SPEAKER_00: welcome everybody to episode 101 david sax is on vacation sitting in brad gerstner from altimeter group welcome back to the pod brad how you doing it's good to be back good to be back i mean first

SPEAKER_03: first you guys uh you know tilted friedberg and now a little bit on uh sax is it's getting attacked on twitter and so you roll me back in when yeah we've got a little problem whenever the brigadoons come

SPEAKER_09: out brad gerstner comes i think sax will be okay but shout out to sax you know who probably hates the term brigadoons the nitwits that are in the brigadoons uh the brigadoons it's all going to end

SPEAKER_14: at some point because i think the brigadoon new ownership at twitter is going to change like the whole spam that's a rogers and hammerstein musical right for you doing yeah yeah yeah

SPEAKER_18: yeah but now i think brigadoons could stick i don't i've never heard anybody use that for the

SPEAKER_17: calling the twitter mob the brigadoons is a good new thing i like yeah it's pejorative it's funny it'll it softens everything a little bit tones it down i like it it feels goofy it completely disempowers

SPEAKER_22: them they really want to be taken seriously but they're just a brigadoon i mean to be a brigadoon

SPEAKER_24: though you have to have four or more accounts and you have to reply to each of those accounts as if it's

SPEAKER_22: an actual conversation can you be a solo brigadoon yeah when you retweet something as a social justice warrior as an example you're trying to join the brigadoon ah got it it's just a different brigadoon

SPEAKER_32: it's a bigger jakel are you're sometimes a brigadoon right you're part of brigadoons jakel

SPEAKER_27: no i'm not part of anybody you're totally brigadoon come on i do not no i never i've never

SPEAKER_37: bring a done i mean i may have done once or twice for my burner account but that's it i mean

SPEAKER_18: well anyway uh kanye west can't leave uh an amazing career alone and he is going to buy parlor which apparently candace owens husband george farmer had created so he's gonna buy his own social network if you don't remember parlor is like a really shitty version of twitter that never

SPEAKER_50: seems to have worked or been stable it crashed the first 10 times i used it miraculously this

SPEAKER_52: steaming pile of garbage had raised 56 million in funding and kanye is on a social media media tour

SPEAKER_50: saying horrific anti-semitic stuff he seems to be having a mental breakdown again uh there's a big discussion now i guess should people be platforming them to the point um that he's doing three four or five hour interviews with people and it does seem like it's acute mental illness breakdown i don't want to like diagnose anybody uh from afar here and i'm not qualified you just did well i mean he has

SPEAKER_12: been public about his struggles with mental illness it's not a huge leap for any of us that have had

SPEAKER_60: family members have manic episodes i mean this is clearly a manic it's pretty much right out of the

SPEAKER_50: textbook so my question for you guys is what you have somebody with great wealth great creativity he's obviously a savant in so many different categories with a huge social media following plus money plus fame and then you add social media to the mix which is an accelerant and then all of these you know tucker colson and every other publication every podcast using this moment i think in a way to kind of i don't know get ratings off of this train wreck i find it abhorrent to interview somebody when they're in a manic episode like this i'll be totally honest i wouldn't do it what is your take

SPEAKER_66: on this i have a family member a blood relative that is in severe mental health crisis if the emails

SPEAKER_55: and the text messages that this person sent were public you you i read these things and they've

SPEAKER_66: severely severely impacted me to the point now where i have like a rule that when they're in a manic episode i just kind of harvest them and archive them just in case something bad happens but i can't even take the effort to read it and because it takes such a toll and then i feel really guilty because i think maybe there's a something in there where i could be missing something so this is what when you're in the middle of a of of of a severe episode this is what the family and the loved ones of that person is also dealing with so i have i have no idea what's happening with kanye but what i would tell you is when you're in a manic episode the more the the thing that you need is for the people around you to try to step in to help you and it's really freaking hard and i can tell you that in in i've seen this person in my family say and say things and do things that are just so beyond the pale yeah and it's part of when they're in that moment and the whole goal is to try to get them out get them back on their meds get them rebalanced it's a really really complicated thing to deal with well look i mean

SPEAKER_73: the guy the guy's buying a social media platform i think it continues to support the point that i've made a few times which is i don't think that anyone has a monopoly in social media networks we've seen every couple of years uh competitors emerge people proclaim monopoly those monopolies get uh destroyed by the next thing you know from friendster to myspace to facebook to instagram to snapchat to tick tock and i think that the the reality is the users of those platforms ultimately coalesce around a set of standards they want to see happen on that platform and those standards become kind of the editorialized or produced model for how that platform should operate because that's what the users say they don't want anti-semitism they don't want what they would call kind of challenging an institution they don't want fake news whatever the the classification is there is an editor or an editorial board that editorializes what is and isn't allowed to be said on that platform and ultimately there is a fringe voice or a voice that feels unheard or feels like it cannot speak on that platform and what we're seeing now with i think elon acquiring twitter and kanye acquiring parlor and generally a number of kind of emerging networks uh like uh what's it called rumbler as an alternative

SPEAKER_75: to youtube it's a really indication maybe what's it called rumble i think rumble yeah there's no

SPEAKER_76: i think it's it's a really clear supporting fact that there are going to be alternatives and that

SPEAKER_73: these what we thought were monopolies and what kind of became digital town squares and almost infrastructure are really just application layers they're editorialized and there are going to be competitors and i think there are folks that want to have a voice that feel like they've been editorialized out of the existing networks like kanye like trump like elon to some degree and they're um you know those that have resources are changing that and i think that speaks to a really healthy competitive market so having folks like kanye step in and try and create a new platform that has alternative voices long term i believe in freedom of speech i believe that we should have alternative voices but i also believe that consumers and customers should be able to choose what platform they want to be on based on the editorialization that happens on those platforms and i do believe that the owners of those platforms should have their own rules because it creates a different differentiated

SPEAKER_79: product jason is that what you were hoping to get comment on or this idea of the media feeding frenzy

SPEAKER_80: um feeding on kanye's mental breakdown yeah i was talking about the media frenzy that's the thing that i think is pretty abhorrent here in fact youtube just pulled a bunch of the interviews he did

SPEAKER_14: recently because there's so much anti-semitic stuff in it and you know when somebody's in a mental breakdown like this which i think it's pretty clear he's in you know they they do this behavior and of course

SPEAKER_50: it's hurting them it's to your point you know i'm sure it's hurting his uh kids or or ex-wives

SPEAKER_83: or ex-wife and you know can i ask that it's gonna blow back what's that can i ask who do you think

SPEAKER_76: is to decide that because he's done interviews where he said i have episodes and those episodes actually provide me with creativity and really yeah yeah i think it's up to the post the person who is

SPEAKER_14: the host of that show who has to make an editorial decision and so tucker carlson's going for ratings or if somebody else does it and they want the ratings because kanye's a big name that's you know i get it he's he's a great get right and if you're somebody who likes to interview people that's like a lifetime get that could be the get that you know makes people learn about your podcast i just think it's unethical to do that when somebody is suffering like that to then feature them and to platform them in order to get your own ratings that's a personal decision let me let me ask you a

SPEAKER_12: different question though so i wouldn't do it would you hold him accountable for what he said

SPEAKER_14: well this and this is the nuance you know and i think we do have to think about that because anti-semitism uh exists in the world he's got a big fan base that means if he's got people in his fan base who are also having a manic episode they could then be inspired by what he's saying to do something horrific and cause real world harm and and this is where you know the accelerant of social media i think is particularly dangerous jamoff you know in the old days if somebody said this stuff on a talk show maybe they don't air it where they say it it's in the newspapers but when he can have a continuing dialogue across many podcasts a week he's done like 10 podcasts in the last week he'll he'll go on air with anybody and then he has whatever tens of millions of followers he's reaching hundreds of millions of people all you need is one person who's mentally ill to then go do some thing in the world that we've seen happen many times and that's what i'm concerned about you have to understand your it's the law of big numbers basically chamar there's a large number of people

SPEAKER_79: yeah just to give you a sense of it you know when this family member of mine um you know we've had we've had to have interventions we've had yeah police we've had um the government get involved in canada we had had their driver's license taken away then i mean it is an unbelievably complicated

SPEAKER_22: set of interventions and i am so thankful that she doesn't have massive social media awareness because it would just be chaos and i would hate that you know because of their association to me that this person gets more attention than they should in a moment where what they really need is help

SPEAKER_79: and i think that that it should be the governing principle in moments like this where if a bunch of your family members or your health care providers or whatever can raise their hand

SPEAKER_22: and say hey hold on a second this is completely off the rails you know freeberg to your point i don't think that editorial freedom matters in that point i think there's just the more humane idea

SPEAKER_79: around get this person off the airwaves and like allow themselves to get out of get out of that loop settle down yeah yeah and and typically what happens is that you know these folks at lee again and just

SPEAKER_22: in my experience will have titrated a medicine well and then when that titration fails their ability to regulate their emotions fail and this is the loop that they enter and you know you really have to find a way of like taking all of these mechanisms off the table so that they can re-regulate themselves and i think that as a society we have to sort of move towards that so that if you know family members can call twitter or facebook or instagram or whatever and say listen you're the doctor you know here's a here's the doctor's note like you have to be able to shut this stuff down because you have to mute all of these other things so that this person can then get back into a mode where they re-regulate that should be the priority yeah compassion for the person yeah it's not it's not forgiving what they say but it is having maybe a little bit more compassion in that

SPEAKER_73: moment to get them back to their to their true self i think this one's a little easy to say hey kanye's having a mental breakdown because he's talked about mental illness in the past it's a lot harder to make these you know supposed determinations as a reporter or a podcast host

SPEAKER_107: if someone says something crazy and then it's easy to raise your hand and say hey they're crazy cut it out or there's some mental health issue going on here but freeberg if he's not if he's not having

SPEAKER_50: a mental issue right now then he is a horrible human being who is an anti-semite who is spreading just the most vitriolic horrible things you and tropes you could ever imagine at a time when you know uh there's enough division in the country and somebody could get hurt you know uh so either in either

SPEAKER_14: case his accounts have to get paused if he's going to say anti-semitic stuff on them i mean that's that

SPEAKER_73: i mean there's there's really clear guidelines across all these platforms on what's inappropriate

SPEAKER_114: and certainly i think folks will start to adhere to him i guess if i had anything to contribute i mean i think chamas said this well about a mental health angle but what i would say is i actually think that the social platforms have done a reasonably good job the fact that he's buying parlor i think is evidence of the fact that there actually is an editorial layer yeah that's doing a reasonable job it's a tough decision there's always going to be a long tail of podcasts somebody will you know somebody will go grift off of uh you know an episode or whatever but i think you know a few years ago we were talking about no editorial standards and i think today you know across these platforms obviously there's a tension there's a tension that's existed for a hundred years plus around free speech on these platforms i get that tension but i think uh a little credit where credits do we're seeing we're not seeing these memes spread like wildfire uh in part because the platforms with the most reach are doing

SPEAKER_72: their job snaps down 30 today you guys see this i think it's it's related in the sense that everyone

SPEAKER_73: historically talked about social networks as being these uh you know the network effect where you know multiple people get on and they link up with you with each other it's harder and harder to break the network and it gets bigger and more valuable and can generate more revenue clearly not happened over the years with twitter to the degree that people thought it should have and now clearly it's not happening with snap i think it also speaks to this idea of fragmentation i don't know if you guys want to talk about snap but pretty significant decline from well here's the 160 there were 160 billion market cap and today they're trading at 12. they're down 91 percent from peak to track 91

SPEAKER_79: here's the important thing to note which is that if you look at the mau growth of snap it's actually been extremely steady and they've had an incredible march forward and i think that they're roughly around 350 million uh nick i'll send you the dius right i'll send you the link yeah i think it's like

SPEAKER_22: the dow is you count is incredible it's incredible amazing so it's like yeah it's a service that is incrementally every day more relied upon than the day before and it's a service that's providing a set of features that is incrementally more important to a larger and larger group of people so how do you then square that with its stock performance and in my opinion i'll just be really honest with you and i don't know evan spiegel and i've never trafficked in snapchat at all okay but it

SPEAKER_28: is the most glaring example of corporate misgovernance that has ever happened on the internet and the

SPEAKER_22: reason is when you look at what happened in the ipo it basically created a governance structure where the common shareholder had all voting power taken away so a hundred percent effectively the de facto voting power stayed with the class that was held by the founders and so you you do not have a normal

SPEAKER_28: check and balance and it was egregious other companies would have voting programs where it was 20 to 1 and you would sometimes say oh it should only should be 10 to 1 or it should be 50 to 1. this was like 100 to 0 and what you have now is no real feedback loop because there is no person who can own enough equity with enough say to sit across the table from that ceo and say here's what

SPEAKER_130: you're not seeing and here's what you're getting wrong and i think you're always better off by having those kinds of people be able to get a meeting with you in the first place and have a vested interest where you take them seriously but how would you receive a meeting when you're sitting across the

SPEAKER_28: table from somebody in the back of mind you're like wow this person has literally no say in what i do

SPEAKER_132: after this meeting ends literally none you can't vote even to even it's different than alphabet and meta at 10 to 1 because they i think they both have dual class right at yeah i think zero is in my

SPEAKER_28: opinion a deep sign of disrespect i think you can i think you can agree you know that um there is a

SPEAKER_138: separation between you know the voice of the common shareholder in these companies and and the direction of the companies but i think it obscures what's going on chamath i totally agree with you if

SPEAKER_139: you look at usage the number of customers walking into the store um snaps gone from 265 to 360 million daus twitter 190 to 240 meta from 1.8 to 2 over the course of the last three years they're all growing

SPEAKER_140: more people are walking into the store and using the service the story here is all about pricing how much

SPEAKER_142: is each of those users worth i mean apple is the apex predator of this entire market we wouldn't be having this conversation but for the fact that apple's changes with idfa literally pickpocketed the industry two billion dollars this year under the auspices of privacy and so if you look at these

SPEAKER_140: companies usage up pricing or arpu down okay recently apple's come under a bunch of pressure so now they're out with scad 4 which is their update to uh the the the ad policy post idfa that allows you to target advertisers or individuals with 10 000 attributes instead of 100 attributes so we're going to see some realignment i expect that the real question is what happens to arpu next year

SPEAKER_143: but to me the story here is that the usage and the health of these core platforms is remarkably sticky

SPEAKER_142: yeah for all the things we say about instagram i mean tick tock has had explosive growth 30 growth each

SPEAKER_140: of the last three years but even the incumbent platforms really sticky usage this is about how they're monetizing those users and the real story is apple yeah and if you for people who don't know idfa

SPEAKER_50: is the identifier for advertisers some people refer to it as made uh mobile id ad id i'm sorry um and so what that does is it lets you track a user anonymously across have you ever have you ever owned and have

David Friedberg: you ever owned any clicks to a sale right have you ever owned snapchat stock no why not um certainly

SPEAKER_155: governance is a key component of it um but the second thing is like do you have do you have any belief that

SPEAKER_158: you could even get a meeting with the ceo and management where they would listen to you

SPEAKER_160: appropriately we've certainly got meetings with management before so yes i believe we could

SPEAKER_138: whether or not that impacts you know how they build product how they how they run the business you know the

SPEAKER_162: influence etc but again i i think that's not really the problem here but the point i would totally agree

SPEAKER_138: with you on chema we've had 10 years of where the cost of capital was zero 10 years of hyper growth for

SPEAKER_142: these social networks right in each of the last five years facebook has hired more people in each of the last five years then they had 10 years after the company was founded okay so as we've seen this growth begin to turn over i have seen the companies really slow to react to right size their behavior that they had over the course of the last decade to put themselves in a position to compete for the next decade so it's one thing just to throw your hands in the air and say well this is all apple we couldn't do anything about it but we we really haven't seen leadership in terms of cost control we

SPEAKER_50: really have we all know these companies yeah of the of the major companies brad snap did do a 20 riff that had 6 000 employees or so and they cut 20 facebook is the one that's perplexing because they seem to be massively over staffed as you talked about and they have been massively um they've had a massive decline in their uh stock price and they are the one who is affected most by what apple did in terms of app tracking transparency is i think that there's a perception

SPEAKER_79: though i i mean i'm still stuck on this issue i really think that stock prices tend to ebb and

SPEAKER_22: flow based on sort of like friction or momentum and when there's momentum more and more people can easily underwrite it and when there's friction fewer and fewer people can underwrite it and so i think that if you are a ceo of a public company you have to think about how many headwinds do i have and how many tailwinds do i have all the time and some of them are in your control and some of them are not at least in the case of meta as with apple and google they meta is forced to copy the best decisions of these bigger companies why because they were one of those biggest now they may have been the smallest of the biggest but it's going to be very hard for meta eventually to not converge on those same set of decisions and the most important one is what brad just alluded to

SPEAKER_130: which is that there was a point in 2016 and 2017 where you literally could not give away apple stock

SPEAKER_22: and the big turn of the dial and you know some say it was carl icon who knows was this theoretically this famous dinner that carl icon had with tim cook where he laid out a plan and it's like listen you need to start managing costs better managing opex better return a ton of cash buy back the stock and you'll be a darling and tim cook was rewarded and he's he's been rewarded with an incredibly performant company and so you know google is slowly inching towards that plan microsoft

SPEAKER_130: is in that plan and so the only big four horsemen that hasn't really gotten the script yet is meta but

SPEAKER_28: they will it's just we're just debating when and so there's a perception that you know meta will copy what the rest of these big guys do but these other long tail companies the headwinds are just greater and so when you you know don't have a company that can be broadly owned by intelligent thoughtful investors that's a headwind right when you give nobody votes that's a headwind and so that's why you see a company that's continuing to grow impact not being able to translate that into economics

SPEAKER_130: and if i were the board of that company that should be a wake-up call because eventually that'll flow into

SPEAKER_28: the morale of the employees and the ability to retain and then the ability to invest in the future and i think the simple answer is enough with all these you know gymnastics around control you know if you looked at elon the most incredible thing from day one was there's common stock you know and his whole thing was like i'm just going to do the best and you know what if i'm not the best i'm going to be out he literally said he has you guys want to vote me out vote me out vote me out he's never ever played these games so in this funny way control is a symbol of a lack of ability to run the business

SPEAKER_176: masterful mastery of a business you can translate that to being i'm just going to have common stock

SPEAKER_73: well i mean if you think about historical argument by the way um tracking back to the high voting class for founders was that they would be challenged by the investors in the market and you can see the things that carl icon and others ask for they say we want to see you cut opex we want to see you pay dividends we want to see you buy back stock and we want to see you grow and so the trade-off then in the mind of a founder uh that that that started this business and scaled it to billions in revenue is well that means i've got to make short-term decisions over long-term decisions i've got to make the i got to give up some of my long-term opportunities to trade for my short-term

SPEAKER_31: opportunities that's that that was the argument i think originally for the voting class and you can

Chamath Palihapitiya: read this in google's founders letter as well does that not apply any founders at google don't even

SPEAKER_97: show up at the company why do they have to have super voting control they don't probably even know what's going on inside the company it might talk about that argument like so no no i just i just want

SPEAKER_31: to hit on zuck's point because zuck has said look you know this this vr ar metaverse stuff in the

SPEAKER_76: future is everything this is where i want to invest our resources so look what happened time but look what

SPEAKER_28: happened they they made a missive they said we're going in this direction investors really smart thoughtful supportive investors including brad were like uh hold on we're gonna check your check your roll and they capitulated now to your point did super voting control come into play there no of course he could have said you know what guys pound sand i'm gonna do what i want instead he's like i'm a smart guy these guys are smart guys so i'm gonna make the smart decision so in my opinion all of these things are red herrings these are in directions right so this idea of i'm just gonna take my toys out of the

SPEAKER_09: sandbox like a crying baby is what super voting control means to me as a shareholder brad do you

SPEAKER_31: think the era of super voting control for founders uh taking companies public is over nope should it be

SPEAKER_138: you know i i think it's again when facebook was doing really great and snapchat was doing great nobody complained about super voting stock okay so i i think that you know my preference would be

SPEAKER_142: that i partner with a company where i know the founder whether irrespective of their votes right listens cares and has the mental flexibility to make course corrections right and the and the reality what i'm trying to point to we have lived through a decade of excess everybody knows all these companies could do exactly the same revenue david this is the pushback to your point unlike what the google argument was exactly the same revenue with vastly less investment in terms of people etc right a 20

SPEAKER_192: percent riff at meta would literally only take them back to where their personnel expense was in 2021 yeah nobody argued in 2021 and they said they were going to do this too brad right and just hasn't

SPEAKER_139: happened yet this is this is part of the problem jay cal everybody so why 10 percent why 10 percent

SPEAKER_142: you've doubled this the number of people working in the business over the last few years right there's nothing magical about 10 percent the real question is what is the optimal number of employees to produce the best outcome for our customers and our advertisers and what bill gurley has pounded on and we've all talked a lot about there has been in a zero cost of capital world a unilateral march two more more of everything invest in everything hire more people silicon valley would do itself a favor these big companies vacuumed up every single engineer in silicon valley they ought to return that pool to the startups that are actually inventing the future they don't need this money employees i mean last night i read a report came across bloomberg that elon's talking about 75 reduction at twitter

SPEAKER_50: yeah so that would leave twitter just to give people some context here that was in that that originated in

SPEAKER_167: the washington post that would take them from around 7 500 workers to maybe 2 000 1800 and so he's

SPEAKER_200: starting from first principles how many people do i need to build the next generation of twitter that's the

SPEAKER_142: question start with a blank sheet of paper and ask that question you'll come up with very different

SPEAKER_79: answers back to the government question i think that you you can correlate these kinds of uh governance overreaches with zero interest rates that dog doesn't hunt when rates are at four or five percent i don't care who you think you are but when you try to go public in uh over the next four or five years

SPEAKER_22: if rates are sustained you know three four or five percent that will be the check on all of these people's

SPEAKER_28: overreach because you will have you know liquid alternatives that on a risk adjusted basis seem better and when rates are zero and everybody was forced to own tech we all gave up our standards we all stopped saying you know oh you know the things that we used to think were important before like one person one vote

SPEAKER_22: you know uh a check between the board and the ceo a check between the executives and the shareholders

SPEAKER_28: they'd all went out the window no discipline no hygiene right because when interest rates are at zero percent you have to remember right how does how does the the structural basics of of the financial markets work it is meant to make money on behalf of every single entity and person and thing in the world from a pension fund to a university to a research lab to a government to an individual but in that ability to make money when we took interest rates to zero forty percent of what we all used to own bonds yielded nothing and so we just completely whipsaw to the other side and said we need to own

SPEAKER_130: anything that grows so tech got a disproportionate amount of attention but in that we lost our standards and we are now going to go through the hangover of dealing with it and so you know snap will be

SPEAKER_28: an example of where investors are going to abandon that company because because it's just there's no point there's no governance there's no ability to have a conversation it's in the too hard bucket so people will just leave it it'll be uh stranded and it'll be a refugee in the public markets i think meta will be fine

SPEAKER_130: eventually because i think that they will revert to the mean and the mean is microsoft google and apple

SPEAKER_22: and we already know what that playbook looks like so i think what brad predicts is more likely than

SPEAKER_28: unlikely and i think in the future to david friedberg's point i think it'll be very hard to justify these things you know bankers will be able to push back because the buy side ultimately guys like us who have to buy the stock when these things go public will say nope you want to have these you want to have these dumb governance games nope not for me i'll just go buy something else i'll go buy more tesla where it's one person one vote why you know so it's hard when the best ceo in the world is like judge me keep me fire me on an equal basis and everybody else is like i'm smarter than this guy and so you know what let me make sure that whenever i feel like it i can throw a temper tantrum and take my toys out of

SPEAKER_12: the sandbox and let's use there's analogy here doesn't work look at look at um steve jobs ousted

SPEAKER_92: from his own company company made a huge mistake ousting him some people argue was a learning experience for steve to get better at his job he comes back and he absolutely turns the company

SPEAKER_12: around so there's an example thus far you've proven that the two most impactful and important

SPEAKER_22: ceos of the last 50 years had the courage to basically say let my performance do the talking but not my protective nanny control correct and steve's performance was light in that first period

SPEAKER_130: he had some problems and uh and he learned and he still won but this is what the greats do the greats know how to perform not you know use some no trade clause to make sure that you can just sit

SPEAKER_210: there and underperform forever do we think brad when we get to the sort of macro look at this let's

SPEAKER_50: assume we're in this four or five or three four five percent interest rate for some extended period of time let's call it a decade what does the tech industry look like because it does seem if elon does with twitter what seems to have been leaked here correctly according to all reports and there's a 20 riff at uh facebook and we start to see people take the medicine is that the ultimate setup for now hey these companies are being run to throw off cash and we have some way out of this uh what people

SPEAKER_113: think is going to be a very hard landing well i mean you know first just let's talk about you know

SPEAKER_114: where rates are you know today you know we're at four three on the on the 10 year i mean technology's performed incredibly well for a long period of time with rates in this in this range so the adjustment period is very difficult right and so when when you look at the convexity and going from zero percent

SPEAKER_142: interest rates to four and a half like that has been a shock to the system it has been destabilizing to multiples multiples were basically infinite last year and now multiples have come back to reality and so i don't question in fact i actually think free capital was a weapon of economic destruction right free capital hurt good companies from being great companies they hired too many people their margins were too low you know softbank funding all of these rideshare companies around the world to compete with uber meant that uber even though they're a market leader did not have market leadership economics and so the ringing out of the system of that excess that grift that stupidity that's going to be good for the fundamentals of these business but the transition from you know that low rate environment to the high rate environment it's dislocating for investors it's dislocating for management at these companies and it's going to be just this is not you know a a six-month phenomenon we're going to have two years of ringing out right because there's no bailout here by the fed there's no v-shaped recovery for these companies this is now going to be i heard somebody say this week if the last 10 years was about

SPEAKER_141: beta the next 10 years is about alpha not all companies are going to do well not all companies are

SPEAKER_142: going to bounce back this is going to be about what companies have the courage to build great products and to drive a great business model that allows them to compete and continue to invest at high rates in the next wave of innovation whether it's ai etc and so um you know to me the markets jcal have largely put in a box at this point inflation and rates right rates have come up 65 percent in the you know from 2.7 to 4.3 in the last 60 days and the market's basically sideways it's down 5 to 10 percent rates are up another 10 percent in the last two weeks and google and apple are up that tells me that the market's gotten you know gotten its its arms around rates and inflation what the market really is worried about now are two things number one is earnings and number two is the long tail of risk on earnings there's kind of a conventional wisdom emerging from a front from many folks that 3200 is the bottom or maybe 2700 the bottom that we're going to go from 225 and in s p earnings back to 200. that seems to me to be you know again a lot of people making that bet i don't see any evidence in q3 earnings united health care united airlines schlumberger tesla etc their earnings are up on a year-over-year basis they've guided now to q4 their earnings are going to be up on a year-over-year basis and the consensus expectations in q1 are that earnings are going to be up on a year-over-year basis to go from 225 bound down to 200 we it can't just be a slowing of the rate of growth of earnings you have to reverse course entirely so we have to see something we're not seeing yet so on an earnings

SPEAKER_140: growth that's where the mark there's some tension in the market then finally what i would say is there are a lot of big brains in the world who look at this level of dislocation rates going on the two year or on the front end of the curve from zero to four and a half and drunken miller or soros

SPEAKER_142: would say negative reflexivity breaks when you have this much volatility in the world the world is not equipped to deal with these exponential moves and so there's a lot of concern in the world whether it's about ukraine taiwan uk bonds the japanese yen nobody knows what it will be

SPEAKER_140: but they're just saying demand a higher margin of safety because the propensity the likelihood that ship breaks when you have this much dislocation is higher so the proverbial black swan could come any

SPEAKER_142: minute and could cause another downdraft but last year we were all sitting here and said asymmetry to the downside multiples at all-time high interest rates at all-time low we saw that starting to roll over we saw smart people elon bezos etc start to sell into it as i sit here today yes we're going to have harder times ahead economically but it feels to me like a lot of it is priced in i don't think we have huge asymmetry and skew to the downside i think that's like fighting the last battle it's not to

SPEAKER_140: say in this distribution of probabilities one of those events can't occur but from my vantage when stocks the average stock down 20 percent stocks like meta down 50 to 60 percent a lot of stocks down 70 80 90 that doesn't seem like the time to call the big short that seems like a time to be like

SPEAKER_147: neutral to positive should we go to tvpi dpi uh and talk about the privates well i just want to say one

SPEAKER_72: thing about your prior question uh which kind of ties into some of what brad said but you you asked the question about does this mean that these companies are now going to kind of cut costs and start spitting out cash i think there is certainly a market incentive to do that to keep share prices up and the companies that can do that are certainly taking action with the headcount reduction across some of the big guys what i think is going to be interesting and what a lot of people are watching is how many of the small and mid cap guys can actually do that and those that can't will it will become pretty evident pretty fast and they're going to end up in the shitter um you're talking to a paleton or

SPEAKER_73: something like that doesn't matter across sass across consumer across d2c across hardware everyone is now saying can you actually earn and at this point you should have enough scale that you should be able to earn and if you cannot the market will punish you for it and that's certainly what seems to be the incentive and the pressure in the on the buy side to the the executives across all these organizations today so i think that's a big trend of what's happening right now is everyone's going through their portfolio spending time with management and asking can you earn can you actually get this business to generate cash what is the path show it to me prove it to me in the quarterly results and if you can't then you're not fitting in a bucket that i can own you the only irony there friedberg is

SPEAKER_142: that that comes as a surprise god forbid we should actually expect companies to prove unit economics and and to make profits yeah but when you when when your interest rate zero you divide by zero you get

SPEAKER_73: infinity so you know you were able to kind of explain everything away into the future now you actually

SPEAKER_72: have an interest rate at five percent i got to be you know making uh i'm not going to pay a lot more than 20 times earnings and i want to see that that's really my earnings you know i want to see that you

SPEAKER_58: can actually earn there was a person at brad's investor day who brad interviewed and i won't

SPEAKER_79: say his name but he's a star of stars he's a bit of a goat and he had and i'll just say the generalized version of what he said believe it out and said the following which is so true it's like we've gone

SPEAKER_22: through an entire decade of under training an entire generation of people in silicon valley you know we have under under trained and under mentored the product managers the engineers the senior executive management the ceos many of these people unfortunately are not um they don't have the skill set to execute at a high level at any point in the cycle except when rates were zero like many business models and now that rates are not at zero these people are turning out to be extremely underdeveloped and unable to run these businesses and when he said that it really struck a chord because he's right and you

SPEAKER_28: know he was also saying it just got even more exacerbated in this era of remote work because now there is even less opportunity to mentor and to coach and to talk one-on-one and people think you know that this is a boon and it's not so you know we we're going to deal with also the aftermath of an entire generation of highly underskilled companies because the executive and senior

SPEAKER_130: leadership and ceo ranks of many of these companies are not in a position to win if i may there was an

SPEAKER_147: interesting moment this week when we talk about this discipline that has been lacking the last couple

SPEAKER_50: years 101 million dollar funding led by kotu uh lightspeed venture partners at a 1 billion dollar valuation uh for stability ai uh this is a for-profit company built off the backs of the open source

SPEAKER_84: project stable diffusion they have no revenue they have no product they've been around for

SPEAKER_14: you know a millisecond any thoughts on this type of funding happening pre-product pre-revenue on an

SPEAKER_228: open source project i mean there's still there's always going to be yeah it's a free world

SPEAKER_73: it's not my money it's going to be these these asymmetric bets that people think if it works it's worth 100x and they'll price it as they price it i think i think what we were just talking about is a little different which is how do public markets rationalize evaluation uh these businesses need to start earning for the public investors to be able to represent to their investors that they're doing their job and making sure that they're holding management accountable to demonstrating earnings potential but these early stage bets you can see valuations range depending on the asymmetric outcome potential of the and you know what the upper and you know what the upper bound

SPEAKER_130: is the upper bound is that when rates were zero and governments were printing money more than they could get their hands on the top five tech companies represented a quarter of the s p 500 but there was

SPEAKER_28: a pretty steep fall off and everybody else represented the next you know about 10 of the market cap

SPEAKER_22: so the point is that we had bounded outcomes when rates were zero the average market cap of a successful company was around three or four billion dollars so i'm not going to judge this company at all and those investors are very smart investors light speed and koto what i will say is at the end of the day there's a terminal buyer of these companies and we had a period of time that we can look back on to understand that when the party is absolutely rip roaring the alcohol is free you know everything everything is going well yeah we know what the upper bound is which is the average company if you were able to get out would be worth about three to four billion and then there was a very very steep dispersion where then there was four companies that were you know a quarter of the market cap and a few in

SPEAKER_130: between so if you do a deal at a billion the overwhelming odds is that the terminal exit multiple is going to be somewhere between a 3x and a 4x x of dilution and x of all of the other capital that

SPEAKER_22: comes in and all of those features that may be attached so i think everybody should be allowed to make

SPEAKER_28: different kinds of bets and you'll see over time um which kind of deal can generate which kind of return

SPEAKER_210: brad will be it this will be a really interesting data point the the common thinking was these kind

SPEAKER_50: of deals were not going to happen in this kind of a market so when you saw this kind of deal happen or some other that we've talked about privately what do you think is happening in terms of discipline

SPEAKER_22: uh private markets i think i think i think maybe you should tee this up with brad because i think that what i have to say follows on okay with him but there's a there's a there's a macro view of the

SPEAKER_28: venture industry that again it's like everybody wants to never look at the past everybody wants to assume that this time is different and there's some work that he did which is really instructive jacal to help answer this question i think so yeah maybe you should ask him and then and then i'll jump in

SPEAKER_243: afterwards this is the tv tvpi uh study yeah so i mean brad in relation to my stable diffusion and and

SPEAKER_247: yeah dpi maybe you could well you know we we shared this with our investors at our investor day that that you guys are at this week and there's a modern industry it's only been around since the mid 90s

SPEAKER_249: right so the history of venture you know is uh you got to look at when you look at returns it's to say

SPEAKER_251: by the way what an incredible chart you guys put this is so good yeah let's describe the chart for

SPEAKER_254: people who the truth hurts oh so breakdown let's go ahead jaco do you want to just so if just for

SPEAKER_14: people who know we on spotify and on youtube you can search for all in episode uh 101 and you could

SPEAKER_50: uh see this chart if you're watching the video if you're listening um the video describes 1997 to 2020

SPEAKER_256: there's an orange line across it with the dpi average uh so why don't you define dpi so you know

SPEAKER_138: what we did is we took the top quartile data from cambridge associates who invest in all across the entire venture industry is widely used as kind of industry data and we just asked a simple question of the top quartile top 25 percent of venture capital firms right what were in those vintage years

SPEAKER_114: of the funds so funds raised in 97 98 99 what were the average cash on cash returns right tvpi is what

SPEAKER_138: your mark is that's where you're carrying the marks total value to paid in capital so this could be

SPEAKER_14: just so we're clear because it's a little confusing to people you have a company on your books that on paper is worth 10 billion you had put in at a billion and on paper you've got this 10x return right

SPEAKER_140: correct right dpi is actually cash distributed to your investors so that's cash on the barrelhead so the reason if you look on this chart sorry just to just to build just to be very clear for everybody

SPEAKER_22: the whole goal is to be able to convert your tvpi so what your theoretical book is worth into dpi which is here's money back to my investors and what you want on this chart is the blue line to catch up to the gray line so you want the gray line to be as high as possible and eventually over time you want the blue line um to come up correct right so the blue line here we're looking

SPEAKER_14: at 2010 just for one example you have a 4x for the tvpi you 4x everybody's money but the blue line only

SPEAKER_50: got up to it looks like 3.5x maybe or something in that right let me just point out because that's

SPEAKER_142: an interesting year jason yeah we were coming out of the 2008 2009 period everybody was despondent they said i'm sure they said what you just said about stable diffusion don't invest in anything everybody's stupid but there were incredible companies that were invested out of that vintage right snowflake and mongo out of our vintage shortly thereafter so maintaining this duality that yes the world sucks but the the secular curve of innovation continues so that is a vintage where people actually

SPEAKER_140: got things sold got in public distributed the cash back to investors the real question is this on the vintages between 2011 2012 and now how how much of those gray lines how much of those marks look

SPEAKER_142: those are historical marks marks have never been this high how much of those marks will actually return turn into cash on the barrel head and how much of those will actually just be mean reversion it'll all get marked down and the returns at the top quartile will look much like the returns did in the period between 2000 and 2007. my hunch is that by the time the cash is actually distributed the returns are going to revert to that orange line mean which means there are hundreds of billions of dollars in mark downs sitting in lps and gps portfolios that are likely to come because nobody really thinks that the deals done in 15 16 17 18 are going to be that far above the mean return and so people also understand

SPEAKER_50: this these are vintage years so these are funds formed in that year and so this trails a venture fund takes about 10 years they're formed without concept in mind to become realized so if you're looking at you know the year 2016 and 17 these are but five-year-old funds at this point right correct yeah so they do need time for these companies to grow how much of this chamath and freeberg do you think is attributable to entry price because entry price during 2017 18 19 20 is going to be extraordinarily high entry price i.e the value of the company when investors invested in 28 2008 to 2011 when i had a lot of my hits

SPEAKER_109: was pretty low i invested in uber thumbtack and um you invested in uber calm those three were 15 million dollars combined the three evaluations yeah you you invested in uber oh yeah maybe third or

SPEAKER_277: fourth investor i can't remember amazing i did get in there i got in there slightly before you did like maybe eight years you you should write a book on angel invest i should yeah you should call it angel

SPEAKER_122: but let's talk about entry price because entry price does matter brad or maybe chamathi you want to take entry price for freeberg well look there's this i think i think what that set up is that's

SPEAKER_79: probably a chart that most vc organizations don't even look at because if you looked at that chart

SPEAKER_22: um you'd have to take a real investing approach to things so if you were looking at that chart as a gp there are two takeaways the first takeaway is oh my gosh what is the sum of the invested dollars above this orange line since 2012 2011 right because all of that stuff could just basically get whacked if we mean revert and the answer is about five or six hundred billion dollars of paid in capital so then you would say oh my gosh well if there's five or six hundred billion dollars of impairment coming down the pipe maybe more maybe it's going to be 750 million because the other thing to keep in mind is over time the the orange line has a tendency to go down not up right because as you add more and more of these things and some slight performers you have a general decay function in every asset class as it scales in size so this this orange line theoretically goes down which means more of those gray bars get destroyed okay so there's let's just call it 600 billion or 700 billion the most important thing you would want to do is now look inside your portfolio and try to answer the question uh-oh um how likely am i to see that impairment and jason this is a proxy of answering your question the important question for a venture fund which then has a downstream implication to the to the entrepreneur is

SPEAKER_28: now what do i do knowing that all of these gray bars could get destroyed and nick go to the next

SPEAKER_79: chart well i calculated it for you guys so i'll give you the answer here's a simple thing and you know this is publicly available data now why did i do this because when brad showed me that chart

SPEAKER_22: my immediate mind went to how do i make sure i'm not susceptible to losing a ton of money well what happens in markets is that when things go down the things that are highly correlated go down the most because they are the things that are the most highly trafficked which means that they are the things that have the most investors which means that in an up market they have the propensity to have the highest prices so we put we you know pulled all this data from pitch book and we just started to i just took a smattering of firms here andreessen index graylock benchmark sequoia gc founders fund tiger excel kleiner kosla and us you could pick anybody because this data is publicly available and

SPEAKER_28: i started to calculate the uh overlap coefficient so how how correlated are you with other people's

SPEAKER_22: portfolios trying to estimate at the upper bound and at the lower bound what will happen so jason this is a a proxy of answering your question what about entry price well if you have a very low correlation which touch wood we have you're less you're less exposed to bad entry price because it

David Friedberg: wouldn't have been a bidding war to get into these companies exactly you picked your right spot you you

SPEAKER_28: went into areas that were earlier so you were able to risk manage a little bit better but if you have a highly correlated portfolio now your marks become very susceptible so my guess is if you take the

SPEAKER_22: 700 billion dollars and you calculate it for all the vcs and you look at their correlations and their overlaps you can probably guesstimate where that 700 billion dollars of impairment will come to and you can you can lay it out across any organization that you're interested in trying to find a solution for by just stack ranking them and by looking at the at the at these correlations and this is by the way to be clear nothing about the quality of the organization or the people but this is just simple portfolio mathematics and how portfolios tend to play itself out in moments like

SPEAKER_50: this well and there's some interesting data in here as well i freeberg you probably are aware of where some fund like let's say founders fund and khosla have a close relationship because keith roboi was at khosla and then he moved to founders fund so you see that nice dark purple there

SPEAKER_151: where they have a high correlation investments interestingly index seems to just follow benchmark and bill girly's investments and plow into them that seems to be the highest correlation see here's

SPEAKER_28: the thing if you had to steel man the defense of that strategy jason i would say in an up market benchmark is a 500 million dollar fund where i get no allocation if i was a smart lp and i did this work i'd be immediately knocking on index's door saying can i put money in you because in the back of my mind it's basically getting leverage on benchmarks portfolio yeah you figured out how to follow them yeah yeah but when the cycle reverts you know you're not the only one that wants to copy benchmarks

SPEAKER_22: portfolio everybody does and if these correlations are too high and the overlaps are too high then you start to get into a cycle where you put yourself in a position to actually suffer from the market beta

SPEAKER_130: much more yeah even when you can benefit from the market beta in an up cycle freeberg you want to

SPEAKER_111: uh analyze this chart and chamat's uh thinking here his theory i don't know i mean i just think

SPEAKER_72: this has become a pretty competitive market and a lot of the value has been competed away

SPEAKER_296: unpack well i mean i think for a lay person please yeah the long-term value creation of technology

SPEAKER_72: of new technology is going to remain high the market's going to pay for that so you know new

SPEAKER_73: market value creation new market cap is going to continue to be built every year what's happening when venture has a low multiple is that number one the good companies end up the founders end up owning more of the company and they end up you know having a higher percentage ownership when the company ultimately gets sold or goes public because they were able to get vcs to compete against one another and as a result pay a higher valuation and as a result buy less of the company and then number two is that because the vcs that couldn't get into that company still had a bunch of money to manage they went and put money into crappy companies so you know it's a lucrative business you guys everyone's in that business because it's a lucrative business and that certainly it takes a decade to realize whether or not you're good at it so you know you have this period of time as brad shows that's maybe a decade before the lp market learns who is and who isn't bad and meanwhile those folks who got competed out of the good deals you know they don't look very good and the folks that are left in the good deals own less of the company and their returns get diminished and you know i think ultimately this market is probably going to end up being a multi-decade cycle of capital in and capital out we're probably at peak capital being managed in venture funds right now and will likely decline

SPEAKER_50: for the next decade right how would yeah brad how would lps look at chamat's analysis there and how do they look at the clubby nature and overlap you know writ large in our industry and then whatever other

SPEAKER_303: insights you have yeah no i i mean i think uh i very much disagree with with david that all the returns

SPEAKER_248: are getting competed away the the huge difference between the venture market and the private equity market or the public market is that the venture market is unquestionably a power law market okay 90 of the gross profits and the returns go to 10 of the deals and 10 of the investors right so we just

SPEAKER_139: show the average of the top quartile but if we show benchmark one or two or benchmark six or seven it's ridiculous right the cash on cash returns over 20x on those funds let's just pause and explain that to

SPEAKER_14: folks um most venture firms here are getting 2x on average that's the average and is that average for

SPEAKER_92: the top quartile or all vc firms it's the top quartile of vc firms their average is 2x yeah this is

SPEAKER_32: the upper 20 the 25 percent if you include the 75 bottom what would be trash brad let me ask you a question what if instead of looking at the top quartile you just looked at the top 10 venture firms yeah because the number of venture firms has exploded over the last decade and a half let's see and so

SPEAKER_22: i think the point that you're not getting is the top 10 changes every vintage and and the problem is if you are aping the wrong portfolio in that vintage you'll get run over right and so the real goal of this and i i also tend to disagree freebrook with what you say i don't think the returns are getting

SPEAKER_28: competed away i actually think it's more alpha than ever correct and you got to be a good picker and if you're a momentum investor you just need to be aware on the way in that you are going to put your

SPEAKER_22: portfolio under tremendous pressure in drawdowns i think the other thing the other thing it does

SPEAKER_142: this idea of the industrialization of venture the soft banks the tigers like like it's a myth you can't industrialize that you can in dust you can build an index fund of the public market because you can buy every company you might even be able to build an index-like fund in private equity because

SPEAKER_316: everybody can go bid for every company but in venture the founder chooses you that early gp chooses

SPEAKER_142: you and so if you try to build an index fund that misses the best deals and i think there's adverse selection the bigger you get the less likely you're to convert the best deals now you're really in

SPEAKER_73: trouble brad do you think an index of first time vcs outperforms kind of that you know top quartile index so you know there's some lps that select into just solo gp first time fund manager first time fund or you know maybe second time but solo gp but it's kind of like you know first into the market

SPEAKER_72: before you really scale up that's where so many of the returns are found a lot of funds like mit

SPEAKER_138: they look for emerging managers because you're you tend to be younger hungrier you have experience you've got a lot on the line but certainly if you look at the hundreds of startups in vc land over the course of of the last several years uh 99 of them are probably garbage and will fail and and won't work so the all-stars will be all-stars and and the rest won't somebody asked me i use this analog they said

SPEAKER_142: hundreds of new people have come into venture and i said yeah it's like it's kind of like a marathon you're right we had 500 runners and now we have a thousand runners but from my vantage it's the same five to ten runners competing for the podium week in and week out in that top 10 in that power law it doesn't change a lot yes there have been people break in we know how hard it is to break in to

SPEAKER_140: silicon valley nobody invited altimeter to the dance nobody invited social capital to the dance nobody invited

SPEAKER_322: jason calacanis to the dance it was the opposite they locked the doors that they were like trust me

SPEAKER_142: because it's a highly lucrative business dominated by some incumbents that had huge brands they didn't want to share the fruits of that we showed up we worked hard we build incredible teams we had conviction right and we were we also had good fortune right yes we were smart we were we play some good bets but you also have to get lucky in this business we were lucky to be born at this point in time lucky to start when we did in silicon valley i'm going to finish just with this one point this whole experiment

SPEAKER_119: of venture capital is less than 30 years old the modern age of venture capital is 30 less than 30 years old we're going through this period where everybody wants to all over the industry you know tvpi is going to come down all this other stuff i think that venture my dad when he went to

SPEAKER_321: start a business had to borrow money mortgage the house think about the friction for somebody with

SPEAKER_142: a young family if the cost of failure was losing your house putting your family in harm's way versus some young startup in silicon valley today where the consequence of failure particularly if you if you conduct yourself with integrity is that you learn a lot right there's no losing a house there's no a cataclysmic outcome for your family so to me when you look at the economic unlock that we have in this

SPEAKER_140: country by reducing friction to invention by reducing friction to experimentation i am incredibly bullish on

SPEAKER_142: the future of venture i think founders are the engine that drives the world forward right that's where we get electric cars that's where we get rockets that land themselves that's where we get mrna vaccines and so there will be cyclicality there will be industrialization there will be big funds and

SPEAKER_140: small funds but the reality is that this ecosystem is a massive competitive advantage for this country i think when we look forward at the information age over the next 30 years the power of this ecosystem is more strategic advantage to this country even than natural resources i'll say i'll say something

SPEAKER_58: orthogonal to this which is in order for that to happen just to build on the point brad of of your

SPEAKER_79: guest that's your thing we have an entire generation of uh financially um innumerate general partners at venture firms and venture needs to be a pillar of growth in society and i think people need to have more financial tools and underpinnings to do their job why because over these next 10 years when

SPEAKER_28: maybe you have 500 to three quarters of a trillion dollars of value destruction and it's because you didn't think about portfolio construction properly that entrepreneur that needs your money you will have to say no to them or renege on a deal or let them down and the reason is that you didn't think about that on the way in and so these are practical skills that every other part of the financial asset

SPEAKER_22: infrastructure has to learn we are taught the hard way you know we are taught in the public markets how to think about dispersion correlation alpha beta you're taught in private equity how to do it you're

SPEAKER_28: taught in every other asset class and we romanticize venture to think that none of that matters but in a moment like this you will see how much or how much it doesn't matter and if you're going to live up to the to the actual commitment you make to an entrepreneur you better get financially smarter is what i would

SPEAKER_50: say all right let's uh move on uh do you want to go to uh stock picking or lyft versus newsome on this prop 30. i want to hear the freeberg diatribe of stock picking you do okay yeah i want to hear it well anyway there's a bunch of people talking about uh index funds versus um buying individual shares and being a stock picker elon and kathy wood uh got into this on twitter and we all know the arguments for passive versus active and there's large active funds out there uh that are just programmatically buying and elon and many think that uh active would be better for society or a bit

SPEAKER_73: more active freeberg what's your take a business is a over time it's supposed to be a machine that takes money in and puts money out and then there's money left in the machine it's like a box money comes in money goes out and over time the objective the money coming in which is sales or revenue exceeds the money going out and the box grows right the assets grow and the best way to look at that is in the financial statements of that business you know the income statement the balance sheet the cash flow statement but we and then there's this narrative that can be layered on top of those metrics that measurement of how well that business is performing over time and that narrative is what drives a lot of investment decisions today right i see whether it's an analyst writing an analyst report or a portfolio manager or an individual picking a stock everyone's got a reason why they're buying the

SPEAKER_76: stock and they say here's my thesis and what happens is everyone looks at that box looks at that business looks at that thesis from a different angle and there's always something you're missing so there you know there's some element that is driven by imperfect information and in some cases it's just heavy bias you know you look at a stock you're like hey i really like disney plus i really like the subscriber growth but the question fundamentally is over time what is the revenue generation and the profit generation potential of that one thing you're looking at and what are the hundred other things that are going to contribute to that business that box taking in more money or spending more money is that box going to run into a regulatory problem is it going to run into a customer problem is it going to run into a content problem is it going to run into competition the number of issues and opportunities that any one of these businesses can and will face is infinite and every participant in a market is looking at some different set of those opportunities or threats and every participant in that market is making a different value judgment and so very often people will buy a stock because they see their sliver they convince themselves that based on the sliver of the perspective that they have that this is something i want to own they don't do the work on what's the income statement balance sheet cash flow gonna tell me over time about the quality of that business and they don't do the work on what the valuation of the business is relative to comparables relative to future earning potential and i just wanted to have this diatribe because i see so many individuals doing stock picking and over time because of this myriad of things that could go wrong and will go wrong or may go right or won't go right or the regulatory thing or the market thing or whatever interest rate thing hits that stock and the stock price goes down eventually everyone gets hit on the head and everyone reverts to mean or below mean meaning the average of the index over time or underperforms that index over time and so i mean for me i spent two years i know we all went through some sort of investment banking training i spent two years out of college without a i had no finance econ or

SPEAKER_73: business background i worked in investment banking learned how to read an income statement balance sheet cash flow learned to understand how business performance ultimately translates into financial outcomes and spent a lot of time on valuation and figuring out just because you like the story of a stock you like the story that the ceo is telling you doesn't necessarily mean that you're paying a

SPEAKER_76: fair price so if you if everything they do goes right this price could still drop and i think that this is a really important set of lessons for people that are individuals that are doing stock picking

SPEAKER_196: which is to number one you're sure you know how message and this diatribe is specifically targeted towards day traders retail correct i don't know if it's just them i think it's just generally like

SPEAKER_31: make sure you understand how to read an income statement balance sheet and cash flow statement number two make sure you know how to assess valuation make sure you know that when you're

SPEAKER_76: buying a stock you know what the total value of the company is based on the price you're paying and how do you justify that that total value makes sense relative to your model of the future outcomes for that business and then number three recognize and be cognizant of the fact that whatever one thing you're seeing that you think you've got some edge or some advantage on because no one else is seeing it there's 99 other things that you're not seeing and this is where everyone learns this lesson over time and everyone gets bonked on the head at some point in making these decisions and it's why every stock picker or nearly every and we can talk about the greats at some point here and where alpha can be generated and so on but generally most stock pickers over time underperform the index um and it's just particularly with the retail movement of the last couple of years i i see a lot of thesis here's my reason for buying the stock that excludes understanding the

SPEAKER_72: financials understanding the valuation metrics and also excludes the whole litany of things and all the diligence that goes into thinking about all the other angles you might be missing so that was my

SPEAKER_58: bottle or feedback generally it turns out that it's hard to be good at anything insert the blank takes tens of thousands of years of practice in investing i think what i have learned is that it's very easy to get

SPEAKER_22: caught up in the mania i've also learned in the last decade that you know we really benefited from zero interest rates it was a tide that lifted all boats and i have learned how to think about correlation and the difference between alpha and beta and how to construct portfolios that i think can be all weather portfolios to friedberg's point those are nuanced long tail skills that you'll only take up if you're really passionate about the craft it's not dissimilar to a person i'm just going to use golf as an example who learns how to hit a fade versus a draw and who learns how to really manipulate you know their wedges in very specific ways and these are all long tail skills that come in when you decide you want to master something and it's just important to note that that mastery is required to be really good because otherwise there'll be times where you'll go out on the golf course and you'll crush it but then you know there'll be other times and most other times where you can go and get run over because it's hard so that's my only comment is that this is like everything else it's not nearly as

SPEAKER_151: easy as it looks like brad you pick stocks for a living should retail how involved should retail

SPEAKER_31: investors basically just buy an index i don't think it's fair to say retail what i think my point was

SPEAKER_76: really about no his point is everybody okay sure everybody my point is saying a thesis and excluding all these other factors that are critical in making a decision about what you're buying and whether you're paying the right price means that you have to make sure that you're expanding your point of view on whether or not a stock is worth buying at the market price today and i think having that broader perspective is what i see missing in 99 of the chatter on twitter 99 of you know folks talking about what thing to buy and why they're buying it and i think it's critically important you're saying that most

SPEAKER_22: investing that you see is very narrative driven and that narrative can sometimes be so powerful that it overpowers all the other elements that one should be doing to get a full picture of why you should be buying something is that i think that's a fair summary chamath yeah yeah and i think it's um

SPEAKER_76: you know it's and it's it's it's just about how so much of what goes on on cnbc on a lot of reddit

SPEAKER_73: boards not all of them there's very sophisticated folks there doing very sophisticated financial analysis and looking at all the angles of a stock assessing the valuation but so much of these

SPEAKER_76: conversations exclude what you're paying and what you're getting and exclude the broader context of all the things that could and may not happen with a particular business and as a result

SPEAKER_73: at some point one of those things bonks you on the head you lose 50 and you're like oh my gosh

SPEAKER_58: and sometimes if you try to inject that logic into those channels you'll get brigadooned

SPEAKER_360: bring it to be absolutely brigadooned bro what do you what do you think uh in terms of people's access to markets i guess would be another way to look at this and people's propensity to just you know gamble let's call it or maybe not make thoughtful decisions i kind of think if our

SPEAKER_362: friend bill garley was here he'd be like this is a five minute conversation about the statement of the obvious um yeah you know this is stock picking's hard really is that the theme of this section yeah

SPEAKER_138: stock picking's hard very little alpha has ever been generated in a sustainable way even by the

SPEAKER_248: greatest people of all time i think you know maybe something that is a little bit useful to add two things not all good companies are good investments price of entry matters okay so i hear a lot of

SPEAKER_138: people saying well i'm gonna buy that because it's a good company that i don't even know what that means

SPEAKER_367: exactly right good relative to the price of entry but the second thing is the single greatest power

SPEAKER_248: we have as investors the green greatest single source of alpha right other than stock selection

SPEAKER_138: so choosing the right company time arbitrage okay so do you have the ability to own something that is a growing asset over a long period of time so that if you got number one wrong you bought it at the wrong time happened in the world they miss a quarter etc that you're not forced to lock in those losses

SPEAKER_248: because you over allocated to that so this idea around portfolio management is a principal component

SPEAKER_303: of overall stock picking is it's just absolutely critical so i think it you know i don't really

SPEAKER_138: i love the fact what i put myself through college i put myself through law school through business school day trading stocks out of the back of the classroom i'm grateful i live in a country that let me feel like i had some alpha and that i could do that and i could go read the newspaper and sort it out and i wasn't building sophisticated financial models so like you know i think there are ways that folks can do this there are a lot more ways to lose money than there are to make money in a sustainable and durable way right and so as investor what we try to do you know we've got 90 of our portfolio in our top

SPEAKER_142: five or ten companies okay i'm not an index and the deal i have with rlps is i'm very transparent with

SPEAKER_248: them they know that we're gonna own companies in size and it's that portfolio concentration and our time arbitrage holding companies for three years or longer that is a strategy they choose to believe in and sign up to but i know a lot of greats who would never subscribe to that strategy so know your

SPEAKER_142: strategy execute it allocate a reasonable amount of capital so when all of these unknowns that day freeberg talks about come along you can react accordingly and you know the final thing is if it's not fun for you right like if you're actually not passionate and curious about like studying this

SPEAKER_248: stuff and learning about it not everybody is then don't do it right then don't do it then just put

SPEAKER_76: your money in it you're not gonna be good at it but give it to somebody who is the analytical depth

SPEAKER_73: and rigor that the greats employ to be successful at picking stocks at picking businesses and investing in them um and selling them at the right time over time it does not make for good tick tock content

SPEAKER_76: it does not make for good short form content and i think that's why we've seen this dumbing down and this kind of short form thesis driven narrative approach to content creation around

SPEAKER_73: markets and stocks that ends up causing a lot of people a lot of harm uh you know you watch the jim kramers of the world i don't mean to disparage any one individual but that sort of content that's like this is a great company we should buy it like let's go and uh the the depth and rigor takes a lot of time and a lot of effort to really do right and then you get hit in the head you know when we um and that's that's what i've observed lately in a really kind of flurried way particularly across social media and so on that's uh that's why i just wanted to talk about this topic today just to

SPEAKER_58: build on top of what you're saying warren buffett made this very famous bet in 2000 it was him versus a bunch of hedge fund managers and they were able to pick a basket of hedge funds and he said i'm not even gonna pick myself i'm gonna pick the s p 500 and the low cost etf the vanguard etf and he said we'll check in like 20 years later anyways you know the punchline of the story buffett won he won like a million bucks that he donated to charity and these hedge fund folks lost and so to build on your point

SPEAKER_22: jason time and time again the smartest investors in the world ie guys like him have shown us that the most predictable way to make money if that is your goal is to own the s p 500 which is you know a dynamic index of the 500 best companies in the world so there are these people doing all the hard work for you and they have very strict criteria of who's an s p 500 company or not now yes if you cherry pick other companies that are not or you concentrate in some will you generate better returns absolutely but systematically over time that thing has lurched forward at eight percent a year you know nine percent a year if you invest dividends you can approach ten percent a year um and so if if you really want to just grow your wealth that's a very simple steady eddy way to do it and to take a small amount and then go and you know experiment with it to learn makes sense but i think it's important to make sure you're going there eyes wide open to try to actually learn buffett

SPEAKER_138: of course says the index works really well but then he's got 50 of his public portfolio in apple over the last few years so he clearly believes in alpha as well but you know back to friedberg's point since we brought up buffett you know somebody asked munger why can't why can't people just copy

SPEAKER_148: what buffett does and he said because nobody likes to get rich slow nobody likes to get rich slow if you want to what did a zero percent rate environment remind us all over the course last few years

SPEAKER_142: everybody had a grift everybody had a get rich quick scheme i don't care whether it was nft crypto flipping or whether it was house flipping or whatever it was everybody thought you know this was easy and frankly looked at guys like us oftentimes and said you're the dumb ones you're playing the game that's really hard why don't you just you know uh flip some crypto and i think

SPEAKER_385: we're back to a world that if you really want to you know oh by the way yourself how dumb did you

SPEAKER_388: feel i felt so stupid all these tokens minting minting billionaire billionaire billionaire billionaire billionaire billionaire and i just i just sat on the sideline to your point right it just made you it

SPEAKER_123: made me feel so stupid i felt super nice it's like i what who's the customer and how much do you

SPEAKER_210: charge him and when you can't get that basic answer of who the customer is and how much it costs for them to

SPEAKER_78: buy the product or service it was like brad's the brad's point i think the punch line is and then you know at the 11th hour it's like there's a tendency to just capitulate and say okay forget it i'm in

SPEAKER_50: and that's when all the money gets torched real quick there's a proposition here in california where we vote on specific uh ballot measures not every state has this but we have prop 30 coming out this is a 1.75 tax on income earned incomes earned over 2 million for the next 20 years in california which by the way had 100 billion dollar surplus that would go towards clean energy this was proposed originally by environmental groups but uh newsome has come out to battle against this which would seem counterintuitive because he's so pro environment what this would do is spend about 80 percent of this 100 billion in new tax revenue over the next 20 years 80 percent would go towards charging stations for evs and motivating customers to buy evs 20 would go toward to combat the crazy amount of wildfires we're having here he uh gavin newsom that is called this um a cynical scheme devised by a single corporation lyft to funnel state income tax revenue to their company lyft has provided almost all of the 40 almost 48 million in funding for this prop 30. uh and the reason is because california is going to require 90 percent of ride sharing miles to be traveled by zero emission vehicles in 2030 you know on top of that that california is going to not let you sell anything other than evs in 2035 if this continues now you've got a bunch of people on the other side of this doing anti-prop 30 including the california teachers association because they want the money reid hastings over at netflix moritz over at

SPEAKER_111: sequoia sam altman over at open ai well what do you think of this um freeberg i'm curious sorry what

SPEAKER_92: side are they on jaco the side of lift ottman no they're they're saying don't do this because they are trying to control taxes in california they're on newsom side newsom side hey this is a grift by lyft

SPEAKER_50: because lyft is concerned that they're going to have to you know bear the brunt of 90 of miles so i guess the i don't know if it's original sin but the the one of the levers here is lyft has got the majority of their rides are in california uber has stayed out of this because they don't have as much exposure because the number of rides in california is a smaller percentage of

SPEAKER_111: their overall revenue brad brad you have some thoughts too here i think so freeberg or brad i'm

SPEAKER_381: just looking at the board of directors at lyft and thinking to myself good god what are these people thinking spending 40 to 50 million dollars on this it just seems that they've totally lost the script

SPEAKER_142: the company has way bigger problems way bigger problems to focus on right then you know this measure have a little faith in the system that if we don't get to a place where this is reasonably practical over the next 10 years then i'm sure we will evolve right uh the legislation around this you know kudos to dar and the team at uber for not running scared on this right for not trying to push this through these corporate governance initiatives guised as referendums in this state i mean this is just bad politics bad policy i mean we got valerie jared on the board of this company you got political sophistication on the board of this company i want to be you know i wish i was a fly on the wall i want to know the conversation that went down and who raised their hand and said this is the highest and best use of 40 million dollars of our money crazy yeah right makes no sense freeberg you have thoughts

SPEAKER_360: on if i mean you've talked before about how you think the free market should solve these things

SPEAKER_303: what is the governance structure at lyft guys i knew that was coming i knew it was coming did they have super voting shares yeah anybody look i don't know the answer to that so i think that the

SPEAKER_73: tax rate in california is high enough now that we all have friends friends in our poker group who have left for the state of texas or the state of florida where there are lower tax rates and where they feel like they're getting more value uh for their tax dollars there's certainly a calculus going on with newsom i believe in you know the impact that having higher tax rates would have on what is clearly not just a theoretical but an actual evidenced um you know exodus from the state of wealthy and high income earners this could be like you know at some point there's a tipping point that looks a lot like france where you raise the rates high enough enough wealthy people leave and the net tax dollars actually go down like what happened in france when they introduced their wealth tax then they reversed it and everyone came back i will say i don't more important long-term point

SPEAKER_76: i don't see a world where we don't have over 60 tax rates on the wealthiest people in this country at a

SPEAKER_73: federal level if you look at um if you assume a five percent long range call it 15 20 year uh horizon for uh for interest rates even four percent on 30 trillion dollars of outstanding debt and you assume that the voter base will never vote to reduce social security or medicare entitlement programs and obviously the defense budget won't get cut we are not going to see a situation in this country on a federal basis where we can actually meet all of our fiscal obligations without incremental tax revenue and i think it is much more likely that you know look whatever happens with the state initiative happens but i think it's very likely that over time the only way for the united states to uh to bridge its fiscal gap is going to be to raise income to increase the tax rates i don't see another solution because i don't think that the federal government or in our kind of democratically elected congress we're going to see a system that's going to say hey let's go for austerity measures let's reduce entitlement programs both sides will say that it's just not going to happen so tax rates higher tax rates i think are coming well you know maybe california will skip over this particular generation but i don't see how the united states continues to thrive over the next 15 to 20 years without tax rates that will today seem exorbitant well in the last 20 years we blew

SPEAKER_22: through a debt to gdp that was i think 57 percent and it basically doubled and so david to your point when we wanted to feel prosperous what we did was we financed it we went out and we you know put out a ton of debt in order to make sure that our entitlement spending or our defense spending or whatever the things were that we needed as a population to feel like we were growing and moving forward as a society we had so that is the practical nature of what happens and look a lot of people think that there is some upper bound to debt to gdp and i'm actually of the opposite view which is i think that you know the quote unquote invisible hand justifies us moving debt to gdp to higher and higher rates so the first time the united states went past 100 we thought it was the end of the world it turned out it wasn't we'll eventually go past 200 somebody will clamor and you know be anxiety riddled but they'll take some ssris they'll be okay we'll keep moving forward then we'll get to 300 percent we'll keep moving forward so we are in a debt spiral that is a feature not a bug of how democratic societies work as a companion to that i do agree with you that taxation kind of is a pendulum it it ebbs and flows and you know we're in the part where it's going to go higher before it goes lower but i want to tell you a story which is that in the beginning of this summer or sorry this fall i was in the middle east and then i was in asia and they have very different taxation schemes right and many of them have zero cap corporate gains tax and you know sometimes zero income tax but then the opportunities for them to be able to invest in drive returns is also commensurately lower meaning there's not as much alpha in most of the opportunities that they see whereas if you go to california you have to pay 60 tax but then you know you could be an angel investor in uber you know and all of a sudden take 25 000 and turn it into a hundred million which is un ungodly it's incredible so i think that in my opinion actually like there's actually this beautiful symmetry where even if taxes are high your earnings potential is commensurately higher such that the net that you're left with is the same as if you were in another place where taxes may be zero but you're just not going to get exposed to the same ways to make money and i think obviously there's corner cases where that's not true but i don't think sweating taxes is a really important waste it's important way to spend somebody's time i just think it doesn't matter rad funnel word i would just say

SPEAKER_138: the beautiful thing about federalism is we get to a b test in real time uh different points of view and so we're seeing the biggest a b test maybe in the history of federalism between the state of california the state of texas and the state of florida and it's not just tax rates right when when elon leaves to go to texas we have the head of the california general assembly right changing her twitter profile to say good riddance and flipping in the book flipping the bird to elon right there is a hostility toward business that has emerged in california that i think is commensurate and

SPEAKER_142: related to the tax rate but also separate at the same time we have the mayor of miami texting us asking us to come down for a visit we have friends uh in texas who are literally politicians who are marketing their state to people in california and we're going to be able to political scientists will look back in five or ten years and they'll be able to answer those questions for you but i suspect that that makes us a much stronger place for experimentation than countries like france where

SPEAKER_167: it's all or none and just to give people an idea to chamat's part about point about debt to gdp here's the chart early part of our lifetimes 50 percent 1990s 60 70 percent uh after the great recession in the pandemic 120 percent japan's at 200 percent i think so there's obviously uh it doesn't mean

SPEAKER_79: anything i know that your payments might at some point yeah i really don't think so because i think what will happen is you'll just move the yield you know the yield to maturity will move out and you know we'll issue again you know this is the funny thing we talked about this last night at poker like you know trump's ideas some of them were actually very brilliant they were just packaged

SPEAKER_58: through this lens of being a total goofball so you could take it seriously but 100 year bonds when rates were zero now looks like oh my god what a brilliant move well i mean if you could

SPEAKER_92: take a 50-year worldview about climate about nuclear energy about semis we didn't get to semiconductors again this week we got so much good stuff but you know we do need to take very long multi-decade looks at investment and why not make a 25 or 50-year bond for semiconductors can i actually just do a

David Friedberg: small psa sure quickly public service announcement from shaman the more you know go i went to blue bottle coffee today and i asked for a latte and uh they gave me a latte with oat milk that's their

SPEAKER_22: default which is disgusting and i find out i find out that is now their default and brutal and i said there's a lot of normal people that don't want to ingest that chemical spew into their body and so this is just a shout out like just a comment to blue bottle like can you please realize that a lot of us are normal we want to come to your store and then you know not have to ask for the long tail alternative can you just serve the thing such virtual signaling most of the people drink coffee shop yeah most of the people still drink milk okay um i'm not trying to brigadoon you blue bottle but i'm not going to go to you anymore as a customer because i find this stuff really dumb like can you just have milk so that i can ask for the oat milk if i want to versus giving me chemical stuff that i don't want

SPEAKER_424: i don't want that yeah that's and and and complaining about oat milk is that what's going on no it's this is where this is where we are moment it's just like i just want milk i want a latte i

SPEAKER_425: mean i want to go and support you guys i want to maybe you know maybe the cow doesn't want to make

SPEAKER_73: that milk for you after its baby was ripped away from it oh boy here we go you know here we go it's

SPEAKER_219: today we and we we survived 90 minutes and here it comes at what point you know did the cow agree to be in service to you to make your milk you think i need to have a verbal contract with cows

SPEAKER_429: i mean well yeah i mean are we going to do the olive fed beef next week or not let's just get down

David Friedberg: the translator of the cow human protocol who who is it you be boop is it one of your friends like what i don't actually i am working on a neural link i'm not sure i'm not sure that the default

SPEAKER_72: assumption that the cow should be there to do whatever you want it to do is a fair assumption i think that'll change over time but it'll take some time i i think that that's completely fair

SPEAKER_22: and reasonable but what i'm saying is right now while there's an entire you know i can't believe you said that economy of people well there's an entire economy of people that shouldn't get rolled over because you want to impute the emotions of cows i'm allowing you your freedom to want to impute those emotions of cows well i would like to support the dairy industry and buy milk so can i

SPEAKER_73: please do that no i want to impute the freedom and rights of the cows but that's going to take some

SPEAKER_425: time but sure go ahead have your milk for now and you're allowed but i right now will take the side

SPEAKER_50: of the dairy farmer i just want to know did anybody get your chakaren outrage your trim off karen outrage your chakaren on tape is this trending on tick tock yet when you admonished the barista

SPEAKER_425: it's not the barista's fault i just think it's i didn't make a scene or anything i just got it came

SPEAKER_22: in i taste it because i just said can i please have a latte assuming that it would come with milk like no most normal places yes and now i have to actually ask for milk because they think that this chemical composite stuff that's called open have you looked at the ingredients that don't we had

SPEAKER_210: this conversation yes we as anybody listen we didn't even get to male chimp ceo ben chestnut who is

SPEAKER_123: you know like one of the kind great ceos of our generation getting yeah his memo is his last name

SPEAKER_443: really chestnut i believe it is yeah he's just there's a nice chestnut is a great guy i've met

SPEAKER_14: him so many times incredible human and he's been ousted should we do outros because you didn't do intros jacal did you have all right so here's the outro yeah for uh for the sultan of science the

SPEAKER_210: queen of quinoa himself climbing the stray cat leaderboard as we speak david friedberg follow him on his twitter handle where you can get all kinds of hot takes from science to ukraine at friedberg is the hand talking about i never tweet i know that's the joke okay also with with us again

SPEAKER_425: the anchor he'll be doing a twitch streaming where he translates the emotions i'm actually doing various

SPEAKER_448: my cooking show which has a base of oat milk it's my oat milk top 10 beverages tonight on twitch

SPEAKER_123: just follow stray friedberg get it i don't want to get brigadooned by the oat milk lovers but they're

SPEAKER_78: coming milk stands are coming for you man you listen i don't want that chemical stuff in my body but i'm not going to stop you from doing it i'll do a diatribe on chemicals in oat milk next week well

SPEAKER_14: what should we drink if you did have a choice friedberg if you didn't want to drink the chemicals

SPEAKER_453: and only what would you drink what would you advise what do you drink nothing drink soy milk oat milk

SPEAKER_448: whatever okay but you okay but you're okay and uh um bringing that namaste have you tasted milk i drink

SPEAKER_458: the beautiful glass jar no i'm asking freeberg's of straw milk yeah three dollar returns for each

SPEAKER_460: glass bottle i return them i get them from good eggs have you tried have you tried no look i'll tell

SPEAKER_76: you what is going to happen in the next he's never had milk in the next 10 to 15 years

SPEAKER_72: i'm telling you there is an economic model that will work where we're going to make that's great

SPEAKER_22: you know but i'm saying but wait between now and then can i just two things number one is there's a taste and a flavor profile i've grown up with that i would like and i don't think i'm a bad person so i just like to have that and not be made to feel guilty about it okay and and and number two i don't want to put chemicals in my body okay so if i can find a natural thing that i like can i please

SPEAKER_311: just drink that can i just please blue bottle have that in my coffee without having to explicitly ask for

SPEAKER_337: it yes you you will get that and number two your short is still owned by nestle and they're the

SPEAKER_109: largest dairy but but chamath has still has a short on oatly so let's just keep this going for just two more weeks okay let me ask you an ethical moral question it's not i'm joking he does not

SPEAKER_72: have a short i don't even know if at least public i'd rather you ask me an ethical moral question than a political one so i'm i'm going to yeah i mean we got a break from ukraine this week

SPEAKER_14: would you have a if the synthetic version of milk or steak was made uh like and is a protein

SPEAKER_229: that is exactly the same to a cow would you have a problem morally with eating and or drinking it

SPEAKER_76: no so the objective of what's called precision fermentation or some people call it biomanufacturing

SPEAKER_72: you take the dna from the cow or from the chicken you put it in a yeast cell or a bacterial cell and you put in a fermenter tank you put sugar water in the tank and the yeast cell or bacterial

SPEAKER_76: cell eats that sugar water and it spits out that protein yeah so you've programmed you've programmed that organism to make that protein and instead of growing a whole cow or growing a whole freaking chicken you're growing the protein no moral issue no moral issue no because no animal died in the

SPEAKER_32: making of the process you know you're not taking can i quote dave chappelle here go ahead yuck

SPEAKER_190: all right i mean it's gonna it's it's identical to the protein you'd be eating otherwise it tastes the same it's the exact same compound oh there's nothing about it that's different uh thanks to the

SPEAKER_210: dictator thanks to the southern science and for the fifth bestie coming in and and uh and doing a great job today uh on behalf of our friend the sassel david sacks who is busy in a secret clandestine peace uh making junket to ukraine i am the world's greatest moderator jason kyle canis we'll see you

SPEAKER_229: next time on all in love you boys brain man deep and source it to the

SPEAKER_498: merges