Jason Calacanis: Welcome, welcome to This Week in Startups. Today, we're going to talk about all those tech stocks tanking, many of them down at least 5%, the S&P 500 down for a fifth straight day. We're going to do a little macroeconomic analysis like we do on This Week in Startups. That's right. The SEC is looking into more restrictions and disclosures for late-stage private companies. We asked the two basic questions here, what would that look like and why? Plus, details about mixed reality headsets from Apple. There are leaks, which makes us both suspicious and enthusiastic. We're going to break all of that down, and we have a new segment, Over Under. It's a great show. Stick

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SPEAKER_04: Big pullback this morning. Most tech stocks, with the notable exception of Uber, evidently, were down. Yum, yum. About 5%. The S&P 500 is down for a fifth straight day. Square, now called Block, Robinhood, Zoom, Coinbase, Snowflake, Airbnb, Spotify, DoorDash. All of these others were down at least 5% as of this morning. And here is a crazy stat from Bloomberg last week. About 40% of public companies in the NASDAQ composite index, because the Dow, not down so much. Heavy on the financials,

Jason Calacanis: not really impacted so much today. But about 40% of these public companies in the NASDAQ have seen their stock prices drop at least 50, 5-0% from their one-year highs, approaching the highest ever,

SPEAKER_08: according to Bloomberg. Let's turn it over to Professor J. Cal with some insights.

SPEAKER_09: Well, I think Macy's is going to be great.

SPEAKER_10: Let's do it. Let's do it. Why is this happening now?

SPEAKER_11: So I have my own theories about this. And obviously, the market has been incredibly hot. So we have to start there. And the economy is incredibly strong right now. But the market has been hot for since 2009. And so here we are in 2022. So we're talking about a 13-year bull market. Maybe it's closer to 2014. I don't know the exact time of the crash. Somebody can fact check me. But so we're well

SPEAKER_12: over a decade into a bull market. And in that bull market, you have corrections. So what we're seeing now is a correction. And then in some stocks, you're seeing a crash. So overall, if you

SPEAKER_11: zoom back on the NASDAQ, you zoom back on the Dow, major indices, you'll see a correction. But if you look at Zoom or Peloton or Bitcoin this week, you'll see a crash, right? And so let's just put that

SPEAKER_12: there that there's two separate things occurring. Certain things are crashing. Crashing means I think over 30 or 40%. Certain things are correcting. That's generally in the 20%. So crash versus correction are the two definitions here that we're going to work with. Okay. What happened during the

SPEAKER_11: pandemic? Once in a 100-year pandemic, let's hope, we poured stimulus into the market. At the same time, people stayed home and didn't spend money on, you know, White Claw. Shout out, Producer Nick. They didn't spend money going to basketball games. Shout out, go host Molly. And they didn't go

SPEAKER_16: traveling around the world on business trips in, you know, business class, staying at Amman Hotel.

SPEAKER_12: Shout out, J-Cal. So all of people's personal balance sheets kind of got cleaned up and we had record savings. Yeah. Because they stopped spending. And then people were like, oh yeah, here's some stimulus checks that you don't need. A lot of people did not need them. Let's be honest. Probably 50, 60, 70% of the dollars that went out were not needed in hindsight. But we did that because we were scared as heck that the economy would crash because it did have a crash. The stock

SPEAKER_11: market did in fact, you know, I think technically went down more than 20%. So, uh, and so what do people do when they're at home with nothing to do and a lot of money? And they fire up Coinbase,

SPEAKER_12: they fire up Robinhood, they fire up, uh, fantasy sports apps and they start gambling. And so I think what we're seeing now is the unraveling of people who were speculating and gambling. And then what we have underneath it is a very vibrant group of companies that are making

SPEAKER_11: incredible products that people love record, low unemployment, a large amount of jobs available record

SPEAKER_12: low in recent history, immigration. So we have a labor shortage, uh, massively rising wages. So this is like three or four macroeconomic trends happening concurrently. So, you know, Peloton, I think is like a canonical example for me. That is the perfect example of a stock that a lot of people decided and zoom would be the other one. Let's just gamble the heck out of this one. I'm sitting here at home. I want to place a bet. Everybody's getting rich on crypto. Everybody's getting rich trading stocks. These are two obvious bets. And so it got run up more than it should. And now we're seeing that those trades get unwound. Will those companies go back to their former selves? Sure. In five years, in 10 years. And that's my take on what's going on here. And it's, it's healthy to hash this out, but we have to stop pouring money on a raging debt and fire is my personal opinion, because we don't know exactly what we're doing here. I, it's, I get the sense like the fed, the way they're acting, they're in a bit of a panic. And then you superimpose on that politics. And you know, the people who are in office trying to

SPEAKER_27: stay in office, what's your take on all this money? Well, I think what you said just right

SPEAKER_04: there at the end, too, is also really important to point out, which is the debt question. And in fact, INIAC 78 says so many margin calls, that's 100% true. A lot of the crypto crashes that we've seen. So when you look at some of that gambling on Robinhood and the gambling on Coinbase, let's not forget that record low interest rates have also fed a ton of confidence in borrowing. And so you have people taking out debt in order to gamble in the market, then they lose, get washed out institutions come in, this is mostly happening with crypto. But I think it's probably going to be happening across the board in the stock market, because you've got a lot of amateurs, right? You got a lot of tourists, and suckers at the table, the stock market should be more available to everybody. It's a good trend that more Americans are participating in this in the public markets. But at the same time, like a lot of them are going to get in trouble, because these are some shark filled waters. And then you also have all the things that Jason just said, plus some warning signs. This question of whether inflation is going to continue and whether that's going to lead to rate hikes, is there going to be tapering, which means taking some money out of this super sloshy economy. And so I think those warning signs are starting to make people say like, maybe the institutional investors, at least, maybe I should get out of the fun, but shark filled part of the ocean, and head for the shallows, which are bonds. So you're seeing bond yields rise, like institutional investors are fleeing for safety. That's partly why you're seeing some of these more household name stocks, particularly tech stocks where nobody was ever really sure if they were worth the valuation in the first place. Yeah, I mean, they're like, let's stop playing this dangerous game and like flee for safety. And when you start to see that happen, it's good to pay attention, especially in our field, because it could have huge impacts on company valuation, right?

SPEAKER_11: Yeah, I mean, the good news when you're an early stage investor is, you're there at the moment of inception, you're there at the birth of the company. And it's, you know, just a unique place to live because you have a 10 year outlook. And if you have a 10 year outlook, you get basically abstracted from these kind of mornings. So when I wake up, and I see my publicly traded stocks, you know, flipping over and over, I'm just like, I have a 10 year view on these, I believe in Robin Hood got crushed, I believe in Square got crushed, I believe in Uber, not crushed. But you know, I believe in these names, I believe in the companies, we have the products, the services, the teams. So I think in 10 year increments, there's no world in which I think Uber, Square, slash block, whatever it's called, Jack, and Robin Hood will not be bigger companies 10

SPEAKER_44: years from now. So I'm holding those companies and holding those names.

SPEAKER_04: Which is so funny, like, just as a side note, that's how public market investors should be thinking to like, buy and hold would be healthier for everything than the sort of speed of the trading

SPEAKER_02: that we so often see. But that's a separate investing advice from a totally not professional.

SPEAKER_11: Well, here's the thing, you know, if you're if we have a lot of new entrants, they're experiencing

SPEAKER_12: things for the first time, what do people do? When things go down, a lot of times they hold them in the hopes that they'll go up, right. And then if things are going up, what do people do? They sell them because they're like, I got to book my win. And then you know, there's this concept of riding your

SPEAKER_16: winners. If you believed in Uber in years one, two, and three, you know, are you gonna believe it in

SPEAKER_11: years 11, 12 and 13? I do. I still have the same conviction about it. So in fact, I have more because of the delivery business. So I think the the big picture here that makes me feel good is I think Omicron is like we're going through the eye of the storm right now. I think all of these day traders, these new entrants to the market are getting a quick education. And I don't think a lot of them face the risk of ruin. Of course, some may and you know, that's their fault for doing what everybody tells them not to do, which is be concentrated on one, you know, or two assets as opposed to being diversified, you know, not paying down their debt, all those like fundamentals and long term

SPEAKER_16: participants. So I'm actually very bullish on the market because of the consumer, and because of

SPEAKER_11: the companies. And I think this is the setup for a rally. As the Fed cleans up its balance sheet and says, Okay, and then maybe we don't pass this. And it knows maybe controversial to some people, but the Build Back Better Act just felt like, Oh, my God, it's like another barrel of kerosene on the fire. I'd rather see that broken up into smaller chunks and, you know, digestible spending

SPEAKER_55: going forward until we have some way to pay for all this and then pay down the massive debt or getting into.

SPEAKER_06: Well, once we reform the filibuster, it can totally be introduced as a package of smaller bills instead of all at once through reconciliation, because we have a broken

SPEAKER_08: congressional process. Okay, I'm sorry, different. Totally different show this week. Totally different show in our broken political system. I think that was a Sunday shows yesterday.

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SPEAKER_02: So what does this mean for, there's this sort of now ongoing question, like what happens if the window to go public gets smaller, which is a conversation that's happening simultaneously as

SPEAKER_04: it was reported in the Wall Street Journal today, that the SEC is considering trying to make more private companies. So big, big, big unicorns that stay private for a really long time. See also Uber. It is, the SEC is considering tightening qualifications and requiring private companies

SPEAKER_02: to routinely disclose information about finances and operations. What do you think?

SPEAKER_12: Yeah, this seems to me to be a Theranos reaction or a WeWork reaction to me, which is, oh my God, these private companies that are backed by the most sophisticated investors in the world need to be

SPEAKER_16: monitored. It's like, really? Does like tiger and like, you know, and KOTU and Goldman investing in these companies really need to have somebody like standing next to them, you know, when they place

SPEAKER_45: a hundred million dollar bet. Are we still saying that SoftBank is among the most sophisticated investors in the world? I would say so. Yeah, I think they'll walk. Okay, just checking.

SPEAKER_12: Well, here's the thing. Are they, are they crazy gamblers? Are they the person who comes to the poker game, buys like five times everybody's stack and just starts betting every hand? Yes, they are a volatile player, but still, I think we'll wind up turning, you know, a hundred billion

SPEAKER_11: into 200 billion or 150 billion and then getting 20% of that. So they'll net 10 to 20 billion in carry and the Saudis and whoever put their money in there will be perfectly fine with getting 50, you know, a 50% doubling of their money in five years or doubling it.

SPEAKER_75: But is this, I mean, I'm going to caveat what I'm going to ask you by saying, I think that

SPEAKER_04: everybody in this game knows what's happening here. Everybody knows venture capital is risky capital. That said, because of the froth in the market and the money that can be made from private companies, you probably have seen LPs be more willing to put more money in this risky capital bucket. And those LPs can include financial institutions with lots of exposure, right? So pension funds and banks. And is it, does that when you back it up from the

SPEAKER_06: investor stage to the LP stage, is that what makes it the SEC's territory?

SPEAKER_79: I don't know why the SEC is doing this. I'll be totally honest. It makes no sense to me because

SPEAKER_16: even if you look at those LPs, if you were to take a retirement fund, they probably put 5%, 10% of their money into private equity or venture or less. It's been their best performing asset class. So it's their best performing, and it's a small part of what they do. And if they were to lose half their money at it, it would be fine. But instead, they are making a ton of money on it. So this is a very strange, when I saw this headline today, I was like, this is crazy. And,

SPEAKER_12: you know, maybe their thinking is, and it's hard to know what the regulators are thinking here is, maybe they want them to disclose so that there's better hygiene for when they do go public, right? So like, okay, we know you're going to go public. So maybe we want you to just start that

SPEAKER_11: process of cleaning up beforehand. But, you know, in my experience, people are doing that. Like, post WeWork, people are doing that? They've always done it. I mean, people have always done

SPEAKER_12: their diligence in this space. There's always been representations made. And it's up to those,

SPEAKER_16: you know, the most sophisticated players at the game, we're talking about the top 1% of investors, 0.1% of investors who place these bets, actually. The 0.1%, one in a thousand capital allocators are the ones making these late stage bets on, you know, Stripe or Airbnb before they went

SPEAKER_11: public or Uber before they went public or Google. They know what they're doing. So I don't get it. It doesn't make any sense to me. I'll be totally honest. I'm confounded. And I think we're just going to have to wait and see why they feel the need. This is not where they're needed. You know, like, right. You know where they are needed? Crypto.

Jason Calacanis: Crypto. I was just about to say that, like, how about maybe spend some time giving the market more clarity, some regulatory certainty for companies like Robinhood or Coinbase that could actually either help them grow or help them grow safely as opposed to getting involved in private companies,

SPEAKER_04: which to me does seem to be, even if they're backed, you know, far up the chain by public companies, it still seems to me to be out of the wheelhouse of the SEC. And I'm not, I don't

SPEAKER_14: understand. Why don't they resolve XRP? Is it a security? Is it a scam? Seriously? You know,

SPEAKER_27: and then like, maybe let's look at every other crypto project that gets over a billion dollars and

SPEAKER_04: people are trading. Like, I mean, what's going on there? You know, those are the ones I'm worried about. I would rather see the SEC figure out a rule for Twitter than try to require disclosing from private companies who are in fact, fundamentally private companies. Yeah, this seems like a

SPEAKER_11: over-regulation and pointing the gun at the wrong place. Like, this is not where, like, people are, people are not losing their money in private companies, you know, at high valuations. That's not, and, and those people, if they do lose their money, can afford to, like, they're sophisticated, as we've said here. So who, who's not sophisticated? I think, you know, a lot of the crypto trading that's going on. I think people trading on margin, uh, people day trading stocks, you know, maybe SPACs,

SPEAKER_16: you know, the ones that are free product, you know, the, the, the, the Jason's rule, like, if it goes public before they have a product in market, it could be a scam or, you know, if it's worth over a

SPEAKER_101: billion, like, what about Fisker, you know, like, let's what Nicola, like, that's a good place to

Jason Calacanis: look. Right. I mean, I guess I will say the one population that has been affected here that we

SPEAKER_04: haven't talked about is, you know, because it's true, when a company like Theranos, or even a

Jason Calacanis: WeWork goes down, it doesn't take down the broad based economy with it, it doesn't take down the stock market. It does hurt a lot of employees.

SPEAKER_11: Employees who got paid incredibly well, and who easily found another job,

Jason Calacanis: who probably took a pay cut because they were betting on their company.

SPEAKER_16: Not at Theranos or WeWork. They weren't, I mean, maybe in the first year or two, but by the time they started getting like the Series B money, and those places are probably overpaying. And those

SPEAKER_107: people, if you're trying to identify some damage, that's, it's a bit of a stretch, like, I think

SPEAKER_16: we're, we're really looking for the SEC. Yeah. And also, like, like, if we're gonna talk about

SPEAKER_110: people in society who are getting screwed, like tech workers, who have five job offers,

SPEAKER_04: it's not always tech workers who work there, though, it's like low paid designers, and there's janitors in the cafeteria. I mean, there is some, I'm just like, literally, like, if you were trying to identify a bubble of economic impact, it is fair to say some people are impacted when this happens. But you are like, to your point, you're also taking a risk by going to work at one of these companies. And you should know that if you're if you're going in the first two, it's not a blue

SPEAKER_27: chip. Yeah, especially if it's in the first series, a series B, when they're figuring out product market fit, it's a real gamble, and you get equity for it. And then if it's in the later stages, they're probably flush with cash and competing against Google and Facebook for

SPEAKER_16: employees and giving less equity. But yeah, that seems like a weird one thing. I really like to see SEC workout is in addition to crypto regulation, and I'm not saying like crypto legal action, I think there should be legal action against frauds, of course, I just think clarity of regulation, so that what investors do for a living and coin offerings do for a living have the same set of

SPEAKER_12: rules, like we're both driving on the same highway. And one group has no speed limit, no brakes, no airbags. And like, they can just go 150 miles down the road. And like, everybody who's in venture running a syndicate like myself, or doing any other kind of investment is like in the middle lane going exactly 66 miles per hour. Which is how you always get killed by somebody you always get killed

SPEAKER_04: by somebody faster behind you. And you always get screwed as the person who's like following the rules.

SPEAKER_124: And I'm always like, I'm watching people pass me. And I'm like, I want to be in that lane. Can I go

SPEAKER_126: faster? Like, I'm going 65. I want to go 85. I don't want to go 150. But I'll go 85. Like I don't

SPEAKER_14: live in a state where the speed limits 85. In August of 2020, the SEC voted three to two to expand the definition of accredited investors. And they've been charged with that for a while. So that's what I'm looking for is, you know, like, if people can bet on crypto, like, why can't they bet on private

SPEAKER_130: companies? It makes no sense. Seriously? Yeah, well, maybe this is a step in that direction.

SPEAKER_132: Oh, I see. Oh, okay.

Jason Calacanis: This just occurred to me, like, maybe the SEC is saying, Okay, well, listen, we want to create a

SPEAKER_04: pathway for people to invest in private companies, but we want to de risk it a little bit. Yeah. Therefore, these these rules, that's the most optimistic possible reading. I think I have of

SPEAKER_12: this headline from today. I mean, the other possibility is they want those companies, they don't like the trend of people essentially running a public company privately. Yes, because that's what I

SPEAKER_16: hear from the inside. Some people are like, I can just be private, I have a small number of shareholders. And if large institutions want to own a part of my business, I go to them privately, I open the books, I say you can buy 5%. They buy 5%. And here we are, the end, you know,

SPEAKER_12: and essentially, you can have a shadow private company that just has let's call it 150 100 major

SPEAKER_16: shareholders. And they just trade the shares privately amongst themselves once per year. And

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SPEAKER_04: Yeah. Producer Nick just said, uh, note that the WSJ article said the SEC is also considering tightening the qualifications that investors must meet to access private markets. So that actually gives credence to what you just said, which is they don't like this and they kind of want to

SPEAKER_02: encourage companies to go public, which is like, don't put your finger on that scale. It's not your business. I mean, I guess it is sort of your business, but it's not totally.

SPEAKER_12: We, we have to have a conversation like we had with cannabis in this country, um, or gay marriage,

SPEAKER_16: uh, or wagering. If you look at those three issues, gay marriage, cannabis, uh, and gambling your own money, sports betting, wagering, poker, whatever. And you look at what the public, how the public felt about them over time, the public went from the minority of people wanting, you know,

SPEAKER_11: gay marriage, cannabis legalization and wagering to the majority of people wanting that the majority of people would like to be able to buy LinkedIn in year two or Uber in year three or DoorDash when it's in year four. Most people would like to do what they want with their money. They would

SPEAKER_16: like to be able to buy weed, you know, bet on sports, bet on private companies. And if you're gay, get married. And that's where our country has this very weird, I guess the word would be paternalistic, um, sort of view of its own citizens, which is we need to really take

SPEAKER_12: care of you. Like you're too dumb to figure this out. And we have to make the decision for you. And I think we have to get to the point where we're like, you know what? People can make their own

SPEAKER_11: decision on these issues and, and betting on private companies. And if we don't, the thing I fear is there are other countries that allow easy access to it. And we're going to lose those as an

SPEAKER_16: example. If I ran our syndicate, the syndicate.com, I think in the UK, and didn't allow US citizens have access to it, I just let the UK folks have it. I could allow anybody, I believe their laws are anybody can bet on startups. Or if I moved it to, you know, Southeast Asia. So what's going to

SPEAKER_12: happen over time is the opportunity to invest in private companies could go to other citizens of

SPEAKER_16: other countries. Let that sink in. If people in, I don't know, Singapore, or the UK, or whichever country it is, are able to access these and move up in wealth. That seems unfair to US citizens. Mm hmm. I'm

SPEAKER_161: not saying I'm thinking about that. But I am. I mean, I didn't spend the weekend thinking about it,

SPEAKER_162: but the whole or tweeting about our weekend. Like why? I mean, well, people can people are starting

SPEAKER_12: Dow's, you know, and there's, I said, How do you get 100,000 LPs in a fund, right? Like, if I wanted

SPEAKER_85: 100,000 LPs in our next fund or a fund I created for early stage startups, I could just talk about it here, talk about it on all and tweeted and 100,000 people could put in $1,000 each, right?

SPEAKER_16: $100 million fund. Boom. I can't do that. I can have up to 250 in one fund. And then, you know,

SPEAKER_85: 2000 QPs qualified purchases in another, put those numbers together, you know, talk about just over

David Friedberg: 2,000 people. Okay. I'm a like expert at what I do. I'm a good actor. I do deal it. You're here now. You see the care we put into investments and how we think about them, you know, really vet the companies and struggle

SPEAKER_12: over that and turn down, you know, 100, 200, 300 companies that we meet with for every company we do invest in. And I, you don't trust me to have 100,000 LPs, but a million people can buy Solana or 10 million people go buy Solana or NFTs or anything. It just feels to me like it's just completely unfair. And it's a little bit, I'll be on, if I'm being honest, it's a little frustrating for me to play by the rules over here and really be diligent about it. And then watch a bunch of people over here, you know, take out some piece of software that makes 10,000 monkeys and then airdrop them with like one filter on them and they

SPEAKER_165: can just print their own stock exchange and call it a, a Dow or an NFT drop. It's just bizarre.

SPEAKER_04: Yeah. I mean, I think fundamentally that model is a very interesting threat to the type of, I mean, it's so weird to even say that the type of like early stage investing or venture or traditional investing, it is a bit of a threat. It is also potentially dangerous to the people who are doing it. Like it really is, right? We're, we're partly having a conversation about mitigating risk for all the parties. The SEC might be headed in like, unfortunately it's pointing its fire in some ways in the wrong direction. It is reasonable to, you know, to go back to your sort of Europe example. It's reasonable to say that when there is a lot of money at stake, moral hazard gets introduced. So if you make it easier for everybody to invest in private markets, you know, somebody, I think in one of the Noda gangs just pointed out that like a lot of people don't want to do the hard work. They just sort of want someone else to do it for them, which means

SPEAKER_177: they will be strung along into disaster. They will follow the Pied Piper right into the start.

SPEAKER_12: Such an easy solution for this too. I don't know why people lack the common sense of this one. Here's

SPEAKER_16: an idea. Whatever your last two years tax returns say combined, right? So you're, let's say the janitor at Google and you make $50,000 a year, all in, you made an app and you made 40,000 last year, you had $45,000 as a custodian. Okay, what is 5% of that? Okay, about $2,000. Sounds good. That's the max you can spend investing in private markets. And it's up to you to go to a portal. These are easily set up a shore, angel list. A lot of them have this service. I think Republic does it too. Now, maybe seed invest does it where you go to a portal, you upload those that portal looks at it certifies this is the amount the person can do. Then I as a private company investor or syndicate lead, you authenticate through that service. And it says this person is qualified to spend up to $2,000 a year, they've invested $400 a year, they have 1600 left left this year, you could just come up with very simple rules like that. Imagine

SPEAKER_12: if Vegas when you walked in, said, What was your yearly income? Okay, you can buy up to $2,000 in

SPEAKER_181: chips, but you can't buy 10. Yeah, people might be a little freaked out by that. But it might also

SPEAKER_183: save a lot of risk of ruin that happens in Vegas.

SPEAKER_04: I'm like that. That's sort of the exact opposite of people should be allowed to do what they want with their money. And if they're stupid, then there it's on them. I mean, but yes, you're talking

Jason Calacanis: about basically the credit system, right? That exists in and it's why it's why this is so frustrating because there are two totally different sets of rules. On the one hand, you can only take out so much debt on a credit card because we have like a bunch of opaque black

SPEAKER_04: box corrupt companies determining credit worthiness. And you know, like screwing people during the pandemic for missing one bill that didn't get mailed to them because like the limit like you have that whole system that says you can only have 20% of your credit worthiness be debt. But you could cash out your entire bank account, put it all in Solana, or take it all to Vegas. And nobody will say a word. So the question is, do we want those two systems to try to exist simultaneously? Or do we want to try to equalize?

SPEAKER_12: And I think intellectually, I would just like everybody to talk about these things at the same time. Yeah. Like, can we keep all of these disparate concepts in our mind without this like cognitive dissonance, have a little tolerance for ambiguity here, and say, Hey, the same human beings, the custodian at Google, the teacher, you know, in New York City, public school teacher,

SPEAKER_16: the police officer, you know, in Los Angeles, and the real estate broker in San Diego, they're all going to Vegas, they're all doing these activities. And it's imagine if when you got to Vegas, they

SPEAKER_11: tried to stop you, people would be up in arms, right? Yeah. What's up? What's a better bet? You know,

SPEAKER_110: the Jets, betting on the Jets, you know, betting on the Jets, playing blackjack, or poker, a game of

David Friedberg: skill, or betting on a startup, like betting on Uber. Yeah, yeah, I mean, come on, like, I think

SPEAKER_12: we all know the answers to this. And, you know, I think if you forced unicorns to report their revenue,

SPEAKER_85: like, let's just say, they said, top line, you raise over a billion dollars, you got to start reporting your your revenue every year, not your earnings, but you know, just how much money you

SPEAKER_16: made this year. Like, does that make any difference to the people who are investing at that level? No, they already know that number. So what is it? What does the public need to know that number for I

SPEAKER_04: don't actually get it? Well, and then you get to this question that producer Nick is raising, which is then do companies start to try to route around that anytime you create a metric, people will try to either hit that metric, or avoid that metric. So as soon as you've created like, okay, a billion dollars, you have to report, well, then they'll be like, Oh, we're not worth a

SPEAKER_117: billion dollars. And since we're private, there's literally no way for you to confirm that.

SPEAKER_11: Well, or if they're raising more than a billion, they could say, you know what, we're going to raise 5 billion. It's a loan. Right? We didn't we didn't sell equity, we have a loan.

SPEAKER_04: And although it's relevant to us, what would it mean for that later stage investing where you've got these two, would that keep the Saudi, you know, funds maybe out of our business so much

SPEAKER_138: because there's not as much incentive to raise billions and billions of dollars from people would chop folks up.

SPEAKER_16: Yeah, this is the kind of thing where like mucking with your changing the rules of the game that don't need to be changed. And like, there's a whole nother set of things that do need to change you need to change. And just, here's another thought experiment. So I did the one thought of experiment of you were capped in the number of chips you could buy at the at the Aria in Vegas, based on your income. Okay, seems crazy to do that to people going to Vegas, right? But I'm proposing it for private company things because sure, why not? If people have this concern, I'm totally willing to start there, right? Maybe after 10 years, if we don't see a lot of people

SPEAKER_85: getting hurt, we could up it to 10% or we could get rid of the rule altogether. Here's another one.

SPEAKER_16: What if you went to Vegas and to play blackjack and, you know, let's say any games involving cards, poker, blackjack, whatever. We made you take the card room license. You had to sit, you had to take a two hour online course to understand the odds. And then you showed up and if you didn't have your license, you could go to a room on site at the Aria and you could take the quick two hour course and, you know, answer 20 questions. Well, that's what we're asking people to do, right, for private market or to be involved in this. So I'm in favor of that. So Vegas, imagine a Vegas had a cap and you needed a license to play there. They would be up in arms. And here in the private markets, I'm saying, let's do it. Let's give people a license. I'm all for people being educated. There's nobody in Silicon Valley or the private market world. Or I'd say there's very few people who are bad actors who are saying, let's get private, let's get small time investors

SPEAKER_12: involved in this so we can steal their money. Right. It's quite the opposite. Right. Anybody who's in the private market who wants to do this, including myself, I want to see people who are the, the janitor, the custodian, the teacher, put a thousand dollars into an Uber and have a million dollars come back. That's sincerely what I would like to see. That to me would be the fulfillment of my career journey would be to make millionaires from people who were blue collar people, just like

SPEAKER_04: what happened to my family. That's kind of what I want to do it. Pretty weird to consider that that was supposed to be the promise of public markets all along, was that anybody could in fact put in that money into publicly traded companies and have an opportunity to reap wealth from that. That was the concept, right? But of course we introduced, because of course, when the incentive is money, things are going to get out of whack. You have this massive inequality. It's something like, what is it? It's less than 30% of Americans are actually invested in the stock market. And that includes like 401ks and retirement. So you have that system that has failed to enrich the public broadly, which is what it was designed for. Now you have private companies that people are going to work for in some cases, because they hope that they will reap that benefit through the stock options that they'll get paid in. And you have this like outstanding question of like, well, if people aren't participating in public markets, because they're being front run, and there's like dark pools, and there's like all of these sort of incentives and reasons they're going to fail, maybe they could have this opportunity over here to invest in private companies and gamble that way. And the SEC, while not cleaning up the public side of the house is still trying to be like, nah, crazy.

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SPEAKER_65: let's go on to our next story. Everybody who's watching on YouTube, youtube.com slash this

SPEAKER_16: weekend, go ahead and give us a thumbs up, hit subscribe and hit the bell next to subscribe button. So you get alerted when Molly and I go live, which is typically around 10 1015. We did a little bit early today because I got an Ivy League, a phone call to do is I got some business

SPEAKER_107: after this. We'll see. But give us a thumbs up. And then if you're new to this program, just give

SPEAKER_16: us a hashtag new in the chat. And also tell us where you're calling in from and what topics you would like to hear us talk about on the show. Next up, more details are coming out about Apple's mixed reality headset. Mixed reality is a fancy way of saying AR or VR. It's a catch all term for both of those. Nine to five Mac reported rumors that Apple's headset could be announced this year and might cost $3,000. That would put it in the developer kit kind of mode. When people launch something that expensive, it's usually for the first year or two to get developers and real, really elite enthusiasts business builders to play with it. The headset is rumored to have both AR and VR, which means you could be in a virtual world, or you can press a button and see through the lens and see virtual objects in your real world field of view. That's what you know, defines

SPEAKER_122: mixed reality or XR is, you know, the ability to do both of those things. This would be 10 times the

SPEAKER_16: price of the Oculus Quest 2 headset that goes for $300 now. But again, that's just VR. And of course, if Apple is going to do this, they want it to be better than what's out there, both in terms of look and feel and ease of use. The information made a drawing, we'll show it to you here based

SPEAKER_230: on rumors that looks Apple-like. It looks like ski goggles, I would say. What do you think,

SPEAKER_16: Molly? And it looks a little like the Sony one, actually. Oh, yeah, or the grand. If you compare that to the Oculus two quest, you know, which has a lot of battery power on the back, etc, or computing on the back, I guess, it's pretty obvious which one's gonna be more appealing. And I think this is why Apple has waited. Famously, Steve Jobs was gonna do the iMac first, not the iPhone. But then he's like, you know what, this is not responsive enough to do the big iPad, let's go with the phone first, because the touch and the screen is more responsive on the smaller one. So they really care

SPEAKER_85: about usability. Apple's approach will differ from meta's VR approach because Apple will not create the metaverse. Blueberg's Mark Gurman for that he was told pretty directly that the idea of a metaverse is off limits internally at Apple. In other words, they probably don't want to be responsible for a bunch of people walking around in a social network, doing things to each other. Obviously, crazy stuff happens when you run a virtual world, whether it's Grand Theft Auto or any other service Gurman reported that Apple's headset will be used primarily for short bursts of activity rather than prolonged sessions, focus will include gaming communications and content consumption. Project

SPEAKER_233: is horribly codenamed reportedly and 301. Maybe that's a room in the basement or something right at all.

SPEAKER_184: Yeah, come on. Project Falcon. Can we get like a bird of prey hawk?

SPEAKER_04: I know. I mean, I had some doubt about this entire endeavor and this rumor and whether Apple is going to do this at all. But now that I know it may or may not be called product codename and 301.

SPEAKER_186: I'm like, nah, it's not real. And I you know, this like late mover advantage is typically Apple's

SPEAKER_16: approach, which is let everybody go up the hill, Google Glass, if we forget, less we forget Google Glass, Oculus, let everybody you know, what's Microsoft's called? Um, HoloLens. HoloLens. Yeah, let everybody embarrass themselves with products that are 40, 50, 60% away there. But if you plug this into a new M1 machine, which is what I think is also driving this is Apple made their own chips. I think one of the reasons Apple invested in those chips was to make the batteries longer on phones, make the laptops faster. But also, I think their end

SPEAKER_107: game was to be able to make chips so good that VR AR actually worked. What are your thoughts, Molly?

SPEAKER_04: Yeah, that makes a lot of sense. I mean, I think I've gotten to the point where with Apple, every time I hear about Apple getting into some new business or some new part of a business, my question is, cool, how's that going to sell iPhones? And secondarily, how's it going to sell Macs with fancy new chips in them? Because let's be honest, like, almost all of Apple's revenue, services, sure, it's growing, right? Other things are growing, accessories, and profitable, but most of the nut comes from the iPhone. And so still to this day, almost everything, the entire orientation and people who work at Apple will tell you that this is fundamentally the question is, how does it sell more iPhones? And so that's why the car doesn't make a lot of sense to me. But VR AR makes a little more sense, because this is something that could sell devices and or tie into that ecosystem. I still think that there is an issue with them saying we're not going to create a metaverse, by which I mean, what is their operating system going to be? Is it going to be, you know, an extension of iOS, and then they'll have developers just build games and things like that. If you start to get into an arms race where you have like multiple different ecosystems, that does benefit. Apple? Yeah, I just wonder what their software explain why explain why? I mean, Apple is great at ecosystems, they're great at locking you in. The last thing that Apple is going to want. So really, the success of Apple's VR AR efforts, totally depends on how successful the metaverse ends up being if everybody wants to be there. And Apple has built a headset that only works in the Apple ecosystem, which, you know, we can virtually guarantee 100% do because

SPEAKER_248: that virtually guarantee. I'm sorry, we can 100%. No, I see what you did there. Pun not intended.

SPEAKER_75: That's amazing. Got it there. You got there. But if everybody wants to be in the metaverse,

SPEAKER_06: which is highly doubtful, then Apple has a little bit of a problem because they don't want to play with

SPEAKER_85: that. And they don't also great at running an app store at scale with high quality content that

SPEAKER_16: parents and everybody can believe in. And so that's going to be what's going to be great about this is Facebook is going to try to control the full stack, the hardware, the operating system,

SPEAKER_12: the app store, and the actual metaverse you live in. Apple wants no part of being, you know,

SPEAKER_16: the community where you walk around. That's why they don't have their own version of Twitter or social networking, and they easily could have done that. Remember, they built some social networking into iTunes at one point, forgot the name of that fell project, but I thought it was pretty cool. They don't want to police content. No, they know that is a it's a losing place to be much better to have this beautiful hardware that people buy for aesthetics and

SPEAKER_107: pay a 50% margin on. I think it's going to be this could be Tim Cook's legacy, actually, because the big critique of Tim is under Tim Cook. They massively optimized the business,

SPEAKER_16: they continue to print money and increase the velocity in which they they printed money,

SPEAKER_107: but they did it on Steve Jobs's vision. That meant the iPhone, Apple TV, you know, and the watch, which, you know, supposedly, Jobs had a lot of input on. So this could be great for for Tim Cook,

SPEAKER_16: I believe I think this will be his legacy. I think it's gonna be a huge hit. And I think the reason I think it's a huge hit is I think people will use it sitting at their desks to play games. And to the probably be some work stuff for it. Like imagine we put the headset on and we had a version of zoom that actually worked in a meaningful way where we could, I don't know, pull up a whiteboard. You know, I could be looking at my desktop and looking at my laptop. And these laptops are so super powered. Now, did we send you a new computer when you joined? It scares me. I have

SPEAKER_207: that one MacBook Pro. Yeah. Oh, the new the 16 inch the new one. Uh huh. Oh, yeah. Well,

SPEAKER_04: it's the size of a Volkswagen, but it goes as fast as a Tesla. It's crazy. It's a bonkers laptop. I

SPEAKER_85: just got my m one upgraded to that one. And it is. I had the like first m one and it's crazy how fast and beautiful the screen is and they put the ports back. But what do you think if we what's the what's the over under? Uh, I see our producers put a little note in here for us. They set the over

SPEAKER_270: under at 3.5 years. Yeah. For Tim Cook retiring. Take the over or the under. Tim Cook retiring after this product is released. If this is his iPhone moment, if this is his legacy. So let's say this

SPEAKER_65: gets released this year, 2022. That means starting in 2023. He would retire before after 2026. He's 61

SPEAKER_04: years old. Now, what do you think Molly? You take the over the under. So the over is that he would retire

SPEAKER_77: after 26. Yeah. Okay. Yeah. Hi, I have a lot to learn about gambling terms still. So here's how

SPEAKER_16: you would set the over under for the clay Thompson, uh, yesterday. Yep. Will clay score 20 points. If you were betting on yesterday's game, you'd say, uh, I set the over under at 16 points. Do you bet clay does over 16 or under 16? That's probably what you would set it at. And what did you score

SPEAKER_105: yesterday? 19 or something? Uh huh. Yeah. And also happy. Typically the over under, you will have

SPEAKER_280: like a 0.5, they call it the hook so that you can't push. You can't have it land on 16 because

SPEAKER_107: then nobody really wins. Oh, oh my God. There's a gambling terms. So I love it. So here I'll tell

SPEAKER_16: you how I would do this. I'm looking at it. I'm, I'm hot. I'm massively over. I think he would, he would not retire before 67, 68, because in your sixties, I can tell you this having turned 51, my Lord, like all the bull that you deal with and all the hard stuff becomes easy. Yeah. And then all that's left is the work because you know, who to hire, who to empower, what systems to set up to deal with bull. Like when I was in my third, my twenties and thirties, it was like just piles of punch lists of nonsense that I had to get through. And then you kind of hit your forties and you're like, wait a second, here's how you just dispatch that stuff really quickly. You just triage it immediately. And then you hit 50 and you're ruthless. You're like, this is your job. This is your job. Get it done. And it's like, oh, it's not done. Great. You're, this is no longer your job. This is your job. Get that done. And you're just like, have this roots of efficiency. I think he's in the ruthless efficiency era of his career where he's probably enjoying it.

Jason Calacanis: How could you leave running this company? And if you look at Apple and where they are now, right, they're not being hauled before Congress. They're not trying to deal with content moderation at a grand scale. They're making crap tons of money, but without pressure to make more money, right? Like they are just a solid, trustworthy growth stock. They couldn't possibly make more money. The VR AR can only be additive in some way. It's not going to take the company down. It's not a particularly big risk the way something like a car would be. So I got to think that running Apple right now and probably for the next decade, it's just pretty fun. I'll tell you, there's only fun.

SPEAKER_154: I can tell you the reason why his life is great is because they get to pre record all those Apple presentations now. Seriously, he doesn't have to do it live with all the technical problems.

SPEAKER_290: He's just like, wow, it's such an amazing day here on campus. And you're like, it's raining outside. It's like, yeah, we taped this two weeks ago. Game changer. I'll tell you.

SPEAKER_295: The hard part is over. The hard part is over. Remember Steve Jobs when something

SPEAKER_298: wouldn't work. He looked like he was gonna murder something about ruthless.

SPEAKER_111: Yeah, we're gonna find out a list of all the people who got fired after every single Apple

SPEAKER_184: keynote, or just shoot out or just yeah, just shoot out. Yeah. Can you imagine being the poor

SPEAKER_110: audio guy or something? And like, he throws there was one time I remember he threw to something and the audio wasn't playing. And it's like there's some audio guy with his with his or her finger,

SPEAKER_295: or their finger on the audio thing. And they forgot to push the button or slide the slider up. And they're just like, Oh, my God, they just they probably just run away. I'll tell you if you want to get I'm out. I moved. I can tell you how to get how to get Tim

SPEAKER_154: Cook to immediately retire. If the employees really want to get him out of there. Yeah,

SPEAKER_16: all you have to do is start leaking stuff. Writing petitions that you know, and unionizing.

SPEAKER_110: If the Apple workers became so entitled that they made his life like dealing with a bunch of like, difficult problem childs like which they've had like, like, two or three little flare ups.

SPEAKER_304: Yeah, I mean, there are some teeny little brush, tiny little brush fryers. Yeah, tiny,

SPEAKER_04: tiny, tiny. So yeah, it's a question of whether that continues. But yeah, right now you got to figure being the CEO of Apple is a pretty cush gig. It would be like, imagine like three of those

SPEAKER_16: brush fryers like connect and become like an actual fire. Like that would be when

SPEAKER_309: yeah, like Tim Cook would be like, you know what? You ungrateful because it is like,

SPEAKER_04: the flip side of it is I am a little astonished that they haven't had more. I mean, you know, they've just got like literally the same cadre of white guys in charge that they've had in charge forever. They the pressure to seriously innovate is essentially off. But like, that's also kind of a bummer. I mean, I don't know, I was at that Warriors game yesterday with my brother who has the Samsung just just like as just one thing, right? He's got the Note Ultra Note 20. Yeah, whatever,

SPEAKER_314: with the super zoom. What the hell? Why do I not have that? It's incredible. It's my backup phone

SPEAKER_253: and the camera on it is ridiculous. I always buy like the best Android phone as my backup phone. And it's just ridiculous. But you know, Apple's been at this for a while back in January 2016,

SPEAKER_85: Financial Times report Apple have built a secret team to quote, kickstart their virtual reality effort. And they were building prototypes in 2016. I'm sure they built prototypes, you know, 1020 years before that. And you know, it's six years later, why don't they have one yet? Because they want it to be perfect. Somebody named Brad Lynch tweeted coup says Apple already anticipates delays in the production of its mixed reality headset as devices expect to have much more advanced hardware and design than rival products display alone is pretty advanced and likely to be the biggest slowdown for

SPEAKER_154: Lisa maybe some you know, you could see these supply chain issues maybe slowing this down, you

SPEAKER_04: definitely could. But I would say if there is a delay in this device, it's because they're afraid it's going to cannibalize iPhones. I guarantee yeah, it's a business consideration. They're like, is it

SPEAKER_319: going to sell iPhones or take away from iPhone sales? Because that's the only thing they're

SPEAKER_253: thinking about. I think one out of I think one out of 20 people buys this in the first couple years,

SPEAKER_85: one out of 20 in the first year, and then maybe 110 and it will be if it's $3,000, it's the equivalent of buying like three more phones. So it's only like it's like that would be net net a 15% lift in iPhone sales. I think it's going to take five or 10 years for this. I would say it's going to take

SPEAKER_16: if I was to set the over under of when you could take your headset. We'll play over under again, your headset, let you leave your your Apple glasses, I'm going to call them glasses because

SPEAKER_27: it would not be ski goggles because nobody's going out to a restaurant with ski goggles 100 to the

SPEAKER_16: Warriors game. So let's say they get down to the glasses format, I'll set the over under at 10.5 years, yeah, that you will be able to not have an iPhone and do everything with the goggles

SPEAKER_266: or glasses. Would you take the over Molly or the under on that bet on 10.5 years? I 10.5 years.

SPEAKER_306: Yeah, I'm gonna take the over. You're taking the over. See, I said it so high. I was going to originally go 9.5 and I said 10.5. So then if I said that takes a decade for any pro any consumer

Jason Calacanis: product to find a market and find its legs. And this is really difficult technology to miniaturize and

SPEAKER_77: they're going to protect the out of the iPhone for another decade. So when he's gone,

SPEAKER_65: yeah, then boom, this becomes the new iPhone. Now I said it at 14.5 over under under. Okay,

Chamath Palihapitiya: there we go. So now that's a new segment, by the way, over under, over under. So that's how you said it. Alright, everybody. It's been a great show. And from Hollywood. We'll see you next time. Bye.