SPEAKER_00: did you just finish a good cry because you have this wetness right here on your eye oh sorry i just got out of my cold plunge in my sauna because you know i hit a new record low weight 169 this SPEAKER_02: week oh hold on what's your temperature on oh i don't want to say it's embarrassing it's embarrassing SPEAKER_07: i don't want to say no what is it i've been doing like 56 58 that's great it's okay i mean all these lunatics like i don't know they're at 45 degrees 48 degrees i think it's unnecessary you SPEAKER_09: get the same value i think at 50. my two-year-old does 56. it's good it's really impressive SPEAKER_12: i consider an 80 degree pool to be a cold plunge SPEAKER_16: i don't get it unless it's like 85. that's actually i've been to pool parties at sax's house there's no difference between that's like a schvitz it's a schvitz it's a schvitz it's a SPEAKER_18: full-on schvitz it's a schvitz if it's not the temperature of bath water i don't get it SPEAKER_05: yeah it's a schvitz it's crazy and then i went in my infrared sauna so now i've been going in you do the cold then the warm i think you're supposed to do warm then cold no they say end on uh cold and so i've been ending on yeah yeah but i just do like a cycle you do cold SPEAKER_43: warm cold cold warm cold yes what do you do like two minutes ten minutes two minutes or what do you SPEAKER_45: do yeah exactly like one or two minutes cold plunge four minutes you warm up you get back to it and then SPEAKER_47: you jump back in yeah it works pretty good you know i have to say my energy level goes way up have you SPEAKER_48: been tracking your blood pressure i have not but i have this uh executive health coach that i'm using and so that's where i got those ridiculous glasses the blue lights in my sleep's better i got some i'm taking some supplements uh i'm eating estrogen SPEAKER_54: are you taking more estrogen bro no estrogen levels are at an all-time high from hanging out with you guys SPEAKER_45: it just oozes on to me no it turns out you know even at 52 my testosterone is very high so that's SPEAKER_57: what is your free testosterone i don't have the number here but they said it's the the high end of normal so i was like should i be shooting up testosterone they're like no you're good you're good SPEAKER_61: just we'll send it over to freeberg i was like all right great send it over to freeberg it's all good a lot of people take testosterone in their 50s and 60s and i've had a couple of my friends in their early 60s start h is it hgh human growth yeah this is that right not a good idea SPEAKER_47: it seems like a really bad idea that off-menu stuff i don't think it's a good idea i think you SPEAKER_05: gotta be careful with the off-menu items no i think you can get a prescription for it is that right yeah SPEAKER_66: i know there's a lot of off-menu items available to affluent people with the right doctors and i don't SPEAKER_47: think it's a good idea i mean you guys see bezos he's jacked i didn't bring up anybody specifically but he looks great i think that's just all weights is he going to be president i mean if you had your SPEAKER_69: choice right now between bezos and bob eiger who would you try and biden i think we know who you'd pick SPEAKER_71: i mean listen i was talking to some affluent people and they everybody's going to be SPEAKER_04: talking to some affluent people i don't want to say who but vivek is now people are starting to talk SPEAKER_74: vivek i think he's hitting the right chords man vivek is about to pass desantis he will be i think if you look at the polling right now new hampshire he'll be the clear number two in about four between four and eight weeks from now that's crazy that's crazy and so i think if he becomes a clear number two the the think of this it's like then all of a sudden all these maga supporters are given trump and then trump with some small feature improvements that are actually pretty meaningful right and then they're like well do i want the 80 year old trump or do i want the 38 year old with like the super features you know i can forgive all of his other issues when SPEAKER_81: he tells me that he's going to cut the government the federal government by 75 percent 75 percent my gosh sold so you're right so you're on team vivek i want to continue to gather a little data there's no rush to make a declaration right now give me a little bit of time come up are you with vivek SPEAKER_74: yes i and and the reason is i would love for it to be rfk and biden in a debate and then trump and vivek in a debate so that i could really figure out between rfk and vivek who i would like to vote for but i think it's been pretty clear that the democrats have chosen to railroad rfk's candidacy it's unfortunate because i don't think we're given a real fair shake and really being able to evaluate him yeah even the detractors like freeberg you have some pretty significant things that you dislike about rfk which i think are fair they're never going to get a chance to get aired out because you're never going to get a chance to be put on a national platform where there will be really enough debate and i think that's where america loses so yeah in that context i would say that vivek has done more in the last month to convince me that he is fiscally responsible and that he Chamath Palihapitiya: has some intuitions that i think rfk and trump and a lot of people in america share which is just about SPEAKER_74: the usefulness of the blob and you know that there maybe needs to be a grand experiment where we deconstruct the blob and i'm for that experiment to be totally honest with you to see what happens SPEAKER_93: sex where you at he's unhappy what i would say i think it's too early in the process to say definitively okay this person has to be the person for me i'm viewing candidates as either being SPEAKER_98: acceptable or unacceptable and vivek is acceptable to me i think desantis is too the ones who are unacceptable to me are the ones who would escalate this ukraine war because i think that avoiding world war three is to me the central issue of the campaign so for me it's just a litmus test issue i can only support a candidate who would work to end this war not one who had escalated where does our SPEAKER_73: fiscal emergency sit for you in terms of priorities so no world war three priority one is the fiscal SPEAKER_102: emergency that we're facing priority two or is it overstated by me do you think or others no i think SPEAKER_98: it's important but the problem is this is that in order to do something about that problem you really need bipartisan support yeah because it would be suicide for one party to try and do all the heavy lifting without the support of the other and i just don't see in the near to midterm that you're going to get that kind of bipartisan support no matter who is president whether it's a democrat or republican the only issue that for sure the american president has unilateral discretion over is our foreign policy and so for me making sure that the next president pursues a foreign policy that doesn't result in the destruction of the united states that to me is the overwhelming issue it doesn't mean these other issues aren't important but look at how these numbers are let me show you SPEAKER_48: this poll for a second just so we level set with the audience poll ending september 18 2023 for those SPEAKER_07: of you not watching on youtube trump 39 is that or 38 then vivek 13 haley 12 christie 11 desantis 10 SPEAKER_93: that is a stunning turner yeah that's probably because it's new hampshire jacow but you know no i SPEAKER_75: know it's just but that's a very critical state right i mean sex what do you think about what dalio said SPEAKER_103: on stage about the need to have a manhattan project style effort here that is bipartisan comes to the center and tries to resolve this as that scale of an emergency is that realistic to kind of frame this as we are in a fiscal emergency we have to get a manhattan project style effort underway to try and SPEAKER_98: engineer a solution well let's back up first of all i think you asked the right question to him which is is our decline a matter of physics you know due to forces we can't control or is it something we still have control over and i think that that's a really good framing i think if you're in the bucket that we can do something about it i mean i believe that we can the question is how and i think his view was that somehow you get all these elites together and you get them on the same page i don't think that's how our system works i think what happens is you have elections people compete against each other and then voters decide who's right and so one side has to defeat the other and i think until we get some clarity from voters on the direction they want to go i don't think there's going to be a SPEAKER_103: resolution but to your point there's no solution without bipartisan bipartisanship here so what is the path to bipartisanship when it comes to the fiscal crisis i'm not sure wouldn't the obvious thing SPEAKER_69: be if one party wins with that as part of their platform then it becomes part of the winning platform SPEAKER_48: and the winning formula are we just saying that's not even possible because it's too unpopular to tell SPEAKER_98: people that they don't get free money i think it's political suicide for one party to engage in deep cuts deep government cuts deep cuts of programs especially popular programs he probably cut the unpopular ones at the margins but it's political suicide to cut anything important without having the other party on board there's been a couple of times where we've been able to have this type of consensus i mean the one that always gets mentioned is when reagan and tip o'neill cut a deal and they were able to reform entitlements and make some changes to those programs and they kind of did it arm in arm and that worked and then the other time where it kind of happened not through agreement but almost through lack of agreement was when we had the sequester remember when obama was president and what happened is the democrats and the republicans worked out a deal where if they couldn't agree you would get equal cuts in both military spending and social spending the idea being that republicans wanted the military spending the democrats wanted the social spending and that's ultimately what happened is that they couldn't agree and so you got the sequester and we had some spending restraint for a short period of time the problem now is that both republicans and democrats want more military spending i don't hear anybody really arguing for cutting military spending except for maybe rocana at our event but the democrats are completely on board with war now and then on the social spending i don't think either party really wants to cut social spending either or do entitlement reform so there is no constituency out there for reining in the biggest sectors of government spending so i don't see how it's going to happen no matter who the president is well the forcing function will be the debt service SPEAKER_103: costs which is just crossed a trillion dollars a year just to pay the interest and it's mounting right 30 of our debt i think is coming up for refinancing in the next 12 months and it's going to refinance at a five percent rate because that's where the markets are at just like consumers can SPEAKER_119: ignore it friedberg and put their fingers in their ears and say la la la la la i don't have to worry about my payments then the payments show up and you got to worry about them same thing's going to SPEAKER_121: happen here in the us right the federal budget will get naturally constrained at some point here but SPEAKER_98: yeah as the economist herb stein once said if something can't go on forever it won't so i think i think you're right freeberg that this is not yogi berra it's not yogi berra as a herb site i think yeah if something can't go on forever it won't i think that that's where we're headed is we're going to have restraint imposed on us from the outside it's not going to SPEAKER_127: come from people people stop buying treasuries interest rates just have to go up to what's happening SPEAKER_52: in japan right i mean their bond auctions have uh been very um lukewarm and supposedly a lot of the SPEAKER_48: money in japan is coming west looking for opportunities to get alpha so we have an example that we can SPEAKER_47: look to all right let's get we can get started here we got so much to talk about i think we got SPEAKER_07: to give some flowers here last year the sultan of science the prince of panic attacks the queen of quinoa was an absolute terror when i did the all in summit 2022 and then this year he was an absolute all-star and delight what an amazing job you did on the content people are saying the content at all in summit 2023 is the best conference ever had bill gurley got a four minute ovation and that talk is on youtube elon musk star linkedin from uh 40 000 feet he crushed it toby was fantastic ray dalio larry summers mr b beast gwyneth paltrow the botez sisters which we did a pretty good showing i have to say a great job to sax and friedberg uh who who held the line with the botez sisters in our group chess SPEAKER_132: brian armstrong who am i missing here i mean what an incredible lineup the fusion panel SPEAKER_07: nicole polk rob henderson jenny just rob henderson i mean extraordinary let me just go around the horn chamac your what what um discussion or moment pick pick your choice there for you was the most intellectually engaging and important at the summit you can mention two or three if you like i thought number one were my outfits pretty great i mean you did do an alpha change twice a day so congrats on that i like that i did a really good job with that i do agree i agree David Sacks: did you guys get the special shoes from laura piano oh my god the king's cashmere loafers yeah those SPEAKER_142: are ridiculous i'm wearing them as we speak actually i wore them they're incredible night and i came SPEAKER_98: into pulsox yeah yeah i mean these are the most incredible shoes clouds they're the most incredible like 10 pairs or something and yeah and we got four special for us yeah then i get back to the beverly SPEAKER_150: his hotel the suite that freeberg booked me a beautiful suite thank you freeberg and there is SPEAKER_61: they lure up freeberg shafted me on my room what what yeah i put you by the garage no i got a room SPEAKER_74: that was well it's very appropriate that these rooms exist but it's handicap accessible which totally fine except the problem is the the closet and everything is set for wheelchair height why didn't you change SPEAKER_61: your room dude and so all my and so i thought oh he just me on purpose he just tried to he trolled you little passive aggressive name check so all right you guys got some work to do in the group therapy SPEAKER_160: shaft i would never do that to you guys don't worry when i when i organize this summit i'll make sure SPEAKER_81: these details are perfect i fly onto him off plane he has gluten-free nutella crepes handmade in the morning and i stick him in a handicapped accessible room where he can't even put his bag and i can't put SPEAKER_74: my clothes except without it touching the ground so then i had to play them on the bed and then i had to SPEAKER_135: delay them on the first world problems yeah the audience right now is just triggered by the suffering SPEAKER_61: that you went through at the beverly hills hotel my honest reaction was i thought the content was really inspiring i guess it's kind of like i knew what i was going to get up front with so many of the SPEAKER_74: folks because i knew them but then where i still came away where they exceeded my expectations number one probably was graham allison oh i could literally talk to him for eight hours a day i feel like and i don't know him well so i felt like i was scratching the surface of the things that he knew i could do an entire dinner i think where he could just walk through the cuban missile crisis and i could just sit there listening so i thought he was unbelievably intellectually stimulating for me every time i sit down with toby i'm just like in awe of how smart and different toby lutki is mm-hmm and so i always kind of like walk away thinking this is really one of the very special entrepreneurs of our generation just in terms of his mindset underrated i thought larry had the line of the summit larry summers where he said self-esteem should come from achievement and not the opposite which is that achievement should come from self-esteem and he was talking about wokeism and sort of like the entire philosophy around that stuff right now and i thought that that was really insightful those are probably the three moments i thought girly's obviously presentation was superb but again it's kind of like saying the obvious because it was just so master class but the the from what i expected to what i got those were the three that i thought were the most inspiring and net new positive for me fantastic sax did you have any moments uh aside from gwyneth SPEAKER_171: paltrow saying she was your favorite bestie other than that being the clear number one for you and SPEAKER_175: crushing soul crushing for us well i never even heard that because of the uh zoom issues we had SPEAKER_98: technical issues during her interview and it got really hard to hear her at various points and i SPEAKER_52: don't think you guys heard that either right i heard it i tried to ignore it i tried to block it SPEAKER_179: out i couldn't i couldn't hear it so i didn't know that yeah well congratulations have that can we uh SPEAKER_05: can we queue that up right here no we're not doing victory laps on the pod we talked about this on the chat no i mean that's awesome go go for it i want to hear it you know my husband but we have a little SPEAKER_182: bonus contention is he thinks i'm in love with david sacks but keep letting you do it so it's it's okay uh oh this is not good david is incredible the husband's jealous and that's not a good situation SPEAKER_191: after that what did you like sex be honest i i want to also give credit to david sacks who um showed up for every talk and freeberg said uh jacal i have an issue i said well anything i can help he said oh well actually uh the issue is i asked david sacks to show up at 8 45 for the run through and he um he won't respond to me can you can you get in touch with him i said let me tell you what's gonna happen with david sacks program's gonna start at nine he'll be here at 8 56. and if you get him on stage for two out of three talks you did better than i did and freeberg's team which god SPEAKER_07: bless the production board team they did an amazing job these wolverines are incredible shout out to laura rachel and everybody on the team there they did a fantastic job and sure enough sac shows up at 8 56 SPEAKER_193: goes on stage and he crushes it so great job uh getting him on stage but congrats on showing up for SPEAKER_93: well they wanted me i mean i asked when's the first speaker going on stage yeah i actually think SPEAKER_98: it was 10 a.m right 10 a.m i'm sorry 10 10. so i'm like okay in my head i'm thinking okay i'll be there at 9 59. and i'm like what time do you yeah and then they're like you were there 955 and i was SPEAKER_199: like they said you need to be there at 8 30 for a sound check and i'm like does mc jagger come for the SPEAKER_201: sound check what i'm sorry does jimmy page like checker what are we talking about here does madonna SPEAKER_204: come check okay let's start can we start the show can we have we done self-aggrandizing ourselves look SPEAKER_98: i thought the conference was amazing it exceeded my expectations your conference exceeded my expectations too jacal but i think freeberg took it to another level and it exceeded my my already high expectations yeah you know highlights i mean i think starting with ray dalio as the first speaker was really interesting i think we only got to go for what 30 40 minutes with him i felt like we could have gone for two hours you have to bring it back on the pod and you know drill into that topic more two hours with dalio would be amazing because i think what's really interesting is the way that he's looking at the grand sweep of history right he's thinking about not just a 10-year business cycle or a 75-year debt cycle he's looking at a 250-year empire cycle i think this is really interesting that he thinks in that really big way i agree graham allison really interesting we could have spent two hours with him larry summers these are all people i think we should bring back on the pod for a long-form conversation i agree that bill gurley's talk was one of those great ted style talks that i think should go viral i think it has you know i think 20 million people should watch that yeah i mean the people retweeting it are incredible SPEAKER_211: and i was at a dinner party last night and everybody was talking about it so it's it's spread SPEAKER_48: into our industry and it's starting to tip over into other industries already the chess was really David Sacks: fun i am a game day player that way you know i i brought it and managed to win the game but what else SPEAKER_93: i don't know there were a lot of great moments i'm sure forgetting about things i love that i love that SPEAKER_215: the parties were incredible the parties were absolutely incredible we missed both of you guys at the grimes SPEAKER_217: dj set that was amazing by the way i think chamath was there for that weren't you there no i left right SPEAKER_85: at 10 to fly back to the bear early night yeah i got it yeah she grimes thank you to grimes for SPEAKER_218: doing that for me a personal favor uh the audience lost their minds sent them out she was incredible she's such a performer it's incredible yeah people were losing their minds uh uh for you freeberg uh best SPEAKER_103: moments uh on stage it was just great to be with everyone and go through it i mean honestly i didn't source all these speakers you guys did and so i don't want to take credit for that i think it was what i had hoped you know i went to ted for 12 years i started going to ted i think 2007 and i felt pretty disappointed over the last couple of years and i actually spoke to the ceo of ted and said i'm not going to go anymore because so much of this the talks became kind of social justice type talk nonsense that i wouldn't i don't want to use that term because i do think it's all very well intentioned and i think it just became overwhelming that you would go to ted and you would basically feel bad about yourself and that it kind of missed the element of the world is an amazing place we should have a great degree of optimism with technology and where it's taking us we should observe the greater cycle and the bigger perspective of things that are happening in the world not kind of go into a whodunit and who's to blame and us versus them kind of mentality which i think so much of the stuff turned into at ted and i was really hoping we could capture some of that and so i'm really glad we got a lot of the speakers we did and had a couple hours to be able to to share you know those sorts of perspectives so it was fun i really enjoyed what you did with the conference in SPEAKER_226: terms of the editorial direction was great you leveled it up certainly from last year as trimoth SPEAKER_69: pointed out correctly and it had a great amount of optimism realism and we didn't talk about superfluous SPEAKER_171: virtue signaling social justice woke nonsense that really is should not be at the top of the agenda SPEAKER_07: in my mind i'm not saying that these issues are not important to some people but i think prioritizing what's important in the world is what i got out of the conference you know when you have people on this level speaking for for you know very long periods and not long enough but you know that larry summers and and and you know ray dalia talks they really gave you a sense of this is what's important in the world SPEAKER_48: right now this is the priority and and i came away from it so intellectually stimulated that made me just say hey you know i want to travel more i want to read more i want to have more conversations and i have been basking in that like afterglow so i just want to say you know once again what an extraordinary uh amount of teamwork just as the moderator of our quartet i felt everybody did a great job moving the ball around i think everybody was on their game everybody you know i'm talking SPEAKER_07: about the three of you guys very focused on just knowing exactly when to insert a great question so i felt like we were playing basketball like the warriors when they play prime basketball ball moved really well great questions people picking up on themes threading themes from one talk to the other and it just made me really excited for next year so i just want to say great job to each of you SPEAKER_48: thank you back at you yeah back at you listen uh we could talk about ourselves all day but people hate that let's talk about what's going on in the markets yeah we only did it for 40 minutes SPEAKER_47: perfect okay yeah exactly ipos and m a on fire we've had a ridiculous week six quarters of down SPEAKER_07: market has suddenly turned into a bunch of green shoots on the m a front cisco announced it acquired splunk for 20 billion dollars in an all cash deal if the notes are correct here it's about 10 of cisco's SPEAKER_47: market value somebody did a trade where they they bought a bunch of options and uh so that looked a SPEAKER_45: little fugazi congratulations to nancy pelosi on that trade possibly allegedly don't forget your SPEAKER_238: favorite word allegedly allegedly allegedly perhaps i don't know she's good at trades so if somebody's SPEAKER_191: going to make money on that trade or somebody's going to jail so congrats to screlly instacart klavio SPEAKER_07: and arm all ipo'd in the past week and you know they've fallen back to earth just crazy stat 21 SPEAKER_48: months since the last significant venture-backed company went public i'll leave out like the middle eastern food company was a kava that went public and then the vacuum company that went public but that's just in the past seven days so we talked about this on the program we discussed hey we'll know when the markets are back if some of these companies are forced to walk the plank slash get SPEAKER_47: public you know and fix their cap tables and sure enough instacart really kind of represents that SPEAKER_07: most most of the late stage investors in instacart are underwater the early stage folks absolutely crushed it chamath listen you're you're a market expert here you've taken a lot of companies public what do you think the last week means for the greater technology industry i don't think that SPEAKER_74: this was the great reopening that we all were hoping for i think it's important to understand the dynamics of bank led traditional ipos in america and the best way to understand them is to contrast and compare to how that same company would go public in europe or asia because it'll explain what what SPEAKER_160: happened and i think unfortunately what has happened is not good for the market so typically what happens SPEAKER_74: is when you construct an ipo you're selling 15 to 20 percent of the company and when you do that you go and you call hedge funds and you call these mutual funds but what are called long only's right meaning they SPEAKER_64: don't short they just go long these big mutual fund companies and you try to find a handful of people SPEAKER_88: to anchor the ipo so they take a huge piece of that 15 to 20 percent and in europe and asia the securities SPEAKER_74: law says that when you get such a big allocation you have to hold it for six months which means you're Chamath Palihapitiya: treated exactly the same as the employees who are typically locked up in an ipo for at least six months and so what happens is these firms do all kinds of diligence and when they buy something it's because they really believe in it and then they go long it for you know what is at least half a year so it's a it's a non-trivial amount of time so that's what happens in europe and asia 15 to 20 of the company is sold a handful of people anchor and you're locked up for six months now you need to look at how american ipos are done which is why people have experimented with direct listings we've experimented with spacs it's because the fundamental architecture of ipos are broken they're set up in a dynamic where it's a heads i win tails you lose situation for the bankers that run the ipo now what happened in these three ipos number one it was less than 10 percent of the float SPEAKER_74: so highly highly highly concentrated small amount of the of the company was made available for sale Chamath Palihapitiya: number two there really weren't anchors what happened was the allocation of that less than 10 percent was smeared across 50 or 60 different organizations and then number three there was no lockup which meant that people could sell right away and so what you saw with all of these companies was the exact same dynamic which was it opened because there was such a small amount of supply it traded up and the minute that retail which typically tends to be late to the game because they don't have access to these things right when they started buying what was unique this time around is all of the mutual funds just dumped everything and the hedge funds were like well we don't have a real allocation our SPEAKER_74: friend said in the group chat he got a five or ten million dollar allocation in these ipos these are 20 and 30 billion dollar hedge funds five and ten million dollar allocations don't move the needle Chamath Palihapitiya: so the hedge fund sold right away and got on the sidelines and said i don't care about this the long only's bought just enough to make the stock go up because of such a small supply then when retail stepped in they just dumped it all and so unfortunately what's happened is all three ipos within a few days have breached their issue price now they're at the same issue price maybe slightly higher but that is an unsuccessful dynamic what could have been different the banks could have forced these companies to sell up to 20 percent the banks could have found a few anchor buyers the banks could have created a lockup structure for these anchor buyers they did none of it and so the result is a lot of downward pressure in a moment where the overhang of rates has have come back and are SPEAKER_74: forcing all of us to realize and we'll talk about it in a second that these rates are going to be higher for longer which completely changes how you value these tech companies so net net very poor ipo SPEAKER_253: construction by the banks and the the grand reopening was a grand closing i think okay so just to put some SPEAKER_48: numbers on that instacart's float was 6.7 percent and clavia's float 7.6 arms float almost hit the 10 percent 9.4 but certainly less than the 20 percent that you would expect so then i guess the follow-up question here sax is why did these companies go out and do will we see the the other big ones go out the stripes and some of the other backed up inventory what's what's the back channel in our industry about SPEAKER_171: the viability of other ipos is this going to push a lot more people out to get liquidity even at discounted prices even with the headwinds that chamath points out or is this going to have SPEAKER_48: a chilling effect and people are going to say you know what let me wait till 2025. so i think they went SPEAKER_93: out because investors and others need liquidity and there's no point holding on and waiting for a SPEAKER_98: valuation that's never going to come back i mean so you take instacart for example their last private round was at 39 billion what's the market cap now around nine nine so it's great that they got out i think that was at eight today it's at eight i mean look it's sort of a green shoot that they got out but we're never going back to the valuation levels that we had a couple of years ago during a giant zurp created asset bubble so i just think there's no reason to wait and you look at softbank they needed the liquidity from the arm ipo yeah so i think that's why these companies are going out is we're kind of getting back to business as usual just to broaden out the question a little bit what i think is interesting is that for the past year or so we've been in a software recession it really started in the first half of 2022 the market's cratered especially for growth stocks there's a huge correction of valuations that happened in especially the first half of 2022 but then about a year ago so starting in mid 22 and continuing through q2 of this year you saw a reduction in growth forecasts everybody started forecasting down there wasn't a single board meeting that i was in in private companies that wasn't missing their numbers and re-forecasting down and you saw it in the public companies as well i think jim and ball substack showed that the average growth forecast for sas companies for next 12 months have been cut roughly in half so for the last year year and a half we've been in a software recession you could say a b2b recession we saw companies like meta google and so on cut thousands of jobs tens of thousands of jobs you know get much more efficient yeah each that meant they were buying a lot less software on a perceived basis so i think we've been through call it a b2b or enterprise recession but the thing that's held up stronger than i think people might have expected over the past year has been the consumer consumer spending has kept the economy afloat so the b2c part of the economy has been strong whereas b2b has been very weak what i wonder about next is whether that's going to flip i wonder if the consumer is on their last legs here you see that credit card debt is at an all-time high interest payments on credit card debt all-time high mortgages the rate now is approaching eight percent so no one can afford to sell their house which has a three percent mortgage and then buy a new one at eight percent so real estate transactions have cratered the commercial real estate industry is you know on its last legs i think they're starting to throw the keys back to the bank and start forfeiting buildings because they can't refi at an attractive rate so i just wonder if the consumer now is about to go through the type of pain and restructuring of their personal balance sheets the way that the enterprise segment of the economy did SPEAKER_171: over the past year freeberg your thoughts on what we're seeing here in terms of the ipo window companies getting out and and the impact that'll have maybe on how limited partners look at venture SPEAKER_48: funds that's been frozen for 18 months limited partners and i'm raising a fund right now publicly under 506c so i can talk about it and it's going great but man it's a lot of meetings and i'd say two-thirds of the meetings i'm having people are saying we're not adding managers we're cutting managers and we're cutting commitments to managers but we'd love to meet you know just to start the SPEAKER_07: relationship you know so what do you think this means overall for the limited partner gps and the SPEAKER_262: startup market start of a turnaround or maybe just sideways for more i guess we should just put the SPEAKER_103: volume in context if you look at this slide this is from ernst and young showing the ipo activity by year and this was through june 30th so if you assume kind of a steady state you probably are going to come in at a volume that's less than 22 and and perhaps even less than going back all the way to 2019 with less than 1200 ipos during the year compared to the peak of 2400 which happened in 2021 if you go to the next slide and just look at the total dollar volume raise so the ipo proceeds thus far through june 30th of this year is just around 60 billion compare that to a total of about about 180 billion all of last year 450 billion in 2021 and the ipos we're talking about today instacart clavio arm in total raised about five and a half billion dollars so you know that kind of doesn't have a huge consequence on this dollar volume for the year and then if you look at what's in the pipeline right now in terms of what's publicly filed as s1s there's basically nothing right now so i think everyone's kind of sitting around waiting to see how these transactions go before they decide to put other stuff i think the big mistake is that we continue to treat ipos as this big yardstick the real yardstick for a business is the performance of the business and the valuation you get when you raise capital at some point in time is largely driven by market conditions not necessarily by the performance of the business and the value of the business over time the market will do its job and rightly value that company we've talked at length about how much value has accrued as a public company for apple for microsoft for google 99.9 percent of their total market value was realized post ipo so that the ipo transaction i think it's a little too much weight gets a little too much attention in terms of determining success or failure of a business and success or failure of the investors in that business so i really hate this whole thing about does the ipo price go up on a day it's this really weirdly engineered thing that they try and do to drive psychology and marketing by banks to go out the bank the banks to try and get people to give SPEAKER_266: them more capital or to give them more deals in the future do you think that the ipo market would be SPEAKER_74: better served if banks were forced to be locked or the the allocations were forced to be six month SPEAKER_270: flock like the employees of course maybe longer what if they were if they were locked for seven SPEAKER_85: months what do you think well where would the float come from on day one but why do you need a float SPEAKER_103: yeah i mean that's that's a good point i i believe the direct listing should be the way that you do this and then you do a um a follow-on offering once you're sharing the problem with the direct listing SPEAKER_74: as i've found as a seller because i went through a handful of direct listings i went through slack and i went through coinbase coinbase right yeah and in the slack direct listing i only sold a small portion on day one and it turned out to be a a mistake and the reason was because the pricing of a direct listing forces you to find the absolute highest price at the open now i we learned that so then going into the coinbase ipo what all the venture investors did was distributed literally the day before and the day of the direct listing right so that you would get delivered your stock at the highest price so that you could sell i'm not sure that that serves anybody any better you know what i mean because then you get a lot of price volatility and the price just goes straight down so i don't exactly know what the answer is i suspect though that getting companies to float at least 15 to 20 percent and doing a better job of allocation so that you're right david removing the psychology of like it has to go up a hundred percent on day one is success is the thing that actually catches these companies off guard now we haven't even talked for a minute about whether any of us thinks the quality of instacart and clavio and arm are good businesses and this is part of it as well exactly you just spent 15 or 20 minutes debating the stock price that is completely SPEAKER_253: divorced from the reality of these businesses and that's a bunch of distraction that the banks create as well that are that is totally unnecessary i mean what do you guys think about SPEAKER_103: these businesses let me just respond to the direct listing point i i just want to also point out spotify went public via direct listing the stock actually traded up after the direct listing it went down a little bit after but it continued to trade up you know into the 2021 era and today it's trading at or above what it was trading at during the direct listing so can i tell you why though SPEAKER_81: the performance of that business fundamentally drove interested from investors the thing with the SPEAKER_74: spotify ipo was that it was still a very new vehicle and so that direct listing was we were all learning as we went along and at the end of the day there was one bank that kind of not cornered the market but really became an expert on it and they use spotify as the example so by the time slack and Chamath Palihapitiya: then coinbase came along the playbook was so tight that everybody knew how to play the game so i think a lot of the spotify post ipo behavior was a bunch of people figuring out what a direct listing meant by the time that we actually dld slack and specifically when we dld coinbase the bank was so sophisticated in telling us here's what's going to happen here's what you should do what do you want to do and obviously we wanted to do the thing that maximize returns for our lps so i'm not sure that the spotify example will ever repeat in a direct listing i think that the slack and coinbase particularly will be SPEAKER_74: the example going forward you'll top tick day one and then the thing will spear down find a bottom SPEAKER_103: and then why does that matter why is isn't it ultimately about finding the real market value for the company yeah it doesn't matter it doesn't matter that the price goes down or goes up that ultimately the buyers that want to pay a certain price will step in and buy and the folks that want to sell because they think the price is higher than their mark will want to sell i agree with you SPEAKER_74: i do think that it's really about business fundamentals but there's a lot of people that get caught up in the price as what the quality of the business is now those people are maybe not the most sophisticated people in the world but they make a lot of noise for not knowing what's going on and so they can be a real distraction to a ceo trying to run a business i remember in 2008 i think SPEAKER_103: i've told you guys this story it was like november of 2008 expedia was trading down to seven bucks and i saw dara at some event in march yeah march and he said hey our stock's at seven bucks i can't believe it i mean like everyone should be buying our stock and that was well off of the price that it had been trading at in 03 04 05 and sure enough if you had bought that stock you know you would have made 15x from there to where we sit today and even more if you sold at the top take in 2021. so you know these yeah there's a that's a good chart so look at where expedia was in in march of 09 it was right around seven bucks and i think that that was for me like the first example where i really understood that the price where the market trades a stock shouldn't matter as much as the fundamental value of the business if you're willing to be a long-term holder if you're willing to say you're willing to Chamath Palihapitiya: do the work and you have to do the work yeah most people are not willing to do the work they want SPEAKER_74: to look at a price and then they want to imbue all of their own psychological desires into it versus what are the actual ones and zeros of a spreadsheet tell you yeah but i'm like a pure efficient market SPEAKER_81: guy i feel like the you know whatever shares should be people want to sell they should be able to sell SPEAKER_103: whatever people want to buy should buy the market and if the stock gets too cheap there's plenty of capital out there to step in and buy the stock if they think that it's too cheap and the market SPEAKER_121: will find itself so let's do the underwriting of instacart then were any of you guys investors in instacart no throw any i am in a fund that's in instacart from the seed ranch so i will do i think very SPEAKER_45: well because of that uh let's bleep that out thank you uh that's that will be a that'll be a yum yum SPEAKER_98: for jacal but let's just talk about revenue when it trickles down all the way to you as an lp SPEAKER_48: what's the real multiple i guess you know if you take out the carry 25 or 30 less than uh what looks SPEAKER_297: like to be i'll tell you the game the whole fund first so yeah that that fund's been paid back many SPEAKER_48: times over already so that do you know what the multiple is on that fund for you yeah it'll it was SPEAKER_259: 8 million invested and uh no that's their investment that's not your investment yeah what SPEAKER_48: if you look at your investment what my understanding is that investment is going to be uh 200x 100 or 200x somewhere somewhere in that range i will report back but i think the seed round investors are going to SPEAKER_98: be hold on so so you're saying 8 million will become 1.6 billion i think it's over a billion we can SPEAKER_301: actually have a chart here let's take a look at let's assume it's a billion 1.6 seems a little SPEAKER_98: high let's say a billion but let's say the fund was what five six hundred million so for the lp it's like a 2x i'm just saying that yeah for the fund it was 100x but for the lp it's a 2x SPEAKER_47: i think that's a big difference right funds already in the black so mitigating factor okay SPEAKER_101: so it's two extra turns of your investment uh meaning if it was a 4x jason he's saying that it'll become a 6x yeah yeah something like that yeah i mean it's a good fund i'm not disparaging it but i just i'm just trying to set things and put things in proportion i think i think at this point SPEAKER_48: that funds at 21x right now something in that range so it's a pretty great fund in terms of total so it'll go to 23x something to that effect yes uh it's going to be pretty amazing what else was in SPEAKER_07: there uh i think that was instagram and whatsapp were also in the fund either before it or with it so they were that's a pretty good fund there were two funds uh i wouldn't say which firm this is um what 12 and 24x i i believe is the last time i checked in what's that was a monster that was a SPEAKER_48: really well everybody learned from whatsapp um and you know shout out to the sequoia team douglione i think and um they did every round jim getz did that one yeah they did every round SPEAKER_238: so it was an internal round for i think four rounds in a row so they just made preemptive SPEAKER_98: offers the reason whatsapp was a home run is because it was so capital efficient yes they didn't burn that much they didn't raise that much so there's very little dilution yeah for everybody i mean and i think that's the problem with instacart is how many billions SPEAKER_48: that they have to raise let's pull up this chart here this is super telling to pull up you know who made money and i think this shows you what happens in a serp environment when people do not look at entry price the series c underwater no no seriously not underwater everybody from f on is kind of underwater uh and everybody from the series c is underwater compared to the s p 500 to your point SPEAKER_259: free free uh free bird even and then everybody who invested in 2020 and 2021 actually lost money SPEAKER_48: general caddis dst d1 t row fidelity all the late stage folks even sequoia was in that late stage SPEAKER_119: at series i in 2021 when it was worth 39 billion so but that whole environment not only was it bad for SPEAKER_101: all the late stage investors who invested at too high a price i would argue that it was bad for the SPEAKER_128: companies and even their early stage investors because these companies got so inefficient the SPEAKER_330: dilution is ridiculous yeah the dilution was ridiculous i also think you have to think about SPEAKER_74: this in the context of what your alternative returns are i think that we always look at these numbers and we think we try to make judgments but if you put yourself into the mindset of a of an investor it's actually the alternative of what you could have gotten and it's the spread between the two that's really important so nick do you want to just throw up this image that i just sent you this is an example that i saw in axios i thought that this visualization by the way i want to try to use this visualization in the future because it tries to really it just paints a very clear picture let's let's uh sports this picture shows is essentially and this uses instacart as an example but you could use it for any company but it just basically shows you at every point in which you could have invested money in instacart what would the equivalent return have been had you just invested that same Chamath Palihapitiya: amount of money in the s p 500 and the difference between that is what you would call the alpha right because the s p 500 is the beta meaning it is what the market's going to do it'll be up 10 it'll be down 4 whatever and so by owning the market you get that if you decide to not own the market and make an explicit decision like owning instacart then you get a different return stream and if you compare the two you know how much better or worse you would have been so what this chart shows for example is the series f investor in 2018 if you had taken a dollar and put it into instacart would have gotten SPEAKER_74: 13 but if you had put a dollar into the s p 500 you would have gotten 68 in the series c in 2015 had Chamath Palihapitiya: you invested a dollar in instacart you would have made 153 but the s p would have returned 121 the difference means that the series c investor generated about 32 percent alpha now then the decision you have to make is that 32 of incremental gain over the last seven years or eight years was it worth it you're SPEAKER_61: not liquid and because you have to then solve for illiquidity and other things and this is the math Chamath Palihapitiya: that i think all of the lps will be engaged in they'll be doing these calculations it just goes back to what sax's point said which is our business frankly did very well in moments where we had zero interest rates our business now when prevailing rates are at five or six percent and you can own SPEAKER_74: those things or you can own structured credit for 11 to 13 percent our business unfortunately does not look so good and when people do the calculations on what the true alpha of venture capital is they're Chamath Palihapitiya: going to come back with answers like this which is it's not that great and i do think it will impact SPEAKER_74: how limited partners have an appetite to give all of us or you guys folks that are that are accepting lp checks more money because the alternative universe is more liquid it's less volatile and it has SPEAKER_135: roughly the same amount of return i can tell you what they're saying because i'm doing about a dozen SPEAKER_48: lp meetings a week and i've got 50 more on the calendar to the end of the year so i'm going to hit 100 of these meetings they're really saying two things one we want to go earlier we don't want to go SPEAKER_47: later as that chart proves they're suddenly fascinated with the seed and series a rounds and they're looking SPEAKER_07: for distinctly different strategies uh they're looking for some sort of edge so the first two questions are how early are you getting in and securing a 10 position in this company and then what's your edge and literally the start of my pitch deck now when i walk people through it is i have two podcasts one of them gets 50 million listens a year the other one gets over 50 million listens a year those 100 million listens result in 20 000 applications i have larger deal flow than anybody with the only exception being y combinator and that resonates with folks um but if you're somebody who's got a new fund and you're like what's your what's your edge yeah i go to you know some demo days that's not an edge you have to have a massive competitive edge and a differentiate you have to be differentiated in some very credible believable way and they're telling me the same thing they're cutting two funds out of their 20 and then they're cutting their commitments to the weaker ones of the SPEAKER_282: other 18. i have a question for all of you guys you had a wonderful question which we never touched guys what do you guys think about the arm business model or the clavio business model have you guys SPEAKER_07: had a chance to look at any of those companies and think about that let me tee up the facts and then you guys respond the revenue is up 15 year over year 716 million ad revenue is 206 million SPEAKER_48: that's on pace to make up 28 of their revenue this is just the last quarter i'm talking about it right here end of june 30th net income 114 million they have 600 000 instacart shoppers those are like uh the drivers you can think of them like door dashers or uber drivers 7.7 million monthly active orders the red flags is that their gross transaction volume which is the value of all of the groceries in the in the bags uh is flat but ad revenue is growing this means ad revenue is just a massively larger percentage of the total revenue they think they can you know they're on track for 800 million in ad revenue so this is starting to look not like a e-commerce business but more like a an advertising business your thoughts freeberg or sax on the actual car business amazon by the way has SPEAKER_344: that dynamic too now have you seen the chart showing advertising on amazon compared to the entire internet SPEAKER_61: yes it's huge and also uber's blown past a billion i believe here's what we know we know that advertising SPEAKER_74: multiples broadly speaking have contracted right so i think that the market in general doesn't love that revenue quality because it's too levered to interest rates in the economy so when the economy does well more companies advertise when the economy doesn't do well companies advertise less that's number one and number two the ones that can systematically drive advertising more broadly the facebooks and the googles of the world tend to get an increasing share so advertising as a revenue stream i think is is good and complementary unfortunately the markets don't necessarily love it and then the second thing generally speaking for these businesses that drive huge gtv's gross transaction values is i think most people when they try to find what they're worth are very sensitive to the take rate and what they typically do is they assume a falling take rate which means what percentage of the transaction can you get and the reason why most people do that is that history has shown that these kinds of businesses cannot defend take rate for a very long period of time whether it's for competitive pressure or whether it's because their suppliers actually develop more pricing power take rate tends to decay so said in you know in grocery land i think it's because walmart and amazon will try to do it for much much cheaper and or charge just be more aggressive in how much they they want to keep which means it's less that you can maybe necessarily pass through i don't know the instacart business at all but if i were starting to look at it that's where i would focus is what are SPEAKER_160: the assumptions on take rate and if the take rate is going up and it would be a little bit of a head-scratcher i think that you have to model the health of the business with a decline SPEAKER_48: i can actually build on that pretty easily having spent a long time in the advertising market if SPEAKER_171: this was very profitable advertising chamath it would get a 25 x uh multiple on earnings let's SPEAKER_07: take that 800 million you put it at 400 million in profits like if the other business didn't exist so you have 400 million in profits of advertising times that by 20 you get 8 billion that's exactly their market cap so it perhaps what you're saying is exactly what the market is is actually penciling out uh google which obviously has a lot of other technologies i think a 28 x pe and facebook is crushed it like 35 p but these are much different scale and scale matters this is not one or two billion SPEAKER_48: in you know little extra revenue on top of your business that's the entirety 90 95 percent of their SPEAKER_74: revenue i think what's working in favor of instacart is that if you compare it to probably uber and doordash or airbnb at least airbnb dash i'm gonna guess that it looks pretty cheap now i think of all the three businesses dash probably has the biggest upside quite just like again parm's length i don't i don't own any of these three stocks i'm just saying business model quality dash seems infinitely scalable airbnb i think probably has long-term issues would take because of this exact reason because just competitive dynamics and pressure regulatory capture you're seeing that in new york fairbnb and then the question is what is the business outside the united states look like for instacart SPEAKER_160: i don't know but if i had to figure out what to pay for it that's how i would kind of try to break SPEAKER_48: the problem down sax any of your thoughts on the on the actual business here or do you want to jump SPEAKER_116: over to clavia yeah i think uh clavio is the really interesting one at least from my standpoint SPEAKER_98: because it's a software business i think jason lemkin had the take here he said that clavio's ipo will be the ultimate yardstick for sass in 23 and 24 top growth top margins top founders gonna cruise past a billion in arr whatever multiple they end up trading at your home is certainly worth less SPEAKER_47: i think it's trading at about 12 times for revenue so just or last quarter they did 165 billion 165 SPEAKER_98: million sorry yeah so they're at 650 million in arr growing 56 percent that's amazing so year over year 51 year so you know project that for they're probably going to be at a billion in arr next year 119 nr which is very good especially considering that it's from smb's folks it's net revenue retention it's the way to think about that is if you just look at your existing customers going into next year what percent of that subscription base is gonna be there and if it was 80 it would be 20 of your customers are turning away if it's 119 it means you have expansion from your customer base in other words your customers are buying more and there will be some who churn but the ones who are expanding more than make up for that and then they've been very capital efficient apparently they've only burned 15 million today that does not mean they've only raised 15 million they've raised several hundred million in various growth rounds but they've still got that money in the bank so i assume they raised it as a cushion in case they missed their forecast or something like that yeah it seems like a pretty strong business but i think his point is right is that they're kind of the ceiling you know so i think founders still have maybe unrealistic expectations from the days when sas businesses SPEAKER_222: were being valued at 100 times arr have you had this conversation sax with folks coming in for funding who have great businesses or let's call them good to great businesses somewhere in that zone there's seven SPEAKER_07: eight nine businesses but their valuations are way off and do you do you bring up hey here's what your your company would be worth publicly this is what your last round is and then trying to negotiate SPEAKER_48: in between those two numbers because it does seem like founders are bringing that up proactively in some meetings with me they're actually aware of public comps now and they're kind of admitting SPEAKER_101: hey i get it kind of situation yeah i think founder expectations have adjusted on this yeah SPEAKER_98: which is healthy yeah when you're in a hot market there's definitely a lot of sharing among founders of what's happening and where valuations are at and i think the same thing is probably happening in the down market as well so yeah i think everyone's getting more realistic yeah just to finish on clavier SPEAKER_137: i just want to give a shout out to toby lukey the best thing that i saw about that was that shopify SPEAKER_74: actually owns like 11 of this company which i think like if you look at the corporations again just doing an incredible job of building an ecosystem not only does toby support these companies but shopify ends up owning a huge non-trivial portion i think shopify owned like 11 or 12 percent of clavio i think with the sale of the flexport deliver back to flexport they own 13 or 14 percent of it i suspect they probably own a non-trivial share of stripe i say it's incredible right and by the way if you do some of the parts on on shopify their cash and cash and then cash equivalents are only valued SPEAKER_61: at like two or three billion so i feel like there's a ton of upside there just for free again i don't own it i haven't done the work but i'm just saying it seems like it seems like it's great uh so i think SPEAKER_98: that brings up a really interesting point which is the only vulnerability or negative i think about clavio's business is the fact that 70 of it is on shopify so that's a platform dependency and whenever 70 of your business is on one platform you always have to be afraid of getting the rug pulled out from under you by the way that was paypal's problem back in the day 20 years ago 70 of our business was on ebay ebay had a competitor we were constantly worried that they were going to pull the rug out from under us if we could have made a business deal with ebay we would never have had to sell the company it would have been ideal i think clavio was really smart creating alignment with shopify by letting them invest giving them equity doing a rev share agreement and they would be smart to continue that rev share agreement into the future to take this risk off the table because investors do not like existential risk you could have a perfect business but if there's some hard to quantify risk of the whole thing basically getting rug pulled then how do you discount that SPEAKER_74: david as an investor you look at that and you're like okay i then price this company as a function SPEAKER_98: of shopify that's a good point i mean 70 of the business is shopify the way i would look at it is i would price it as a sas business because shopify is more of a transact well they're a transactional slash sas business clavio is a superior sas business i'd price as a sas business but i would have to create some sort of discount for the chance that you know that the well shopify adds the features SPEAKER_294: how do you figure that out that's a really complicated thing to figure out yeah i agree but i think that clavio mitigates the risk to the extent they do this like ref share agreement it's SPEAKER_48: a really savvy move for people who have insights into the market to own pieces of emerging companies and lock in that partnership uh this was emil michael a shout out at uber and travis did this with all of the grabs dds etc and then dara just slowly sold those positions and they were incredible cash a creative to that stock and to running that business let's talk about air table for a second um this also trended on twitter with a tweet storm if you don't know what air table is it's kind of like what is it it's like excel meets a database and it's more programmable so if you wanted to have a bunch of data uses it a lot of small businesses use it medium-sized businesses and they use it to let's say instead of hiring somebody to build a database system uh or it's like google sheets on SPEAKER_103: steroids it's actually a really good product and it's a really sick product yeah i've seen it used like 10 different ways some people use it for tracking uh product feature requests uh and you know task lists some people use it for contact database some people use it for complex project management it's super extensible super easy to use and great collaborative tool uh think about it SPEAKER_321: like it's like a spreadsheet for words instead of numbers yeah yeah but you could also do numbers SPEAKER_103: so yeah with a lot of great features that you can do really dynamic things within the spreadsheet SPEAKER_74: do you guys believe in this swiss army knife approach of building these kinds of things or do SPEAKER_383: you believe that it's just cheaper and simpler to build best-in-class versions of each of those use SPEAKER_263: cases freeberg that you just i think it allows certain businesses to have a very specific SPEAKER_103: tunable version of what they need from call it a project management tool so if you use a traditional project management tool it may be too overbuilt or it may be too specific whereas this tool allows you to build something unique for your platform so that's where i've seen a lot of teams use it instead of other tools like jira or whatever for tracking well this is the point i just wonder that you get SPEAKER_74: these small non-scalable use cases because then if the company is successful don't they then just SPEAKER_103: migrate to jira for example no i do it a lot like spreadsheets basically the reason people use spreadsheets for so many different things is because everyone's got their own representation of data and utilization of a spreadsheet and i think this is just an extension of that it's a cult think about SPEAKER_98: it as a more feature-rich spreadsheet tool i actually think that jama's question is is an excellent one i i tweeted many years ago that the way i saw excel was the long tail of use cases that hadn't moved into a dedicated sas app yet that's interesting yeah and that the way that if you wanted to be a sas founder you're trying to come up with ideas find some really complicated excel spreadsheet that's used across many different businesses yeah and just figure out if you can move that into a sas app so for example think about carta you know before carta people just use a SPEAKER_297: spreadsheet for the cap table and every company totally had a cap table totally totally but they just move that into a specific sas app so i think there's a lot of that and so and all the spreadsheet SPEAKER_81: is it's a visual representation of a database with some relational logic that you build into the the cells of the spreadsheet and this this pattern of breaking apart breaking apart a major SPEAKER_07: product was the playbook for craigslist people looked at craigslist and said oh there's couch surfing make that airbnb oh there's a ride sharing i'm going to la i have two extra seats that became SPEAKER_396: like uber so people this playbook has a great visual of that too where every category on craigslist SPEAKER_400: became its own dedicated like five startups yeah yeah oh test rabbit was one well you know everybody SPEAKER_401: uses yeah free break everybody uses something different it's interesting that it comes to you SPEAKER_386: that's the one that comes first craigslist was a huge dating product before dating apps came out SPEAKER_345: it was casual encounters or missed uh what was it called missed connections miss connections miss SPEAKER_406: connections it's hilarious to read it was like me you the number four train the point i think the SPEAKER_74: point though the question that i was asking is exactly this which is you have these beefed up workflow things that happen in excel but then eventually you go to these systems of record that are purpose built to solve the use case and if the use case is important enough it just seems like that's what's happened i don't have a view because i've never used the product but i wonder whether SPEAKER_105: part of this valuation reset doesn't reflect that dynamic it is a dynamic uh the two companies or SPEAKER_171: yeah two or three companies that represent it best is there's a product called coda uh which is part wiki part airtable part database and it's programmable and notion and now people are making templates in notion and then they're adding things like project management so i asked my team to do project management for events and they tried base camp they were looking at asana and then somebody was like you know what i just added it to notion is good enough it's not as good as those other two SPEAKER_07: products but it's good enough and we don't have to and the reason they want to do is not because we're cheap i don't want to spend money on another sas product we don't want to have to teach everybody a new sas product we don't have to want to do the logins for that so i think it is a a natural tension and people are doing both jama fill some people like the best of breed but you're also seeing it i don't know if you saw this uh past week slack added i think during dreamforce the ability to give you an ai summary of everything you missed and then zoom added ai summaries of calls so that feature that uh i guess otter and some other people were doing that feature is now built into zoom you you get a transcript from zoom for free and now you get a summary of the call for free that is work that was done by somebody on the meeting right somebody was responsible for being the note taker sometimes somebody was so those are jobs that are gone and i think it speaks to the bigger economy i had the ceo of kayak on this weekend startups this week it'll come out next week he's really great and i asked him about hiring and the size of the company said i'm not hiring anybody in the next year or two because all my developers are 30 or 40 better i got junior developers that are acting like senior developers i got senior developers who are turning into 10x developers we're not hiring we're just going to have increased margin so what happened to air table air table had a massive SPEAKER_48: valuation uh here's the tweet storm that's somebody from cb insights this guy anand uh who i think i SPEAKER_413: follow him did something happen or nothing well they're most recently valued at 11.7 SPEAKER_48: billion in december their 2021 series f his thesis not only is air table worth less than 11.7 billion SPEAKER_340: it's likely worth less than the 1.4 billion in funding it has raised to freeberg's been bringing this point up over and over about the overfunding and cash in is less than the valuation most yeah SPEAKER_81: most of these unicorns are worth less than their total press stack this is a good example i've just SPEAKER_103: been through this this week i went i saw it as a company i was an investor in that i saw this happen SPEAKER_93: air table on track to do their big problem is i mean they're doing over 100 million of arr it's SPEAKER_98: it's a great product and 150 million of arr that's no small feat the problem is the growth rate i think SPEAKER_102: still like 15 percent what do you do with the founders sacks because this was my point earlier is in these circumstances it's still a good business investors are going to want to own these shares at SPEAKER_103: some price someone will buy new shares at some price but to do this transaction given that the preference in the company which is effectively debt is greater than the value of the company the founders and the employees get their ownership stakes wiped out so if you want to i think their SPEAKER_98: only hope i think their only hope is to go public because that wipes out the pref stack and everyone basically just owns their percentage of the company if they don't go public and if they found a SPEAKER_418: private investor do that why would a preferred investor allow that to happen well this is going to SPEAKER_98: be the huge tension on the board is that if you're a common holder or if you're one of the early investors of the company you want to go public if you're a late stage investor you don't want to SPEAKER_48: give up your preference but those late stage people sacks did not have blocker rights in many cases because the market market was so hot they just put the money in without yeah i mean unless they had SPEAKER_103: a ratchet into the ipo but yeah yeah but in many cases but that's not a universal truth right in almost in the majority of these cases the preferred shareholders do have significant representation on the board they do have the ability to influence whether or not the company is going to go public and there's likely some middle ground that every company ends up having to meet at which is we're going to recap the company in a way that we're going to give some shares newly issued shares to founders what we saw we're going to doordash i doordash they got SPEAKER_07: dragged along yeah in doordash i think they all just got dragged out they didn't have a choice my understanding of some of these late rounds during peak zurp 20 20 21 from talking to bill gurley was people did not negotiate those rights those rights the blocker rights weren't available and if the majority of common says we're going public you're going public and that's the that's the end of the story here's here's the punch line to the air table if you look at the uh ford price to sales SPEAKER_48: multiple 78x for an 11.7 billion dollar valuation at 150 million arr and you compare it to the trailing price to sales multiples in the project management space mondays at 12 x plus asana 6.6 x and smart SPEAKER_98: sheets at just around 8x so it's a challenge yeah well to freeberg's point one of the downsides of taking all this excessive capital at these ridiculous valuations is that it produces a dynamic in your boardroom where your board members are at war with each other the late stage investors are going to be at war with the early stage investors and the founders and who knows who comes out on top of that SPEAKER_103: i don't know if you guys have but i've got like so many anecdotes over the last couple of months on SPEAKER_171: this exact scenario playing out well take us through an amalgamation of those you know without talking about specific ones but you know you can make an amalgamation what is the dynamic and how SPEAKER_75: does it work itself out investor invested a multi-billion dollar valuation the company is now worth 20 SPEAKER_103: of that valuation and the investors have more money in the company than it is worth and the company needs more cash they can't go public at this rate because the markets are shut down no one's going to buy new shares they can't raise cash by going public so they have to raise cash in the private markets so then the tough question is okay what's the value of the company in almost all of these cases the ceo has been replaced or there with some professional ceo so there's a new option pool created equal to 10 to 15 of the company new options are issued and a round is done at a significant discount and there's a huge recap and a pay to play and all this other sort of stuff starts to play out that the original founders in the company get wiped out most of the management team leaves because their options are now worthless and the investors who historically have been totally passive late stage investors have had to step in and try and take action in rebuilding a management team which guess what they're not necessarily good at and so it ends up becoming this really nasty unwinding of the business because everyone thinks oh well i deserve to get a fair deal because i put money in and i have a preference in this company founders don't want to see their ownership go down from 20 to 2 they're like why would i keep working for two percent i'm fully vested i'm gonna leave the management team's like wait a second i'm getting offers left and right to go join other companies and so it's a real kind of nasty unwinding and i think that's the scary scenario that's likely going to play out not all but a good chunk of these companies that are there are still businesses they have decent value to their business but they just raise too much capital SPEAKER_251: relative to the valuation of the business today if you looked at it on a blank piece of paper these SPEAKER_74: businesses would look incredible at whatever the true valuation is today but if you have the psychological hindsight bias of what the price was two years ago you just can't see that you can't get SPEAKER_98: it totally can't get it by the way i will send the structure there's like legacy structure in the cap SPEAKER_81: table from yeah yeah meaning there's like this press stack i will say that the terms are so crazy good for the recap that investors are clawing their way into the recap round well that means oh my gosh SPEAKER_150: i get the niche markets are healing that's means we're in the end game right that's part of what's SPEAKER_439: happening part of what's happening it's totally predatory it's totally predatory it's totally SPEAKER_98: predatory what i've seen is when you're going to be able to go public again i think that when there's a recap and the founder is still running the company there's a chance of it being fair but when they bring in a new ceo who then does a recap oh yeah they don't care they don't care they don't care they're marauders they care about their interest exactly and all these recaps turn into a disaster SPEAKER_45: yeah well it's recap or you're going to go out of business so i mean this is a forcing function and SPEAKER_171: everybody party too hard i think it's time for everybody's favorite part of the show which is to give chamath his flowers here we go chamath the uh fed spoke this week and it's time for chamath SPEAKER_452: to take his victory lap here he goes everybody chamath is this this is vangelis yes vangelis doing chariots of fire this week the fed said SPEAKER_141: to quote chamath well this is look i paid this is this is but interest rates would stay higher SPEAKER_61: deep state for longer there he is there's chamath leading the pack i sent my i sent my talking points SPEAKER_282: from six months ago to my deeps up to our friend deep state you can keep that up sent the note and SPEAKER_434: deep state sent it to the fed and the fed just cut and pasted it into the race will stay higher for SPEAKER_462: longer and now he takes his victory lap all right enough of this shenanigans chamath said rates will SPEAKER_48: stay higher for longer the fed said rates will stay higher for longer at the end congratulations chamath you got it right thanks okay well that's every week we're going to give our chariots a fire SPEAKER_466: here he is SPEAKER_74: this is when obama who is obama giving the metal to what's the real picture here it's obama SPEAKER_467: is he giving it to the metal to obama to biden but i think he's going to get to buy it SPEAKER_61: he's going to buy it he thought it was so oh chamath giving a medal to chamath so i think what SPEAKER_74: happened this week is actually pretty important because i think the markets were really trying to force jerome powell to start the cutting cycle and now they had to move the date at which they could expect cuts out by a year and i think that we're only starting to see the reverberations of that you're going to have to reprice a lot of risk assets so if you put it all together oil is creeping back up so commodity prices essentially are trending up i don't think that's going to have a big impact on inflation because of the way that owner equivalent rents and core cpi is calculated because it's calculated on this six month lag this dumb nonsense of just how arcane our system works but that's going to spike down so basically the fed's like saying we know all of this is happening we're sitting on our hands but the problem is that if you add another 100 basis Chamath Palihapitiya: points to your discount rate for an unprofitable sas company my gosh guys you're taking like another turn and a half of market cap out of the business like if you thought it was worth eight times it's now worth six and a half six times so unfortunately that's going to hurt everything that's not the top SPEAKER_74: seven tech companies and everything else is just going to just kind of meander along for a much longer time so it's really good for the magnificent seven i think it's really bad for everything else SPEAKER_65: and we're going to be in a holding pattern for a while crude oil uh is at uh let's see SPEAKER_74: 89 a barrel yeah it's you know i told remember remember this conversation i told my ceos guys let's get enough cash to last through the middle of 25. sure remember i was pretty clear about that to folks i mean get to get to default alive but if you can't please have enough money to the mid of 25 i think Chamath Palihapitiya: that that was wrong i think now you got to be q1 of 26 and maybe even mid 26 so now i have to go back SPEAKER_74: to all these ceos and redo an entire justification for why they need to cut even more people cut even more expense cut more burn i don't know where we're gonna find another year of burn in most of these SPEAKER_282: businesses so i was wrong by at least a year jason because of this i think i got the words right but SPEAKER_98: i got the timing wrong yeah just to just to further translate this okay so the markets right now are definitely taking a bath the growth stocks are off significantly expect them to be off more yeah and the reason is because the market had started to price in rate cuts next year and now the fed is saying that because inflation ticked up a little bit it's not coming down as much we have higher energy prices we may not get those rate cuts i think the fed still maintains that we'll get 50 basis points of rate cuts next year but the market was pricing in more and i think people are starting to wonder if we'll even get the 50. so as a result of that interest rates are going to stay higher longer which means that risk capital will be less available so valuations are going to go down or at least SPEAKER_12: they're not going to be racing back up like they used to when i was saying mid 25 sacks that was SPEAKER_483: because the forward curve started showing cuts in early 23. you know what i mean so i was like okay SPEAKER_74: let's assume they're wrong by 18 months it turns out that that initial data point in early 22 Chamath Palihapitiya: my god we were wrong by three years it's not a year and a half right it's brutal and i think the x SPEAKER_98: factor here is that we're running almost two trillion dollar deficits in peace time well i mean we're not in a direct war we're in a proxy war but in relative peace time and in a relatively decent economy so what happens if either of those things change and what happens to long-term rates as all of these debt issuances you have to get raised as the fed has to keep selling more treasuries to fund our deficit and debt at these higher rates do long-term rates keep going up based on the debt SPEAKER_74: financing needs of the federal government and then this is again where you know we made a huge mistake by politicizing this idea of raising money beyond 30 years we made that mistake under the trump presidency because people reacted to trump saying it but it was the smartest thing we could have done to give our kids and our grandkids a reasonable economy and freeburg has been right all along about just like our spending is just going up and up and up and now short-term rates are really high maybe we'll have enough political will to just get out of the fed's way and the fed can actually look at raising in durations past 30 years because if you Chamath Palihapitiya: believe that we're going to start an aggressive cutting cycle at some point and you believe we'll get back to like a two percent terminal rate you could theoretically justify 50 60 year bonds SPEAKER_61: at much lower than the 30 year but i don't see it happening here's um a really good way to look at SPEAKER_48: this there are prediction markets this one call she is the one i use k l s h i chances of a rate cut by SPEAKER_171: may of 2024 29 chance and these are people actually making bets on these things and so it has gotten SPEAKER_48: pushed out and i guess 74 chance by the fourth quarter third fourth quarter of next year people think there'll be a rate cut so we're a year away from a rate cut everybody needs to just take that off the table which means the translation for founders for gps is performance has to go up you got to beat five six seven percent or whatever people are going to get on those other instruments SPEAKER_75: corporate debt you know 10 11 12 you got a really hard bogey to beat here the alternative to that SPEAKER_103: statement is that total capital has to go down in order for the capital remaining to have its return multiple increased given that there's a generally set number of companies that are going to generally create a certain amount of value over the next couple of years and the way to create that value is so if that's true well i'm saying if there's a bunch of startups that are going to make 100 billion dollars of market value over the next five to seven years you need to have less capital going into those companies in order for that capital to generate a higher return which on your SPEAKER_495: day-to-day basis means what freeburn explain on a day-to-day basis on a day-to-day basis it SPEAKER_102: means there's going to be less companies that are going to get funded but more importantly it's going to be less lp money going into venture and there's going to be less capital available SPEAKER_07: to fund startups in aggregate by a significant amount on a daily basis you need to do more with less as a founder you need to delight customers with less resources spend less money on marketing send less money on teams and get to profitability you've got to be a stronger founder i'm seeing it across the board in the seed stage two three four founders raising 250 to a million instead of SPEAKER_135: raising three to five i gotta be honest jakel i thought it was much easier to kind of say the sky SPEAKER_74: was falling this time last year sure right now and i think that people are a little bit again exhausted about hearing this message constantly of like cup more it's like i think that they're exhausted SPEAKER_61: and i see a lot of founders that are exhausted and giving up there's a lot of giving up they're like they're like i can't cut anymore and now i do think we have to go back to them and say if we're doing SPEAKER_74: our jobs right okay even okay look our now our strategic view was right but the time scale of our analysis was wrong and i think now you got a plan to mid-26 i don't even know where to start to be SPEAKER_171: honest with that conversation actually that what i'm seeing is people are merging companies and m a's picking up because hey you got two companies doing five million each but they're burning two million each a year cut half the team put one team with the other and i think you're going to just see SPEAKER_392: some of that portfolio consolidation happen go ahead sex i think one way to put it is that we've had a SPEAKER_98: regime change those are the words that we've been using for a while and specifically we've gone from a regime of capital abundance to a regime of capital scarcity and i think a lot of people are holding out hope that there's going to be a quick bounce back because we've cut these interest rates and capital would start flowing again in a big way and i think that the fed here has dumped a bucket of cold water on the markets basically saying we're not bouncing back to capital abundance anytime soon we're going to be in this environment of more capital scarcity and that's what i think just founders and vcs now have to take into account is this shift could be permanent or it could it could last a SPEAKER_218: while could last five ten years sure we're seeing a lot of question i have is just what do you guys SPEAKER_98: think is going to happen to the consumer because i i actually think that even though founders in many cases could cut more and they could have acted faster i actually think that the b2b economy has kind of taken its licks i mean for the last year we've been in this software recession companies have been sharpening their pencils they've been cutting costs and getting more efficient yes you could say maybe they haven't done enough but the consumer has still been strong but what is the consumer going to do now that credit card rates and interest payments are at all-time highs they're going to they can't sell their house no here's what they're going to do SPEAKER_07: they're going to skip an iphone cycle instead of going from you know 13 to 14 or 14 to 15 they're going to go 13 to 16 14 to 17 they'll just skip which i did for the first time i don't need to skip it but i was just like this 13 is good enough they're going to skip upgrading their car you're going to keep your car for an extra two or three years and if you were thinking about moving your house SPEAKER_45: you're going to say you know what i'm going to make this house work uh we're going to put two of the SPEAKER_453: kids in a room 100 right i think that is that is i think that's very i think that's very well said and SPEAKER_74: and the the other side of it is that some of these industries where you have these large ticket purchases that drive consumer consumption their backs are against the wall look at the automakers that the deals that's that the unions have proposed to the automakers will cause them from i thought i saw an out an analysis of ford where ford would go if you just did a pro forma and went back the last couple years they would have gone from like you know 30 billion of profits to minus 17 billion of losses so that's a 47 billion swing in the ford pnl the only way they overcome that is with more expensive cars which jason to your point means that those cars are not going to get sold i do think that you're going to just have a little bit of belt tightening in the in the consumer i think this SPEAKER_294: is interesting i think you know trimath you're right that at the same time that the auto companies are SPEAKER_98: facing what you'd expect to be reduced demand because no one can afford a car payment at these higher interest rates the unions are going on strike demanding oh i think this is existential higher SPEAKER_74: wages yeah for a four-day work week how does this work work week i think that the the labor deal is an existential risk to the unionized auto industry in america and i'm not opining on whether this deal should or should not happen i'm just making an observation if the deal as announced happens Chamath Palihapitiya: and you sensitize stellantis gm and ford's pnl to these new terms and then you compare that against SPEAKER_74: non-unionized highly automated organizations like tesla and rivian it's going to be very difficult for the established auto industry to survive right and then if you'd layer on top of it seven eight nine percent consumer lending rates for new cars forget about it and yet SPEAKER_98: the fed forecast at the same meeting they were being hawkish about rates they also said that they were expecting unemployment next year to be 4.1 percent down from their previous expectation of 4.5 percent and they forecast that economic growth would be higher so i just don't understand how these countervailing forces aren't gonna create so much stress in the economy that something breaks and these uh idiot unions SPEAKER_60: honestly their timing is so dumb whether it's the ones uh you know in hollywood or this car strike SPEAKER_345: while they're shutting down it's great it's great for tesla i mean it's giving tesla the entire u.s auto market yeah tesla is lowering the price when i bought my model y long range i think i paid 72 for it SPEAKER_07: the old price on this chart says 66 that car is now 53 that's down 20 percent at 13 000 i'll say it's the model y long range i think is the greatest vehicle ever made i paid 57 i think for my model y SPEAKER_74: long range uh huh oh no no i think sorry i paid 57 i paid this price for the model y performance uh-huh David Friedberg: the best car and yeah that'll be a 40 000 car in the next three years well you know and i looked at SPEAKER_47: it and i it's speaking of austerity measures i i was like ma i have a model x do i get another model SPEAKER_07: x i think i'll just go with the model y because the model x is i don't know 50 more and i i just SPEAKER_74: prefer the model i think i think this labor deal is going to put tremendous pressure on these David Friedberg: established auto ovms china is now the world's largest exporter from what i understand that just SPEAKER_07: happened they work i looked it up 58 to 64 hours a week factory workers the u.s factory workers want to work 32 hours a week they want a four-day work week i mean i don't understand the timing of SPEAKER_191: these unions i mean they they're just going to move these factories to mexico or i think it's reasonable SPEAKER_74: for the unions to ask for as much as possible on behalf of their members that's like obvious and good because meaning if you're collecting fees from those folks and you're doing a good job on their behalf your job is to ask for as much as possible i get that SPEAKER_251: where i see the breakdown is that it just doesn't seem like there's enough numeracy between them SPEAKER_74: and the companies that they're negotiating against to really sit down and look at what the impact of this is because you may get a short-term labor deal that you can celebrate but it may actually destroy Chamath Palihapitiya: that union member's pension yes it may destroy the company and this is my concern is that then that has to get bailed up by by the u.s taxpayer and once it happens in one industry it's going to be very difficult to actually not do it in other industries and the thing that needs to be understood SPEAKER_74: is the risk that it puts on those kinds of tail outcomes and i think that that's not well discussed nobody in the media is really talking about it they make it a a moral issue of like what is the ceo pay Chamath Palihapitiya: versus what is the ratio and yeah sure look that's an important issue at some level but if you if for example like you have u.s senators blathering on about how they'll wear a suit and not look like a homeless bum if this deal happens in that and it's like well that's not what you should be saying what you should be saying is my team has done a financial analysis and here's what it shows SPEAKER_294: right they're not saying that this is crazy what you're saying is that the negotiation SPEAKER_98: and also the political dimension of this have become completely untethered from economic realities SPEAKER_340: yes they are negotiating in the review mirror they basically talked about whatever billions of dollars SPEAKER_48: in profits the companies previously had during the zerp environment during the heyday and yeah it's just SPEAKER_101: timing's off just added to the list of latent problems in this economy it just feels to me like something is about to break but who knows i mean if the to your point sacks you you keep SPEAKER_48: bringing up like what happens with the consumer i think they just slow their role you know staycation SPEAKER_98: instead of european vacation larry summer said at the summit he said that soft landings are like second marriages the triumph of hope over experience yes meaning everyone's talking about a soft landing everyone's banking on a soft landing but soft landings are actually exceedingly rare when you have very fast rate tightening cycles it generally has a very predictable effect on the economy there's a lag but the effect is very predictable which is it causes recessions and then i would argue we've already been in a b2b recession we're starting to come out of that but i think the consumer hasn't been hit yet and maybe that has to do with all the stimulus they push through yeah and that created some amount of cushion for the consumer but i just wonder if that cushions SPEAKER_171: run out now we're about to enter a new phase and it would what all of these strikes you if you overplay your hand from off is automation so this happened in new york just over 10 years ago the fast food SPEAKER_48: workers wanted you know i think it was 15 20 bucks an hour okay seems reasonable and they replaced every cashier you go to mcdonald's now you're ordering on the app or you're ordering on a kiosk in the space and we have an investment in a company called hello meter what this company does is pretty simple they just study what's going on inside fast restaurants and then they just increase the speed at which people are getting served and they're crushing it why people can't hire people there's not enough immigrants in the country anymore we have an anti-immigration thing going on here so unemployment's too low and the the the salaries are too high it's not working a lot of restaurants are breaking because a 30 or 40 dishwasher is the difference between a company you know a restaurant being profitable or not all right SPEAKER_171: listen there's apparently some potential major breakthrough in autoimmune disease treatment with this new inverse vaccine let's go to our science correspondent the sultan of science himself for science corner SPEAKER_531: did sax just turns his camera off SPEAKER_534: wow sax is going to take a dump he'll be back oh he's back i'm here i'm here geez you wouldn't even SPEAKER_539: let me get away with that nope where are you trying to go oh we were zoom shaming you do not leave you SPEAKER_45: could learn something sax i just want to give you a shout out my super gut i just have my super gut chocolate oh so good i just got my super gut protein and uh the weight loss continues health boosting SPEAKER_102: my gut so good there was a paper published in the journal nature this week which i thought was worth SPEAKER_103: highlighting sax you're going to be quizzed afterwards on exactly what i say during this this and the implications for it we've all heard of and know folks that have autoimmune conditions and some of us may suffer from them an autoimmune condition is when our immune system mounts an attack against a protein that exists in our body that is natively part of our body our immune system kind of mistakes that protein for being a foreign antigen so the term antigen refers to proteins that the immune system views as invading and it needs to go in and attack so when the immune system messes up and it sees a protein in our body as being a foreign antigen and starts attacking it you get these autoimmune conditions and autoimmune conditions as you know are very debilitating cost on the health system on people's lives the top 10 autoimmune diseases this is like lupus crones rheumatoid arthritis even type 1 diabetes multiple sclerosis irritable bowel shogren's hashimoto's thyroiditis these are all pretty in different ways damaging diseases so this team at university of chicago in 2019 published a paper where they actually took an antigen and glycosylated it so basically attached some sugar molecules and carbohydrate molecules to it and presented it in the liver so they put it into the blood and it showed up in the liver and they were able to cause type 1 diabetes to not develop in an animal model that was supposed to get type 1 diabetes so they did an extension of that work and the team has gotten broader and they just published this week a much more substantive paper that highlights a pretty incredible technique that may potentially address a long list of autoimmune conditions so they take the antigen the protein that is sorry are you saying sorry in the type 1 example are you SPEAKER_61: saying like the beta cells didn't get destroyed like it just stopped it just stopped everything on the SPEAKER_81: time yeah so the immune system has a bunch of ways for self-regulating there are t-cells in our body SPEAKER_103: called t-reg cells or regulatory t-cells their job is to go find the t-cells and the antibodies that are attacking our own protein that's their job and when they don't do their job the antibodies and the t-cells go and attack our own body so t-reg cells kind of when they're turned off they're not doing their job so it turns out that when a protein is presented in the liver in this this particular part of the liver the immune system recognizes that protein as being a safe protein and there's a regulatory process that gets kicked off that causes the immune system to start to see that protein as being safe it should not be attacked and t-reg cells start to develop and other systems start to develop that tell the whole immune system stop attacking this protein this is a safe protein this is our body this is like friendly fire right like do not it's like friendly fire do not attack this protein so what they did is they took several antigens proteins and glycosylated them meaning they put some you know molecules on them put them in the in the blood just with an iv hookup they go into the liver and once they're in the liver the immune system sees them and is like whoa these are totally safe now and they found by analyzing all the different t-cells the regulatory pathway that emerged that caused the body to stop attacking that protein and they were able to end ms using this induced system in animals so basically that we have a known model for making multiple sclerosis show up in animals and they were able to stop ms in the animals by taking this particular protein that they use for ms and they put it in the in the liver through iv they did the same with an egg allergy and they did the same with several other antigens this represents a very novel and seemingly super impactful and powerful way to think about eliminating autoimmune disease going forward is that we can take the antigen and we now know the antigen or the protein that causes almost all of these autoimmune conditions from thyroiditis to lupus to ra to ms and we can take that protein glycosylated put it in iv ends up in our liver gets presented and our immune system realizes i shouldn't be attacking this anymore and resolves it so it opens up a whole new category of therapeutic pathways for addressing all autoimmune conditions it's a totally new modality it's a very interesting approach it'll be studied more deeply folks will take this paper and try and start to develop very specific therapeutics for very specific autoimmune conditions using this approach and hopefully over the next couple of years we see some of these things have success gain traction and go to market these autoimmune diseases SPEAKER_405: are typically some combination of genetic and environmental so this is not attacking them on SPEAKER_340: that basis it's attacking them in a different modality you know there's two ways that we address SPEAKER_81: autoimmune conditions today the first one is by presenting the antigen to the immune system SPEAKER_103: before you develop autoimmunity this is like you know when they give little bits of peanuts to kids and yeah yeah that's how you present prevent peanut allergies in most autoimmune conditions we're past that point the immune system has already developed t cells and antibodies to go and attack so that doesn't work the second way is immune suppression and that's terrible globally suppressing meaning on the whole body turning off the immune system is not healthy in a lot of ways and that's the current you know kind of best-in-class way we address autoimmune conditions so this is a new approach which is we can actually re-regulate the immune system to not attack itself to not attack our own proteins by introducing that protein with a with what's called glycosylation getting it into the liver and boom this magic starts to happen and we'll see what the side effects are as they start to try this on humans we see we'll see what conditions are more effective than others uh sorry for the stupid SPEAKER_554: basic question but how is the uh how is it different when we put these into say like uh you said these SPEAKER_171: were monkeys or chimpanzees so how are their anuses different than your anus what sorry anyway let's SPEAKER_179: keep going here great science corner i'm laughing at how contorted that you go you punch it up you SPEAKER_238: and i do these workshops i'm just workshopping it you know let me work on work on punching it up SPEAKER_561: we'll try to get a better urination anyway it's super cool autoimmune conditions the world's getting SPEAKER_103: better the term modality refers to refers to an approach to a therapeutic and this modality is a new modality so it's a super exciting new kind of universe to be explored now on how we might be able to treat autoimmune conditions ranging from okay let me try hold on yeah hey that's actually on the SPEAKER_98: science one what what part of the body do you think is going to be most impacted by these discoveries SPEAKER_573: no the immune system no no no that's not good okay let me try let me try let me try okay here we go SPEAKER_576: you guys are just so dumb about science okay all right here we go okay here we go freeberg i thought SPEAKER_74: the only solution to ms was uh fecal transplantation through uranus yeah okay there we go there's your SPEAKER_04: winner there's your winner because you kind of did a little uh a misdirection there with the fecal SPEAKER_07: transplant and then we came back through uranus that would be the way to to get that done we're gonna wrap here thanks to everybody who came uh brian armstrong also did a great job elon did a great job thanks to everybody who showed up for us and if you want to watch all the talks all the talks are being released exclusively on youtube and x so go to x and look at the all in uh podcast twitter handle and type all in podcast on youtube and you get to see all these talks uh available now and ray from SPEAKER_191: the unofficial all in podcast meetups is doing a 150th uh meetup for the fans in all different cities around the world so just do a google search for that for the sultan of science and the world's greatest conference producer the dictator in the arena making it happen and for when it paltrow's favorite SPEAKER_585: bestie david sacks i am the english greatest moderator see you next time bye bye SPEAKER_586: david sacks SPEAKER_600: we need to get murky's