SPEAKER_01: any word from the dictator or should we just do uh i don't know man i gotta i i cannot spend my

SPEAKER_02: whole day sitting on zoom waiting for chamath or i could have brad gerson come on and say him for

SPEAKER_04: isn't he richer than chamath he is now the largest pack of the world should we do that should i just have brad come on the pod oh my god yes start it now get him on started

SPEAKER_01: come on comes in later he's like what the we're like we'll replace you with the new smack king

SPEAKER_11: oh my god oh my god get him on is this like uh a kidnapping and you guys are going to take me out and drop me out behind uh behind the railroad cars what's going on here okay good here we go

SPEAKER_16: i'm good is it how's the game game is great good game three game two one hey everybody hey everybody

SPEAKER_29: it's another episode of the all in podcast we took last week off because it was spring break and we

SPEAKER_30: all needed a break hope you had a great one too with us today of course the queen of quinoa from an undisclosed sunny location david friedberg it looks like city is it redwood city arraignment himself

SPEAKER_32: david sachs ready for governor sachs.com and of course the king of all specs brad gerstner is with us again the new dictator uh filling in for chamath palihapitiya the dictator oh wait chamath palihapitiya the dictator is here as well and special bestie jason jason jason

SPEAKER_38: not when you

SPEAKER_39: i don't know what that means but we're editing that out of the show that's a bunch of beeps

SPEAKER_42: uh but welcome brad sitting in uh just for a moment here because chamath was gonna

SPEAKER_43: blow us off he was a no show we needed a spat king sorry guys backing i apologize emergency it's

SPEAKER_10: just it's just a little flattery for chamath the truth of the matter is chamath uh chamath is

SPEAKER_50: pioneering here and uh you know i think um uh it's been incredible to watch the competition and choice and as chamath knows i participated in a couple of the deals that he's done um and i think we all share the same feeling which is you know there's been a uh a system that is pretty byzantine that wasn't serving the founders who we all uh you know care deeply about and so i'm just i'm thrilled whether it's direct lists like roblox did a few weeks ago that we we helped do and you know or whether it's chamath and the incredible innovation that he's helping to do or you know we're lucky we've been we've invested in you know building a capital markets business on top of this uh this back and and and then you know worked with uh grab to bring a great public company

SPEAKER_53: out this week so let's get to the direct listing uh good segue clearly the biggest news of the week

SPEAKER_02: is coinbase the largest direct listing ever uh bill gurley somewhere is smiling and that's on top of

SPEAKER_29: roblox which i think was the second biggest uh 2020 revenue 1.2 billion sorry brad did did snowflake

SPEAKER_55: direct list or that was a traditional no that was traditional idea traditional idea i don't know who

SPEAKER_29: got their bet week their wet their beaks on this one sax did you have a little bit i had a little

SPEAKER_59: tasty poo a little tasty poo i had uh i had a lot showered upon me uh explain boy because you're because

SPEAKER_47: you're in ribbit right i am i was mickey's one of mickey's largest lps yeah who's making for the

SPEAKER_65: audience who doesn't mickey malka who runs uh ribbit capital who owns seven percent um or ten percent or seven or eight percent of coinbase and what was incredible was i got distributed all of it yesterday

SPEAKER_63: which by the way i think for a direct listing the strategy to me makes a lot of sense i made a mistake in hindsight if i think about my distribution strategy because myself excel and andresen when we did the slack direct listing we distributed probably five ten percent and then we waited and then we trickled it out over time but by definition i think the price action on direct listings shows you that you top tick the top price at and the moment on the open print and so you know if you're going to sell you're probably better off selling absolutely right away and if you look at the price action on direct listings it's basically been one way direction down from the point of the direct listing spotify did that for two years it kind of languished you know slack did that until the salesforce acquisition um so in general i think if a direct listing happens when you get distributed

SPEAKER_53: the stock you should probably sell it right away and that uh means it was priced correctly as opposed to underpriced is that what we should take from that well no because there's no price that's what's

SPEAKER_63: what's tbd is what is the morale hit to the company to see a one-way direction down in you know a stairway down on the stock price so maybe it was good for selling shareholders it's not necessarily good for the morale of employees which then could impact the long-term enterprise value that's being built at a company so i think there's a bunch of tbds i do think that direct listings are administratively clean in some ways but company building may not necessarily win but you had a point

SPEAKER_73: of view i think it was last year or two years ago about how you know and i read some papers that one

SPEAKER_74: of the analysts at well street put out showing that um there isn't much of a benefit to lockups with

SPEAKER_73: respect to short or long-term uh price volatility do you still hold that point of view like i think

SPEAKER_63: lockups are i think lockups are really unfair because they they're they're attacks on the people that have been there the longest which are the employees so you know the idea that somebody that comes in at the absolute last minute you know brad and i have done a bunch of ipos recently where like you get allocations in a book he and i had nothing to do with companies but we get it shares and we sell it day one then there are people that have been in that company for six seven eight nine ten years who sit around you know twiddling their thumbs watching all these other people make generate one one day returns there was a tweet that bill gurley had yesterday that says there's a well-known crossover fund that over the last year has printed a billion dollars of of one day share gains well that's crazy so i think that lockups are kind of a regressive tax on the people that do the work and they they are just rewarding people that have nothing to do with companies brad what do you do

SPEAKER_76: in grab because you lock yourself up right for a couple years and is there a lockup for the existing

SPEAKER_50: shareholders in grab yeah so first i totally agree with chamath lockups are one of the most insidious things i think about the traditional ipo process um you know the fact that doordash employees

SPEAKER_78: are sitting there watching the stock go from 100 to 200 and then you know all these other folks are selling while they'll watch the stock go from 200 back to 100 i i would think it's incredibly

SPEAKER_79: demoralizing and it doesn't here's the thing it doesn't need to exist in roblox there was no lockup the employees were free to sell but guess what a lot of them chose not to sell right it's fairer and quicker price discovery when you actually allow the supply and demand to exist in balance so what we what we did at um at grab was we fought hard for the most open unlocked right day one we could possibly get um in that case there are a lot of big shareholders who are on the board so they're deemed affiliates under section 16 of securities laws so they can't sell right they're deemed to be insiders right and um but we at the end of the day all employees can sell there is a group of senior management that said hey we want to voluntarily lock as a signal to the market but all other employees in the company can sell so they're over 5000 employees in the company um and all of the early shareholders

SPEAKER_50: can sell on day one and i think this was uh the first time i've seen this in in you know this alternative ipo so we have almost a third uh of the entire uh share base of the company that is available

SPEAKER_73: for sale on day one incredible hey brad can i ask one more question the um the economics for grab are they are they better under your structure than they would have been for traditional ipo to get the

SPEAKER_74: same amount of capital and they're paying seven percent to the underwriting banks you know as you

SPEAKER_50: as we all know you know bill gurley has has laboriously pointed out and documented that there are two expenses to a traditional ipo right there's the upfront fee five and a half six percent whatever they're paying on the amount of capital raised but he would argue the much bigger expense right is the indirect cost of the structural underpricing right right so in a traditional ipo let's say you have a 10 billion enterprise value raising a billion dollars if it's being underpriced he would argue

SPEAKER_79: structurally by 40 percent we can all debate that but that's 400 million dollars of dilution to employees and to existing shareholders i i think everybody in the grab process um both the buy side

SPEAKER_50: portfolio managers from fidelity janice t-row etc as well as the company believe that we got a 20 to 30 percent higher price than a bank would have got because of the conviction the portfolios managers had as a result of the significant investment we were making in the company as a result of the fact that we were locking up our promote shares our sponsor shares for three years um and so if you say it's

SPEAKER_79: 30 percent on a four billion dollar raise that's over a billion dollars of savings right over a billion dollars of indirect cost savings to the employees and the shareholders and like for me our north

SPEAKER_50: star is founders and so we literally have deconstructed the ipo at every step of the value chain and to say you know like rich barton my my thought partner in this he's taken it's on the board of netflix when it went public took zillow public took expedia public and he said like we can make this better at every step of the value chain and so we've thought about it like a product and we build in a capital markets business that says part of it right is eliminating the commission part

SPEAKER_79: of it is getting a fairer price but part of it is curating that day one cap table right because these companies are stepping into the public markets and you know as rich has said and others have said think about all the curation that goes into a private cap table now when you go public rich calls it a cap table randomization event right you lose total control over your cap table right whereas in the case of grab we hand selected what we think are the world's best public market shareholders to be their day one cap table so it's a very different outcome and it's not just about cost savings it's not just about trying to get a fairer price it's actually making the process better at each step of the value

SPEAKER_30: chain all right so we were talking about coinbase last year when they had a big brouhaha and brian

SPEAKER_02: armstrong said we are not going to talk about politics inside the company um you can have political views but not inside the company sacks you did some tweets about this what are your thoughts yeah i mean

SPEAKER_90: apparently the coinbase's ban on politics in the workplace and their refusal to submit to new york times interviews did not prevent them from creating an 85 billion dollar company you know i'm i'm shocked shocked that they were able to to do that that's basically what i tweeted and um you know it just shows that founders can do things their own way they don't have to submit to you know the woke mob and that's basically what i tweeted and then you know of course uh i well the first it's been interesting to see the reactions the first day i got like 10 000 likes and then the second day it seemed like

SPEAKER_92: some sort of sos went out and uh now i've been sort of surrounded there's been this like outcry and my takeaway is that the woke mob really doesn't like to be called out as a woke mob and um they're sort of they're sort of surrounding me with pitchforks now saying how dare you call us a mob um

SPEAKER_93: sax are you running for governor because it looks like you've taken

SPEAKER_96: did you take botox he's in miami so it's probably what is going on with your lace and your face on the bottom your lips are incredibly swollen i mean they look very

David Sacks: succulent it's unbelievable i've got a new lens i've got five different uh technologies uh making me

SPEAKER_70: slimming me here but you do have your pin on today and you do look very governorial and i noticed that

David Sacks: you bought i'm wearing my miami pin this is my city of miami pin francis gave you that francis

SPEAKER_106: gave me the pin that's fantastic did you tell you never call me francis

SPEAKER_76: what is the big announcement today for you guys we're really excited to hear it yeah tell us

David Sacks: governor sacks.com what do you got on deck there there's nothing this is a this is a jason construction

SPEAKER_113: i don't want to do we do we have a do we have an exploratory committee set up yet let's get sacks

SPEAKER_63: out of the game i need that deal i mean guys guys obviously if this comes to pass we're going to rewrite history as david sacks was our manchurian candidate you know i floated the trial balloon there was a layup for david sacks to come and alley-oop and dunk on gavin newsom

David Sacks: woof no look oh come on sacks no look the world well i tell you newsom is doing everything in his power to to blow this recall because i mean timing is working in his favor i mean he's done a horrible

SPEAKER_90: job on everything vaccine related but the reality is covet is winding down it's going to be over so even though he delayed um everyone getting the vaccine by by weeks if not months months probably yeah by months we've got seven million unused doses sitting on the shelf in california because of all of his crazy eligibility requirements despite all of that by the time we actually get around to the recall which will be in about five or six months uh the recall election you know the economy is going to be booming again and we're going to be over people will

SPEAKER_92: probably forget but but for the fact that he is now saying that he cannot guarantee that schools will reopen in the fall so we now have we now have schools reopen in you know every public schools reopen basically in every other state you now have private schools are all reopened in

SPEAKER_102: california and he still cannot guarantee that schools will be reopened not not now but in the fall

SPEAKER_127: david throw down the gauntlet yeah make the guarantee you made enough money you will open

SPEAKER_129: all the public schools when they open in fall day one yeah and uh well i'm not this is the window david

SPEAKER_131: now or never i'm not i'm not i'm not saying that that i'm running but one thing i would say is that

SPEAKER_102: whoever does what what about if you rent if i ran i would 100 absolutely guarantee that school is

SPEAKER_92: open in the fall what we need what we need is a governor who will go to the teachers unions and say listen you will either report for your duty the first day of school five days a week

SPEAKER_136: no exceptions or you will go look for another career that is what we need

SPEAKER_140: more more more more more i'm not running i'm not running let's go let's go let's go can you

SPEAKER_144: make all the vending machines free yeah sure we can do that too okay can you can you get rid of all my debt yeah yeah why not okay i'm in can we go back to the to the markets just for one second

SPEAKER_63: because i just want to i want to ask a couple questions brad uh q1 was nuts let's get some color commentary from a big player in the capital markets you talk us through us uh talk to us through what uh factor rotation was talk to us about your reactions to this archegos capital thing about inflation also gut check like what is the what is what does the rest of the year look like like talk

David Friedberg: just how what's your sentiment how you're feeling just give us a reaction on just the economy and the

SPEAKER_30: gut check brad on weren't you like the biggest shareholder united at some point and oh yeah that

SPEAKER_50: was a bad way to start off 2020 yeah i want to hear about the bad way to start off 2020. however i would say that it ended up being the best year in the history of the firm and so you know like we like everybody else had to reinvent a lot of things about our business last year and and um uh we learned a lot from that moment and and the courage that a lot of people at united showed through through that period of time without a lot of help uh a lot of people think the government was helpful there's a lot of unhelpful things that were being done but notwithstanding that fact to to chima's point um chima i think i went on cnbc in november and just said like when we normalize there's no reason that the tenure shouldn't be uh back at the level it was in january 20 right and for every one percent move

SPEAKER_79: in the tenure you've got a 10 to a 20 drawdown in growth multiples and the reason for that is very simple they're long duration assets you discount them back at a higher rate and so you have multiple compression and so we were starting at an all-time high in terms of growth equity multiples for both software and internet uh when you look at october november of last year we've seen about 30 to 40 percent retracement or you know give back in terms of those multiples right in some names it's bigger and sometimes some names it's less i suspect that there's another 10 to 20 percent to go right uh for a tenure that's going to be sitting here at one eight um it i just got done talking as part of this road show as you know to all the biggest growth equity portfolio managers on the on the public buy side i can tell you they're all deleveraging growth they are not adding they're not looking to add dollars to growth and these are the biggest uh managers in the world and so we're not through that process there are some people who've anchored themselves to the fact that zoom was just at 500 they're like oh my god it's going straight back to 500 you're like no 500 was the outlier event that was the all-time high multiple event it will get there in the fullness of time but it's

SPEAKER_63: going to have to get there through earnings so so what do you think then happens in the privates and you know there's a lot of talk about certain firms some of your competitors in the growth stage side ripping capital into companies every 24 hours or 48 hours where where does that then normalized because aren't we setting up a dynamic where if you have a bunch of growth firms pricing crazy rounds whose valuations can then will not be able to be held up in the public markets aren't

SPEAKER_78: we creating a different kind of problem well um you know you and i've watched this dynamic play out probably four or five times over the course of the last 15 years where there's this inversion private capital markets private markets are actually overvalued relative to public markets i just look at a few ipos this week over the last couple weeks deliveroo hot private company down 30 in the ipo apple oven came out this week 20 down in the ipo right at the end of the day the great day you know as monger likes to say you know the markets are a voting machine and the public markets are a

SPEAKER_79: brutal voting machine um and so you know it just is going to take remember when groupon got done that

SPEAKER_50: last private round at 20 billion and then about nine months later it's trading at five billion or zynga i mean you and i go through the list we've watched this you know so it just takes the smackdown and people losing actual money um and and however so that's the one side right this is a temporary dynamic markets will clear i think it is possible you referenced you know a good friend of a of mine you know who's supposedly writing a term sheet every two days um you know uh at tiger the truth of the

SPEAKER_79: matter is you can hop you can hold simultaneous troops you can believe the next three months that we're likely to have more multiple compression in the public markets right you could hedge your public book in a variety of ways against that like like we did and announced last last december and at the same time you can believe that the secular trend in technology has never been more potent right and i believe that if you own an index of the top 30 of technology companies in the world today and you're willing to hold them for five to ten years you will be incredibly well rewarded the the most asymmetric bet maybe in the history of all of investing is having a golden ticket to have access to the best

SPEAKER_50: technology companies in the world today it's it's like unfair play and everybody on this call is playing in what is a highly asymmetric and unfair game stacked in our favor now we can screw that up by trying to think we're good at short-term trading or doing a bunch of other stuff we can get individual things wrong but if you bet on the top the top quartile of technology companies on a global basis like tiger and others are doing um and you have time on your side you're going to be

SPEAKER_53: well rewarded we talked about the mid-market late stage venture space being a no man's land a vortex the value being created in the late stage and value being created in the early stage but the

SPEAKER_02: money in the middle becoming a commodity because of tiger co2 and others coming in and just coming over the top do you uh subscribe to that brad do you think that's just a financial transaction in the middle and not a lot of value to be made there or do you think you know listen it doesn't

SPEAKER_78: matter in snowflake whether you invested in the 100 million dollar round the 200 million dollar round the 500 million dollar round the billion dollar round where sequoia came in you know if

SPEAKER_79: the company's going to two three four hundred billion dollars right all of those are extraordinary returns so altimeter has described itself uh often as a life cycle investor right i represent

SPEAKER_78: the biggest portion of the capital in the firm some long-term endowments are number two and number three and we have a multi-decade view on the world and our view is the one that i just articulated i want to have maximum dollars i don't care that it's all in the b or the c or the d or the ipo or you know i want to have maximum dollars behind our best ideas and i want to be an incredible partner

SPEAKER_79: to these companies as they move through the life cycle and part of the reason we build a capital markets business to help founders in a better way step into the public markets is it's part of our mission right like i want to you know how frustrating it was to me jason to be pre-mart or pre-ipo and mongo or twilio or okta and then when it came to the ipo i have to go to the banks and grovel right and grovel for an allocation and they dribble five or ten million and i see them handing big check you know big allocations to people who i know are going to flip it and i actually want to own this stuff it's very

SPEAKER_164: frustrating and so we think there's a better way and when those companies come public in the future

SPEAKER_63: you said something which i want to use as a question to uh friedberg and sax and jason because these guys are involved very sense in one way in what i'm going to say which is you said gross tonnage of dollars one of the most incredible things that i thought about the coinbase um uh s1 was the amount of unbelievably smart buying that andreessen did and i thought to myself andreessen just out sequoia at sequoia and what do you guys think about sort of how they've been able to to actually execute it just seems like andreessen is done an incredible incredible job i don't want to i mean jason you're

SPEAKER_65: close to sequoia so are you friedberg i just want you to react to that no you gotta get you gotta give

SPEAKER_90: them credit on coinbase because i think they made the they made the most money i guess um ribbit and gary tannon initialized may have made the highest roi because they invested a smaller amount of dollars

SPEAKER_169: earlier my return my return in ribbit was the maya from iconic told me was 506 times right exactly so

SPEAKER_90: so so ribbit made the 500x and i guess andreessen but andreessen made like 20 billion of returns of which you know they're probably getting 25 30 percent so they they made the most money uh may not have been the highest irr but it was the most money and you're right they doubled down in this like 2018-2019 period it sounded like they were doing a bunch of secondary buying they were buying the

SPEAKER_30: stock at 25 bucks yeah they bought it all from fred wilson and union square so as much as from other

SPEAKER_173: investors yeah they were just they did what soccer did with twitter right and with uber and

SPEAKER_90: started buying out but they did it but they did it at a time where people were losing faith in crypto there was like you remember there's like this big crypto winter yeah there was a big crypto boom in like i'd say december of 2017 january 2018 and then it kind of collapsed and the you know it mirrors the price of bitcoin you had bitcoin reach a peak of about 20 000 that crashed all the way down to four to three or four thousand obviously that was a great time to buy bitcoin but it sounds like these guys were also buying coinbase at that time so that was a pretty that was a remarkable doubling

SPEAKER_74: by the way it's a good it's a it's a good validation of brad's point uh about you know market perturbations being fairly independent of value creation over the long run and you know if you have faith that this is where value will be created over a period of 10 plus years um you know you're you're when you have an opportunity to buy in buy in and don't let the market perturbations drive your decision making or else you end up in this market trading trap um yeah i think i think we've we talked about this a lot warren buffett talks about it a lot i think chamath you've made the point about uh not timing the markets but your time in the markets and this notion that when you have conviction in a business or an idea or a thesis uh you know you can continue to double down on that conviction regardless of whether you think relative valuations are appropriate or or kind of disjointed

SPEAKER_185: at the time it's even more acute because what happens is we make short-term decisions and then

SPEAKER_79: those short-term decisions oftentimes to prove to be right in the short term and let me give you an example right exactly right and then it leads to behavioral lock-in right so at the end of 2014 bitcoin's at 1100 a share we get i get very interested in crypto i think this is one of the most asymmetric bets i see in the world right i have i think it's a low probability event but if you win the size of the prize is absolutely gigantic right so we're looking at a deal with um andresen um because i thought biology was one of the smartest people in the space the company was called 21.co idea of mining for bitcoin on a chip on the eve of the deal my partner and i i said you know what i believe that we should place our bet in bitcoin because i'm not sure whether or not this mining company is actually going to work out okay so we pass on the deal crypto bitcoin goes from 1200 to 300 in like a straight line down and what was my takeaway my takeaway is like man i'm so smart i'm so smart we passed on that deal okay rather than being curious rather than learning more rather than developing it and what andresen did during that period of time is they stuck to their belief that this could be a highly asymmetric outcome ultimately i ran into katie hahn a board member at coinbase the night of the ipo and she said brad you know um do you remember you know 21.co i was like yeah she goes those were

SPEAKER_194: some of our original shares in coinbase we sold that company to coinbase wow right and and and you

SPEAKER_79: know it's just for me i sent this note to our team because i said you know what guys in the face of having some good wins i want to remind you of some really potent near near wins and misses and my mistake

SPEAKER_185: at that point in time was i lacked mental flexibility i got locked in to this idea that i was really smart by having miss 21.co rather than learning from that moment and saying listen when i started to see it move and then it moved pretty quickly and i was like oh i missed it it's just like a stock we do the same thing the reality is you should allocate to things that you think are thematically highly as

SPEAKER_124: asymmetric and great ideas and and this was one of them and one we missed can i just kind of add

SPEAKER_199: something to that i was in 21 it was 21 e6 i don't remember getting any coinbase shares so

SPEAKER_203: all right so somebody somebody you did not own the preferred yeah

SPEAKER_210: i did own preferred i invested you did not clear the press stack the wrong series

SPEAKER_53: with one thing i'll add to that is you have to look at the mandate of these funds if you're an early stage fund and you have the ability to sell at 500x or a thousand x or 2 000x sometimes you've got to

SPEAKER_02: lock that in and give something to your lps and i think this is where you know thinking full life cycle you said chamath like what did you learn from all this well if you're if you're building a business right well i mean one of the things i learned is i didn't even know what prorata really was when i started my career i didn't do prorata in uber or anything and now my position is i am

SPEAKER_213: going super prorata in our winners so not only holding winners i'm trying to get to 10 15 ownership in these companies and it's starting to happen you know with companies that are worth 500 or 700 million and so that that is the economic that's the change in behavior i'm doing which is you know to your point if you bought snowflake at any time you feel great about it but then you have to have buy-in from your lps that they agree with that and that they're okay with you taking a

SPEAKER_110: longer strategy and then at some point you want to return capital and that becomes super problematic you're in seven eight nine ten of your fund you want to take some chips off the table

SPEAKER_213: and so what i'm going to do now is i think i'm going to try to do both where i have a group of lps who want to buy shares and i don't know how to figure this out and maybe somebody could advise me here

SPEAKER_02: because i have had other venture firms who had this challenge where the i don't i don't want anything you

SPEAKER_219: own well no no i know that be careful be careful be careful why do you set yourself up like that no yeah i'm looking for advice here but if you don't talk about the whole point of this podcast is for me

SPEAKER_222: to draft off people who are smarter than me mission accomplished so here we go yeah we still have to

SPEAKER_172: teach you how to set up an llc to buy your house i mean it's unbelievable in the process sorry i'm an idiot

SPEAKER_30: nouveau riche but here's the issue can i be an angel investor in uber and then be selling shares in uber to my other lps and creating that sock a secondary market or is that conflicted you know i'm saying

SPEAKER_74: well i'll tell you you know um uh i think this is public i don't know if it's public i will say it anyway because i think it's well known but um founders fund had early spacex shares that they thought it was prudent to sell in the early funds those spacex shares the later fund was buying spacex shares in that round um and so they were in a circumstance where they had such a big markup on the early round the early fund um that they had to kind of distribute and liquid liquidate those spacex shares meanwhile they're somewhat with a good overlap of lps were buying in the other fund at that

SPEAKER_63: at that higher price you are speaking to something i lived out in the early venture funds of social capital because when it was not entirely my own capital base i felt that pressure and i did similar things because i was like oh wow we're in year seven eight nine yes you know that i had and i had great lps it's like wait i how can i not give capital back to the broad or mayo these are phenomenal institutions they weren't pressuring me at all but i felt internal pressure and i started to make suboptimal decisions for myself i couldn't make really you know clearly the best optimized decision which would have been to hold everything as long as possible you know to your point like if you're in the top quartile of things the best thing is to never sell and it's an incredibly special place where you can actually have that freedom to do it the it's what's interesting is i actually think the the folks that are in the best position to do are actually employees and you i actually think that they're they're randomly doing this when you look at the churn rates of employees today like i saw this crazy stat the average tenure at uber is 1.8 years that's crazy the average tenure at tesla is 2.1 years the average tenure at google is 3.2 years so if you think about a traditional 10 year career in the valley you have somewhere between you know three and five three and five different baskets of shares that you're getting and you know those are those are costless options effectively that's actually an incredible form of portfolio construction for these people because if you never have to sell those things you can wait till they go public and you can underwrite them forever that's probably what a lot of employees in silicon valley have figured out implicitly i have a question i want to ask you guys as well which is um i just want to go back to the public markets for a second i tweeted out some of these amazing things i learned from the bezos oh my god this is

SPEAKER_232: demented did you guys see what i what i tweeted your tweet nice and i've been reading it it's unbelievable

David Friedberg: it's been do you have it in front of you jason i do i'll just give you the chamat's tweet here high

SPEAKER_53: level 28 of purchases on amazon are completed in less than three minutes i think we've all done that

SPEAKER_213: 50 of purchase is on amazon are completed in less than 15 and if you actually look at that and i think this is a really i don't know if you made this calculation no this is bezos wrote it in the letter all of these things so if you value your time at ten dollars an hour a very low one um that's 750 a year um and that means your prime is free of 120 a year 630 in profit let me say differently uh the

SPEAKER_63: average trip to the store driving buying coming back is an hour so what bezos said is that typically we will save you 75 hours because we can make all of that more efficient for you at 10 bucks an hour that's worth 750 dollars we only charge you 120 for prime which means you're you get 630 dollars of savings but then he goes on to say and we have 200 million customers on prime so we're saving them 126 billion dollars my instant reaction was two things and so the last two points in that tweet are mine one is holy that's more in one year than what most companies are worth in their entire lifetime and the second is that you can buy amazon for 13 times one year's worth of savings for a customer it's just if you look at prime yeah which which makes amazon seem exceptionally cheap but i i reason i brought up amazon is he also wrote in there about his responsibility to his employees and we were just talking about employees and churn and this was incredible to me that 70 of their employees voted down the unionization effort in alabama and i just wanted to get saxipu yeah red red pill it crush it

SPEAKER_90: snort it what what do you got to say yeah well i mean what what happened is you had in alabama there's a amazon plant there that uh where they there basically was an election to decide whether they would go union or not and there were 2536 workers who voted in this union election about 1800 voted against unionization election versus 738 who voted to unionize and then ballots from another 505 workers were either were challenged by either amazon or the union so we don't know yet what they mean but those votes won't change the outcomes the election is over now this was a heavily lobbied election i mean amazon was lobbying employees but so were the unions and it looks like the unions at the end of the day or lost and the

David Sacks: employees voted to you know remain unionless brad what do you think i thought it was a beautiful

SPEAKER_50: defense of capitalism that's very much needed right now yeah you know um it reminded me a lot frankly of the gates foundation annual letter you know where bill gates is saying you know capitalism is far from perfect but it's resulted in the most important era of prosperity and health and wellness in the history of the planet and you know as i said on cnbc this week you know we live in a moment where capitalism is absolutely under attack um and i truly believe it's the greatest force the greatest potential force for good in the world it brought us a vaccine right it brings us innovation that pulls people out of poverty that makes people healthier that gives an opportunity for people in rural areas that are impoverished to be educated but i do think it's incumbent upon bezos i think this was very much a robber baron sort of defense of building railroads and i thought it was brilliant

SPEAKER_79: in its execution but i think it's important in it for all of us to stand up not defensively but to say what are our obligations to make capitalism the greatest force for good you know chamath whether it's you

SPEAKER_189: and i talking about invest america on cnbc and giving every child in this country a participation

SPEAKER_79: in the ownership society right right or all the other initiatives that we need to work on to debt you know to to make the case we need to make it better and i think one of the issues here is

SPEAKER_53: you know what we see on twitter being part of the twitterati is you know people who are super woke socialist whatever talking about this but in reality the workers don't want it and i was talking to

Chamath Palihapitiya: somebody in the media no no hold on can i just say something slightly different jason

SPEAKER_63: i think what workers don't want is the version 1.0 of unions okay because i think what they see that as is a tax that then goes and fills the coffers of certain people i think you've seen like you know a bunch of waste a bunch of graft a bunch of corruption people have been arrested unions are not effective anymore in collective bargaining they are not they don't have any data they don't have any facts they're not they don't have any power they're but they're not set up to win so i think in my opinion i think unions have an important role but you need a version 2.0 you need some young smart bright people to reframe what unions are and then i think you would see everybody collectively organized which is it's not about dues you don't need hundreds of millions of dollars to to all of a sudden like use to then elect certain people and that old model is breaking it's breaking every day instead i think what people need to do is like if you come together and like you understand what are the products we make what are the margins we have how is my contribution measured you know and then you're able to use data and fact to really collectively bargain that hasn't

SPEAKER_29: happened yet so i think what it was or it could be a free market and people could go work at starbucks

David Friedberg: or for postmates both are good and get paid more but if capitalism allows both to exist yeah if you

SPEAKER_74: if you think about what a union is you could almost make an argument that it is the ultimate manifestation of a free market system because it is basically like a bunch of people spinning out to have their own startup and so you know that group of people are saying we're not charging enough for our product or service today the value that we are creating is worth more therefore we should go create a you know a different business and charge more and effectively compete in the marketplace uh with a higher quality product at a higher at a higher price point um and i think that that may be kind of you know the the distinction between what people kind of view to be regulatory capture around unions where there have has been government involvement in the past versus what may be possible i think i've heard some people talk about how you know at some point in the world we end up with you know at some point the evolution of capitalism you end up in a place where there are no employees there's just a ton of independent contractors doing independent work and maybe there is an organization of people around doing the same work over and over together as a group uh where you charge one kind of you know uh aggregated fixed rate for that service the other the other thing to me was

SPEAKER_63: like all of a sudden it brought into such a stark contrast this wasn't like 55 45 this was 70 30 and probably it could have been 80 20 or 90 10 and so it said to me wait a minute there's a very small vocal group of people who are screaming for the mountaintops about this level of unionization and organization and then the people that are actually the the participants of that system are like no

SPEAKER_76: thank you yeah well i mean it shows that amazon does a great job managing right i mean they they

SPEAKER_74: create enough value and they've bid enough for the service that people don't feel like they're being

SPEAKER_53: underbid media companies have been going through a unionization process from gawker to vox the

SPEAKER_02: new york times has already had one and you're starting to see a bunch of folks voting on that i was speaking to somebody who runs one of these companies and they said the in the short term it's

SPEAKER_213: fabulous because they set the prices of employees so when somebody comes to you and says i want to raise they say well we can't because here's the pay scale that you negotiated so we have to stick to that and i can't give you more than other people because one of the things you fought for as a union was pay parity and so you've got five years here's what it says on the chart five years so it made everything predictable and they said they like that they said the problem is over the long term

SPEAKER_53: when you get to year 10 of a union in order to fire somebody who's not doing a great job you have negotiated with the union that they have to get all these warnings and it's uncomfortable so then the managers don't do the performance plans they don't do that and then eventually who's left in the organization the lower performers and then who leaves the higher performers who can command more money so once you get this union thing going inside of a media company in the short term it controls costs in the long term it kills excellence this was what somebody told me have you guys seen the movie

SPEAKER_90: american factory i think this was on netflix it was actually created by am i uh it was the first film produced by uh barack and michelle obama's production company uh but it's it's a very interesting film um about there's a chinese billionaire who goes to kind of the rust belt to out so a little um city outside dayton ohio and there's and basically opens a a factory producing glass windshields for cars and this this factory had been shut down the whole town was kind of out of work they were kind

SPEAKER_92: of down and down in the dumps and so this this crazy chinese billionaire comes in there and reopens the factory and all he and and it creates like 2 000 jobs for for people in this town and everything starts off great there's these really interesting sort of culture clashes between the american workers and the chinese executives and some of it's kind of comical and they showed in the movie but then about halfway through the movie and and by the way like these are people who are out of work and you know this chinese company comes in they they do things kind of their way but they pay people pretty well and creating a lot of jobs and initially everybody's very happy with it and the politicians are all encouraging it and then about halfway through the movie the unions come in and the unions start agitating and they start telling all the workers that you're underpaid you're mistreated they start you know there's there's sort of intimidation tactics being used and then the politicians come in and you know these politicians are sort of you know this ohio right and so the politicians start telling the the workers at this plant that they should get unionized and it turns into this giant battle because and and the chinese company basically threatens to leave because they came into this town and made a something like a 500 million dollar investment in this plant based on an understanding of a certain cost structure and now all of a sudden the union wants to change that and you know it turns into this giant conflict and you realize that look that workers in this town had a good deal and then the unions are about to like blow the whole thing and and wreck it and they're about to drive this chinese company out of the town and then they do this election kind of like what amazon did and ultimately the chinese company wins and the voters choose not to go with the union but you just feel like you can it's just so frustrating to see this um because it's it's not like the the

SPEAKER_262: this particular union is benefiting the workers it's about benefiting these union representatives

SPEAKER_264: um paying off the politicians which gets back to our discussion in your little speech for your governor

SPEAKER_252: run that you're going to fire all the teachers come september 1st if they don't show up for work

SPEAKER_92: no but look it's really it's a really interesting movie because it i think what it does is it highlights

SPEAKER_267: that what's in the interest of these labor union leaders is not necessarily what's in the interest of

SPEAKER_63: the employees anybody watch no no no they're this guys look that this is like the simplest form of incentives to understand you pay dues as a union member those revenues get allocated and controlled by a handful of people in union leadership so this is this shouldn't be a surprise that their incentives get misaligned especially when you go from a small effective union to a broad you know union that represents all kinds of different workers it's an impossible infrastructure to manage and it becomes unwieldy unions can be effective there is a value and a place for them they need to get

SPEAKER_73: reinvented by the way i i looked this up you know what the average wage uh the average fee is to be in a union uh across all unions in the united states as a percent of labor anyone got to guess it's one and a half percent yeah i said two yeah yeah so the argument is if they can increase wages net to those employees by more than one and a half percent it pays for itself right that's the argument

SPEAKER_07: about their incentive i totally get it they're a startup in and of themselves they are an asset

SPEAKER_279: manager right their goal is to grow assets yeah and so their goal successes so so the more assets they grow um you know the uh the bigger their business the the way in which you know relating

SPEAKER_50: this back to bezos's annual letter right um we've been presented this false choice for two decades between some form of anne randy and capitalism and a nanny state right right right that either everything's unionized or we have no intervention at all what i love about this moment in time what i

SPEAKER_79: love about the leadership of benioff or bezos or gates or even anthony tan this incredible mission values driven leader who's using the power of capitalism to uplift tens of millions of people in southeast asia is that i see a totally new generation of leaders that understand the

SPEAKER_185: responsibility like they're charting the middle way right and we can equally reject lorena gonzalez right and at the same time the worst want to have 15 minimum wage in the state of california like

SPEAKER_79: those two things are mutually compatible and so um that's why sax has to run he's got to chart the third

SPEAKER_255: way let me ask you this brad would you put up 250k for an exploratory fund brad zach do you put do you do you believe in a 15 minimum wage oh i'd be fine i'd be fine with this not that that's not that's

SPEAKER_284: oh it's on he took a blue pill he took a blue pill give everyone everything i think certainly in

SPEAKER_90: the state of california i think that makes sense you know i think look there might be some parts of

SPEAKER_92: the country where the standard of living is much cheaper i mean i think probably the the minimum wage should be a state issue because there's such a disparity in different uh costs of living in

SPEAKER_90: different states so i'm not sure i'd federalize it but i'm but certainly in california i think 15

SPEAKER_289: bucks what about 20 bucks david yeah david 20 bucks in california why not why not a thousand yeah

SPEAKER_294: can everyone get a free tesla no but look can i make can we make the point about unions in california i think there's a huge difference between private sector unions and public sector

SPEAKER_92: unions so and look i'm not against collective bargaining when it comes to these private sector unions okay because the the workers do have you know these these plants involve can involve very tough working conditions it's physically dangerous um you know there before there were labor reforms they were working really long insane hours or safety issues okay i think it makes sense to have some sort of collective bargaining and there's somebody to negotiate with there's the management of the company has an incentive and so you have some give and take and you have a negotiation it produces an outcome public sector unions are completely different right because when the teachers union goes to negotiate who are they negotiating with they're negotiating with gavin newsom and the teachers union is his biggest contributor so who has an incentive to oppose their demands there's no market there's no market and so it at a minimum takes a politician who has a lot of integrity to stand up to the teachers unions because he did it in new york bloomberg did do it by the way

SPEAKER_76: by the way this is this is a true market dynamic for everything as it relates to government spending

SPEAKER_73: if you think about when when the government says it's going to spend something on someone on something legislation passes and it mandates that something needs to be bought when that happens there is no negotiating power because there is no marketplace to achieve that objective they have to spend the money on the thing that they said they were going to spend it on and at that point there is a seller who sells that thing who says oh these guys have to buy it i'll double the price okay great that's just the natural law of government inflation that happens it's happened with everything that we've seen inflate in this country education health care is all because it's a government mandated service and so then the service providers to the government have a single captive customer who has to spend the money and so the same is true of education the government has to educate therefore i can show up as an education union and say i'm going to double my price to educate your people because you have to do it by law and you've passed all these laws that say you have to do it and there is nothing the government can do about it and so you know i think it is worth highlighting that there the lack of a marketplace meaning if you were to negotiate with a company let's say a company had to buy productivity software for its employees it could decide whether or not buying that productivity software generated a positive return at the price point that the sellers are negotiating against them and they could say no you know what i'm not going to buy it everything's too expensive i'm going to go find another way the problem is governments are mandated to spend that money on that particular service and therefore there is no room and so unions are a manifestation of this fundamental problem with giving governments large budgets and relying on the government to provide the service to us outside of a market-driven context so i think the question really is can health care can education can these things that have been inflated with the government having such an active role be provided in a way that the government facilitates their provisioning without the government being the

SPEAKER_299: customer this is a good jumping off point to one very uh to the next then topic there's a bunch of

SPEAKER_63: things happening in government that i just want to get your guys's reaction to one which was uh the crazy summary that somebody did about the reaction to biden pulling out of ifghanistan okay the second is um unfortunately biden reiterated trump's decision on uh refugee numbers just today um so he's not he had a pledge that he would you know go back to the the original numbers uh the obama level numbers and

SPEAKER_65: he said he's not going to he's going to keep it at the trump level which basically says you know very nominal refugees and then the third is the growing frustration and perceived incompetence of the cdc and now you have the entire business community starting to push back those are three completely

SPEAKER_170: different things but they just speak about some government things i'm curious about your reactions

SPEAKER_213: to anybody everybody i mean the thing that that highlights for me is the media double standard and i think this is why a lot of people are going to centrism and why this podcast has become a purple podcast and a rational podcast because aoc was going down to the border hysterical crying you remember the photos they were all dressed in white and is there any difference between what trump did at the border and what's happening now doesn't feel like it feels like it's a problem that they're both trying to solve and it's 90 the same outcome and then you look at afghanistan you know trump's like we got to get out of here and then the press dunks on him like how could you do that and now biden's doing and he's getting high fives and so i would just like to see some consistency from the press and the reaction and americans on these issues which seem to be non-winnable or you know how much do you lose in these instances like afghanistan's a lose-lose and the border is a lose-lose like there's there's no winning i don't think in these in some in some situations that a president has to face i'm

SPEAKER_90: interested what sax has to say well yeah i saw that i saw that tweet storm on the media double standard around afghanistan we should show that and link to it in the show notes because the whoever it was incredible it's incredible incredible this is like definitive proof of the media double standard

SPEAKER_92: where he goes literally he does a side by side of every single major prestige media outlet their

SPEAKER_90: coverage on trump versus biden's drawdown in afghanistan you know trump trump did the major drawdown and i think got us down to maybe like 1500 troops there i think he missed a political opportunity not to just go all the way down to zero then he could have taken credit for ending the war which i think he wanted to do for whatever reason he didn't get it done and he basically handed biden a beautiful opportunity just to kind of end the war once and for all i think it's very popular people are we've been there for 20 years i think people want to get out so i think biden's decision was politically correct and i think it was the the the right decision as well i think we've it's it's it's time to be out of there but yeah the coverage in the press was just completely hysterical about trump doing it it was predicting all sorts of negative consequences um and then when biden did it like like jason's saying it was um nothing but kudos so well not only is the press not objective and not impartial but they changed their mind about a particular issue

SPEAKER_213: based on which team is doing it yeah i mean if you look at the two quotes they have a cnn tweet

SPEAKER_53: that they then he just screen grabbed cnn on the same issue says this is reckless and it's really

SPEAKER_213: risky of trump's plan to withdraw troops and then the next cnn tweet from this administration president obama praised president biden's bold leadership to withdraw from afghanistan by september 11th and

SPEAKER_73: and there's dozens of these npr cnn new york times over and over and over again and then i think this

SPEAKER_90: is why americans hate the media absolutely i mean the the this is the you know what the what the conservatives i would call the mainstream media you know msn i mean but they are proving their bias right here i mean and they're increasing irrelevance this is why the american public don't trust them don't listen to them and don't care what they have to say brad what do you think well i i wanted to

SPEAKER_78: you know at a federal level we really can't opt out of any of this right we're not going to leave the country we got an election every four years so we're just talking about market failures in the

SPEAKER_79: state of california and one of the most beautiful designs of our system of federalism back to this idea of markets right is the fact that you get to choose what state you want to live in and in a post-covid world we have the greatest a b testing in the history of federalism because now you can live and work from anywhere and the differences between state policies have never been greater

SPEAKER_185: and so we've never had this incubation that we can all watch and live tweet about on twitter and so now

SPEAKER_79: texas and florida they get to make choices california gets to make its choices and then we get to see and political scientists are going to have a field day in five to ten years and people are voting with their wallet today the a b test in real time we have the largest economic migration in the history of this

SPEAKER_185: country occurring right now and gavin newsom and lorena gonzalez they're going to have to be held accountable for the conditions in san francisco for the decisions with respect to companies leaving the state people leaving the state and frankly it's not about lower taxes

SPEAKER_79: i would contend the even bigger issue is the contempt for capitalism the contempt for entrepreneurialism and innovation that exists in california and i have no intention to leave but i will tell you this like i'm gonna fight like hell for a third way right that actually says capitalism can be a force for good in california um and that's why sax needs to run well i love i love this idea of a state

SPEAKER_90: by state a b test i mean what was the old line i get it was it was fdr's line that uh or federalism is the laboratory the states of the laboratory of democracy yeah great so i want to show this i just

SPEAKER_92: posted um a link in the chat of covet death rates uh in the us by state and it's really remarkable

SPEAKER_90: because every state has very has we've seen a lot of very different covet policies um by state what we see is that california and florida have almost the same death rate i think california is like 154 per

SPEAKER_92: 10 000 and florida is like 159 it's a very very small gap um despite the fact that california has had the longest and most severe lockdowns in the country and california and florida has been the most open and then meanwhile you look at states like um like michigan which has also had very severe lockdowns and has had a much higher death rate and so you see that there's there's really no correlation between uh death rates for covet per capita and the the severity of of lockdowns basically the data shows that lockdowns don't have an impact on a state's success in battling covet and you know it's just remarkable that we still aren't despite this data despite the fact that you know science is not showing us we still have lockdowns in the state of california we've loosened up a little bit but we're still talking about orange tears and it's just and i'm here in florida right now they're they're it's open it's open and you know florida has a lot more old people than california and the death rate is just about the same as california so it's just remarkable to me that we are stuck in in this mentality of lockdown and i think it's because newsom has bought into this savior myth that he has i think he's remembering all this press that he and cuomo got at the beginning of covet about what great saviors they were and how they protected the population from from covet but it's

SPEAKER_63: also been compounded by federal failure because the cdc basically said or not said they revealed themselves to be incompetent you know the same person that we all thought was an incredible genius fauci increasingly looks like a somewhat of a an idiot and you know not completely informed on the topics that he should be informed about and then you know you have these federal agencies come so for example when you put the cdc and the fda together some of their decisions are just complete head scratchers like for example this past week you know the fda stopped the use of the johnson and johnson vaccine because seven women between the ages of 18 and 48 got a blood clot and one passed away and if you think of over 7 million doses right and so a million what it's it's literally one in

SPEAKER_330: seven million for fatality and actually here's the crazy thing about that more people died in car

SPEAKER_63: accidents on the way to getting those vaccinations and actually died from a blood clot and so

SPEAKER_92: more enlightening strikes so it's it's bad risk assessment but it's also been very bad pr for for the vaccine so in the wake of that the with the polling on vaccines went down by like 15 points and so they're scaring people away from getting vaccines i don't know if that polling was just on j and j or whether it applies to other vaccines as well but the most important thing that the health officials could do is just convince people to get vaccinated and the decision they made on rolling back j and j has really hurt that and then also this you know the the fauci comments that even if you're vaccinated you can't go to movies you can't go to sporting events you still have to wear a mask you still can't you know get together in groups of indoor spaces well then why would you get

SPEAKER_53: vaccinated why would you take that chance that is so critical friedberg do you think if you get a vaccine you should be allowed to take the mask off like that could be a reward look i mean it's a it's a

SPEAKER_73: it's a it's a bigger question than the science question right but um i certainly don't think

SPEAKER_74: that there's any risk to you or people around you once you've been vaccinated with respect to your wearing a mask um and so uh you know this the the mask mandate i think as you guys pointed out is a little bit more kind of political and social posturing uh than it is kind of you know scientifically reducing the the the spread of the of the virus once you've been vaccinated once you've been vaccinated you're in the clear theoretically can do what you want to do of course so i mean

SPEAKER_92: let's just be really clear once you get vaccinated there's no reason to wear a mask remember the reason for the mass mandates was source control right that's right that's right to prevent other people from getting the virus well if you're not carrying the virus and you're not admitting the virus there's no need for you to wear a mask and to and to to insist that people wear a mask after they've been vaccinated is performatively anti-vax because you're sending the message that the vaccines can't

SPEAKER_76: be trusted you agree with that freeberg yeah it's a fair point i totally i mean i think it's a it's a

SPEAKER_74: really fair point and um uh and you know the the the whole counter-argument to that which is counter factual is you know hey you know you can still transmit the virus we don't know that you can't transmit the virus but you know you could theoretically say that about anything we know deterministically uh we don't have empirical evidence that we can say statistically here's how likely you are to transmit the virus but we know deterministically this is the process by which a vaccine works you're not going to be having replicating virus viral loads in your body therefore you're not going to have a high viral load coming out of your nasal passages of your mouth therefore you know and this is the case with all these kind of vaccines like the flu we you know you shouldn't be or be needing to wear a mask so like um you know it totally makes sense

SPEAKER_63: and what's the upper bound friedberg of the number of people that are that are going to get vaccinated

SPEAKER_43: in the us are we going to get to 60 percent i think 60 percent probably yeah i would guess 60 60 65 percent i mean because remember what percent of uh people are under 16 20 i think is that right yeah yeah i

SPEAKER_102: think we've really we've really we've really botched this i think we've totally botched this vaccine

SPEAKER_74: rollout by the way i i will tell you because of the the upper bound being where it is i i still think we'll end up at a point where we're going to have a lot of people um that are going to be immune because they already had covet coupled with the vaccine we're going to have extremely low numbers

SPEAKER_73: but the reality is the numbers are not going to get to zero and we talked about zeroism a couple podcasts ago because we're not going to get to zero i think this is a really important thing to remember the way that we've tuned ourselves to react to covet it was initially remember it was initially about you know minimize the surge and by minimizing the surge we will keep the healthcare system from being overwhelmed now we've transitioned into the we can't let covet spread but as we've seen the reality is cannot stop covet from spreading no matter how many lockdowns you put in place societally people still get together in their homes and they'll give each other covet and because some number of people will continue to have covet we are going to have covet in the united states for years to come it is not going to go to zero and the question we have to ask ourselves is how are we going to allow ourselves to operate how are we going to live our lives if the covid risk is non-zero and it will always be non-zero and by the way the measles risk is non-zero the chickenpox risk is non-zero there are already non-zero um you know transmissible um infectious diseases out there that have some degree of fatality rate to them but um i think the biggest thing we should all be concerned about is this notion that we are like shifting into a new normal that will last for many years because we will never be at zero

SPEAKER_342: so can i i'm moving out of california if that's the case i'm literally going to texas there will be

SPEAKER_185: mutinies there will be me i'm done i got my vaccine i'm people people that nobody's going to stand for that um we already see it you know chesky went on cnbc this morning and you know basically said you know they are battening down all the hatches because there's no like the demand for travel is literally going to blow the roof off the building totally right like people people are too smart people make risk reward decisions in their personal lives every day and if the government tries to lock them down

Chamath Palihapitiya: they're going to tear down the gates like it's not going to happen but what what you're saying though

SPEAKER_63: is that what the implicit thing about what you're saying which is scary is unlike times before about measles or chicken pox you we now are basically debasing the credibility that these government institutions have about anything they say that's the real enemy in the room and this is all said and done so now you have people that are acting on their own so the cdc says you can't fill the middle seat the airlines say no go yourself we're going to fill whatever seat we want and nobody's going to complain back to what brad said because they're risk underwriting for themselves and saying yeah wait you don't know what you're talking about anymore and so where does it leave us is that a good

SPEAKER_79: thing or a bad thing you know one of the ways states even democracies maintain power was information

SPEAKER_50: control right right there is no information control today anywhere in fact the we have frictionless information which means that by definition i think there's greater chance for decentralization i mean remember you know the arab spring governments were overthrown on the basis of twitter

SPEAKER_79: right i don't believe we live in a hobbesian state uh you know of suffering in in the natural order of things right but i certainly believe that government has a role to play to help organize us and uh you know because there are big issues that we face in the future and

SPEAKER_348: you know i just hope we can find a balance uh you know uh in the path forward but this i i think

SPEAKER_53: chamat this is a um an inoculation i think to bad institutions if you look at people who spent 250

SPEAKER_213: 000 going into debt at some big expensive college these young folks are saying i'm not going to do that

SPEAKER_110: anymore now those colleges have to react and change and now we're seeing it with the teachers this but

SPEAKER_65: i think jason it's actually more extreme than that like we're learning that institutions aren't reliable

SPEAKER_63: number one and then the second is that we're learning that those institutions are static so meaning like today there's i think that there's a lot there's a big case to be made that the cdc doesn't really know what they were doing and that in some cases the fda has been a little over reactive okay now what can we do about these things it's not like we can have a new cdc that we all create and believe in or a new fta these are the laws of the government those laws won't change because there's a bunch of incentives for folks who are currently in power that oversee those things to remain that way so now you know exactly as sax said on the whim of frankly like you know maybe an overreaction we pull vaccines off then we pull them back on then we pull them off you know the reaction to the astrazeneca vaccine was kind of a little uh awe-inspiring you know oh it's bad no it's okay oh it's good no it's bad take it off take it on put it on and that's a that's been a global reaction so you add all of these things up i think the takeaway is what freeberg said institutions are broken because the incentives of the people that run them are not aligned to the people that actually

SPEAKER_73: expect output from them i'll say two things to this that that's an important point one is institutions

SPEAKER_74: to me are like like like any living organism they want to grow and so you know every government wants

SPEAKER_73: to add laws spend more money grow its budget every company wants to have more power grow its top line even every university harvard's endowment wants to grow over time it wants to do more research it wants to have more classes it wants to have the bigger campus every institution as a result is then trying to aggregate more resources and more power and more authority and so you know then when you have these moments where the institution doesn't serve the stakeholders that it is meant to serve you have this breakdown of trust in the institution and institutional fallout begins whether that's the financial system and the and the evolution towards decentralized finance and bitcoin and so on

SPEAKER_74: or the failure of government and the ignorance against laws and what the government is telling us to do and so on or in companies um and so the big question for this century is going to be are we

SPEAKER_73: going to allow that to happen now i mentioned this a few pods ago what i'm most concerned about is the absolute um alternative to an institution is a mob rule and a mob rule as we've seen where you get

SPEAKER_74: cancel culture and you get um you know gamestop going through the roof and and you get um trial before

SPEAKER_73: um uh before without a jury uh and trial without a judge can be really ugly and can be really nasty and so the original intention of many of these institutions was to create a system by which there are rules and values that we all ascribe to and those values go out the window when those institutions fail so the big the big challenge you know we as a as a as a as humanity are going to face this centuries this this this dichotomy between the failure of institutions and the need for institutions to constantly grow versus the challenge of not having institutions with respect

SPEAKER_74: to how do we operate societally with mob rule uh and distributed rule um and and it's going to be interesting to to kind of see there's going to be a lot of back and forths over the next couple of decades i would imagine with respect to how do we make uh economic government and business uh decisions and how they play and whether institutions or kind of distributed decision making plays a

SPEAKER_02: role uh good segue here to your pal josh hawley uh sachs i never thought i would see the day that a republican wanted to bust uh all the big companies but he says no acquisitions by companies with a market cap over 100 billion putting aside the fact that this wasn't elizabeth warren or bernie sanders proposing this this was your your bestie your josh hawley sacks have you met him or donated to him

SPEAKER_88: i haven't met him i haven't met him um i think the second question you make a little donation there

SPEAKER_356: to holly uh maybe maybe one day we'll see you know what do you think about this concept uh two two

SPEAKER_90: points okay number one you're right that this is showing you know there's there's a big political realignment underway uh this legislation could have come from elizabeth warren or bernie sanders i think they would have justified it in different ways i think what holly's concerned about is a concentration

SPEAKER_92: of power by big tech companies who are then using that power to censor people so that's kind of the impetus there i think sanders and warren their impetus would be around more of a concentration of wealth and money and the power that that creates so slightly different motivations but i think they're probably on the same page here it's kind of this populist wildfire that's uh that's kind of burning in both parties so i think that's sort of the first observation is is it's kind of this new

SPEAKER_90: populist realignment of our politics the second point i'd make about this is that this legislation

SPEAKER_92: is is what i would call sort of performative legislating i mean i don't think this bill is a serious proposal to become law um it's too much of a sledgehammer i think that you know if the goal here is to try and rein in big tech i think just banning you know any acquisition by firms over

SPEAKER_90: 100 billion market cap it is way too much of a um it's just not you know it's just not uh crafted

SPEAKER_33: enough i mean is there any merit to it and how would you change it sex it would have tons of unintended

SPEAKER_92: consequences for you know what we do i mean we've talked about this isn't it good for what we do

SPEAKER_70: though i mean if companies stopped selling early if instagram and youtube stayed independent wouldn't

SPEAKER_63: this have been much better no no it was it was a blanket it was a blanket statement that said any company can't do it if they were over 100 billion right so berkshire hathaway's business boop done

SPEAKER_92: gone to zero right i mean it's too much of a blunt instrument and and look even for us right there's only you know three i guess two or three good outcomes right there's ipos direct listings respect let's put them in a category of a company going secondary sales yeah then there's m a okay and the third outcome is basically the company goes under it goes bankrupt right so if you take m a off the table you are basically denying a lot of attractive exits for risk capital and that's going to ultimately hurt the returns for risk capital and lead to less of it there are a lot of there are a lot of companies where you know founders create a technology that's valuable and interesting but it can't monetize and it needs to be part of something larger and if you deprive every i guess big company of being able to buy of r d acquisitions it's sort of crippling the economy for no reason i don't think it really addresses the issue that holly really wants to address which is censorship so my point is i would find a different way to address it i think that at the end of the day this legislation is not meant to become law it's meant to make a statement and to be a warning to big tech and to get you know and

SPEAKER_90: holly's trying to appeal to a constituency on his side of the aisle and i think it's sort of it's disgusting it's performative in that regard i mean holly like he votes against the election

SPEAKER_185: he comes out with this asinine solution to his censorship beef you know like this is the problem the grandstanding of these politicians on both sides that aren't focused on like how do we make sure that everybody's participating in the ownership society how do we deal with you know you know issues of diversity it's it you know it's so far removed from actual pragmatic solutions to the real problems

SPEAKER_79: facing us that it just drives me insane and so um he will most certainly not be getting a donation from and um you know like but what i am going to invest aggressively in uh you know and what i think we ought to be doing and i i i hope chamath will take me up on this right i don't want to go spend 10 million in washington to lobby them to create the invest america account let's you and i put up the money let's incubate this let's hire a ceo let's you know let's let's put up 10 10 15 million bucks let's

SPEAKER_185: distribute it to families 2 000 bucks at a pop let's build a proof of concept hire a great ceo

SPEAKER_63: that's what we do and prove that it works yeah that's better that's actually a more practical giving pledge than the giving pledge oh my god what a great idea we should if we should just do that right now and basically name and shame everybody that doesn't want to contribute who's made money because the reality is we all have been extraordinarily lucky yes we've worked hard but frankly you know none of us deserve any of this we've been lucky and so whatever representative share that you could contribute and what it does it gives you know a low-income person of color minority

SPEAKER_67: person in america somebody who's you know disadvantaged a two thousand dollar head start when

SPEAKER_373: they're born is a amazing we could raise a hundred million dollars in the next three months

SPEAKER_185: because do you know the reason people people are like i don't want to pay taxes because they don't believe government is going to use the money wisely if we went out and told all these folks that we're going to use it to give two thousand dollars directly right to create a sense of ownership and participation in the american dream their little slice of tesla of walmart of amazon of google like the

SPEAKER_152: money will come in from all the folks that you mentioned and i would love to see this crew get on board with that yeah i think we could do it over the course the next six months i'm in let's do it

SPEAKER_213: the audience who doesn't understand what we're talking about imagine we put a thousand dollars into a 401k or 2 000 401k for an american every american born what would that look like when they're 65

SPEAKER_110: years old and what if 500 of the 2000 was in a 529 what would that look like when they're 18 years old going to go to college that was my little punch-up jamoth is you know put half of it in retirement

SPEAKER_73: half but education it turns out if you put your stimulus check out each of the last three stimulus

SPEAKER_74: checks into dogecoin you would have 300 000 okay so there there may be there may be alternative

SPEAKER_63: investment accounts that absolutely all right listen there's been another amazing sorry just so you know the two thousand dollars by the time you're 65 at at eight percent which is you know if you just

SPEAKER_65: buy the s p etf would be about 300 000 297 000 more than enough to comfortably retire in style and if

SPEAKER_02: you were to put 500 of it into an account for college maybe you get 25k or something i'm not sure what it

SPEAKER_185: equals in 18 years but as buffett has talked about in snowball the behavioral economics are if you have savings you save more right well this is about educational yeah yeah people feel part of the system

SPEAKER_233: feel like they're part of the game all right listen another amazing episode uh brad thanks man

SPEAKER_153: thanks for coming on thanks for coming on we don't have a nickname for brad we never need king of

SPEAKER_363: specks oh just kidding i'm happy to have the crown oh i just want to be called king

SPEAKER_394: all right boys uh somebody pick me up and let's go have a guys trip what are we doing here guys

SPEAKER_396: where are we going i just want to say well since david is in miami david's david's in miami i'm

SPEAKER_65: going to tell you guys that my favorite prime number has always been i don't know what it means

SPEAKER_358: what's the joke it's in my oh believe that out all right we're going to miami let's go love you see all next i love you besties love you brad love you brad brad say love you to sax see what happens good keep it up brad say love you to sax see what happens love you sax back at you

SPEAKER_434: i'll see you all next time on the online podcast bye bye