SPEAKER_01: hey everybody hey everybody welcome back molly she's back thanks for holding down the fort

Jason Calacanis: partner appreciate you no problem it is thursday i am back in time for a bunch of news because

SPEAKER_02: whatever day it is you know there's a lot of news there's actually breaking news as we started uh writing the rundown and getting ready to record today which is uh theranos ex-president sunny balwani has been found guilty of fraud and speaking of fraud we're gonna then drive into

SPEAKER_06: crypto uh note the people in charge of crypto regulations in the u.s might have to forego crypto investing themselves the u.s is uh you know creating some more regulations after you know all

SPEAKER_08: of this crazy dismantling and crypto contagion it seems like the u.s government is going to finally

SPEAKER_02: step in what a concept what a concept maybe a little less self-dealing in government and there's a big lawsuit aiming to become a class action lawsuit against solana it's taking aim at vcs and some of that insider uh dealing yes this is something we've talked about it's a multi-coin fund and uh

SPEAKER_15: we're going to do a startup of the day for warehouse workers very cool it's going to be a great show

SPEAKER_17: stick with us this week in startups is brought to you by microsoft for startups founders hub for the challenges you face as a startup founder microsoft for startups founders hub is here to help the platform provides founders with free resources like azure credits development tools like github mentorship resources productivity software training and so much more the program is open to all and takes five minutes to apply with no funding required learn more and sign up at aka dot ms slash this weekend startups masterworks masterworks is the first company allowing investors exposure into the blue chip artwork asset class twist listeners can skip the 30 000 person waitlist by going to masterworks.io and using promo code twist and lemon.io need to speed up your product development without draining your budget hire vetted engineers from europe at lemon.io go to lemon.io twist to get 15 off for the first four

SPEAKER_02: weeks all right so as we mentioned before we dive into all that crypto stuff just an update that theranos ex-president sunny balwani has been found guilty of fraud of course elizabeth holmes was found guilty six months ago about um and in this case uh this is kind of interesting sunny balwani was found guilty on all 12 charges against him which were all wire fraud and conspiracy to commit wire fraud elizabeth holmes got that split decision she was like yeah convicted on four acquitted on four and there were like three where they couldn't reach a decision but in balwani's case across the board guilty both of them

SPEAKER_21: face up to 20 years in prison well not looking sunny for sunny balwani uh but uh hey oh you know what

SPEAKER_06: great uh we need to make an example of people who are committing outright fraud and putting people's

SPEAKER_24: health at danger you never like to see this kind of stuff happen but it happened they are solely responsible the two of them this was a joint effort by both of them to deceive their investors to deceive the public and uh they should have the book thrown at them we put people in jail for selling dime bags of weed or you know whatever you know stealing a car uh you know you probably go to jail if you rob somebody's home for 20 years right if you steal a car grand larceny if you're dealing drugs

SPEAKER_06: you know these white collar criminals they they they they typically get a pass and the amount of damage here you know was really significant uh you had people who made health decisions based on this data it's not a joke and uh you know fake it till you make it when you're making an app or you know i don't know you're trying to make your movie and you're quitting tarantino and you're telling everybody you're going to change the world with your script or whatever that's fake it till you make it right you assume molly that hey you know what i i'm not a director but i'm gonna be someday i'm not a ceo

SPEAKER_15: i'm gonna be someday that's that's laudable that's fun great you're a little bit delusional but there is a very clear line from being delusional and being a fraud as a delusional person i can tell you this i never would in a million years ever think about lying or selling shares in a company that didn't do what it actually did but i might try to pump myself up and say hey i'm going to change the world so for founders watching this is this week in startups remember you can pump yourself up you can fake it till you make it you can be delusional you can try to sneak into conferences you know definitely that's all good you can you know but you can't commit fraud and you can't put people's lives at risk they knew what they were doing yeah and we know that because we

SPEAKER_34: watched the show yes the tv show proved it to us i think that tv show is gonna put sunny balwani in

SPEAKER_36: jail like i'm just saying who knows how much what he would have gotten away with had there not been

SPEAKER_38: that show which really like i think stuck it i mean obviously they had a lot of proof and they had the

SPEAKER_02: texts and the emails back and forth from each other you know that were basically like i'm in it just as much as you are um but there was definitely speculation that that show which was so well done

SPEAKER_39: i tell you they should have had a light they need to have uh if we watched this johnny depp nonsense

SPEAKER_06: for weeks unfold which is of no importance to society you know generally speaking i'm sure it's important to johnny depp but all due respect this is not like some super lesson to be learned uh i think

SPEAKER_24: by society but here there's a lot of lessons to be learned i wished that this had been televised i think this would have been very important for the public to see what happened here and understand it and you know to study it i didn't know that the guilty that that that the uh trial was underway even i

SPEAKER_41: this was lightly covered yeah there's been like a lot going on on in the world yes but it also tells

SPEAKER_02: you i mean what media manipulation looks like right like sunny ball one he's just not as interesting

SPEAKER_43: because he's not the cute blonde here like yeah well he's not the ceo either but he was not the ceo

SPEAKER_48: but he should have gotten at least 50 as much coverage i mean i would think so absolutely and it they seem to be zero or like maybe i would say one percent of the coverage so that does feel like a

SPEAKER_20: double standard yep although to be honest i i can't even really say for sure how much it was or was

SPEAKER_55: not covered because a algorithm and b like well the world being on fire at the same time you know yes

SPEAKER_38: there was so much that even i will cop to the fact that this is the least the thing i'm least

SPEAKER_02: interested in but i really like tying it back to being a founder you know being an investor like some of this is about doing your diligence which a lot of the investors in this company did not they took all of these claims at face value and didn't do their diligence and also the point at which you go from magical thinking to lying yes which is a very clear line two very important lessons

SPEAKER_51: and uh thank you for bringing up the first one which i you know i didn't even think of if you're an

SPEAKER_60: investor do your diligence and if something is not right and you're not seeing the technology then you

SPEAKER_51: know it's a red flag and then if you're getting spun you know it's just like how many red flags do you need molly in order to say i'm going to pass on investing in this or i am going to put my foot down

SPEAKER_24: and you know i've had the situation happen uh you know in one of my future books i will i will tell more stories but to obscurify situations i've been in situations not dissimilar than the elizabeth holmes

SPEAKER_15: one where a founder was lying or a founder was doing something unethical or something that even molly i could consider getting close to the legal line right and i put my foot down in these two cases i

SPEAKER_65: think it's two cases not legal cases but two instances and i have a strong belief which you

SPEAKER_06: now know since you've been working together six months here and you've been you've been doing this

SPEAKER_65: week and uh we've been doing a vc sunday school i believe in diligence and you are now getting a front row seat to how much work we put into the diligence here at launch and the syndicate we put

SPEAKER_67: a lot of work into it and boy do we find a lot of interesting flags and red flags some of them are

SPEAKER_06: mini red flags some are pink flags some are like okay this is something that could be cleaned up your

SPEAKER_67: accounting's a little sloppy you know oh you need to get these legal documents in order so you're in compliance they're kind of like compliance issues right or let's call it hygiene right like good

SPEAKER_15: hygiene and you now are getting to see how founders react to them and how they respect us the founders and other investors who see us do this diligence they uniformly respect us who doesn't respect you when

SPEAKER_65: you do proper diligence the people who are committing fraud so when you get push back on diligence i

SPEAKER_70: encourage all the young investors out there on their first funds i'm on my i'm going to be starting our fourth fund and over 300 investments i too got a little bit like oh am i being too hardcore doing this diligence molly and then i freed myself of that because i said anybody who's going to fight back on an investor who's giving hundreds of thousands millions of dollars to a founder and being partners

SPEAKER_51: with them and putting their name attached to the company who would in a situation like that fight

SPEAKER_35: against doing proper diligence who would who would fight against that someone who does not want that

SPEAKER_02: spotlight coming exactly exactly if you don't have your house in order and you're hardcore about that you know we're hardcore about demos like i have seen you in professional development and other investors and and you know we'll write templates that are like if you are still going on and on after a certain number of minutes about your background and your origin story we're going to want you to skip to the demo even in super early stage companies we want to see the goods and in the theranos case over and over and over people were not showing good and did not insist on it it's such a good point you know

SPEAKER_60: if one of the core things we do as investors and as partners these companies is we give product

SPEAKER_51: feedback and we understand the product and we try to understand the product because it's going to eventually make contact with the world aka customers and the magic that happens in startups is when a product is so well constructed that the customers fall in love with it they're delighted their problems are solved and if you are investing tens of millions of dollars or a hundred millions of dollars and you can't bother to look at the machine and understand how it works and open it up and send a diligence team in you shouldn't be investing right like rupert murdoch put a hundred million dollars into

SPEAKER_15: this could he not have earmarked but ten thousand dollars to hire somebody in science to go look at it think about what he did he just trusted everybody else and i'm not singling him out but there were many people like this who trusted everybody else but there were more people molly

SPEAKER_65: who i know who laughed in elizabeth holmes face literally and sunny's face when they refused to show

SPEAKER_06: them the technology so i'm actually really glad that this is what uh has happened yeah i am glad that

SPEAKER_24: this is over it was a nightmare for silicon valley to be blamed for this they didn't have a lot of silicon valley investors it's criminal behavior full stop and every thousand companies or so or maybe it's every 500 you could have sociopathic people narcissists criminals there's an evil element

SPEAKER_51: in the world people forget that and so why wouldn't that exist in any vertical it could exist in the movie industry the finance industry startups pharmaceuticals health care every industry is going to have bad actors these are amongst the worst actors i've seen in my career yeah this is this was i mean

SPEAKER_83: this was major yeah yeah no doubt no doubt all right well i call this same out by the way

SPEAKER_85: and i will get my flowers and i will get my coronation at some point molly when it comes to

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SPEAKER_90: every with every passing day exactly i mean i was gonna say let's let's talk about my flowers are

Jason Calacanis: here with every passing day more cherry blossoms are popping up behind you as a result of your accurate

SPEAKER_97: predictions about crypto okay first of all we're going to talk about a little regulation uh story

SPEAKER_02: because you know we have been wondering what's going on with regulation a lot of companies where the regulators where are the regulators what are they doing why aren't they providing some certainty

SPEAKER_100: here or maybe protecting retail investors and and then it turns out it's possible i don't know for sure but evidently up until right now there weren't any rules about whether you could be a regulator

SPEAKER_02: or a legislator or an advisor on regulatory issues related to cryptocurrency in the united states

SPEAKER_38: government um that there weren't any rules against you also just like owning a crap ton and being a hodler

SPEAKER_51: oh my lord so what we're saying now is the next shoe to drop is there might be people who are responsible for making laws that were buying coins nfts whatever buying crypto writ large had a vested

SPEAKER_15: stake in it maybe because if they're doing this i don't think they're doing this proactively this sounds like a reactive move it kind of does yeah it feels reactive i mean if this was proactive it would

SPEAKER_24: happen five years ago yeah we're we're in decade two of crypto and we're certainly in like you know

SPEAKER_02: year five or six of it being mainstream so this is a legal advisory from the office of government ethics to be clear it's not even really like a law but it bars federal workers who own crypto from working on policies that could influence the value of their digital assets so a pretty straightforward non-conflict of interest rule here we do know um that for example there have been some white house staffers that have been open about their crypto investments i assume that there are plenty who haven't been one example is technology advisor tim wu um who has been an advisor to the biden administration who holds millions of dollars worth of bitcoin recorded reportedly and has

SPEAKER_48: voluntarily stepped back from working on crypto policy i have a solution yeah kind of like

SPEAKER_24: journalists do we would have disclosures right especially for high higher profile journalists so if you were walt mossberg or kara swisher or molly wood or whoever you know somebody up there

SPEAKER_15: in your bio it might say i am you know in a relationship with somebody who works at google

SPEAKER_24: like kara swisher was famously married um to a googler and so you know she would just disclose that

SPEAKER_70: now if you live in silicon valley the chances of you and you do get married the chances of you marrying somebody in the tech industry or like 98 so fair enough and would that change somebody's

SPEAKER_51: coverage yeah almost certainly not but if it's disclosed it makes you feel a heck of a lot better so what should happen is on the bio pages of everybody who works in government you know who's in any kind of a significant position it should just say if they have any direct holdings not mutual funds because

SPEAKER_85: mutual funds you know you're kind of obscured but if right you know or maybe small mutual funds you know which is what i always tell people when i'm on something like when i'm on cnbc i would say to people listen i might hold some facebook you know in a mutual fund or i might own tesla in a mutual fund

SPEAKER_51: or an index fund actually is what i use vanguard like index funds but i don't actually trade it i

SPEAKER_24: don't own specific ones if i do own specific i'm like i own coinbase i own you know uber obviously and

SPEAKER_15: i own other you know square so i i'm just always upfront about it but why not just put it on everybody's bio page it actually gives them more credibility hey i mean it really does has bitcoin ethereum nft and if you've listed six different things he held great perfect you know and i'm

SPEAKER_02: wading into a minefield i know because members of congress are constantly violating these rules

SPEAKER_119: right like policy is the greatest trader in the world i mean let's just not even get into joe manchin reaping like five million dollars in stock dividends from a coal mine do you not know this

SPEAKER_122: on the energy security like the energy committee i mean it's like it's all of them by the way it's

SPEAKER_44: all of the rules democrats republicans it's all of them it's all of them and they have disclosure

SPEAKER_02: rules in fact i think there's a republican congressman right now who's in trouble for like waiting a year to disclose an investment that because he was like writing legislation related to that specific investment i mean it's all as dirty as it can be um so but at least and so i would love to see it all get cleaned up there even uh producer nick found this wall street journal investigation finding that back in 2021 there were 131 judges who failed to step back from lawsuits that either they or their families had shares in and it was like appointments going back to lyndon johnson yeah yeah

SPEAKER_60: uh you know here's the thing it's very simple to solve these problems too you go into government

SPEAKER_51: office you should have all of the shares of companies you have either in a blind trust you don't have access to the trading you just put somebody who's a good custodian into it and they

SPEAKER_24: could give you like a yearly report or you could make yearly decisions right so even if you do make decisions they would be every year i think that would be reasonable because you don't want people to

SPEAKER_15: not take office because they can't it would hurt them financially so let's say they said hey you have to disclose it every year and you can do your trades at the end of the year whatever in january you have a month of trading but you just have to disclose your trades um five days before you make them you know one week so if nancy pelosi wants to buy some pharmaceutical company because she has or

SPEAKER_06: mansion has some coal company whatever it is and they sit on the coal thing or they they know what's

SPEAKER_15: going on with covid they can only do it once a year and there's five days for the rest of the world to

SPEAKER_110: look at that trade and they get the to jump the trade right totally yeah um that would be fair to

SPEAKER_44: me that would be fair and i would think that's fair to be clear like congress passed this stocks act

SPEAKER_38: that was supposed to increase transparency and maybe make it harder for them to buy and whatever

SPEAKER_20: and then they immediately watered it down completely so ridiculous so the dirtiness is everywhere but if you have been wondering why there hasn't been more crypto regulation this could be

SPEAKER_02: could be a reason oh that's right it was david purdue of georgia and then somebody else that one woman who like insider who traded who like bought like body bag and ppe stocks when covid first broke

SPEAKER_20: after they had been briefed i mean it's so dark it is so dark it's so dark you're making decisions for

SPEAKER_85: like you run for office because you want to do some public good ostensibly then you use it as a grift

SPEAKER_70: and how much money are you making like are these people making 10 grand on a trade 100 grand on a

SPEAKER_51: trade like why even do that it's much easier to just put your stuff into a low fee index fund on wealth front uh uh you know vanguard and set it and forget it and then just focus on your time in office

SPEAKER_114: it's so much easier it's so dumb to be a day trader like this while you're you know and then have this

SPEAKER_24: appearance of impropriety it's just dumb you know if you and at its worst you know there's a whole

SPEAKER_85: bunch of people in hollywood right now who are getting dragged into a whole insider trading lawsuit because somebody was trading or they knew about the activision sale or something do you remember

SPEAKER_24: that like a bunch of high-profile hollywood people made a bunch of trades yeah martha stewart comes to mind you know and all the people who are making those trades and if you get caught up in one of these

SPEAKER_29: things you can wind up in jail you know and in these da's sec you know they take this stuff mad

SPEAKER_148: serious you know and they would love to have high-profile people to put a pelt on their wall and you don't want to put yourself in that situation yeah it's totally unnecessary so easy to make money

SPEAKER_06: you don't need to do shenanigans all right you know i love alternative investments i mean i've

SPEAKER_15: invested in over 300 startups it's kind of my thing but if you want to diversify with an asset class that is historically uncorrelated with the stock market then you need to look into blue chip part and

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SPEAKER_24: i actually bought some shares last year in a basquiat i love basquiat is one of my favorite artists and i wasn't gonna be able to do that myself and i don't want to take custodian of a painting and then worry about it insure it maybe somebody steals it no i bought my shares in one at masterworks which you can see on the screen if you're watching right now what a beautiful painting so i want you to give it a shot go take a look at it go to masterworks.io twist and get priority access that's masterworks.io twist to cut the line today now you got to see the important disclosures at masterworks.io slash disclaimer and this is an investment so you got to do your homework it's so easy to profit off of

SPEAKER_97: um tokens why bother with publicly traded securities when you can actually get us to doing it no no no no

SPEAKER_02: i'm just saying like you know what you know is a good way to do this is like get a bunch of unregistered securities in the form of like a crypto token yes and then what you could get a whole bunch of them and then you could be like everybody this token is the jam you should totally buy it and then you should offload all of those tokens and make a ton of money while the whole thing

SPEAKER_24: collapses long after you're gone this is the solana labs uh or solana and the multi-coin capital now i had and totally these are alleged on the pod on episode 1302 so anytime something remember i said this in the previous episodes anytime the market comes down the lawsuits and the actions come out

SPEAKER_51: right so we don't know here if this is a bogus lawsuit or if it's legit but let's just factually go through what they're claiming and then i'll give you my handicapping of it yeah um the claim by uh

SPEAKER_02: mark young who bought solana tokens during the summer of 2021 is alleges that solana itself the token sol is an unregistered security and that far from being decentralized he says this uh this lawsuit alleges it's actually highly centralized and that mostly benefited only insiders the lawsuit mentioned solana labs the solana foundation the co-founder anatoly yakovenko uh who was on episode 1302 in 2021 and also the crypto vc multi-coin capital and its co-founder kyle samani all by name plus the trading desk falcon x so there's a couple there's the the two big components to this one is that the way the token soul was created and sold meets these three tenets of the howey test which is the test used by the supreme court to tell if the sale of something is a security so the four parts there are investment of money okay in a common check in a common enterprise check with the expectation of

SPEAKER_35: profit check check check check check to be derived from the efforts of others check check check check

SPEAKER_65: check check check right it's obvious all these coins fit this profile the only reason it wouldn't fit this

SPEAKER_51: profile is if you didn't expect a profit from it and that's where you would fall into what i would consider a utility so it wouldn't be an investment of money in the utility token you might be buying the token not as an investment but to use it so if i bought miles for american airlines i'm just coming

SPEAKER_24: up with something that also uses tokens essentially if i bought a bunch of airline miles from united

SPEAKER_15: and i did that to buy my ticket to italy next summer that's not an investment of money i'm buying them it's a transaction right and it's not a common enterprise it's for me to go to italy it's not to

SPEAKER_67: invest in united and to hope that other people fly united and i'm not expecting a profit i'm expecting to get a good deal right totally and is it derived from the efforts of others the it's not an investment so it's not no i am not giving the money to the miles company and you know so this is why this test is super important and for people who have utility tokens you know if the if the token is surging and the person who bought it wanted to make money which all you have to do is ask them why did you buy the token if you said airlines miles yeah why'd you buy the airline miles molly right go to italy i want to

SPEAKER_13: go to italy why'd you buy your bitcoin because i hope it's going to go up exactly right yeah it's pretty

SPEAKER_15: easy and this is not this has nothing to do with uh solana this has to do with the entire industry pretending that this test does not exist all of these things are securities the only thing that maybe wasn't a security was bitcoin because they put it out there anonymously with no central authority but you know if they ever found satoshi i think you could make the argument here that they set it up

SPEAKER_67: in order to make a profit i just i think it's because they can't find satoshi that they can't put this

SPEAKER_35: test against anybody totally and then even if it started that way it unquestionably is being used

SPEAKER_02: as a security and and you could even argue has just become one has transformed from its original purpose into a security and then there's this other commodity people say it's a commodity right

SPEAKER_181: i don't know what the difference would be there you know like still kind of passes something that

SPEAKER_38: everybody uses and needs like i don't yeah but what is the use case really common exactly then i don't

SPEAKER_02: know why it would be um so then there's this other question too about and this is what i think is actually really fascinating is that the lawsuit also alleges centralized profit taking so okay um it notes that two things these investors particularly multi-coin sold millions of dollars worth of solana to retail investors through this falcon x trading desk yep even though and promoted it really heavily you should totally buy my token even though they knew there were major technical issues with the platform because remember solana had all those crashes they've been down three or four times last month um that prevented the network from producing new blocks and could have affected the long-term value i guess of these tokens but the lawsuit also i think that's bs by the way that clean

SPEAKER_23: because they may be yeah all services go down that seems like a spurious is that where it's spurious

SPEAKER_20: specious i guess the question is like yeah i mean it would be like you should still use twitter even though it crashes all the time that doesn't necessarily get intrinsic invested people bought

SPEAKER_85: shares they sold shares but of course it's going to go down aws goes down you know it's amazon so and

Jason Calacanis: i don't know what part of this is illegal but i do think it's interesting and and uh this woman on

SPEAKER_02: twitter who's a lawyer for general counsel of this group of european software development companies that are building blockchain based software noted and other people did too that the lawsuit contains this allegation that 48 of the sole tokens are held by insiders either like the founder or the team or the investors and she said they're alleging that a crypto vc is an underwriter and said it's you know this is this would be something you might more commonly see in an sec case not from a private plaintiff because in theory it's not illegal for that to be the case but it also does point to this bigger question of like who's crypto even for if it is a security

SPEAKER_06: and i think it is um then all of this should have been done you know properly um and it says here solano labs filed a form d with the sec saying the sale was of securities exempt from sec registration as in private company so they're kind of saying these are private company shares

SPEAKER_51: and of course people are going to sell their tokens when they're on the market and this is the big problem with the shadow economy you know the shadow market that was created they created a shadow securities market in crypto over the last decade and they refined it molly to make it super efficient and the claims are various vcs and i think multi coin is one of the smallest there are much bigger vc firms i'm not going to mention any names here but there are large vc firms who have put billions of dollars to her hundreds of millions of dollars to work and if they were buying tokens and they

SPEAKER_201: were buying them early and they were backing the company and then all of a sudden the public can

SPEAKER_15: trade them and the public can trade them on exchanges that that vc is also an investor in or on the board of you start to see a pattern here of well was this some grand conspiracy here to clear these tokens out to the public which would be as if when you and i now are investing in private companies what if we took the company we invested in six months ago molly

SPEAKER_06: uh and like let's take your first deal for the climate syndicate the syndicate.com climate if you want to invest in climate companies with molly and myself let's say we took that company and now we

SPEAKER_67: told people hey this is the greatest thing ever we start talking about on the podcast and you can buy shares well that's called an ipo yeah so and if all of a sudden we're just promoting and promoting

SPEAKER_02: and promoting it being like you should buy these shares this is the biggest thing ever and that is actually what this lawsuit is alleging is yes that it was this sort of constant promotion that made it seem better than it was i mean the lawsuit it's a very long way of saying we think that solana is

SPEAKER_51: a giant pump and no well here's the thing and if the if solana was up right now this lawsuit wouldn't exist wouldn't be happening so here's what happens everybody had a collective delusion that securities laws didn't apply here or didn't apply in a very serious way and that was fine and dandy

SPEAKER_24: because the way our legal system tends to work is that we let people you know build stuff in the world and we trust that they're going to do it in a you know an ethical moral way and i'm sure they thought they were doing this the people involved but then if people get hurt then we double click we audit we subpoena you know this is just how our society works and so now that everything's coming

SPEAKER_15: apart people are going to look deeply in this now there's also a rub here people were lps in funds that made crypto investments and so i'm lps and funds that have crypto investments and so now am i

SPEAKER_06: going to get dragged into all of this and then did i get a distribution you have to start asking yourself did i get a distribution because i lp'd a fund they were flipping securities really early in the life of

SPEAKER_15: the fund and then people got burned and now there's lawsuits and then is it going to pierce the veil

SPEAKER_67: and our lp is going to get dragged into this well if things keep coming apart like this now the lps will

SPEAKER_06: get dragged into this and so imagine you're some giant endowment you know and you got some distribution of you know some token i'm i'm keeping it generic for a reason obviously um and now you made a i don't know 100 million dollars from this distribution uh you had no control over any of this when you are an lp in a fund you the fund managers get to decide when they buy stuff when they sell stuff and and what they pick to invest in now you're going to get dragged into this and this is where the crypto contagion is going to be disastrous this is going to be disastrous this could be lawsuits for a decade

SPEAKER_02: just like in the dot com era there were lawsuits for years might be absurd right i mean there are people in the comments in response to the the threads that are analyzing this lawsuit being like so you bought this thing and you it didn't mature in the time frame that you were hoping you know like it might be totally frivolous but it doesn't matter because to your point if it starts to spread if it starts to affect you know lps who thought they were investing in basically like a mutual fund where somebody else picked the stocks like it starts to be a stain on the entire industry and real businesses built on this technology will have trouble raising money here's the thing yesterday on the show i was

SPEAKER_51: talking about how you know everybody's an adult who made these bets nobody made these bets thinking i

SPEAKER_15: want to make four percent on my money every year and compound it and right you know double my money you know every x number of years no that's not what people were doing here people were gambling these people were betting on the jets you know or the giants to win they were playing parlays they were betting on 20 to 1 ponies you know at the racetrack people knew they were gambling so now it's if you think about it like a free option i got to bet on this company knowing this is the most cynical version of it that this was a little fugazi or this was on the borderline of like the sec's rules so i'm gonna make the bet if it goes up i sell and i win if it goes down i file a lawsuit and i threaten them with the fact that hey maybe this was a little fugazi and maybe i can reclaim my money so i have a backstop

SPEAKER_85: so that that's the other thing here so to the people who are in our our chat talking about this

SPEAKER_24: i do agree with that position actually and i do think people need to learn that there are no free lunches and that when you invest in a company i hate to get all uh berkshire hathaway here but you're buying into a business based on the future cash flows of that business if there is no cash flow if there is no product if there are no customers and you're making that bet you're gambling or you're investing in a napkin and i think all these crypto bets where people investing in a white paper slash pitch deck slash back of the napkin something in that zone molly yeah and uh now you learn the hard lesson you learn the hard lessons of investing welcome to the club yeah you are the sucker at the

SPEAKER_112: table if you know you go to the poker table and you don't know who the sucker is you're the sucker congratulations as somebody who has been that sucker at the table everybody's the sucker sometimes like

SPEAKER_02: yeah yeah uh okay and then uh more like another quick hit of crypto news that's probably also a

SPEAKER_13: contagion it's never gonna end it's never gonna end well i mean it's gonna end but it's gonna be a

SPEAKER_02: while um let's see crypto firm the latest crypto firm uprise okay 99 of its customer funds trying to be friends customer funds oh how yep uh trying to short luna tokens during the trade and luna collapse

SPEAKER_228: last month that's a great trade but you're not supposed to do that with your customer funds

SPEAKER_70: nope nope that's like me taking all of my lp money and going to vegas and playing in poker tournaments or high stake poker games you're not supposed to do that i'm obsessed with this

SPEAKER_97: rehypothecation situation but it seems like keeps coming out and the crypto companies like that

SPEAKER_02: celsius would i explained it to my son who's really into building mechanical keyboards i was like let's say that i loaned you 50 bucks and in response i took your keyboard or as collateral i took your keyboard and it was like if you give me my 50 bucks back you have this keyboard back and you were like okay the keyboard is in good hands because with my mom and then i was like hey jason yeah i borrow

Jason Calacanis: fifty dollars i'll put this keyboard up as collateral okay so i took the keyboard that was already my collateral and i gave it to you as collateral and then my son was like here's my

SPEAKER_36: fifty dollars i'd like my keyboard back and i was like oh i don't have that and i don't have fifty dollars to pay jason back so i can't get your keyboard exactly yeah or like yeah this is really

SPEAKER_238: that is how these got is have all been operating with each other all these companies it's insane

SPEAKER_02: anyway in this case uprise was shorting luna while the price did fall according to the sole economic daily got caught out during sudden price pumps along the way got it and so uh lost three million dollars of its own funds in addition to the money invested from their clients like

SPEAKER_41: apparently they are trying to figure out how to pay back clients that plan is in the works and it's

SPEAKER_60: gone here's how it works and it's gone so when you place a bet on a pony and you give the racetrack

SPEAKER_51: your money and then your pony loses and then you have some gripe they don't give you your money back

SPEAKER_189: that's how it works it's gone the money is gone they absconded with it chunks tiny two dollar bills three hundred dollars at a time like small competition for great engineering talent is

SPEAKER_149: really intense we all know that and a lot of startups are struggling to hire fast enough to keep up with their roadmap and the demands of their you know competitive space you need to have great developers if you want to compete and if you want to hire better developers and you want to do it faster you need a trusted source of pre-vetted candidates that's the key people you want to use lemon.io they will tell you if this person's legit and if they should be working at your company they have a network of engineers from europe and latin america and every candidate has been tested and interviewed by their team here is how lemon.io can make your engineering team bionic no wasting time with unqualified candidates easy access to global talent plus they can get your developer up and running within a week and of course it's more affordable at launch we know lemon.io is a great solution because our portfolio founders have used it okay drew fabricant said lemon.io was a game changer for his startup scout drew was under the gun to hire a developer with a very specific skill set and lemon.io delivered a great candidate quickly and he says they were a pleasure to work with so go to lemon.io twist to get 15 off your first four weeks okay so this is bad news everywhere but i saw some

SPEAKER_198: good news so let's pivot from web 3 and let's just get down to earth get down to them rare earths i am

SPEAKER_245: so excited to have a story that's good news it's just about dirt right like i love this story

SPEAKER_02: a cool story it's great please let it be true please let it be true okay so that the story is that the turkish government is claiming that it just discovered almost 700 million metric tons boom of rare earth minerals that and it's the kind of like it's enough for a thousand years of supply at current demand and these are the metals and minerals that go into electric vehicles batteries like fantastic mri machines fertilizers oil refineries and it's all the metals that are currently

SPEAKER_51: dominated by china yeah and uh we use like 150 000 metric tons it's going to go up to three or four

SPEAKER_24: hundred thousand and these are dirty to take out of the earth they exist in a lot of places but they're my understanding of it i've been getting a little bit of an education last year is that um you know it's how much work is it to take it out of the ground molly and then it's also does your country allow you to rip the earth apart to pull them out because it obviously means you're going to rip apart

SPEAKER_06: you know some plot of land somewhere but the amount they're claiming and a bunch of different people have made calculations here my calculation was like this is like 4 000 years at the current demand another person made a calculation of a thousand uh and who knows you know this is certainly something to look at because i don't know if you remember this but about 15 years ago we're talking about peak oil you must have talked about it on marketplace and at the new york times oh yeah

SPEAKER_15: and everybody's like we're about to run out of oil this is going to be the end of days our society runs on

SPEAKER_67: oil and if oil becomes rare and it becomes it's going to cause chaos on the planet and there will be anarchy and society will break down that is a true statement yeah the part of the statement that

SPEAKER_15: was false was then norway found oil reserves that were greater than like all the oil reserves that had been previously found and then people were like oh wait a second you know we have this new technique for fracking and you got this new technique for taking the sand out of the oil in the oil sands and once again technology found a way and humanity found a way and now the concept of like peak oil has never been brought up again yeah but there were story after story talking about three four five

SPEAKER_65: hundred dollar a barrel of oil and then literally every nation going to war and it turning into mad max

SPEAKER_24: yeah and we don't talk about that anymore we don't talk about that anymore and you could buy an ev

SPEAKER_02: for 40 grand and then all of a sudden the united states used fracking to determine that like in my home state of north dakota there's a massive oil field and now we're a net exporter of oil and gas right like it the this these are the kinds of things that do turn and again there are reasons to be cautious about this announcement it yes one of the things that points to and the nodies are pointing this out and it's true is that rare earth metals always has been a misnomer like these the metals aren't that rare accessible the extraction of them the accessibility of them that is rare and so what we don't know about the turkey find is the grade of the metals and minerals in question like i visited a gold mine last summer when i was doing this reporting project and it's a really low grade mine as in for every ton of dirt they mine they only get a few ounces of gold so it's a ton of energy and machinery and literal human power and equipment and all of this stuff to get a very small amount of gold so it's not it's economically dicey so if these are low grade deposits then it might not be economically viable to get them out and they might not even bother and there's the question of like

SPEAKER_20: are they going to make the investment in the mining are they whatever right on and on and on and will

SPEAKER_51: new technology emerge to make mining these more efficient certainly that will happen will that happen

SPEAKER_24: you know according to morris law where it doubles every 18 months probably not because it's a physical process and physics and physics but it could become 10 you know every year uh you know or five or ten or fifteen percent more efficient to extract these in other words it takes less energy you know it's less damaging to the earth and that's what's happened with fracking that's what's happened with nuclear everything gets easier and i don't know if you saw the the news but the eu

SPEAKER_15: just said in this like emergency meeting that nuclear is green yeah and that natural gas is green so now the first one i agree with the second one is kind of but yeah you can believe that out however this whole like the that the eu in europe was going to be you know like oh my god we're going to be so green but what we're actually doing is green washing we're we're basically going to buy

SPEAKER_06: we're going to do all the production of energy in russia and other places and then we're just not going to do it on our soil now they flip now that they are faced with a war with russia and the germans are funding the war with a madman who wants to take over you know some part of eastern europe so now they

SPEAKER_268: have religion nuclear's nuclear power nuclear is now is under the green umbrella which is where it always belonged dummies yeah yeah it's like greta thunberg is losing her mind on twitter over this so

SPEAKER_02: there was some tweet the other day that said that uh putin has done more than greta thunberg and al gore and all the climate activists and all the environmentalists or whatever combined when you know it was um the head of luxe capital josh wolf who said that yeah yeah it's so anyway back to this turkey thing and like there was an announcement uganda announced that it's hit this deposit of like trillions of dollars worth of gold like resources whether this turns out to be a huge game changer or not the fact is it could be like these kinds of resource deposits and and discoveries are what upend geopolitics completely and it is worth keeping an eye on this story because these are the metals and minerals of the future and it's either here on earth or like asteroids or

SPEAKER_51: some and nobody really actually knows how to do that and very clearly when something's in demand people start looking for it and when something becomes valuable people spend more money looking for it so it might be just like oil we were not spending a lot of money on oil discovery then

SPEAKER_15: everybody starts talking about peak oil and they're like wouldn't it be great if we found somewhere because hey if it's running out and it does go to three four five hundred a barrel we'll be rich so we should invest some money looking for it yeah that's what's that's my thesis as what as to what's happening here there are law the majority of the planet has not been searched for rare earths

SPEAKER_51: and there'll be more technology and science to look for it and that's what happened with deep water

SPEAKER_24: drilling the sands in canada all this stuff people these in you know this the species called humans

SPEAKER_15: that is just so you know greedy and innovative and clever we're so clever we are now we're like where is it let's go find some that would be a good adventure to go on and if you go on that adventure let's say they just found what china or vietnam has right 44 million 22 million you know whatever

SPEAKER_24: like metric tons like what if they just find the equivalent of one of the top five countries game changer and now you know what every other country's gonna do molly you know what we should do we should spend 100 million dollars looking for some stuff in our backyard what if we find some

SPEAKER_39: stuff just like we found fracking so let's go without a doubt last note on this is that a few

SPEAKER_02: commenters on twitter noted turkey does have an election coming up and its economy has been in trouble so it would be a good time to announce that you have okay you know 600 times more rare earth

SPEAKER_277: metals so sure notes of caution but still yes there could be some red flags here but do keep an eye

SPEAKER_278: on this it's a it could be a huge huge huge deal it reminds me exactly of peak oil and what happened with

SPEAKER_256: norway which like people were like wait norway's got the largest sovereign sovereign wealth fund in

SPEAKER_06: the world it's like yep we found the oil and by the way we're probably not gonna even pull it out of the ground we're gonna sit on it hopefully yeah i mean i think that's the best case scenario here um i was looking up nuclear statistics it turns out china is building 30 nuclear reactors

SPEAKER_24: outside of china in the whole belt and road program to like you know be influential in southeast asia and then africa yeah uh so they're building more like a magnitude more than we are we're building like two like we've got like two in the planning they're building 150 in china and 30 outside of china

SPEAKER_60: 180. china realizes that nuclear is green because they have serious problems in their country with pollution air pollution specifically so they're they know that this is a national security issue

SPEAKER_24: the french know it's a national security issue as well as you know an existential issue for the planet and greenhouse gases so just the eu needs to get their act together and the united states candidly we now have to start building some nukes and be even more energy independent we're beyond behind

SPEAKER_44: beyond and we're like talking about opening up more drilling i mean it's just absurd i mean in the

SPEAKER_06: short it's i'm i'm yeah i was interested in that too it's like it seems like we have given so i keep hearing two sides of the story and it's very hard to find the truth because it's also politicized they're like we're not going to give more permits to drill because you haven't used the existing ones that seems completely reasonable and then the other folks are like well you got to give us more because we need to have to raise the money and you're telling us that you're going to you know tax us out of existence once we get through this crisis so why would we make the investment if you're going to turn it off in five or ten years and so there seems to be this they're not going to make the

SPEAKER_19: investment anyway because it's going to be five or ten years before they even start pulling oil out

SPEAKER_287: of those unused you know permitted lands yeah it's it's it's also this is what i hate about just the

SPEAKER_24: politics right now is it's so hard to get the actual reality of that situation and i've been

SPEAKER_15: if anybody has a good article or a good resource for me on like what is the actual state of these drilling permits it's i haven't found it yet but i'm looking um all right quick startup of the day

SPEAKER_19: okay before we go let's like take even more of a turn away from politics and just please have some

SPEAKER_02: fun with the startup of the day actually we have i love that so my i joke all the time that my favorite movie genre is bad but awesome my favorite startup genre is boring but awesome like things that sound kind of boring at first but are actually awesome so uh producer rachel found this startup traba where workers can find shifts based on their preferred types of work location transportation modes and hours and it's a it's it's like for finding warehouse and other kind of gig work and is just this kind of platform that i would have thought existed um if you're listing like let's say a warehouse job on traba you have to have a minimum wage of thirteen dollars it uh you have to have a rate and review section for workers and companies to fill out to help workers avoid dangerous companies especially in the warehouse industry yeah which can be very dangerous there are 5.1 injured full-time workers per 100 you get instant payment if you are a worker on this platform they just raised a series a today led by coastal adventures at 20 million dollars i'm sorry they raised 20 million dollars at 120 million post money also got investment from founders fund general catalyst sci-fi vc and atomic and what i think is interesting about it is that like this didn't exist that it's hard to find labor

SPEAKER_06: no no it did exist insta work um is a startup that's been around for a while i think this is they're kind of following them down this path so insta work i think they might have confidence working yeah so insta work kind of was the the uber or the the first in the space right this sounds like uh

SPEAKER_85: they're following down there but there's always going to be two of these right so you get a lift you get an uber you get a doordash you get a postmates so i think this sounds like they're they're

SPEAKER_114: seeing the success of insta work which i think is particularly big in south america and india um are like some of the big markets there so this is really like taking the if you think about all the

SPEAKER_24: problems with gig work molly um you know do you trust the person you're going to work for is it safe is it fair you know it's these things these platforms are going to be like the next way my thesis is these platforms act as the union because they collectively they create a competition for those workers observation yeah and so if they if you create competition and you have transparency and

SPEAKER_85: the workers can pick then that just balances out i'm not saying it gives all the power to the to the supply side uh but the demand side you know uh then doesn't have i guess the supply side yeah the supply side would be the workers demand side would be the people who need the worker so the demand side had all the power right previously now the supply this empowers the supply side a bit more and then

SPEAKER_225: makes it more balanced yep great call and yeah it does look like one oh which i had heard of and

SPEAKER_20: instead i know that one too much better name and then shift smart is one of the larger players in the space that raised 95 million dollars yeah and this one is focused specifically i think on like warehouses and also events which i think is kind of interesting yeah the three main categories for this

SPEAKER_114: are food you know you need a dishwasher you need a cook whatever sanitation warehousing you know so

SPEAKER_24: you need to pack stuff or whatever and then actually interesting events right so you throw a party like we did for all in some and all those parties hey you need a bartender you need somebody to serve at an event you know somebody to bust tables whatever and businesses are constantly trying

Chamath Palihapitiya: to find these and so if you're a local restaurant you put out craigslist ads you do like word of

SPEAKER_15: mouth no from now on restaurants are to put their stuff up on these platforms and they're going to be rated so that you know hey was how was i treated did i get a staff meal did you know was it a safe working condition was the boss a jerk or not was i harassed whatever it's just going to be like the rating system uh in uber and doordash so if you get bad food you rate it low if you have bad service you rate it low if you're a jerk of a customer you get rated low so this is also rating the employees

SPEAKER_273: by the way yeah so that mutual rating system is key yep that's clutch that really is yeah it's cool i

SPEAKER_02: also particularly like the focus on warehouse because that is a place where i think people can fall through the cracks and end up in some really dangerous situations and and also has massive turnover and is really hard to find labor at boring but awesome all right thanks for listening

SPEAKER_44: everybody that's our thursday show for you and tomorrow i'm really excited uh for the summer

SPEAKER_24: i'm going to be doing a friday interview series back to my roots and uh i am having the uh founder of a game studio on he worked on starcraft 2 if you were into real-time strategy which is my favorite category of video games in fact the only category i play frost giant is the name of the studio and we

SPEAKER_15: talk about the business of video games and why vcs haven't invested in them but maybe they're

SPEAKER_06: starting to and how a video game startup with 50 people can compete with these giant companies it was a fascinating interview and it got me really interested in thinking about investing in gaming

SPEAKER_24: so mission accomplished and of course on sundays molly will do her climate interview so twice a week we're going to have these featured interviews friday and sunday you get nice strong interviews for

SPEAKER_02: to get you through the weekend yeah you know you go on a bike ride whatever just take it in learn a little bit and then also let's hang out and be best friends online yes because we have tons of community this weekend startups.com tc is where you can join our twitter community we have a discord uh this weekend startups.com discord and of course our nota gang joins us uh every day every weekday to watch our live show on youtube this weekend startups.com youtube and if you are on youtube and listening you can subscribe and then hit the little notification bell noties is short for

SPEAKER_19: notification it took me several weeks on this job to um learn that yes you know what we need is when

SPEAKER_51: notice come in every day and they're like what is that so we need a new category because there's

SPEAKER_24: noties who show up when the notification happens there's a new category motley they're the free noties these are the most amazing people we typically set up the live youtube feed so youtube.com

SPEAKER_149: slash this weekend um we're talking about this weekend startups you'll find the channel channel's at 199 000 subscribers it's starting to grow uh nicely so there are people who are hanging out the

SPEAKER_24: night before because we'll say hey tomorrow's episode is coming up and you can hit a button to get an alert right it's sort of like pre you'll see this on youtube now somebody's gonna have a live

Chamath Palihapitiya: event they have a show placeholder uh and so we put the placeholder up and then i noticed like 25 50 noties are hanging out hours before we get online talking so i'm going to ask my producers to

SPEAKER_06: please please invite those noties to join us in the producer document or help them um you know let them talk about what's gonna be on the show that day we love their contributions love it pre-noties come up with a better name there's some better name than a pre-notie they're really like early birds

SPEAKER_225: there's like the line the line sitters like those people the people who line up

SPEAKER_06: kind of like i need it more like a like a military squadron you know they're kind of like our green marais or they're kind of like our the forward the forward recon they're like the scouts you know they're out there early scouts that's appropriate it's a vc term yeah so they're kind of like the bad batch now they get out there early they're they're our scouts uh they're like our seals you know they get in there uh so there's a bad batch i like bad batch that's pretty good

SPEAKER_23: i like bad batch avengers bad batch no backstage notice that's what we're going to workshop but we're working on it the noti guard they're they're like our black hawk notice uh but we we love you

SPEAKER_149: notice and uh thank you backstage know you tomorrow backstage notice yeah that that's gonna stick

SPEAKER_36: good job rachel yeah like rachel's good at uh she's good to be fair that was that was eric

SPEAKER_329: eric wiener in the uh that was one of the notice who came up oh it was one of the notice oh rachel none for

SPEAKER_54: you sorry no no no no real time all right all right see you tomorrow bye bye