the company by starting a petition or boycott campaign every time they want to drive the company in a certain direction. And so I think companies are finally figuring out this is the only way to react to basically being held hostage if you don't like it, quit. If you don't have 7/8. Job offers, you know, and recruiters calling you constantly because everybody's on the hiring freeze. Well then maybe people will appreciate the contract of I work for you, you give me money, and then everything else is superfluous. On that note, did anybody see the Ricky Gervais Netflix measure yet? If you're not Netflix, it's on Netflix. It's unbelievable. I mean, Dave Chappelle, you know, in terms of bravery, Ricky Gervais was like, I've already made my money. I'm burning the whole building down. I mean, he went full. Equal opportunist and I mean I think the trans issue became like 10 or 20% of the of his latest specials. So it does seem like the comedians are saying, you know what, we're going to make jokes, we're gonna make jokes about everybody. We're not going to buy into this. You can't cancel us. We're just going to keep making jokes and we're going to keep making money and and and that whole concept that. You know, people are gonna be held hostage, I think is over and independent of what you think of making jokes of, you know, various marginalized or smaller groups of people. Can we please go back to something Brad said a while back about how mansion saved the Democratic Party? Because I think there was actually interesting point there. Yeah. Packets, yeah. Such notorious right wingers at Jeff Bezos have said something very similar lately. When do you see that? Where Biden, Biden tried to blame billionaires for the inflation and Bezos was having none of it. He said, no, listen, it's not because of us or our companies, because you printed too much money and Joe Biden or he said mansion saved you from yourself because it would have been another 4 trillion of spending on top of all the other trillions of spending that we had last year. So it's absolutely the case that that if the administration was left just owned devices, remember they were touting back in December, they were touting the idea that this 4 trillion to build back better spending would somehow be the cure to inflation. Imagine if they had poured that gasoline on the fire. We would go to 20% inflation. We might have had a currency, uh, you know, like a serious currency issue, no chamah, but but but we just finished the point. I don't want to just make a partisan point here. I wanna there's there's a serious economics point here with our learning. I hope our policymakers learn from this, which is what happened over the last couple of years. We had $10 trillion of money printing, right? Why do they do that? They thought that they could stimulate our way out of this COVID recession that they had induced with lockdowns and they event. The point is they thought they could stimulate economic activity by printing money, and maybe cynically, politically they thought it would be good for them in the midterms. What actually happened that 10 trillion goes into the economy, but there's no corresponding increase in the output of goods and services. So two things happen. First, price levels rise and we get inflation, and 2nd we get an asset bubble in the stock market. And then the way both those things sort of come crashing down to Earth is the Fed looks at this inflation and suddenly has to Jack up interest rates. That pops the asset bubble, it vaporizes something like 14% of global wealth, and then simultaneously workers feel a lot poorer because their wages haven't kept up with inflation. So this whole idea that you can just print money as a way to create wealth and prosperity, I hope we take away from this. I think recession that we're going into is that is not a viable strategy. The only thing that creates wealth in a society is the output of goods and services that people want, and you just can't try to. Sort of play games with that by creating Phantom, this sort of phantom money that doesn't represent a real increase in good services or productivity. Yeah, it's hard for people not to take this all as partisan, but if you just look at the objective facts, the last two administrations have printed money like drunken sellers, and it's a mess right now. So you you you can divorce yourself from any conception that this is partisan. Trump spent a **** ton of money, and so did Biden. And who's more qualified than Trump and Biden? Elon Bezos, the people who appear on this podcast? We have much more of a pulse on what's happening in the actual real economy and in entrepreneurship and capital allocating than these people, and I love the fact that now. You know, Bezos is a shitposter. He just doesn't get, he doesn't care. And I think we're having, like an honest discussion now, right? One of the one of the areas where I, I don't think Elon gets enough credit is when he explains macroeconomics. I think he actually really understands the, the, the What an economy is. I mean, an economy is basically a trading system for the production of goods and services. If you were to go this point he's made, if you were to go to a desert island and somebody just gives you a billion dollars when you're sitting there on that island. You can't buy anything. It doesn't make you wealthier. What makes you wealthier is the production of goods and services that people want. And that's ultimately what an economy is. Money is just the accounting system. The dollars is the accounting system. If you start printing lots of money, all you're doing is debasing the accounting system. It doesn't make anyone richer. And yet, you know, the way that conversations around economics really take place, the only thing you ever hear about is stimulating demand. You never really hear anything about production. And, I mean, this is an old debate that goes back to the 1980s. About, you know, supply side economics, but regardless of what you call it, wealth ultimately comes from our capacity to produce goods and services that people want. It's a great point chamath all this adds up to companies and the government's balance sheet becoming tighter and more efficient. So the talent diffusion across the industry, perhaps everybody being entitled and getting overpaid, people not wanting to go to work, people who have jobs, not wanting to go to the office, all of this seems to have. Actually reversed in three months O this medicine we're taking. We stopped eating the bad food, we started working out, we're getting better sleep. This is going to turn around for the the companies that take the medicine, the management teams, the capital allocators who do the hard work and sharpen their pencils. As we've talked about, this will all result in a more efficient and vibrant economy, yes. I think for the most part, I think there's still gonna continue to be examples of folks who basically run themselves into a brick wall because they don't want to make the hard decisions. That is going to be more exaggerated in Silicon Valley because we have a culture of tolerance and we have an economic business model that supports. Kind of irresponsible decision making and supports poor governance, you know, look, I I've said this many times. But a fund's job ultimately? Is to make a very important decision about whether they truly care about generating massive returns. Or whether the fee income becomes so meaningful so as to drown out every other incentive that they have. And I think by and large in Silicon Valley, if you track all of the. Increase frequency and fundraising. You can also probably follow those dollars and they generally will be the most poorly run. They'll be held the least accountable. And I think those will have the largest negative outcomes. And then instead, if you follow the dollars of the the real practitioners who have discipline, they look kind of sheepish and silly for years in the middle of a rally. But they're the ones that are able to really reset and help some of these few companies really win. And I think that you're going to go through that cycle over the next four or five years. And so you know I think it's super well said truth because I have felt at where I've been made to feel silly by some folks who said why are you asking to do diligence why do you want to have a board seat why do you want to talk to customers why are you asking for month by month revenue made a sub economic decision like the idea that over the last four or five years you optimized for anything except the market beta was kind of dumb you know and it's and and the worst thing that you could have done in that. Was confuse alpha and beta meaning. Alpha is what you are able to do because of your discrete skill. Versus anybody else. Beta is when just the market goes up. Said differently, you could take any NBA player and put them on a high school basketball team and they would be the, you know, college player of the year. Any single one. OK, that's beta. If you then can be the MVP of the NBA, that's alpha. Yeah. OK. And I think that a lot of folks were made to feel very silly or, you know? A downer or a wet blanket in these last few years? Who will probably have the last laugh? It's been unbelievable, Brad, to watch the changing of attitudes and the entitlement in fundraising and private markets in the last 60 days. And it's been even more pronounced in the last 30. I literally have people we talked to last month who had really crazy expectations. They've come down by 50%. They wanted 50, now they're at 25. They didn't want board seats. Now they're OK with board seats, information rights. They were fighting against information rights. I don't know why that's a hill to die on. Now they're like information rights. Yeah, sure. Here's our CFO's e-mail. We need to get money in the doors. So I guess what's the silver lining here? It does seem to me as a great setup right now. Jason, let me ask you a question. Hold on. Yeah, I ordered the Brad like. And then you're forgetting one other key thing in in the in the race to raise all of this money. What did these folks do? They hired these mid level kids. As partners into their venture firms and gave them money to put into companies. What do these people know? No mentoring. I'm not saying it disparagingly. I'm just like, what do they know? How do they know how to actually invest? Investing is just not you see it, you just say, OK. Well, I think it sounds cool. You know, there are some of those younger folks who are gonna turn out to be All Stars in there. You're just like in the NBA, and they're gonna be some that, you know, proved to be writing the beta. But let me answer Jason's question because, you know, maybe end on a note of optimism. In some countries, you know, notably China, right now they're doing a lot to prop up a bunch of companies that should be allowed to fail. Right. One of the beautiful things about free market capitalism, the creative destruction, the cycle time on creative destruction in this country has never been faster. Right. Make no mistake about it, if you took money at a valuation over a billion dollars. OK. Last year you're not, that's not a venture capital bet. I call it quasi public. Right, you stepped into the bigs and you said I will deliver this plan. And if you don't deliver the plant, there's not gonna be a lot of tolerance. There's not going to be tolerance for just giving away a bunch of more stock. There's not going to be tolerance for no course correction, right? Maybe in seed or Series A right, there's a lot of tolerance because you sign up to a lot of unpredictability. But the level of tolerance that you'll see out of late stage growth investors is going to be akin to what they do with a public company that runs them off a Cliff. You know how that is. You've been on those earning calls. So I think this is going to shine a light on the bifurcation that we really have. We call all of this venture capital. But the truth of the matter is series C and before is venture. Once you're stepping into the bigs and taking money at a billion, 2 billions, the expectations are different. Your access to capital will be different. The expected course correction will be different, right. But I take it as a I take it as a sign of strength that we're going to work through this. We're going to have, you know, the the private markets are absolutely going to go through a reset, but we'll get through it and the winners will win. And those who. Failed to course. Correct. And want to fly into the wall? Will do that. And we'll get on with the next generation of incredible entrepreneurs solving big problems. The secular curve of technology solving big problems has never been steeper, right? And the cycles that overlay that secular curve are not suspended. We have not suspended wars. We have not suspended economic cycles. And so we're going to have to get through this one. It's happening in record. Pace sack, actually. That's an interesting point. Wanna let me ask about a question? About that, which is what's the potential here for more of like a AV shaped recession, where to your point, the market is correct more rapidly and violently than ever? Snap misses of you know, issues a new forecast down 40%? Is there a possibility that this thing gets resolved in say six months? That's not to say that valuation levels are ever back to where they were, you know in the second-half of 2021. But in six months could we have sort of done this big reset, washed out a lot of the problems and you know again valuations are not back but the market become the the capital markets become become unfrozen and we're back to a more normal operating environment as opposed to say, yeah as opposed to say like more of a you. Where we're kind of bouncing around the bottoms here in this volatile state for about 18 months. You know, and then it's more like the.com crash would come out of it in two years. I see smart people on both sides of this. I hear Jason Lemkin's been saying, I think this is kind of short, deep, sweet, six month reset. Fred Wilson just wrote 18 months at least. I think Sequoia is saying two years. I mean I think our instinct is 18 months to two years. But what do you think the possibility is that we could be in a more normal environment in six months, right? So let's let's separate public markets and venture markets because venture markets as you know have a 6 to 12 month. Flag just in terms of the reset, but I would say you know the future is a distribution of probable outcomes. There's a downside case in upside case in the base case. I think the base case is by this fall will have very good evidence right of where inflation is rolling over. I think it is rolling over what the Fed is likely to do the upward bound on, on interest rates and I think we'll be at a point where we can start underwriting to the five year average. Again make no mistake about it, the S&P and the NASDAQ. They are still 30% above where they were in January of 2020. 30% above where they were in January 2020. How much better is the world today than where it was in January 2020? Well, I think what the market is saying is that we've grown the economy on a nominal basis about 15% during that time and earnings have about doubled, right. The earnings margins of those companies are about have about doubled. So you would expect normal course and trajectory maybe that those companies would be 30% more valuable. The problem is as we look ahead. To Chammas point, the earnings are likely to come down, profit margins are being squeezed. So I think there's a decent, decent argument. There's more pain to come in the public markets that we haven't seen the bottom. However, I do think that the Fed is taking a good course here. I don't think that we have runaway inflation. I think that, you know, we're going to have an investable environment come this fall. However, I think for venture, there's a 6 to a 12 month lag to that. So I think you got to add it to those six months. To really get to the market clearing prices for all these companies. But I think it's incumbent upon all of us to give really good feedback today. And I see a lot of it right to entrepreneurs about making that course correction. If they're only turning the plane 10 degrees when they see lightning dead ahead, they're making a huge mistake. The default action by every founder today should be a 90 degree course correction unless they have very good idiosyncratic reason. In that business in terms of their outperformance to stay the course? Plan for the worst, hope for the best. Yeah, and you could even bifurcate the companies in. Private markets to ones that have strong product market fit and the ones that don't, there's a lot of companies, said David's point that we're getting series B without product market fit. You know, it's one thing to get your Series A when you have this like weak product market fit and a great story. But when you start seeing series's happening on momentum, it's like that to me is, is, is, is going to be impossible to resolve. That company has to go to 0 or has to reset or give even give money back to founders. Those are really the three things I would see as a true bottom, like the really dark moment. Where people have two or three liquidation preferences, people reset, reset comp and tell people, listen, we're going to cut comp 30% across the board for management. If you don't like it, leave. And then finally people saying, you know what, we're gonna give the $0.60 on the dollar back to investors. Those are the three things I saw during the two down terms. You're saying something that I think is also important that's not really talked about, which is that there's going to be a lot of really good companies with really horrible capital structures, really terrible cap tables, really bad valuations, really big overhangs of preference stock that are going to have to get worked out and in getting that worked out. Going back to what Brad said, the person that course corrects 90 degrees. Will win. And the reason they'll win may not even be because they're being that courageous. They're just being less stupid than everybody else, quite honestly. Because you have to remember in most of these markets over the last four or five years, we funded four or five versions of every imaginable company. Right. And there's gonna be 2 winners, Sandy, and 30%, yeah. And and there's really only gonna be 1 winner and then there's gonna be a marginal second kind of also ran that captures some value and everybody else is not that valuable. And you know, that's roughly been true. But the reason we were able to support that was that every company looked kind of interesting, anyone with traction. Could be, you know, competed against because the only differentiator at the time was very cheap money that was effectively free and it was flowing in, you know, faster than you could count. So all of that has to get sorted out. So I just think that that those dynamics shouldn't be ignored. And so, you know, again, hard work too. I mean two of the thing we've been saying here, the it's hard work for a board and founders to do this, but what choice do you have? Well, the problem is the if you take much more sophisticated markets like the debt markets, which I would say are much more sophisticated. OK, cutthroat, liquid covenants, when you see the people that make the money, two things are true. Number one is they're incredibly sharp elbowed. #2 is they make money in moments like this, right? If you look at Apollo's great returns or blackstones great returns, or cerebrus, you know, these folks were the, you know, they they really were the Barbarians at the gates, and they made all the money in moments of true dislocation. If you apply that construct here, you know, we've never had to go through a period where there are some real terms and conditions attached to the incremental dollar. And I think that if that does come to pass in Silicon Valley, you're just going to have a reckoning. And I think that that what a real really do is just sort out the winners and the losers, and it'll sort out the folks that were able to get to default or close to default alive or at least default life support default investable. Default investable. I like that one too. I mean Sachs made a great tweet. He basically said it's not default alive or dead, investable or not, and that's it. And even finer filter, well, no, pretty default. Default alive is fantastic. If you can get there basically just means cash flow positive. I mean all default alive means is that your cash flow positive or you're going to be cash flow positive based on the money you have in. You don't need money. Yeah, exactly. You don't need money. Well, of course that's the best place to be is you don't need money. But I think, you know for early stage companies that's almost an impossible standard. You know, it takes time to get to the point of being council positive. So therefore. I was trying to propose a standard that I thought was more actionable for founders because it was because it wasn't impossible and I call it default investible, which is here are the metrics that you need. At least I can tell you what they are in the SAS world. You know, here's what great metrics look like, here's what good metrics look like, here's some danger zone metrics. And you need, you know, out of the five key metrics, you really need three or four great ones and one or two good ones to raise in this environment and no dangerous metrics. And if you don't have those, you need to give yourself the time. To fix the problems in your business to get to those metrics. On that note, you know, Sequoia had a really good chart called survival of the quickest that illustrates this concept of giving yourself time. And I threw it in the chat, but basically what it shows is there's a a green line and an orange line that the green line is the company that realizes in May of 2022 that we've gone into a very different environment and they slashed their burn in half and that they basically doubled their runway. And then there's the other company that just keeps going along the same path there were at until they realize, oh, wait a second, you know, and then that, you know, some point in the future, they realize there's been a change. They make a small cut. They make another small cut, and they're always behind the 8 ball. And I've seen this so many times before that the company doesn't make cuts until they're forced to. And so they never really lengthen their runway. And then when they finally do make the cuts that go into a death spiral and die. And now they're over the Atlantic and there's not enough fuel to get to a landing strip. And you're just. Plunge into the cold ocean and die. Founders really have to think about the the asymmetry of the risk that they face, right? Which is, let's say that you cut too much and the environment is better than you think it's going to be. Well, you can always hire back. I probably lower price. In all likelihood, I promise you'll be able to hire back. OK. But on the other hand, if you don't cut enough and the situation is worse than you think, then you just die. So you This is why Andy Gross said only the paranoid survive. You've got to. Think about the downside risk and be more skewed towards the bad scenario then sort of the the sort of wishful thinking scenario. Hey Survivor Diamond, just just one final point here. You know, because we have all these decks flying around now by venture capitalists telling founders to go make these really tough decisions. Being a little self reflective. Where were we all six months ago? Where were we in October when we were putting more money in and they were hiring like crazy? Where were we in November? Right? I remember some of the conversations that we were having, but I look, I posted in in in chat layoffs, dot FYI. Right. The number one company on that list gets here, Sequoia Company. OK, are they making a course correction? You bet you're asked. They are. They're laying off 4500 people, 15% of the workforce. The second company on that list, lacework and altimeter software company, that's doing terrific, growing hundreds of percent, laying off 300 people, 20% rate a 90 degrees turn of the plane, right? That company will never need cash again. But it's not just flying toward the lightning. They're making the tough decisions because that's what leaders do in businesses that are even good businesses. There are a lot of companies that are ship businesses that should be on this list, but they're bumbling along and not making the tough decisions. We need venture capitalists that instead of, you know, this being a popularity contest, venture capitalists need to look inside as well and say, what about our firm? Didn't, didn't work, right. Why weren't we issuing these course corrections and telling people to tap the brakes a little bit when we knew markets were overheated last year, right? And so I think there's, there's a lot of responsibility that sits on both sides of the table. But I'm, you know, there's 714 startups on this list. By the time we're done, there are going to be at least 3000 startups on that. They added zero at a zero. That's another reason I say the Fed is getting what it wants, right? This labor market. It's, you know, it's cooling down very quickly, at least in Silicon Valley. Well, I mean, and the fact that people felt like they didn't need to take a job and they could live off credit and there would always be jobs for them, I think people are gonna have to rethink, like. Can I be funemployed forever? And, you know, do I need to take my career seriously? Do I need to pay down my debt? Do I need to have a a balanced balance sheet? Do I need to my, my personal balance sheet needs to be in order as well. I think that's what individual workers need to think about. Yeah, I mean, Brad's right that there's certainly enough blame to go around in the ecosystem. And you know, VC bought into these frothy valuation levels last year to some degree were all gaslit by by the Fed and these low interest rate policies. I wrote my post about burn multiple and how to measure capital efficiency 2 years ago. It's getting a lot more retweets now than it did back then. But but look, I do VC's have some self reflecting to do definitely. But you know, I'm seeing a lot of tweets going around basically saying like people objecting to this advice on the grounds you'll hear something like if you VC's wanted us to operate more efficiently, then you should have invested more efficiently or if you wanted us to be disciplined. You should have been more disciplined in your investing. And to me, that's kind of missing the point. It's kind of cutting off your nose to spite your face. The reason we're giving this advice is because we just want our companies to survive and we've been to zero. We don't want to zero. We've been through multiple down cycles. And the truth of the matter is, unless you've been in the business world for over 14 years, you've never been through a down cycle. I mean, that means that, you know, no founder under the age of what, like 36 has even seen a down cycle before. They don't know what it can be like. When you go into a two year nuclear, they probably, they probably weren't the pilots at that time anyway. So it's more like people who are 4045 have the scar tissue cause they were in the pilot seat. Totally, totally. So the reason you're hearing all these VC's all of a sudden say get more disciplined. This is mainly because we've seen this movie before and we don't want companies to run out of money and die. You can safely short if you could, the stock of all of these rando's peanut gallery CEO's tweeting their disdain on Twitter. If you're right, that would be a great index. Index down fixing stuff. Just write that company to zero. Yeah, I just turn your ******* Twitter and and just sharing it bounces. I we we would be remiss if we didn't talk about at least for this last segment about the tragedy in Uvalde D Uvalde, TX, 80 miles West of San Antonio, Tuesday, 19 elementary kids. 2 adults were murdered. How are we gonna talk about this without losing our ****? It's really hard. I think maybe the road map did give this a lot of thought. I was like, why is this? Why is this first segment on the market trundling along on ******* life support for an hour and 10 minutes? And I think part of it is because none of us can really talk about this without losing our cool. It's really hard. And but I do think we did good work. Chamath I I was thinking about the good work we did in the episode of Roe V Wade, and we actually came to a point where he said, you know, here are the extreme positions and then you were like, hey, wait a second. I found this data point. I found this data point. We actually figured out, hey, 80% of people want this definition of abortion in the United States. So I'll throw it to you, Timothy. You know, we're all outraged. We're all frustrated, but maybe we could start there. Is there a consensus of what could be accomplished here that you've come to? I've started to think about it a whole bunch. But, you know, we're all outraged. We could all yell and scream here, but a path forward is where my mind goes. I'll just tell you what I what I. Have been thinking about OK, this is just a random stream of consciousness. Let's do it. I think that the Democrats will not make any progress. Because they try to make this, unfortunately. Moral virtue signalling issue, the Republicans will not make any progress. Because they. Become sort of very binary adamant absolutists about constitutional rights and the interpretation of that right in a very specific way. The truth is in the middle. You know, if you go back before we talk about Uvalde Peyton Gendron, who was the kid that shot up at Tops Supermarket in Buffalo and killed umpteen, you know, black shoppers? Lived in a state where there was a red flag law. For those that don't understand what red flag laws are, David, you know, tweeted some stuff about it as well. But essentially it allows a community member or a family member or a school teacher or a police officer to essentially put a restraining order around an individual that they think could. Cause harm and use that as a way to confiscate their weapons. People have talked about red flag laws as being possible while he lived in a state. The kid was, you know, put under a site called, you know, a year ago and it it all just falls through the cracks. Now, you know, Ted Cruz or somebody else said, let's spend $10 billion and only have one door into a school and put an armed guard there. Well, then you find out that you ivaldi, you know, doubled their security spend over the last two or three years. They actually had a person. That may or may not have just kind of like stepped to the side or something to let them in. The police, according to the AP, showed up and stood around for 40 minutes before they were able to actually breach the school. You know, so much so that the quote in the AP article was that there was apparent that. Tried to get other parents to for 40 minutes they were standing there. You know, in California you have, you know, very restrictive measures, but we've had, you know, in San Bernardino and other places, we've had mass shootings here as well because the guns can just get transported across state lines and there's there's no real way to stop this. The NRA I find out. Just so if you guys are interested. Mitt Romney took $13.6 million from the NRA. This is the moral finger wagger. Of the Republican side, who you know last time I checked is a multi centi millionaire but somehow still needs to take $13 million from these folks. Rich Burr took 7,000,000 Roy Blunt 4.5 million. Tom Tillis 4.4 million. Cory Gardner 4,000,000 Marco Rubio 3.3 million. There's no effective counter lobby. That says. How about we have a more moderate and restrained pro gun set of rights and field candidates on the left and the right that could Jason find this middle ground? And so, you know, we're in this two or three day. It seems like where folks will get extreme and then nothing will happen. Here's one thing that I think we can all agree as well. If you look at the underlying family situation of all of these mass shooters, there is a really disturbing theme that I think is worth putting out there. These are all universally young men, 1819 odd years old. They come from broken families. This individual, Salvatore Ramos's father, was absent again, according to the Times. In the Wall Street Journal article I read mother, intermittent drug use issues, lived with the grandmother, bullied. They're unemployed, barely graduated, if graduated at all. In high school, they harboured these deep resentments towards women or minority groups. They then project a lot of their frustration. They were bullied potentially in high school growing up and all of the they were posting all kinds of very challenging content. You know, apparently this kid had a one tick tock of where he sat in a car with a dead cat in a paper bag. You know, he would post on Instagram of assault rifles. And nothing happens. So I just think that we have to acknowledge that there's a complete failure of our politicians. And at this point I think they should all be replaced writ large. Every single one. Nobody has added value to this solution. This is nobody has really tried to figure this out. But then also like. Parents have to do something incrementally, more from the perspective of the community because these kids are going to school with our kids and that the red flags are there, the red flags are there. So just one last thing and I said I said Brad, I said to my kids. When you interact with your friends, I just want you to understand when you're on social media and you encounter this content. I hope you're never like either scared or embarrassed or unsure enough to just show somebody when this stuff is happening so that you can let somebody with a little bit more maturity and judgment try to figure out what to do, if anything at all. But these communities are completely failing these kids as well. Brad, you have some dad. I would say that every ******* country on the planet has kids with mental health disorders, but not every country on the planet has kids getting shot up in schools and supermarkets and churches. That is a unique feature of the system that we accept the system we created. Right, I'm not against guns. You guys know I took my kids to a shooting range last weekend. But the idea that we let you know assault weapons be sold in this country with no background checks? That we let assault wipe rifles be sold in this country with no limits on magazine sizes, that you could just replace magazines. It's total insanity, right? So I think this is a country that. Does a lot to self help, but we are not self helping here after the assassination attempt of Ronald Reagan. Amazingly, Republicans found their voice. And they said, let's have an assault. Ban on assault weapons or let's have a ban on assault weapons that expired. And we as I asked my analyst, I said plot the number. Of shootings. Since the expiration of that ban. And it's terrifying. Yeah, it's obvious. And it should be something that we just, like, don't accept, like the middle ground. Jason, I saw what you tweeted. There is an obvious middle ground, right? There's about whether it's background checks that Steve Kerr, I mean, is he's gone viral feeling the same way we all feel. But there are also technical solutions. Why the hell do we let assault weapons? Why? Why not put a scrambling device on these weapons so that you can't fire them? In schools and churches, if somebody says that's a breach of their Second Amendment rights, I'm sorry, I'm also not going to allow you to drive into the schoolyard with nuclear material. There are some rational limits we can agree to. So I don't think this is a partisan thing at this point in time. Nobody's saying, you know, ban all guns, right? In fact, I I think there's a plurality among gun owners. They, too, want reasonable limitations. On these things which are killing machines, not hunting machines, sex. Any thoughts on this? Yeah. I mean, I I so I think we're looking for solutions. I think these red flag laws and building on them is is the way to go. You know the the the problem with with background checks and and I'm not against them. I mean, you know, I've, I've gone through background checks to get, you know my guns and I'm in favor of them. But they wouldn't have done anything to stop the Buffalo shooter. They didn't. I mean, you know, the Buffalo shooter was in New York. They've got the toughest gun control. Laws in the nation, the background check didn't stop him from getting the gun because he bought it lawfully. It didn't have a criminal record. So you know it doesn't. That by itself isn't going to do it. So I think where these red flag laws are useful is that we've seen with these all these school shooters, they have a similar kind of profile, right. They are disturbed young men like in their who are still school age 1819, early 20s exactly now this shooter in. Uvalda, I mean, there are reports coming out now that he had been cutting his face, that he had aimed a BB gun at people. So he was clearly ideating towards this idea of shooting people. He had posted violent fantasies, basically of mass shootings on social media, and he told his classmates he wanted to kill him. I mean, there's almost always a call for help here, almost, say, with the Buffalo shooting. I mean, the people who these like psychos go to school with are the least surprised they all know. Because these people have been warning, they've been saying that they're gonna do it. So I think we have this problem of we've got these young psychotic people. And I think the reason why it happens young is when somehow they get into adulthood, whatever this mental illness they've got basically takes hold and they snap and they become psychotic. And it doesn't take long for them to act on those fantasies, those violent fantasies. So the simple solution here, I think, is to prevent those people from getting guns, you know, if you threaten mass. Violence. You shouldn't be able to get a gun. And I you know, I personally don't think that's an abridgement of Second Amendment rights because look felons can't get guns either. If you commit a felony, you can't get a gun. These people haven't committed a felony yet, but I don't want to wait until they do. If they're if they have these kinds of red flags against them, then there should be a way to file to basically get a protective order preventive. We don't. We don't let 12 year olds drive cars. We don't let them drink beer because we don't want 12 year olds drunk driving. Right. And then at some point there is a licensing that occurs. I think a lot of this is framing. I think this is once again very analogous to this abortion issue where most people are pro-choice and want restrictions on abortion where they don't occur after a certain number of weeks, just like Europe got to and I was just, you know, ideating on this and I think replacing the NRA, to your point, chamath, they have funded people. They've become a key funding source for a lot of folks and they've, they've been over. Branded themselves. What if we had Americans for reasonable gun safety and we have this organization raised a ton of money and they just outbid the NRA for Republicans and for people who are against background checks and we just. Good question. But look, Mike Bloomberg started every town for gun control after Newtown and it did it. It hasn't really had I think, the impact that that we wanted. I mean, well, I think part of it is what you said. So let me just give you my, my little 44 bullet points here and have you react it you you are right that people are. Salutis no abortion, you know, no restrictions and no guns or no restrictions on guns. Background checks we all agree on. Make them more intense and make them proportional to the caliber of the weapon. If you want one of these weapons, why don't we have you go through a training course? So for a pistol, you've got a 2 hour training course for an AR15 or something that's more powerful. How about an 8 hour course? A four hour course? Then you could actually see the red flags emerge. And would somebody who has this red flag issue go through that the red flag law should be. National and they should be very strong. And then finally, what if we introduced insurance for certain classes of weapons? Not all. If you want to get a rifle, you know, to go hunting or a pistol for self-defense, maybe you don't need to have insurance. Or maybe if you have one, you don't need to have insurance. But once you get to high caliber, once you get to having clips that are a certain size, what if we just had some basic insurance because that would force then somebody to underwrite the danger of that weapon. I mean, look, the the trick here is to figure out a system that has the least. Possible impact on law abiding Americans. There's maybe a few thousand of these mentally, highly mentally disturbed young men. But like I said, their schools know who they are, right. And what we need is a process where you know, that doesn't turn into the No fly list where all of a sudden everybody's on it. Or training or insurance or content moderation or something like that. This is the look. This is what the NRA is afraid of is that you create a red flag process. And all of a sudden, thousands or millions of people could be on it, right? So you need a right. But that's not true because you had you had this kid who could have been put on it in in New York. He wasn't right. No, no, no. Look, I think we need to, I think we need to figure out how do you create due process around this. And I I think, I think if a school they know, I mean, you get multiple affidavits from a teacher, they should be put on the list. Yeah, school is a no brainer. Police officers in prison. The problem isn't that these, these kids aren't identifiable because, as you say, David, they're hiding in plain sight. These schools. The problem is that there is no mechanism or incentive for any of these kids, parents, educators, teachers, community members to do something about it because they don't know what that something is. And this is where these kids are left to fester, fester, fester and then the. And it boils over and it's all of us that have to pay a collective price. David, can you respond to even worse than that Charmouth because in the Buffalo case, the, the Buffalo shooter was referred to for psychiatric evaluation because they thought he did have mental illness. And then they released him after the weekend. And then he got the guy, got the gun. So he should have been put on a red flag list and that should have been the end of it. And we had database like a federal database, which they're the NRA fights, too. I also want to say something about these technology companies. There is an explicit decision that technology companies can make. To be able to review. Content from certain kinds of accounts and start to build a cluster and a distribution of risk. It is possible I help build one for one of these companies. So don't tell me it's not and I I will not tolerate some non-technical person telling me it's not possible. It is absolutely possible. And these technology companies should have a mechanism to be able to say, you know what, here are these thousand accounts, David, in the United States of these thousand individuals that you know are sort of getting to a red line. Here, yeah, inclined whatever. But it's it's also, it's it's not it's not just gonna be what they post on social media. It's. Although in both cases, Buffalo and Uvalda, they both posted that they were gonna do what they did, but in addition to that, it's the trail of bread crumbs. Warning system and Warning System is a great idea with you ivaldi the the cops were called out multiple times for violent disturbances, you know, and you combine that with what he's telling people in the schools and what he's posting on social media, you it's there's an identifiable profile here. It's not 1 red flag, it's multiple red flags where this is where these corporate social media companies need to take off. All of this for profit focus. That's extreme at this point. Be willing to degrade margins to hire the 10s of thousands of people to manually review content. OK? There should be a mechanism that allows these folks to plug into some system that law enforcement can use. There is an early warning system that can be built with your layer. Great idea. Human review before this stuff gets out of control, David, to control people's individual civil liberties, OK? But that is a big step forward from where we are today, which is nothing there is. Zero leadership in America. Can I just ask David one question? David you you you correctly pointed out, I think it's astute that. We we can't penalize people who are legally getting guns or create too much friction for them. I understand that. Would you consider training or insurance and just take each one individually for high capacity these deadly assault rifles would you consider what would you consider each of those in terms of realistic, you know having some basic training a four hour training class. I mean like like you do for like each food do for driving a car. Should we have that first salt rifles and then should insurance be required? What training does is prevent accidental shootings. OK, that's great. I'm not against training. I love training. I do training. But but look, what should be mandatory, what training prevents is, is accidental shootings, Buffalo and Uvalde and all these school shootings are not accidental shootings. They're going out and killing as many people as possible and they know how to use these weapons. I mean, the problem is, is what their objectives are. So I don't think training solves it. Well, let me ask you this. If you were in training for four hours and you're an instructor and you were trained to look for red flags and it prepared and some friction from this person going and buying it and doing the next day, wouldn't that? Help and then going to have to buy insurance the Buffalo shooter case this this grocery store for like 4 months. I mean they are patient. They are methodical in how they go about. So they would have gotten the carnage I think so that but but we don't even necessarily need that filter jacal because I'm just telling you that the profiles of these psychos, it's so dramatic. When you go back and look I mean again multiple red flags are killing animals. I just joining BB guns at humans. They've been the cops have been called out on them. They're posting on social media. Their classmates are all terrified of them. Their own families are terrified of them now, so we have we just need to basically we need an incentive to Jamal's point for schools, I think, to create these profiles and file the right forms, the affidavits in the database now do insurance for high high capacity assault rifles. Would you be in favor of a do you think it's a viable solution? Do I don't understand what that does. Well, it means you would have to apply and say, hey, I'm Jason Calacanis, I'm 18 years old, I'm in this school, I would like to apply to own an AR15 and then some insurance companies say, OK, you're 18 years old. Romeo, you live in Texas. Your bill is going to be $600 a year for this gun, OK? You're a 45 year old male in Wyoming. You're bill is going to be $100 for this because we've done some actuary tables on the actual risk. Would you be in favor of insurance? I think the key to solving this problem is to create the minimum disruption on law abiding Americans, OK? 10s of millions of them who like you wouldn't do insurance. Look, I don't know what that would do exactly. I want to stop the basically that I think what are a relatively small number? Of psychos, young psychos. Maybe there's only a few 100 or a few thousand sort of candidates in the entire country. I I don't want. I don't want to wait for them to become felons to to basically prevent them from getting guns. And by the way, there is a, there's there's a bunch of. Study about this there's been a lot of social science studies about the individuals that own guns legally and those individuals that sort of break and commit these crimes. And whether we want to admit it or not, there is a definable archetype. It starts with gender, then there's socioeconomic conditions, then there's, you know, home situations. Yeah, these are knowable things. These can be built into a combination of software and human review. And we need to create incentives so that these kids can get some kind of help or intervention. And the worst case is we kind of, you know, do something with them in a way that helps us protect everybody else because. Sorry to interrupt, but we do this every day. We turned this country on its head after September 11th. We started profiling everybody and desaxe is like minimum standard of disrupting other people's lives. The Department of Homeland Security disrupted everybody's lives. Take off your shoes, go through the security before you get on a plane. We changed everything in months because we said we're under attack. But there we are, under attack by a foreign presence, a foreign terrorist presence here. We're under attack by sick kids who need help. OK, but we need to disrupt our lives. We need to change things, right, in order to save these innocent kids who are being shot up in schools where they're supposed to be safe. And so I agree. Let's profile them. Let's get these companies doing their jobs, helping us identify these kids. Get these kids help. But. We need to raise the volume and raise the urgency in DC the way we did after September 11th, 2001, that this is a national crisis as opposed to going back to the normal right distribution here. By the way, after 2011 I was on a no fly list and I think I've told you guys this story before, but I would have the triple S on my boarding pass for years until about 2007 or 2008. Constantly profiled, you know? Put in the backroom the whole 9 yards. But in the end, you know, did did it make me feel kind of like less than a lot of other people? Yes. But did I do it because I think it was the on the broad strokes the right thing to do. Yeah. So you would take a little friction and so, you know, if I needed to basically turn over all my kids, you know, social media or there was a mechanism where, you know. As much as we try to teach our kids, you know, all of these other things that that allow us to make a socially progressive society. If the guidance counselor also sat around and asked these kids anonymously, hey, is there anybody in your class you think needs your help, why don't you do that too? There's there is friction because that that I think we're all willing to take because the counterfactual is too horrible to bear. And this is an example of one of those things. Would you be in favor of insurance and training trauma? I don't think rifles. I don't. I I think these are good ideas. OK? I don't think they will curb the issue. I do think what David said is right. There's a level of evil. Or mental illness in these people that cause them to be incredibly methodical and I think that we shouldn't underestimate. So they would get to the insurance screen, they get to the training screen. Well, I think, I think, you know, look, there's a lot of people that drive cars without insurance, right? It's you can drive off the lot and you can be insured and you know, so I think that those are good ideas, Jason. Where it will falter is we have a political system where the primaries for both sides are dictated by the loonies. T 10% of the left and the right. Yeah, we got to vote in our primary. It makes practical gun control, just like abortion, an impossible task unless we completely turn our political class upside down on both sides of the aisle. OK, so I think these are good ideas, but in the meantime, I think. Parents have to do something because nobody's coming to our aid. And I think the the most important thing we can do is just say the truth out loud. There is an identifiable archetype of these kids we should profile. There's no doubt there. The politicians who are making this about lawful gun ownership, they're not helping. They're they're actually hurting because you're activating millions of Americans who lawfully own guns and believe in the Second Amendment to oppose reasonable measures. Like I'm saying, hyper targeted measures like these red flag laws, right? And so if we make the whole issue about gun ownership in general, you're not going to get any reasonable changes. Migrate the opposite. The sales go up, the sales go up every time. We have this happen. My kids, and I'm sure your kids as well, have now gone through multiple active shooter drills in our school. But at no point have my kids been sat down and taught some of the warning signs of their fellow classmates. And a mechanism to raise their hand and say, you know what? This is actually really worrisome here. They don't have that training. They do have training on how to lock the door, how to flip a desk, how to go into a closet, which is a horrible thing to have to teach a child. But if we're already there, I just say take the extra step and teach the kids because they're living on Instagram and Tik T.O.K every day. They see their friends and their, you know, classmates every day. And we need to start figuring out an early warning system because what is happening continues to happen. These politicians are ineffective. They do nothing to help parents. That's true. I I like, I like the early warning system because you're right. Like, they're so, so first of all, the the red flag laws are something that's done on a state by state. This is something like 19 states have red flag laws, including New York, but it didn't work in New York with the Buffalo shooter because no one federal, no one used the system. I don't think it has to be federal. I just think that people, actually, I think people just have to use this system. So you had in the Buffalo shooter, the kid was referred for psychiatric treatment and they still didn't red flag him. That's just bonkers. So people have to the school systems have to learn how to use these laws. And so tomorrow's point, we need an early warning system. We need that translating into red flags that go on someone's record. And then they can't buy guns after that. It's it's really simple at least till maybe they turned 30 or something. I mean it's it's the the the the problem is that about half the states don't have this mechanism and then the half that do aren't using it effectively enough. I just shared with you guys a chart the the the the most pernicious part of this debate and I think this is a pretty solid debate we had here. So thank you to the gentleman for all participating in it is every time we have one of these gun sales spike. If you look at the chart in the New York Times I just shared to Nick you can. You can share it on the YouTube channel 2,000,000 guns. In the January after Obama's reelection, the Sandy Hook shooting, we hit peak guns. Obviously during coronavirus people got scared and bought a bunch of guns. After September 11th they bought a lot of guns. But. These moments are sadly going to drive AR15 because people because all the conversation is about banning guns. Yeah, and what we should be doing is preventing psychos from getting guns. Known psychos reasonable gun control increase by 50% in the last 10 years. The last 10 years have been the safest 10 years in our lifetime. Yet for some reason, people feel the need to arm themselves more and more and more now I, as an immigrant into this country, except the rules of the country that I come to. There is a constitution. There's a Second Amendment. I respect people's rights to own gun. I've held the gun. Twice once in my life, I had a panic attack and I had to put it down. I had to. So it's not for me, OK? But I respect your right to have them. I think that we need to teach people how to think about the precursors before they get the hold of these things. Really? Sadly, what's killing our kids? It turns out I just put a I just put the tweet in the chat for you guys to take a look at. New England Journal of Medicine. Massive uptick now guns deaths combined. It's all gun deaths, includes gangs, includes suicide and includes mass shootings. But firearm related deaths and injuries now exceeds motor vehicle crashes and so does opioids. So we have a crisis after that. New England Journal of Medicine. Just to be very honest, it's no, it's not necessarily only about kids because they included 18 and 19 year olds in that chart. So those are adults, OK, young adults. Kids and so drug overdoses and firearm related are spiking massively. This is my point about having this debate. This is being armed by the by the left and then the right says, well, hold on, it doesn't include 18 and then everybody gets caught in that whole. Absolutely the shooting, these shootings are being done by people 1819. But putting all this aside, I just want to make a bigger point about our children. Like in the last two years with this COVID the spike occurred during COVID of drug overdoses. And firearms, so there's a lot of suicide in here as well. So we should think holistically about, you know, how kids are dying. And yeah, one other thing to that, which is we have plenty of gun laws on the books that aren't enforced right now in San Francisco. You can't get chase Aberdeen to enforce a gun charge. He, a young kid named Kelvin Chu, got killed because his his killer, a guy named Zion Young. He was arrested weeks before on gun charges and chase budine just let him go. And in LA with gasconne. He's dropped all gun enhancements to charges, the whole thing. Progressive prosecutors who aren't even prosecuting the gun laws we got on the books. That's gotta change. And and Ted Cruz thinks this is about the back door being unlocked. I mean, the, the, the stupidity across the board, left to right, everybody in between. The incompetence is stunning and it has to stop. Yeah, but Jake, Outlook, I mean, if you make this about peoples lawful gun ownership, they're gonna oppose what you wanna do. We gotta make it about to be some incremental controls. Don't you agree? There has to be some. All the controls are basically preventing known psychos from getting weapons. OK, so you wanna focus on that. But to be clear, no additional gun control for you background checks or anything, or background checks or not. I just want to be clear. Red flag laws and background checks are good. I know we have to wrap. I think the consensus was around red flag. There's a known profile. Chamath articulated it well, David. I don't think we helped the cause to build the consensus by calling a sick 16 year old kid struggling with self identity a psycho. And because they're their kids who live all around us, this isn't about lecture. This is about building consensus. I think we can profile those folks. They clearly have psychotic. Challenges, right. But there is intervention to help these kids. I know a lot of kids who frankly had challenges during high school, who turned out to be great, great human beings. So these are kids at a very vulnerable age. We should profile them within the community. Social network should help us identify these folks and we should get them help. And I think you can build a reasonable consensus around that. Yeah, I agree. Just to explain myself, I'm by when I use the word psycho, I'm referring to the the ones who actually. Became shooters, you know, I'm referring to those ones. You're right that if we're talking about people who haven't done anything yet, who are mentally ill, yes, we should get them help. So, I mean mental illness, you know, this is and this goes to healthcare as well. We should have national mental health services available freely to every American. We are in a mental health crisis between COVID and just modern life. And suicide is becoming the number one cause of death, sadly, for many demographics. Now including our kids. And so while we do a great job making cars safer and creating life saving drugs and and emergency rooms and and medical attention has gotten unbelievable and we're making all these, you know, great advances. Mental health. We're not making the advances we need. I'm so, so, so sorry to all those families. Yeah, this is just heartbreaking, I guess. Personal yeah. I'm just so sorry for all those people dealing with. It's heartbreaking. Yeah, yeah, heartbreaking. Let's take some action here. Enough with the thoughts and prayers. Let's actually come up with a ******* plan. And just I've been filed. For years I put up with it. Sorry for the indignity. It's OK, I said. My honest perspective is. There's a clustering and a technology component to this that can meaningfully help, and we need to start knowing that there are these patterns. We need to save the words out loud. There are patterns for these school shooters, for these mass shooters. Those patterns can be written down. They have been written down. And we need to do something about it. They need to be codified in some form of algorithms. And if we've already taught our kids how to duck and hide, I think we can also teach our kids how to raise their hand well before they need to learn to duck and identify who's being bullied. And into your point chamath about being profiled. If we profile somebody and they're not a mass shooter candidate, but they're just depressed or they're being bullied, well, that's very that they they deserve help as well. So there's no downside to profiling somebody who's struggling. You're profiling them with the intent of getting them help. So let's just. Profile the kids who are struggling, profile them for good and you'll catch some, you know, who's struggling a priori. My point is that you actually, they're being bullied, they're gonna probably be struggling. I mean, you know, the kids getting bullied. The psychographic and demographic profiles of the 99% of the cases that we've seen over the last two decades and all I'm encouraging politicians and technology companies to do is come together, create some standard. You know, what's the downside? What's the downside? None, 0. We have mechanisms like this, by the way, where, you know, these technology companies already do these kinds of profiles on other kinds of situations. You know, typically you need a physical request and other kinds of, like legal interventions in order to unlock this data. But it's not as if this is a, you know, antithetical to what they do in other situations. They certainly do it for fraud and advertising. And it's not as if the technological prowess of these companies cannot be applied to a K means clustering of this issue. OK, just to use a simple machine learning context like this is they put a lot of effort into. Finding click fraud, right. This is going to be very similar problem. Yeah, we don't allow angry young men. Who've been emailing with the Middle East, who are citizens of this country, who've been posting online that they want to run a plane into a building to go get their pilots license. Right. We profiled them after September 11th and we said no Moss. And all Chamath is saying is use your ******* common sense. Identify these folks that we know are struggling and need help, and put them on a list and say they can't buy an assault weapon. Yeah. All right, everybody, it's time to go. Thank you to Brad Kirschner for sitting in. Thanks again to the dictator Trump Polyphagia, and thanks, Sacks. And thanks to everybody who spoke at the all in summit. We've been releasing all of the videos. Free Bird will be back next week as well. The hammer. Lucky explosive episode. So look for a great week of all in content next week. We'll see you all next time. Bye bye. Let your winners ride Rain Man. David Sasha. We open sources to the fans and they've just gone crazy with it. You can. Besties are. That is my dog. Take it out of your driveway. Man. We should all just get a room and just have one big huge **** because they're all this useless. It's like this, like sexual tension that they just need to release some out there. Let your feet. We need to get merchants. I'm going.