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SPEAKER_02: slash twist hey everybody welcome to angel this is the podcast where we talk about angel investing

SPEAKER_03: with some of the greatest angel investors of all time and today will be no different we are doing

SPEAKER_05: our season five on super angels what's a super angel i don't know it's open for interpretation but uh generally speaking i think people who've invested in call it over 50 over 100 david tish 350 with his partner so that's you know uh over 150 each um is probably a good way to look at it and when you get past you know five or ten years as an angel investor and when you get past 30 40 50 investors you

SPEAKER_03: probably have a chance at hitting an outlier and you probably learn a couple of things you also get

SPEAKER_06: humbled because the things you think we're going to work out never do and the things that you did as a flyer sometimes come to incredible fruition today on the program we have an angel investor who has invested in and i'm going to need you to sit down for this airbnb air table coinbase flexport gusto instacart open door optimizely pager duty pinterest square stripe

SPEAKER_08: and wish among many others uh you know a lot gid i'm sorry lad gil uh he is uh e-l-a-d-g-i-l i know everybody likes to follow people on twitter and uh he um welcome to the program allowed you've spoken at

SPEAKER_09: the you've spoken at the you've spoken at that you've spoken at our um you have spoken at our incubator

SPEAKER_03: many times and or a couple times i think and gotten great reviews but we've never had you on the pod

SPEAKER_02: which i realized when i haven't had you on the pod i was like well that's an oversight so apologies for it taking so long what have you learned in terms of angel investing when you look back at an incredible

SPEAKER_03: track record there's obviously you and i benefit from having i believe you started around the same time i did which is about a decade ago in that incredible period after the the bust of the real estate market and the great recession and certainly that makes a lot of people look smart we haven't been through the subsequent bust yet to see you know who looks really dumb but you and i benefited from that but what have you learned over the last decade in terms of angel investing when did you start

SPEAKER_14: yeah well thanks so much for including me um to your point i started about a decade ago and it was right around when i had left google and i was starting my first company which was a early data infrastructure company that twitter eventually acquired and to your point i think a lot of things that people talked about then uh that i think we actually underestimated was the enormous size of online markets and just the sheer size of the internet and the liquidity they would provide to people to be able to buy things online sell things online interact with other people and so i do think we benefited from this enormous wave of change between the cloud between sas mobile and other other trends all sort of combining into one of the biggest technology waves of all time and i think that's still running right now um but it was a really good time to start uh investing in companies as an angel it's a really good point you know when we

SPEAKER_05: started and the desktop revolution was i think kind of reaching its zenith its apex we had a perception of what the market size was and that was all these desktop computers and some number of them are on broadband connections and those are really the the great ones those whatever it was 50 60 70 million households and maybe we pick up some people in canada or the uk but nobody really thought that a company like uber or airbnb i think those are our two biggest hits each nobody really thought at the beginning that those could become a global phenomenon as fast as they did so maybe you could

SPEAKER_03: speak to how these things uh were able to capture that market so efficiently and and i should note that you're the author of the high growth handbook scaling startups from 10 to 10 000 people july 2018 uh that's when you published it right around the same time i published angel actually uh and uh you've gotten incredible feedback on that book and a lot of people um you know really refer to it often but let's talk about that what was it that made startups go global and then of course we had the mobile wave kind of crescendo as well yeah it's interesting if you basically look at every single

SPEAKER_14: metric um around the internet it could be hours spent online hours spent on work online commerce happening online uh the penetration of wi-fi penetration of mobile devices each one of those factors is up anywhere between two and over 10x and then you just kind of add them all up and we have markets that are online now that are you know at least 10 20 30 times bigger than they were maybe a decade ago if you really view that as translating men into the set of services that people use and the proportion of humanity that's online obviously is also ballooned dramatically in part due to mobile and purchase to internet penetration and so i remember writing a blog post 10 years ago that said that it's incredibly rare to have a 5 billion dollar company and incredibly rare to have a 10 billion dollar company and you know that happens once every five six years and therefore you know are people running ahead of themselves on valuations and other things and of course that turned out to be completely wrong in hindsight i don't think any of us ever expected to get to a trillion dollar market cap or almost two trillion dollar market cap company in the public markets this soon as well right i mean every aspect of technology has accelerated dramatically and there was um you know if you look at apple's revenue in the last few months i think they generated over 100 billion dollars in revenue you know that's an immense portion of just us gdp if you think about it it's bonkers when you think about

SPEAKER_06: how much money is being thrown off into their i think they have the largest hedge fund in the world

SPEAKER_05: basically um based on that amount of money and what would you even begin to do with it when you

SPEAKER_22: look at a company like apple what should they do with that money because they don't seem to be able

SPEAKER_05: to spend it you know they built a four billion dollar campus or something and they can't put a debt in it like that campus is the ultimate luxury like completely unnecessary to spend that much money

SPEAKER_14: they don't know what to do with their money yeah i'm actually surprised at the degree to which the fang companies you know google and facebook and uh netflix and apple and others uh how non-aggressive they've actually been in terms of acquisitions and to some extent you could argue well it's great they've really stuck to their knitting and they've been very focused as companies at least a subset of them have but the other side of it is there are these really massive verticals that they could enter around healthcare education and other areas that i think are not tractable that are not that tractable for startups but to a large player especially taking a little bit of a private equity plus plus growth mindset combined with technology you could actually create some pretty magical experiences for people that i think could help those systems in pretty fundamental ways and so i know that each one of those companies have except for netflix maybe have teams that are looking at some of these areas now but i do think that they could uh be very strategic and accelerate some

SPEAKER_03: of those activities for example why do you think it is that we we look at these giant companies

SPEAKER_05: they do launch new products on a regular basis like a facebook is very very apt to copy other new startups that we invest in certainly twitter now they seem to actually be um speeding up their pace of development with uh twitter spaces to compete with clubhouse and then they just bought a newsletter company so they do seem to be uh picking up their velocity yet we have on the other side everybody saying there's so much uh they're so big oh my god it's gonna be crushing innovation yet we are seeing more startups than ever more investors than ever more billion dollar companies

SPEAKER_08: more 10 billion dollar companies and now more 100 billion dollar companies congratulations to

SPEAKER_29: airbnb and uber for sort of hitting that 100 billion dollar mark which seemed unfathomable when we invested 10 years ago that 100 billion dollars in value can be created in just over a decade

SPEAKER_14: absolutely um and and snowflake and stripe are others that you know are hitting sort of the scale of just you know these incredible outcomes you know it's very interesting i think there's there's two points that you made that are worth touching upon one is the degree to which technology is transforming multiple aspects of society and therefore the surface area of what software is doing is so much larger but yet there's enormous white space between all these different incumbents and i think that's related to just the size of the markets as well as the scope of what startups are trying to do today um i think if you go back to the 90s microsoft was a much more threatening force to the average company because their os is really the only way that you could do anything and now with the internet you do actually have dramatically more openness in terms of distribution or other aspects of what you're doing which creates the ability to build scale in different companies um so i do think there's way more activity ongoing than we ever expected i think back to twitter one of the really interesting things that's happening is for the first time you see two companies that could potentially be credible threats to twitter in the form of clubhouse on the one hand because of their generation of both the new content format which i think is super interesting but also their reproduction of a social graph and an interest graph and i think they're generating one of the strongest interest graphs of any company in a very long time even though it's still a nascent service and then substack is coming at it from a very different angle which is fascinating where they're pulling all sorts of content that could have normally resided on twitter off of twitter and there's this i think broader societal movement from public open content that can be attacked by a mob or people getting upset at each other as colleagues so from the public square into sort of the privacy of your inbox and that's almost how you used to read the news in the olden days right you'd open a newspaper in your house and read it you wouldn't be yelling at people online about it no like you wouldn't just take the

SPEAKER_08: headline rip it out of your newspaper run into the middle street grab five people and yell in their face and make it super controversial and have nothing to do with the actual article right and so it is sub stack is basically like the twitter thread and the twitter thread was based upon blogging previously

SPEAKER_05: broke down into twitter threads and now it's it's popping over there when we get back from this quick break um i want to expand on valuations what we saw when we started our careers with five to ten million dollar you know angel seed rounds and now things have gotten very heated um and we see something like clubhouse which is confounding people that how is this worth 90 million dollars or 100 million dollars the founders sold some shares um in secondary before the product was even launched and then a

SPEAKER_06: billion dollar market cap i guess with two million weekly users it seems kind of crazy is it crazy is it

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SPEAKER_03: back to angel it's season five it's episode three and this season is about super angels and boy allowed you've had an incredible run what a 2019 and 2020 and 2021 is going to shape up to be pretty

SPEAKER_29: good for you too with i think stripe and instacart and coinbase three amazing companies that you were able to invest in let's talk a little bit about clubhouse and just valuations in general we do see

SPEAKER_03: weird valuations occur where they're outlier valuations and it's very hard to understand that one before this was a company called secret which allowed people to i don't know if you were

SPEAKER_08: involved in that one but it was quite notable because it allowed people to kind of anonymously slander people in there and share secrets uh with their address books it created like a and a social graph from your phone book as you remember and then on the series b they sold two million dollars of shares each or something in secondary before they were profitable but at least they were launched and then the whole thing blew up now we see clubhouse seems much more stable seems like

SPEAKER_03: a much better format and obviously doesn't have the toxicity of a secret but it was confounding to

SPEAKER_06: people let's take the two moments in time and tell me was that first valuation at that moment in time insane that is this valuation at this moment in time insane and then would you participate in this

SPEAKER_07: insanity either one the hundred million or the billion and then is this a sign of a bubble or is this

SPEAKER_14: just a unique edge case unpack it for us sure i mean at a high level if you look at every great company that truly became outsized every uh fundraise was viewed as insane at that moment and so facebook at 500 million oh my gosh what are they thinking that's insane and facebook at a billion oh my gosh i don't remember who did it was a graylock i think or somebody or maybe um and again it was insane and then yuri milner came in between five and ten billion and invest in facebook and that was insane and now it's a whatever it is 400 500 billion company and so and that pattern repeats over and over and over again and so i do think that the very best companies always look overvalued at the time and six months later they look very cheap in hindsight now the hard part is to distinguish distinguishing between the very great companies that deserve that valuation and everybody else who really doesn't and usually valuation multiples or how you think about the comparables for a company get set by the very best companies and then every other founder points at it and says well that's me too even if it isn't in terms of you know the market cap is deserved and so you end up with this bimodal distribution and venture valuations where a subset of companies are probably dramatically undervalued at almost every single stage of the company and then the the rest are somewhere between fairly valued and overvalued uh in the case of clubhouse i do think it's the first really interesting social product in a decade you know it's recreating all sorts of really interesting use cases that exist in other media today that's everything from uh talk radio to podcasting um panel events online discussions you know i think it's actually capturing an enormous amount of behavior that normally would be happening elsewhere and it's also democratizing it in terms of allowing anybody to effectively create a panel on the fly and build a followership and it's the first time in a very long time i've seen celebrities flock to a nascent product you know maybe the last one was snap you know it was basically twitter and then instagram and then snapchat in terms of the the companies that captured almost like celebrity mindshare and you're starting to see that as well on clubhouse so early in its life and so you know it's a company i'm very bullish about it's still very early we'll see sort of what happens over the longer run but you know i think it may end up being one of those rounds where in hindsight everybody's like wow that was a steal because now

SPEAKER_02: it's a 20 billion dollar company what do you think the monetization model will be eventually they've

SPEAKER_03: pre-announced or tipped their cards a little bit that they're going to have tipping um like youtube has or twitch or any number of platforms and i guess they get a percentage of that there's a take right there doesn't seem like advertising would work particularly well but maybe

SPEAKER_05: featuring your discussion but i said that about facebook i didn't think facebook advertising was going to work very well when compared to google but and it didn't on a per click basis you know like it didn't have the intent but it did have the reach i mean my goodness uh in terms of reach so it was less

SPEAKER_03: effective than a google search in terms of advertising but it just was more time spent on site etc so what do you think the monetization is going to be for it i'm curious you know i think

SPEAKER_14: there's two answers one answer is if you look at every single social product that i've ever seen grow rapidly at almost any given moment people said it was never going to be able to monetize and you have to remember that was actually said about google in the early days and google went through three different business models they tried to do enterprise search and they were selling these um you know yellow boxes that go on racks yeah exactly for like enterprise search and you know they went through two or three different iterate they were syndicating search and selling that to yahoo and aol and others and then finally they hit upon their advertising model and it worked magically and um you know if you look at uh twitter and you look at pinterest and you look at facebook to your point you look at every single social product before this everybody always said you can't monetize it and then it monetized just fine and often what you ended up doing is creating an ad format or alternatively a monetization format that fit the native uses of that product so for example at twitter they ended up with um promoted who to follow and then ads and that made sense in the context of their network with pinterest it's promoted pins sub stack obviously is doing a very different model with subscriptions to your point there's tipping and other things that you can do as well um so i think there's going to be lots of different things that could be monetization mechanisms on that platform and it really just comes down to what direction do they want to go in how does that fit with their community and their network and what's also just native to that experience and honestly i think it's one of those things that they probably shouldn't even worry about for another one two three four years as they really focus on executing and building out the user base because if they end up with with a massive massive service you can always monetize aggregations of people and so i think the thing they should really be focused on is building up the product let me ask you a somewhat controversial

SPEAKER_03: question and then we'll move on from from clubhouse but it is the you know most extraordinary startup i think in the last couple of uh months if not last year um a lot of the community was built

SPEAKER_05: with uh people of color african americans black americans and they seem to do that as a very deliberate strategy and bringing in artists and it seemed like it was a it was a very effective strategy and there's a lot of uh black people right now on twitter saying hey this is the you know fifth tenth time we built a platform whether it was black twitter was a phenomenon instagram and we don't own it and black people are not getting these valuations and there's no diversity in silicon valley and you know etc etc etc what's valid about that and what do you do you know and i don't

SPEAKER_08: mean to pick on clubhouse about this you could say the same thing about twitter you could say the same thing about instagram you say the same thing about facebook you say the same thing about whatsapp uh black culture is culture as far as i'm concerned it does drive things but this one seemed

SPEAKER_05: incredible and it's being pointed out now i've never heard it pointed out i've never heard

SPEAKER_03: such a wave of power users say why don't we own this or why don't we have any upside in this so

SPEAKER_14: what are your thoughts on that generally yeah you know i think um that happened a little bit with twitter too where the black community really contributed to its early growth and adoption and i think fundamentally a lot of services have been asking themselves what are ways that we can have the creators in the community really participate in the upside of it and at different times uber and airbnb and other companies that had these large distributed hosts or workforces or drivers or other things they also try to think through how can we distribute stock to them or how can we make them partial owners in what we're doing i know in the first round um the first institutional round the clubhouse did uh i think they really went out of their way to try and include uh women and minorities as angels in the company so their cap table would have diversity on it and you know i think there's a lot of actual crypto projects that try very hard to think about can you create a token that gets partially distributed to your community and how do you go about doing that how do you make mining or other things accessible and so it's quite possible that the crypto community has some of the more interesting thoughts and answers to this because they've spent so much time thinking about community enablement and empowerment and all the rest the other piece of it though is that people on clubhouse or other social products twitter etc are being rewarded by audience and audiences in some cases can be quite valuable and so i don't think that people who are participating in those platforms are receiving no value there's a lot of monetary value in being the top person on youtube or having a very large follower base on twitter and in some cases people monetize those and in some cases they don't um and so i i think it's one of those things that's ever evolving and i think people are really genuinely trying uh to be inclusive in many cases and the question is again like are there models

SPEAKER_54: that we can learn from yeah i mean it speaks to the broader issue of we have this incredible

SPEAKER_05: economy that's occurring i guess people are calling it now the k-shaped recovery where people who are who make income are going down and people who have equity participation are going up now you and i understand that implicitly because we've been doing this for so long and in the early days of uber you

SPEAKER_03: know travis used to talk about it all the time trying to get driver shares of uber and they weren't allowed to it's you're not allowed to give shares as compensation it's just a legal issue with

SPEAKER_05: the sec and the sec is quickly trying to address this i had hester on the on the pod uh this year talking about it or late last year and i know airbnb tried to give the host equity and they had to give up and then they just made a host fund right that would fund uh issues if they if somebody had a bad beat or the house burnt down or whatever they could uh do that so this does seem to be a fundamental

SPEAKER_06: uh issue issue that we need to solve uh for america so that people who are helping build these platforms and networks can participate in them i mean who would know better that clubhouse was a good purchase or airbnb or uber that a clubhouse host an uber driver or an airbnb host any one of those three would buy as many shares as possible last year or 10 years ago when those companies started and can you imagine what an airbnb host from year two buying shares at a dollar each would have experienced i

SPEAKER_57: mean they would have experienced what you and i experienced as angel investors yeah i think i think

SPEAKER_14: it's a broader question because i think if you look at equity participation in general because companies take so long to go public now there's also just less participation by individuals in companies when they're really growing or going through hyper growth and so if you go back to the 90s during sort of the first wave of the internet i think netscape went public after being in business for 18 or 24 months or something you know yahoo was a few years old amazon uh went public quite rapidly and so the public markets allowed people to really capture the upside of these companies where they then grew a hundred x a thousand x whatever it may be and so part of it may also be the degree to which companies with communities are willing to go public earlier and there's all sorts of downsides for companies to do that but there's also some upsides and one of the upsides may be actually the ability for communities to participate earlier in the life of a company which is a great great

SPEAKER_03: segue for us when you and i started there was this giant movement that made our friend bill girly

SPEAKER_05: lose his mind stay public longer stay private i'm sorry stay private longer stay private longer and he rallied hey get public it's good hygiene let people participate it's great for employees etc and now our friend chamath has brought back spax and we're seeing i had one desktop metal very you know young company i don't know if i've been an investor for three or four years

SPEAKER_06: and so exactly what you're talking about this earlier access to companies is starting to happen

SPEAKER_08: with spax when we get back i want to know how that's changed your thinking if at all about angel

SPEAKER_61: investing when we get back on angel all right the new year is here and it marks a fresh start for your small business and you are gonna need talent to pursue all these new efforts you thought about over the break so we're hiring a ton of people at launch customer support we need a new produce another producer for this week in startups we need another video editor for this week in service we need a community manager and i need people who are driven hard working and who have skills both hard and soft skills and you know where i'm looking for them the best place to look for talent that's linkedin jobs you know that linkedin is the greatest place to find talent they have more than 722 million members worldwide and let's face it we're now a remote company and i'm willing to hire anybody anywhere it doesn't matter to me where you live i'm able to post jobs on linkedin jobs with screening questions and they will get all of those job offerings all of those amazing career opportunities in front of the right people and you can edit this on your mobile phone or do it on your desktop bottom line linkedin is going to match your job with the right candidate so i want you to visit linkedin.com slash angel again linkedin.com slash angel and you can post a job there for free right now that's right they're giving everybody who hears my voice right now a free job listing some terms

SPEAKER_03: and conditions do apply of course because they're giving it to you for free linkedin.com slash angel to get that first free job posting because we need to get to work we need to do the work in 2021 okay let's get back to this amazing episode welcome back to angel season five episode three super angel alad gil is with us uh he wrote the amazing book high growth handbook go ahead and buy that right now pause the podcast go get the audio book go get the book buy both why not uh he was on episode 860 back in september 28 when he gave an incredible talk at the lunch accelerator he's the co-founder and chairman of color from 2013 till now you wound up getting the color.com domain

SPEAKER_62: again and tell everybody what that company does sure yeah uh color is uh population health and care

SPEAKER_14: delivery uh company and so they both have a software platform that's being used by everybody from the nih to uh california state in the context of covid for the testing lab that uh california has put up as the centralized testing lab um and uh it's really focused on building the software infrastructure for pop for um public health and population health and in the us when we went to the break we were

SPEAKER_05: talking about spax well this has been incredible although when i started to see my friend chamath doing it and i was like oh these are great companies fantastic yes certainly virgin galactic is a very speculative space company but space is a real category and they have deposits from people and obviously space tourism is going to be a thing is it going to be a giant thing a humongous thing a modest thing who knows but i think that's a reasonable bet for people to make and then i saw and i got really nervous nicola fisker a lot of companies which i considered like no chance of getting in front of the tesla elon musk train at the pace he's going out if you saw the model s today 500 miles and the cockpit looks like it's a a fighter jet like nicola and fisker will never produce a product that is five percent as good as elon's i think everybody who is in the know would agree so there's going to be some really bad product put out into the market as well but how is this going to change what you and i do and participation in these markets because you and i had to sit on our hands for a decade with a lot of these companies to wait for our payday and to get a return on investment that we could then put back into the market so talk to me about spax and how you think that might change things

SPEAKER_14: yeah i think um spax are going to be yet another tool that people can use to go public and i think it's great that uh chamath has done some really pioneering use in the use of spax in the technology sector they've been around i think for a couple decades before that more broadly um it's interesting because if you look at the crypto protocols those actually become liquid really quickly so for example in the last year both filecoin and cello two crypto protocols that i invested in um are now at least partially liquid you know they tend to have vesting schedules and everything else and so really it's core tech that had a long period where people weren't going public very frequently but i think that's shifting and i actually think it's generational i think people who started companies between 2008 to 2012 perhaps because of the facebook example where facebook went public and then i think you know the stock dropped a lot and then eventually it went way back up um i think that created a little bit of turbulence that others interpreted as a sign that you shouldn't go public and there was other reasons that i don't think are quite correct um that people were hesitant to go public but i feel like it's generational because when i talk to founders who've started companies more recently they're actually much more interested in going public than people who started companies 10 years ago and i think that's a really fascinating split in terms of just generational viewpoints in terms of cohorts of founders around what should and shouldn't be done you know lemonade is a good example of a company that went public after just a couple years and is saying we're going to grow in the public markets like people used to and so it's been fascinating to watch between specs crypto and then this generational shift and i think now suddenly it's popular again to run a a public company who knows what it'll be in five or ten

SPEAKER_03: years and it may end up being cyclical i think this had something to do specifically with gen xers

SPEAKER_05: having experienced the dot-com bust and then right after it having experienced the great recession one of them we were blamed for i don't think the tech industry was particularly um to blame for even the dot-com bust i think it was the bankers who just you know really overhyped a lot of this and now and then certainly the the real estate bust was wall street's fault again so i think both of those were really wall street's fault and so there's we just got hit with two hurricanes and now you're like i don't want to build a house i i don't i don't want to get hit by a hurricane it is actually kind of a reasonable thing but i think your analysis i've never heard anybody say that i think it's actually correct um because we had this when you and i were coming up that was the brass ring like take your company public ring the bell i mean it's a moment in time of course it's just a financial transaction but that's not true it is a really meaningful moment as a company

SPEAKER_08: to really clear market with the public markets it is something special is it not yeah i think so and

SPEAKER_52: i think also uh as the first yc companies went public and as more and more momentum happened in

SPEAKER_14: terms of companies going public people started to think oh you know companies are being celebrated for doing this founders are being celebrated some of them say it kind of sucks some of them say it's fine or that they like it and so when your peers start doing something you're like oh okay maybe it's fine and i can do it too i think an interesting analog was payments because after paypal got bought by ebay a lot of folks who were sort of director level at at paypal started talking in silicon valley around how hard it was to do payments and i think that stopped real innovation and payments companies for five or six years and then suddenly stripe emerged and square emerged and a firm emerged and all these amazing payments companies got started and now it's something that people know they can build again but there was a period where people claimed it was too hard and there was too much fraud online and it was just impossible and i think it was a similar thing where there was a generation of people who dealt with it really early at paypal and then it kind of spread as a meme is something that you shouldn't do and i think going public was kind of a similar meme like that and it was

SPEAKER_03: interesting too because y combinator now is 15 years old right started 2005 i believe so it's 16 years

SPEAKER_05: old it's going to be two decades old we were sitting here just three years ago and y combinator had zero public companies after a decade and people were starting to like go what's going on here like is this actually going to happen what they forget is how early y combinator was engaging with companies a vc putting money into a series a is getting in year two or three of the company typically

SPEAKER_08: y combinator was in year zero uh for companies airbnb doordash now public uh stripe and uh i think

SPEAKER_05: dropbox may have been the first dropbox was the first that's true that was four years ago maybe and so that that was the first and it was you know a moderate success like you said a 10 billion dollar company five billion dollar company was an amazing task at the time now it looks you know relatively small

SPEAKER_03: compared to the other ones but um they're gonna have you know quickly two dozen i think um given what's going on here do you how do you think about selling shares and exiting positions i know you've

SPEAKER_05: done well in your career so now that you don't i'm assuming uh have a pressing need to get that capital out how are you looking at this because you obviously want to reinvest money in other places stock markets on a tear how do you think about secondary you had must have had many opportunities

SPEAKER_03: with stripe airbnb and others to do secondary did you take advantage of secondary and how would you

SPEAKER_05: advise you know an accredited investor who's worth millions but maybe uh you know could use some cash

SPEAKER_03: to think about pairing their position or going long right yeah you know i'm very uh unsophisticated

SPEAKER_52: about it i think i have almost a forest gump style approach that is so honest thank you for that if uh

SPEAKER_14: if something just keeps compounding why would you sell out of it and so for example my intention with stripe is to just hold stripe for the next 10 years you know i think it's going to keep growing at a really good rate forever i hold almost my entire position of square which i invested in many years ago and just in public markets i've just sat on it and it's been compounding yeah i have square shares

SPEAKER_54: i sold half of them and i i feel like an idiot because they've done so incredible since going public

SPEAKER_14: it just keeps going and so you see these companies and you look at their tams and you look at their growth rates and you look at their rates of innovation and you think why would i ever not keep participating in that company now that means that i've remained incredibly illiquid throughout my entire career um and you know i always had a very large proportion of my net worth and startups even when i didn't have any money you know i put it all into startups uh i mean literally all of it you know two thirds or three quarters of my liquid net worth would go into these things and so um i'm very comfortable with doing that and just letting things compound and i you know i don't have a lavish lifestyle i don't live large you know so it's it's uh easy to do that if you don't ratchet up your expenses

SPEAKER_05: well i mean it's actually a really interesting yeah and i i think i had a similar approach too which was i i started selling 10 20 of my uber position you know and now i'm just like i i don't see a world in which uber is not number one at ride sharing and either number one or number two at food delivery and so why would i sell the rest of my position i just don't see it you know it's like your airbnb position is is there any way to knock airbnb out i don't see it i don't think it's going to happen i think that that company will be here in 10 years um how do you think about um actually we're

SPEAKER_03: going to go to break so this is the question everybody wants to know how do you pick winners

SPEAKER_05: when angel investors are looking at companies do you have your own playbook i have mine i want to hear yours and then maybe we'll trade some notes here looking back on our portfolios what patterns did

SPEAKER_09: we see about our wins and what patterns did you and i see about our losses when we get back on angel

SPEAKER_61: as somebody who's invested in over 250 startups oh my god has it been that many well i want to talk to you about a serious pain point that i see all the time with my startups too high of a burn they're just spending too much money and the runway is too short one of the things that people have spent a ton of money on these days is buying sas products great idea make your company more efficient but what if you're buying too many what if you're not using some and then you're wasting all this time integrating them together well there is finally a solution and the solution is odoo odoo.com slash twist that's odoo.com twist to get a thousand dollars in credits that's right one thousand dollars in credits odoo is a fully customizable and fully integrated suite of software that lets you build and scale your stack as you build and scale your business it's simple it's modular and you only pay for what you use and you can just add components as you grow you can do project management invoicing sales marketing automation help desk timesheets inventory and so much more for example their accounting products are perfect for anyone who upgraded from excel or quickbooks but doesn't want to break the bank with some of the more expensive options out there and they're going to give you a thousand dollars right now on your first implementation pack that's right

SPEAKER_84: not a joke they're going to give you a thousand dollars they really want you to try the product

SPEAKER_05: odoo.com slash twist check it out odoo.com slash twist wow what an amazing guest i want to apologize to the this week in startups audience for not having alad gil on sooner i knew i should have had you on when

SPEAKER_03: your book came out i'm such an idiot i apologize to you again we have to have you on a regular basis because you're candid and you've got so many uh insights and uh oh for those of you asking yes i am that is a blizzard behind me i am in tahoe and literally before this a lot i had one of the peak experiences of my life i was on the lift alone i went for the final run after i brought my daughter

SPEAKER_06: in for hot cocoa and it's a complete white out blizzard and i put in my dire straits alchemy and i went up the lift twice and i did two incredibly long runs and i could not see more than 15 feet down the mountain there was so much snow and i was whipping and i was just carving through this powder and i have been so losing my mind in this pandemic i just want to give a psa you can go skiing you could go on hikes you could go fishing do something outdoors go get that nature

SPEAKER_14: about i don't know you ski a lot a little bit i snowboard a little bit i think i'm the last person left in san francisco according to twitter so it's just me and i walk outside and the streets are empty

SPEAKER_06: there's nobody left so weird let's do a little before we go to like what we've learned uh in terms of picking companies let's do a little detour here we'll go on a little tangent how has the

SPEAKER_03: pandemic affected you personally are you an introvert extrovert and how are you thinking about 2021

SPEAKER_05: on just a very personal basis you know uh with the pandemic appearing hopefully to be in its final

SPEAKER_14: stages what do you think yeah no i mean i think ultimately uh we have somewhere between you know uh nine months and a year before we kind of wrap this up one way or the other and so i i do think that this is the year that we're going to be done with it in the western world or at least the i should say more broadly in the developed world and then i think the developing world will take a little bit longer or just sort of reopen it really kind of depends on how countries are going to look at things relative to vaccination and everything else um so i i think we're kind of entering the end game of it and to me as an investor that's actually one of the reasons i recently um co-led around in trip actions which i think is a fantastic company in the travel space and part of the thesis there was you know either through vaccine or through herd immunity the end is in sight for covid and um so i i think in general now is a good time to start thinking about what are other services that once all this is over are going to start sort of rushing back and what are the companies that executed extremely well in what may have been the toughest environment that those companies will

SPEAKER_55: ever face and so i think there's probably some really exciting uh companies uh out there who've

SPEAKER_07: who've managed the storm i i have to agree with you i think travel would be a great investment to make

SPEAKER_05: if the travel company survived by this point it's going to have a tremendous second half of the year and i've been doing this back of the envelope bath and tweeting about the pandemic and the vaccine

SPEAKER_03: deployment uh and comparing israel and west virginia and some of the smaller states here where we've gotten over 10 percent of those states you know with vaccines and are vaccinated and it really is dramatic we see the number of hospitalizations in israel is just plummeting and they took a very i mean listen it's a what is it it's a six million person country with four million israelis and two million uh other folks who live in the region four million folks is a lot easier than what we have to do 300 million but this has been pretty extraordinary when you think about the science behind it and now we seem to be really deploying these things professionally i don't want to make it political but i don't know if you watched

SPEAKER_06: the um this morning they did a a briefing and the briefing was about the science and the facts and the deployment and there was nobody people could say like i don't know and we'll get back to you on that and here's our plan and there was a plan and i was like oh my lord we can beat this thing we can yeah

SPEAKER_72: you know it's interesting 1.6 million shots yesterday 1.6 million shots yeah it's

SPEAKER_14: good it's good progress it's good to see the us um starting to kick into gear a little bit more on it i wrote a blog post um a couple weeks ago where i actually called up a bunch of people who are involved with vaccine deployment in israel and i try to deconstruct one of the things that were working really well for them and then what are the common things that people say about the us that are just false in terms of why the us is not working and so i you know i do think that um you know the israelis have done a very nice job of rolling out the vaccine and they're vaccinating you know two plus percent of the entire population every day now which is outstanding um if you think about it and it's a company that spends two percent two percent of the entire population is getting a shot every day they uh spend a third as much of gdp on health care per person and you know what fundamentally like new jersey is the same size as israel la county is the same size as israel like i don't think size is really the excuse i think the reality is they came up with very simple criteria which was age-based they didn't make it a complicated political thing of are you this essential worker that essential worker and we should you know reward and encourage essential workers to get vaccinated as the next set but i think essential workers also care about their elders and people with comorbidities who are likely to die so you know prioritize that people were actually at risk which is what israel did early open as many vaccination endpoints as possible and you know there's three or four other things that they did that really were effective um and so i think the us is finally starting to adopt some of those things and then you see velocity in the places where they're like okay simple criteria a good example i think in california they had seven different tiers or something like that for health care workers depending on how much time you actually spent with the patient and who should get prioritized in line versus somebody else in israel one of the people told me instead of coming up with criteria for a hospital we show up and we vaccinate everybody who works at the hospital and then we know we're done with the hospital and then we go on to the next one because we know eventually everybody has to get vaccinated anyhow so let's just get it done

SPEAKER_06: you know why politicize it but you got to be pragmatic about these things you know and and i think america has become so politicized because we're so soft and entitled and if you're in israel and you have bombs dropped on your city you know every x number of weeks or months you kind of look at the world slightly differently and you take a wartime stance to the vaccine people are dying it's a wartime situation when people are dying you have to do certain measures and there's no time for woke nonsense politicizing this i mean if you're over 65 give them the goddamn shot period and let's not debate who's essential because teachers now i don't it's so outrageous teachers fought unions to get the shots and now they're saying they won't go to school until the kids get the shots full well knowing that kids are not getting the shots are not even able to get the shots the vaccines are not rated for children

SPEAKER_52: yet they will be in 2022 it's infuriating yeah yeah no i think uh everybody is frustrated with how the vaccine rule that's have gone and there's a handful of states who've done it very well there's

SPEAKER_14: a handful of states that have really lagged and i'm excited to hear that you know we're now up to one and a half million a day and hopefully that goes to three million and four million and it keeps growing because you know if the us has 300 million people or you know 250 you have to get vaccinated as adults that means 500 million shots so even at the rate of you know one and a half million a day that's still a year before we're done with it and again if you prioritize the 20 of the population that's truly at risk which is really people over the age of 60 and people with comorbidities you can start thinking about reopening society more and more because if nobody's dying yeah if nobody's dying you know you

SPEAKER_12: bring down the death rate 95 you know that makes a very big difference it's yeah 85 of the deaths are

SPEAKER_03: over 65 and then the comorbidities of the other 10. it's almost nobody under 40 who doesn't have a

SPEAKER_05: comorbidity so we can literally get the economy back on track we could literally have people not committing suicide or opioid abuse or domestic violence all these other second order um painful

SPEAKER_03: suffering that's going on in society you know that has to end as well for sure keep it simple is what we need to do and i mean the other thing i heard was at the friedberg was talking about this on the all in podcast david friedberg said in israel they were when they when they get to the end of

SPEAKER_86: the day because you have to defrost some of these vaccines i guess and they go to waste within three

SPEAKER_05: hours they would if they had any of the shots left they would they were told go out on the street and grab people so imagine if in san francisco we just said you know at four o'clock any extra vaccines you

SPEAKER_06: could do and people are doing that in the united states the citizens of the united states are finding out where these vaccine centers are and they're waiting outside yeah and that's that's fantastic because

SPEAKER_14: the you have to remember everybody will eventually get vaccinated and instead of throwing it away you should give it to somebody because eventually that person will get vaccinated anyhow and there's no point in wasting it there's a really famous story in israel where to your point people line up at seven o'clock at night every night at the clinics and that's the line to get the excess shots and in some cases those lines get depleted and so the nurses will go out on the street looking for somebody to inject and so there's a great story where um these two nurses run outside and they see a pizza delivery guy and they start yelling pizza guy pizza guy come over here and they vaccinated

SPEAKER_102: of course the pizza guy is going to be a factor i mean how many pizzas is he dropping off that's that's

SPEAKER_09: heads up thinking right uh he's on the street so he's got the chance let's talk about when you look back do you have now after all this great success a thesis because that's what i get from a lot of members

SPEAKER_05: of my syndicate hey how do i pick companies etc i'll give you my advice after i hear yours

SPEAKER_09: but i'm curious when your friends ask you how did you do it how do you pick them how do you pick them

SPEAKER_52: you know i think um there's lots of different criteria but the summary of it is that i'm a very

SPEAKER_14: product market driven investor versus a team driven investor even at the earliest stages and i think most angels talk about how they really look for specific characteristics in a team or an individual and i think that's crucial right without the founder things will never work um but i actually index even more on the product market like does a product make sense for the market does the market seem like it could be big in some form or another and are there signs that this thing will get traction and if so that's when i invest and so i think that's the biggest difference between me and a lot of early stage investors in terms of what they emphasize yeah it's interesting why do you think so many

SPEAKER_03: vcs like to talk about this like characteristics of the founders is it like uh some sort of pandering

SPEAKER_108: kind of thing is it strategic signaling like oh we really care about like the driven founder

SPEAKER_14: yeah i actually don't know i it's possible for some people it's signaling um i think in other cases it's just they believe it right they really think that the single most important thing is a person and in some cases you do see these singular individuals build businesses that are bigger than others would have in the same situation right um and you know you look at the difference between where stripe ended up and braintree ended up and braintree is an amazing company but the stripe founders were special right or dylan at figma special or you can run through the list right there's all these sure sort of special founders but i think really the product market side of it is what gets you from like zero to a half billion or billion dollar company or in some cases bigger right you see these companies that just did a terrible job of executing and they're five ten twenty billion dollar companies um and then but some of those companies should have been hundreds and hundreds of billions of dollars of market cap and they weren't and that's just the difference between an uh amazing team and not but if you're in a if you're in a good enough market the market will pull you up

SPEAKER_05: beyond what perhaps you deserve let's talk about the total addressable market because you did say hey does the market need this and how big is that market and you know there's obviously market pull the the market is needs the product so much that they just can't not have it i mean i think clubhouse had this incredible market pull actually during the pandemic right we're home we're bored we're not going to movies we've watched every single thing on netflix it's like that's what i do i'm just like okay i've got every single netflix show done i've got every email done i've put my girls to bed i did

SPEAKER_03: my workout on the treadmill i played two games of chess maybe i'll throw on clubhouse and listen to something after my podcasts are done or whatever um how do you think about tam with these companies

SPEAKER_05: because i i don't think the tam for airbnb was hotels it seemed like it was something very different

SPEAKER_08: and i know for uber it was not taxi cabs so let's talk about tam for a second and especially with the outliers because you and i have made our careers at the end of the day half 80 90 of our returns will be two or three companies that's just how it goes so let's talk you know it's kind of interesting

SPEAKER_14: because um the i think one of the key things about uh companies have become very big is that their start they're not obvious and they're in markets that are not obvious because if it was obvious everybody would be doing it there's no opportunity left and so definitionally a great company has to be not obvious to begin with and so then you start getting into tam and what's the true total addressable market and i think people tend to underestimate tam for the true breakout companies right pretty dramatically and um i often think of it more as effective tam versus tam because people will show up and say i have this trillion dollar market which is a very rare thing for the actual market to be a trillion dollars right corporate travel really is a trillion dollar market but most things are really you know a 500 million dollar market or a billion dollar market and then the question is what portion of it can you capture um but there's also sometimes these other things which are adjacent markets that really turn out to be your market and uber is a great example to your point where it wasn't the yellow cap market it was the market for transportation within a certain geographic region right that was really the market um and you see sometimes big companies do this in really smart ways so the reason coca-cola entered bottled water is they used to only look at their market share in soda and they said look we're at 60 versus pepsi and others and we're winning and we're doing great and then eventually um one of their ceos said well what are we in terms of beverages like if you compare us to water and juices and all these other things and it turned out that they were less up less than a percent of that market so by redefining the market they redefine their strategy they start they bought descent or they uh brought out dasani and they used the shelf space and distribution they had to cross sell that you know they rolled out more and more products so they could gain share in the new market that they perceive themselves as having and that's the really hard part really hard

SPEAKER_09: thing to get right i just love that example because think about the blind spots that we build

SPEAKER_06: up in terms of what we think we can do in the world we sit here and we go you know what we we have done all we can do in in soda and it's like it's a liquid in a bottle what are the liquids in bottles are

SPEAKER_102: it's like there's tea and coffee there's milk there's juice uh there's a lot right and once you like

SPEAKER_06: release that from your brain you're like oh and and looking at uber i i was like

SPEAKER_05: in the early days travis would always talk about being a logistics company and then i i'm sitting

SPEAKER_06: here during the pandemic and i'm losing my mind i'm like why are they not helping these small stores that are selling these other that are not restaurants but there's a small store it's got inventory there's a uber driver sitting there they got no passengers and there's a candy store and there's an ice cream store and then there's a walgreens if i want to get something from walgreens like i'll do a walgreens right obviously instacart has some of that but people need to really open up

SPEAKER_08: their minds and just be a a little bit more open-minded about what the possibilities are correct

SPEAKER_62: exactly and that's why i think when you look at these very early companies it's sometimes very hard

SPEAKER_14: to extrapolate what they'll become and as long you know sometimes the proxy that i use honestly for market size is growth rate because if something is compounding at a very fast rate it suggests it's actually in a very big market even if you don't think the market is big and if something is compounding or growing slowly it's probably in some niche or there's something wrong with the product or distribution isn't quite working but it's it's kind of stuck somewhere right and it could just be market size and so for me when i look at companies sometimes i think oh it's growing this fast and everybody says it's a small market but it's impossible for it to grow this fast if it's a small

SPEAKER_03: market it has to be a big market it's such a good point you use the growth rate to determine the market

SPEAKER_05: size and when you see a company that's growing 20 a month and if you know the rule of 72 you know divide the growth rate uh for the period by 72 you get how many periods it takes to double so if you know in the early days of uber it was double it was growing 20 30 a month which meant every two or three months it would double in a city and i think you probably have seen other situations

SPEAKER_12: like that correct yeah exactly and that's when you're like okay no matter what people say about

SPEAKER_05: market size this is a really big market is amazon not the most amazing company in this regard like they hit a trillion dollar market cap and they still are growing they're still growing it's crazy

SPEAKER_62: yeah it's amazing to sustain isn't it it's hard to sustain but i think also the thing that people

SPEAKER_14: underestimate is the degree to which companies particularly if they have a consumer angle tend to accelerate with scale versus decelerate and so i think that's you know i don't i don't remember exactly where it is but i think there's often an elbow around five or ten percent penetration in a given market where consumer products go faster why do you think that is i think sometimes it's brand recognition it's liquidity it's sort of organic spread i think uber accelerated over time right

SPEAKER_54: it started growing faster yeah it would actually did start growing faster because as david sacks would

SPEAKER_05: say it had that real world virality where somebody would take it out and they would have a car and the person would say i'll give you a ride in my uber and they'd be like what's uber the person

SPEAKER_03: would show them the their phone and be like what's a company that you invested in where you just thought my god this is going to change the world to be huge and you know maybe it didn't and it maybe underperformed and what did you learn from that and then give me the converse something that

SPEAKER_125: just overperformed so dramatically that it changed how you think about the world

SPEAKER_62: yeah i mean there's lots and lots of companies that i've invested in that um didn't end up as

SPEAKER_31: big as i thought they would be and i don't want to um oh yeah that would be we don't want to give a

SPEAKER_06: yeah well give us a composite of one you know without saying the name of it like a composite of

SPEAKER_14: one or two that why you think they stalled out yeah i mean in one case um i think they really did have sort of a limited tam and they never really bridged into other things and the original vision was it was a sas company build out a set of customers and get a big enough footprint you can start cross-selling other products and you can launch these other things that are adjacent and they never did any of the adjacencies they just kind of really stuck to their lane and so in that case it was both a tam or market size issue as well as an innovation issue and one thing that i've noticed is that companies that tend to innovate early tend to continue innovating late companies that tend to innovate late never really innovate and so you see this pattern over and over again in companies right and you can imagine your own examples of the companies that never really came out with a product too and 10 years later they still don't have a product too right um and so i think that's a very interesting pattern and you want to encourage companies that once their core product is scaling repeatedly and they have a great sales motion against it and they have a clear product road map that's probably the moment that they want to add a product to and the advice they're usually given is stay focused on your corner matter what and don't get distracted and your core market's big enough and that's true but you need to build that muscle of innovation and if you start saying no all the time even though you have a stable base for product one and stable base also probably means at least tens of millions of revenue it's not like you're at 200k and you're growing and you're like i should do product too um but at a certain moment you should really start the next thing and that's what google did and it was quite controversial internally right when they started doing gmail and they started doing different forms of search and then chrome eventually they got the chrome and other

SPEAKER_131: things i mean they did a dozen really interesting things and then the acquisitions youtube uh android

SPEAKER_14: i mean these were big swings yeah and and you know android alone is worth everything that they ever wasted money on in terms of like bad acquisitions right same with youtube right i mean absolutely absolutely they have like half a dozen things like that right that justified every i think youtube and

SPEAKER_03: i'm trying to think of the greatest acquisitions of all time youtube chrome whatsapp

SPEAKER_05: instagram i think whole foods for amazon could wind up being one i know that's probably

SPEAKER_13: controversial whatever but it could be there's a lot of things too that were acquisitions for example for google that aren't talked about as much applied semantics android would be one android be one applied semantics right that was the original semantics um the maps deep maps was an acquisition

SPEAKER_14: that's true yeah and deep mind uh deep mind um and you know you look at some of the other companies that are really acquisitive i'll give you a facebook example that i think was more important and just doesn't get talked about very much uh which is a company called snap to which was a um a mobile application for uh the developing world that had multiple social products on it and it was a way that a lot of people access twitter or facebook or other products in latin america or other places at the time and uh facebook bought them made them part of their growth team ripped out every app except for facebook and just distribute it across every carrier they could get it on and they grew i think they i think they added like 100 million users just this was the light i think chamop worked

SPEAKER_63: on this too because this was like the lightweight version of facebook that would work on older

SPEAKER_11: phones and sip data and something related i think there was the thin client stuff and then there was

SPEAKER_140: this client turned into but the same focus right the same focus make it more available the guy who

SPEAKER_14: was the ceo of that ron mcquevey eventually ended up at lyft and you know he was a svp at lyft running a big chunk of that company but it's one of those things that nobody talks about and nobody i think may have even recognized but it seems like it actually was pretty important right and there's a couple other acquisitions like that like facebook also bought an email scraper company so that they could accelerate virality and growth like there's there's a couple of these that they did in a very smart

SPEAKER_63: way that were very quiet and enabling tech is really amazing what why is that do you think apple's got

SPEAKER_03: to change their approach of maybe making some big acquisitions i mean they are just so it's not built

SPEAKER_05: here we don't care you know like we will build it ourselves like they could have bought tesla for 50 million 50 billion you know they could have had a model 3 model y whatever cyber truck in every apple

SPEAKER_52: store i mean it would have been incredible yeah yeah i honestly i don't know i mean it's worked out pretty

SPEAKER_06: well for them yeah it's hard to argue with it but it's it's one of these things where you don't know how much more it could have worked out like imagine if they owned you know instagram or uber or you know pick the company like yeah yeah the counterfactual is really hard to guess on these things and that's

SPEAKER_14: the word i'm looking for the counterfactual yeah and buying tesla could have been it i mean um google could have bought tesla too like multiple parties could have bought tesla at a given moment looked at

SPEAKER_05: it too google i think larry really wanted it but i guess waymo yeah when do you think soft driving

SPEAKER_03: cars car without a steering wheel will drive you from san francisco to uh you know tahoe just i'm in tahoe yeah when will a car with no steering wheel drive you in the snow on it with no

SPEAKER_05: steering wheel so there's no steering wheel that's why i'm trying to make it so that there's it's not like we're talking about an autopilot situation or a safety driver let's talk about real like level five like you can go to sleep there's no windows on the car no driver when is that going to happen give me a over under we'll make a little bet here me and you a little bet yeah yeah you set the line

SPEAKER_14: i'll pick over under yeah you know so the hard part for me on this one is i think that you need a discontinuity to make that happen and i think when it happens it happens really fast um it's almost like a technology discontinuity right and so what does that mean for people who don't know like a discussion yeah so basically um every once in a while you see something that just changes the capabilities from a technology perspective so one example uh for that would be machine vision right suddenly you can unlock the your phone with your face and that's based on a technology breakthrough around um neural networks or ai that can allow you to do really good vision and machine vision and that really got kicked off i think around 2012 um with the famous sort of paper slash approach and then it took like five six seven years to substantiate but that was the breakthrough moment in terms of approaches to to that class of problems and so every once in a while you have these breakthrough moments and it could be a new sensor type it could be an algorithm it could be a chip or semiconductor that specifically helps you with inference for self-driving or other things like that but i do think we need that moment and self-driving but then once we have that i think it'll suddenly spread really rapidly everywhere because it's going to be such an important societal shift and technology shift because it enables so many different things so i think when it happens it'll happen fast but i don't know when it's going to happen what's your view on it you know it's having drove on autopilot

SPEAKER_05: for six years i think i've had it you know from level two to now which is like i think level three ish it feels to me like on a major highway if we could make a major highway for self-driving cars and then in three four or five years we could say hey the 280 is for self-driving and you could be on

SPEAKER_06: your phone or you could be watching netflix but only on the 280 because when i ride the 280 in san francisco and i am on autopilot in my model y it is rock solid i i have not seen it have any mistake and i see people all the time on their phones doing their lipstick eating a slice of pizza doing starbucks and texting up and down the 280 when i drive i look in these people's you know windows and i see them not i see people texting like this you know with their hand in front of their goddamn face and i'm just like please put autopilot on we all know you're texting so i think it could be as soon as three

SPEAKER_05: four or five years on a 280 on the five down to la but i think for city streets i i don't like the idea of you know in rolling hills in tahoe you know this technology has too many factors and then in a city

SPEAKER_14: too many factors yeah and that's why i didn't have a time frame either yeah i think it's yeah it's more

SPEAKER_62: than two it's less than 20 but i think the place where yeah i think that's a good way to put it

SPEAKER_14: yeah i think the place where we're going to see the biggest impact of self-driving soonest is on long-haul trucking or point-to-point trucking without the city driving and that's where it's kind of a no-brainer but um and i think that's what's going to come first versus you know you're going to get into a car and i'll just drive you somewhere in the city well and you could also put

SPEAKER_05: them all in the right-hand lane they could have a big sign on this is self-driving they could be you know doing 55 miles an hour in a caravan and there could be a driver in them uh that is asleep right so they could go 24 hours the driver could be asleep taking a nap in the cabin something goes wrong may come out and it could be remotely controlled because you would know on that highway you have 5g the whole way so you make that infrastructure investment that's why i think in china will exist the thing i think is going to happen beforehand is i think within five years we will be able to take a veto from san francisco airport you know to the marina or from the marina to tahoe eventually like i think vetoes are much closer than people think now there will be some safety issues but over water you got to think eight of those propellers you know those rotors you lose one or two it can safely land in the water it can safely land anywhere they're much safer than helicopters and they're not loud and if they're over water nobody cares so i think this like

SPEAKER_03: they could in a city like sydney or the bay area just do extraordinary are you invested in any of them

SPEAKER_160: kitty hawk yeah i'm not yeah i think it's i think it's a really cool area but i'm not involved with any

SPEAKER_05: i mean i that would be my dream is like i think actually that'll become the new status symbol is people will be living when we get whatever this new time is going to be post pandemic people will be living you know in tahoe or you know wherever pick a place santa cruz and a veto will just take them up into the facebook office or whatever and or san francisco that will be like the new status symbol as we wrap here you're one of the uh last people in san francisco san francisco is collapsing under its own like insanity and stupidity um how long have you been in san francisco are you thinking of leaving and what do you think the slide is going to look like because it's in a it's in a debt spiral as

SPEAKER_164: far as i can tell in terms of real estate tax revenue chaos and management what's your take

SPEAKER_14: yeah you know it's interesting because when you look at clusters for every industry um they exist right there's hollywood for movies and for finance you'd go to new york or connecticut and you know if you wanted to go into the movie business people would always tell you go to hollywood they'd never say go to denver you know and technology is the only market where i feel like people give you the advice of oh you can go anywhere now and it's fine and you know you can write a movie script from anywhere you could edit it from anywhere you can shoot it anywhere etc etc i think there's a lot of analogs for finance and movies and almost any industry now um so i do think the bay area will continue to be one of the major tech clusters i think it'll be a little bit reduced from where it was before and i'm saying the bay area on purpose i mean you know beyond san francisco uh this will continue to be a tech cluster i think it'll be reduced relative to pre-covered and a lot of the really strong founders i know are spending a lot of time in la now some of them are in colorado if they have families or um utah they're doing some sass stuff uh and some are in new york um and so you know i do think that some of those places will benefit from um founders just deciding to stay i think a bunch of people will come back just because of the network affecting clusters here and then the question is to what degree do they stay in san francisco versus start branching out into the east bay or you know strike move to south san francisco or other sort of parts of the bay area yeah sacramento

SPEAKER_63: etc yeah it's it's pretty phenomenal i think it's a five to ten year slide for san francisco and then

SPEAKER_03: maybe it hits some sort of bottom in terms of the price of a two-bedroom apartment and then it will start to look for you the thing i'm fascinated by is young people don't want to come here anymore and you know five years ago uh and i've only lived in san francisco i think well in the bay area now i live a couple years in san francisco a couple years in the burbs in the peninsula but in those six years

SPEAKER_05: it went from everybody feeling you needed to be here to people saying don't come here especially the investors saying don't come here because you're going to blow my money in six months instead of 18. take this money and go back to canada austin san diego wherever um it is the best practice right it

SPEAKER_45: was just too expensive for this period of time yeah and i think also is because people just

SPEAKER_14: remained in san francisco like there's cheaper places in the bay area outside of sf depending on you know where you're willing to go um and so we'll see how it all plays out i mean 10 years ago the real epicenter was in san francisco it was palo alto right yeah facebook was and that's where

SPEAKER_12: palantir was and you'd start a company and you were in mountain view or palo alto you were on

SPEAKER_167: university bull i mean university avenue it was even more concise than that like be on university

SPEAKER_14: plus or minus two blocks and so that was the real epicenter and that was the cluster in the cluster and then it moved up into san francisco over the course of 10 years and the question is where does it move next and i think the biggest cluster will continue to be in the bay area somewhere it could be sf it could be oakland it could be somewhere else um i think la and new york have accelerated and if you look at tech market cap even pre-covid um you know every year or so i i do an updated blog post on like where is all where all the unicorn market caps right and it's a little bit backwards looking but the bay area has been pretty consistent at about half of all the us space market cap and about 25 percent of all global unicorn market cap but la was starting to catch up a bit in part because of spacex just being so big but in part because of about a dozen other unicorns new york was accelerating as well um and so i you know i really do think that we're going to end up with a little bit of a multi-cluster situation where the primary place to be will still be the bay area and then la and new york will be two interesting places um and we'll see if there's other cities that start to take off i mean there's stuff happening in colorado and utah there's a lot of noise around austin and miami like you know my hope is that there's like a dozen different tech clusters yeah you think work from

SPEAKER_15: home stick work from home sticks with us right that's you know that's staying i think it's

SPEAKER_14: partially staying i think what we're gonna end up with is a lot of companies where they say um two or three days a week everybody has to be in the office on those same two or three days and there's more flexibility on the other days and then there's going to be remote first companies if you look at the unicorns who've decided to go remote first all of them are in the bay area even though it's only half of the market cap so there's only a one in 32 chance that that's going to be the way it is right just if it was a twin cost of like is the company in the bay area or not so i think that's reflective of governance um particularly in sf because five of them are in sf out of six companies

SPEAKER_11: in the top hundred yeah so the stripes the twitters the squares i just looked at the private ones

SPEAKER_14: and of them all six that decided to go remote first as of a month or two ago are all in the bay area with five of the six in sf so is that a sign of people going remote first or is that a sign of sf

SPEAKER_86: yeah it's a combination it's like it's so painful to be in sf it's so painful to commute it's so

SPEAKER_05: painful to pay forty five hundred dollars a month for a two-bedroom that their employees are so delighted to work from home that i think it's going to be very hard to compete for some top talent because once that talent's like you know what i'm really enjoying my lifestyle in this place i'm going to find a place that's remote so then what is this is i think the game theory right like

SPEAKER_08: if you're i i saw reed hastings said netflix is going back to offices period but we don't believe

SPEAKER_05: in this bullshit like no way we're all going back to offices now what if like five of his key lieutenants say you know what i'm going to go work for zuckerberg or i'm going to go work for elon or i'm going to go work for wherever because they let me work from home and come like two days a month

SPEAKER_13: or whatever like what's he gonna do the people who start the massive companies aren't optimizing for lifestyle that's true too that's true too yeah they're dogged yeah so i think that people who

SPEAKER_14: made it optimize your lifestyle yeah they optimize for taxes and optimize for all sorts of things i remember you know when i first got started and i had no money and all i had was like ambition and like wanting to do something great you know i i didn't care about taxes because i didn't have any money like it didn't it didn't impact me um yeah and you know similarly i wanted to be around to other people who are ambitious and wanted to do great things and make a dent in the universe and build a great company or do something societally important and people like that tend to cluster and so the question is where will those people be i don't care where the well there is a breaking

SPEAKER_06: point i think for i mean i'm guessing there's even a breaking point for you if they you know increase

SPEAKER_05: the taxes to three percent and put a one percent wealth tax it made you value all your stuff you'd be

SPEAKER_14: out right i mean that's a hard out sure yeah and i i think that's that's um i think a lot of people will leave under conditions where they just feel like it's unfair in terms of the taxes they pay relative to the services they get right if california or san francisco was a utopia where they had great public education and there was real investment in infrastructure for society and you know

SPEAKER_03: because it was not allowed to be dealt openly and taken openly like that i mean that to me is the big tragedy i don't know how we could allow fentanyl to be i mean it's so dangerous it's just so dangerous and we we just treat it like it's a economic issue or an injustice issue it's like are you people not

SPEAKER_06: paying attention this has nothing to do with the homeless surge or or you know uh it's a fentanyl surge there are people overdosing on fentanyl like this is a super drug it's not like a normal drug and i'm not saying that to be hyperbolic like there are ambulance drivers and you know police officers who've died confiscating fentanyl because they just happen to get a couple of specks on their body

SPEAKER_45: like in into their eyes or whatever it's really sad yeah i know it's a really you know uh tough

SPEAKER_14: situation and i think fundamentally it all comes back to like the trade-off in the environment that you're in and um you know fundamentally i think you know back to the original uh question people who want to achieve great things who are ambitious and driven are going to end up clustering and the question is where will they cluster in the short run i think it'll still be the bay area as sort of the preeminent place in the states and then there'll be other places and of course there'll be cloud-based companies and all the rest of it right but i think fundamentally hungry ambitious people like to spend time with each other in person and that means yeah they're going to be clusters i mean look

SPEAKER_03: at what's happening in miami and austin like the people are clustering already you know joe rogan and elon and keith roboi and shirvan and other folks in miami like they're going to create their own little clusters

SPEAKER_05: right and each of those super when you have a super node move like you never see super nodes move right so like to have keith roboi move it's like oh well who's he going to bring with him he's a super node like he's connected to everybody and even if those other people don't move he still brings all those connections so it's almost like moving a giant fiber back end you you know you know to another

SPEAKER_184: location it's like oh everybody's got high speed internet now this place works he's like high speed

SPEAKER_14: internet for miami yeah i think uh he's obviously an important part of the ecosystem and i think he's done amazing stuff the people i worry about or the people i'm tracking most is the next generation of

David Friedberg: founders because that's where the big companies will get built exactly if he's able to attract them

SPEAKER_33: then it will go to miami if they decide that they really want to be in la or they really want to be in

SPEAKER_14: south san francisco or they really want to be in you name the place that's where it really is going to end up happening and you know access to professional services and capital and customers and executives and all that other stuff is going to be incredibly important for those

Chamath Palihapitiya: companies to scale and right now that still means largely the bay area or the bay area and two or three

SPEAKER_03: other places what a great episode la gil uh follow him on the twitter e-l-a-d-g-i-l uh if you want him to invest yeah you probably uh should email him and send him a chart he likes things that are a great

SPEAKER_63: product right great product great customers good start yeah great product great market great product great market okay i'm great product great customers you're a great product great market i like it all right and we'll see you all next time on angel