SPEAKER_01: Hey, everybody. Hey, everybody. We have an amazing show for you today. It's a big show. Molly, what's on the deck?

SPEAKER_02: It is a thick boy of a show. First up, we're going to break down the reactions from big tech companies to the Russia-Ukraine situation because there is not a person or a company or a financial

SPEAKER_04: institution who is not being drawn into this. And so we're going to break it down from our

Jason Calacanis: perspective in the tech industry. We're also going to talk about a startup of the day because we all need a little escapism innovating in mobile games. Amazing. And the companies that we're going to

SPEAKER_10: talk about, I mean, it's Coinbase, it's Netflix, it's Apple, it's Google, it's Facebook. Everybody is being drawn into the Ukraine conflict and everybody has a role to play in this. So it's a very serious talk and it's an expansive talk and I think it's an important one. So I really

SPEAKER_01: hope you listen to it. But after we get through with that discussion and about an hour of news, we have another amazing interview. Joel Greenblatt is back on the program. A year ago, he came on to talk about his book and a range of topics. This is one of the great investors in history and he is well-versed like many investors are on the global situation, startups, the economy, taxes. We have a wide ranging discussion with this legendary investor in second appearance and I booked him for six months from now. He is getting into the rotation,

SPEAKER_16: Molly. It's going to be a great show. Stick with us. This Week in Startups is brought to you by gun.io. The simplest way for anyone to hire world-class developers expertly vetted for you by senior engineers. Get $250 off your first hire at gun.io slash twist. Open phone. As a startup founder, a lot of mistakes are easy to roll back, but using your personal cell phone number as your company's number isn't one of them. Open phone makes it easy to get business phone numbers for you and your team right on top of your existing devices. Visit openphone.co slash twist to get 20% off your first six months. And boast. If you're a startup developing new software or R&D, you may be owed up to $250 in cash back from the government. Boast helps you get that money quickly and easily. The first 50 customers will get 10% off their first year by mentioning promo

SPEAKER_18: code twist at boast.ai slash twist. All right, everybody in our first news story, as you could

SPEAKER_21: probably guess, we need to talk about, um, what's happening in the Ukraine and the war that is going on right now. And obviously we are, well, I can't speak for Molly, but, uh, she will speak for herself,

SPEAKER_10: but I am, uh, obviously really, uh, heartbroken about this. It's incredible. It's hard to think

SPEAKER_25: about anything else the whole weekend. I was, you know, checking in on the news and very hard to interpret what's going on and what the right thing to do is. How are you feeling about all this, Molly?

SPEAKER_26: Yeah, same. I mean, it is a hundred percent all I can think about. And I've been on Twitter all day,

SPEAKER_02: every day, way too much, arguably. Um, because I don't know about you, but I get into this weird state of mind. Like when you're reading a really immersive book or a movie, you know, if I'm, and I'm reading, I'm following this one reporter, Ilya Ponomarenko, who is a, um, defense reporter with the Keeve Independent. I mean, this guy should get a Pulitzer for his Twitter feed. It's unbelievable.

SPEAKER_28: In your imagination, you start to feel like you're there and then you sort of pull back to the real world. And it's super disorienting. And it's also just so anachronistic feeling like we forgot that people still just shoot each other in wars and blow each other up. And it just keeps getting more

SPEAKER_26: and more inhumane. And it's, it's just hard to sit here and know what to do.

SPEAKER_29: Yeah, you know, it's, we live in this time where we have a great amount of distance between horrible

SPEAKER_01: things happening in the world. Um, we see, you know, microcosms of violence, uh, but this wholesale violence that humanity does experience, it's becoming more shocking. And in a way, that's a good thing, I think. And the fact that a lot of this stuff is being shared on Twitter and TikTok and other places, in one way, it's dystopian, uh, and it's shocking and it's hard to reconcile that you're flipping through Twitter and TikTok and having a conversation about, I don't know, whatever show you're watching on Netflix or something happening in your business. And then there's Molotov cocktails going off or people being run over in cars. So it is does have this very dystopian feel to it. But then I was trying to think about the positive of it. And I don't know that any dictators anticipated that rolling into another country would result in a billion people or 2 billion people, whatever it is on social that's consuming this now, and what their reactions to it would be. And the overwhelming reaction now is 2 billion people saying war is bad. Mm hmm. Like to quote Aldous Snow and get

SPEAKER_37: him to the Greek, you know, there's like this crazy moment where he's doing a music video and he writes on the screen, war is bad. Right. And you're just like, oh my God, this person is a simpleton and,

SPEAKER_38: you know, uh, virtue signaling. But that's how we all feel. Yeah. And that's what everybody's communicating. So it feels and you know, reality is different than feeling and Twitter and tick tock and media coverage and 24 hour coverage. But I do think that this global phenomenon of people saying, Hey, this isn't right. Why is this happening? And we don't want this, we don't need this. We can this got to be a better solution. Um, this is a major

SPEAKER_37: difference than maybe previous wars that happened that happened quietly, that you know, the photos were withheld from the public. There were media blackouts in previous wars, and it took months, years for people to know exactly how bad these horrors are. So I think there is some silver lining

SPEAKER_42: here. And I think it might be that the aggressor here, Putin might have underestimated starting a

SPEAKER_02: war in the age of social media. Yeah, well, and he may have overestimated the impact and effectiveness. Surprisingly, considering how effective disinformation has been in, you know, since the 2016 election and even before. Yeah. It is kind of remarkable to see that years long,

SPEAKER_28: very deliberate, very expensive and frequently very effective effort kind of fail here.

SPEAKER_49: It feels like he's not able to control the media narrative, right? Because it, you know,

SPEAKER_02: because I think it's about stakes. Like it's easy to control a media narrative when it's just people picking teams, or, you know, trolling, or doing it for the lulls, like, or triggering the libs, right? Like, it, that is something that you can do without thinking consequence, thinking about

SPEAKER_28: consequences pretty easily, right? You can just kind of goof, especially if you're not a person to whom these real world consequences usually happen, or a person who suffers from real harm. Um, but I think it's like that all changes when there's actual shooting. And so the people who

SPEAKER_02: thought that Putin was just like an awesome troll who triggered the libs and was on their team now are like, oh yeah, no, that's not a team we want to be part of. This is, it's way, the stakes are way higher and it's way too real for it to be so kind of casual and funny. Exactly. And then this Zelensky,

SPEAKER_57: uh, and the people of the Ukraine, I think are so tough, so resilient and so determined to fight.

SPEAKER_01: That is another wild card here that I don't think Putin or anybody else imagined. And I know this sounds silly, maybe at first glance, but Zelensky seems like somebody who is very adept at countering

SPEAKER_38: misinformation. Yeah. And creating a media narrative himself. And people may or may not know that he is a comedian, an entertainer. I'm not saying he's making jokes now, but he seems very effective at communicating in this new medium and, you know, building a consensus. And he said, Listen, we don't need to be I don't need to be evacuated. I need ammunition. And you hear that line. And it's going to be in written in history, this level of of bravery, and they are winning the hearts and minds of the rest of humanity. And I think it's emboldening people to say, Hey, Russia is the aggressor here, there is no valid excuse for this, there is no way to explain this away. And it has to stop. Yeah. And we don't want to escalate a war. I understand that. And this is not a program about politics. But I do think we have to touch on, I think two things that are very much in our wheelhouse is the

SPEAKER_37: communications through social media, and then the sanctions. So I think we we I think we talked a little bit about the communications here. It's pretty awesome to see the entire world just demolish anybody who's pro Putin or pro war. It's almost like it's an untenable position to be pro this action by

Jason Calacanis: and I do want to go back to Zelensky and his skill with social media. I think that that should not be underestimated. I mean, you had the, you know, the official Ukraine Twitter account saying, tag Russia and tell them what you think about this and send us Bitcoin, you have Zelensky making these posts on social media. And I don't think we should like, ignore the fact that he's young, right? He is in

SPEAKER_02: kind of the age range to understand the power of this and frankly, probably to have watched all of

SPEAKER_28: the propaganda efforts that Russia has undergone over the years. I mean, look, this is a country, you know, all the way back to the Soviet Union. And certainly now it this is a one industry country, like, and it's spying, right? It's true. It's the KGB, and oil and gas props it up. And they are just

Jason Calacanis: masters at this. And so if you're the country right next door, and a lot of you, you know, used to be part of the Soviet Union, for example, like you you watch these techniques, and Zelensky, in addition to showing incredible, physical, personal bravery and great leadership is awesome at social media.

SPEAKER_64: And we shouldn't discount the power of that at all. It's huge.

SPEAKER_66: No, I mean, and I don't know if you saw they were asking for internet connectivity.

SPEAKER_38: They asked SpaceX for Starlink. And then all of a sudden, a bunch of Starlink satellites showed up or a satellite receiver showed up. Like this is, in some ways, Putin has been neutralized, as you pointed out, like his greatest strength was the ability to manipulate media.

SPEAKER_37: Yeah. And he's impotent. Yeah, you know, and, and, you know, he was supposed to be like the

SPEAKER_01: aggressive, uh, sadistic, crazy, uh, Russian hand to hand combat, you know, foot soldiers, we're going to be able to come in here and just terrorize everybody. And then you're watching,

SPEAKER_38: you know, right, women, uh, on the border, making Molotov cocktails. And then I, I don't know if you saw the viral video of just a woman lighting a Molotov cocktail in a car as they drive by a tank, and she just throws right there. I'm like, Whoa, it's unbelievable.

SPEAKER_64: Unbelievable. Unbelievable. And so that morale busting on social media, you know, like using

Jason Calacanis: these videos and memes to just humiliate Russians and show pictures of burned out tanks. And I mean,

SPEAKER_02: it re the information war is as much, well, it is not as much. It's a big, it's a huge part of this. There's an, there's a horrific loss of life. Yeah. And I don't want to like, you know, so, but information is always key, right? And what we're seeing here is that you're not wrong. Propaganda is always key. And this is

SPEAKER_13: photos of what happened during the Holocaust or photos of what happened in Vietnam and Vietnam are what changed sentiment and then change the direction of the war. So it is not actually

SPEAKER_38: underestimating. I think, um, you know, people fighting in the streets and dying is obviously a bigger human tragedy, but in terms of effectiveness of what ends a war, it probably is correct that an image would be more persuasive. A video could be more persuasive in swaying the world and then creating a bunch of change or demands for change than, you know, just hand to hand combat or Molotov cocktails

SPEAKER_01: versus, you know, uh, machine guns. Like those things are going to have, you know, an impact in the theater of war, but one image, one statement, one tweet, one viral video could change just the way the entire populace of the world views this conflict. I think that's actually what's happened.

SPEAKER_76: Yeah, it really is. So I don't think it's underestimating at all. I, I, I think you're correct. Um, well, an image can change everybody's consciousness. Hiring software engineers takes a long

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SPEAKER_02: the other thing that's right in our wheelhouse here is, you know, there are obviously a lot of financial sanctions, there are also companies being drawn into this in ways that they never

SPEAKER_28: expected us companies, of course, the obvious ones are the big social media leaders, right? The big platforms, tick tock, meta, YouTube, all three of those companies have restricted access to Kremlin backed sites RT and Sputnik in Europe, and then meta and Twitter have been removing anti Ukrainian disinformation campaigns over the weekend, they've been drawn into this by the

SPEAKER_01: court of public opinion, big time. So these aren't the our government sanctioning them and telling them you have to turn this off. This is them proactively saying, we're a platform, we are

SPEAKER_38: making an editorial decision here, that we do not want to give the aggressor the person who's wrong,

SPEAKER_01: the ability to communicate with the rest of the world, we are shutting down Putin's ability to spread propaganda. So they're picking a side. Yep. And I think that's the right thing to do here. It's a no brainer to not let this propaganda out. And so I think kudos to YouTube,

SPEAKER_21: Facebook and tick tock, I'm not going to call it meta. It's just silly, but no,

SPEAKER_28: and to be fair, they are at least according to Politico getting lots of pressure from Western leaders to limit how Moscow can spread its propaganda. But it I think like, this is not a scenario to you know, to your point about the, the almost completely unified response to this

SPEAKER_02: aggression. Like, you do not want to be in the, the company that is basically like, well, we think

SPEAKER_86: there's like both sides here. Yeah, no, there is not both sides. It's just free speech. Like, no,

SPEAKER_13: no, this is not free speech. This is a campaign to take a democratic thriving country, and to take them

SPEAKER_37: over. And anybody who supports it, um, is supporting a dictator, murder, full stop, you know, I don't care who you are, whether you're Tucker Carlson, or, you know, Trump, or whoever is pro Putin in this, you know, it's deranged, uh, and anti humanitarian to support dictators, period, full stop. Now you

SPEAKER_38: could say, what is the technique we use here? And I think that that leads us to our next question,

SPEAKER_37: which is, we don't want to escalate a war. I understand that. And escalating a war with a

SPEAKER_10: nuclear power seems incredibly fraught and needs to be a very considerate decision. So every single technique that is not war and sending troops in and starting World War three with a nuclear power should be on the table and should be exhausted first. And that means sanctions. So here we have censorship or not censorship, but you know, shutting down the communications, I guess. Um, you know, the communication platform for the aggressor for the person who is clearly wrong here. Well, let's Yeah,

SPEAKER_83: let's briefly touch on the kind of like the efforts to fight the disinformation. And it is interesting. And we'll talk about ways in which you know, it's almost like there's a spectrum of

SPEAKER_28: reactions from these tech companies to that range from the the pretty easy and obvious, like, easy and obvious sanctions to the slightly more severe actions, like, you know, literally blocking, for example, RT, to the extent that that's happening, RT and Sputnik, and that's closer to like targeting the oligarchs, right, and their yachts and planes, all the way to the potential nuclear option, which we'll talk about,

SPEAKER_02: I think a little bit later, which is Ukraine asking, I can to block top level domains. Let's go right to

SPEAKER_37: that in Russia seems to be like an incredibly aggressive. I didn't even think Yeah, I didn't even think of it. But the idea here is for correct me if I'm wrong, I can which manages top level domains to turn

SPEAKER_83: off Russia's top level domain system. Yeah. Yeah, this was breaking this morning. It showed up in. So my

SPEAKER_28: longtime friend, Bill Woodcock was tweeting about this. He's at the packet clearinghouse, which is like a nonprofit that I mean, he's basically like one of those wizards who operates global DNS, right? Like,

SPEAKER_02: and so the so he's one of the few people I think who really can completely explain what Ukraine is

SPEAKER_28: asking for, they sent this urgent request, I can the internet corporation for assigned names and numbers, which is, you know, is like based in the United States and has is effectively has a relationship with the Department of Commerce. Although it is a nonprofit itself, the request was like you

SPEAKER_02: said, Jason revoke permanently or temporarily the domains dot are you dot p o, or whatever that O is

SPEAKER_28: and Cyrillic and dot su. This list, the email went on is not exhaustive, and may also include other domains issued in the Russian Federation and shut down DNS root servers situated in the Russian Federation

SPEAKER_02: in St. Petersburg and Moscow contribute to the revoking for SSL basically like wipe Russian domains

SPEAKER_49: off the map. Now you would still be able to get to these if you had the IP address of the servers,

SPEAKER_57: or they could set up other domain names and other countries and reroute them, I guess. Or I don't know,

SPEAKER_10: technically, if you turn these off, if there would be no way to get to those servers, my understanding is

SPEAKER_38: the domain routing is one way to get to a server and the IP address is the other. So that means that Russians would have to then start what's happening or sending each other a list of IP addresses to go to to get their email. Yeah, this could create chaos inside of Russia. If you think of all the dependencies

SPEAKER_37: that people have on going to domain names to get information to check their email. I mean, this could

SPEAKER_66: cause just chaos, I guess, for people who don't have VPNs and who are not using non Russian services. So pretty crazy.

SPEAKER_09: This right. And this I think is sort of where like, there are going to be increasing conversations

SPEAKER_28: about centralization and control. And there's a bunch of conversations already about like crypto and freezing money. And is that the system that we want to be part of where like, Apple Pay, you know, I think William Gibson was retweeting somebody about this yesterday, like where Apple Pay can just be turned off. And then you can't use that is that are we cool with that. And then this question about getting rid of these top level domains at this to this degree. And not only, you know, according to Bill and some other analysis with that, cut off Russian citizens from information, it would also leave them vulnerable to greater like hacking attacks and security threats. And in the long term

SPEAKER_04: gives ICANN, which is tiny, the ability to arbitrate international conflicts. And that is a nuclear,

SPEAKER_28: that's nuclear, right? That is nuclear escalation. And of course, Ukraine is asking for that.

David Friedberg: But also, whoa, so it does seem like the second order effects here, you know, in the downstream

SPEAKER_10: third order effects, like how does this happen in the future? So somebody disagrees with, I don't know,

SPEAKER_114: the treatment of the Uyghurs in China, the United States, or whatever, you know, so this to me seems

SPEAKER_115: like a, again, you know, we're using the term nuclear here. And, you know, it's fraught with confusion because of the nuclear, the stakes of nuclear weapons. But yeah, this is, could be a

SPEAKER_01: crazy moment in time to think that during a conflict, all the websites went down that people

SPEAKER_10: are dependent on. And this does, I think, give the crypto crowd, the decentralization crowd, another checkbox of, hey, you know, this is why we exist is because these edge cases could happen.

David Friedberg: Listen, lots of founders are loosey goosey with their personal phone numbers, we know that they put it in company documents, they use it for sales calls, these are for everything, including all their

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SPEAKER_10: should crypto be turned off? And should the crypto the centralized crypto platforms like Coinbase, Binance, other folks, should they be allowing crypto trading to occur? If assets are also being frozen vis a vis payment systems and international swift and other things, what's happening with those areas? People, they have not been ordered to stop the Ukraine request

SPEAKER_71: things, right? But we have not said no. And I don't even know if Coinbase apparently said no so far. So

Jason Calacanis: Ukrainian leadership did ask crypto exchanges to freeze the accounts of all people in Russia and

SPEAKER_28: Belarus. And again, I mean, this is you're talking about citizens. Yeah, in Russia, who frankly, are only just finding out if they're finding out at all, the extent to which this is an act of pure naked aggression and war crimes against Ukraine, a lot of them think it's, you know, they've been told

SPEAKER_71: it's a peacekeeping mission. Obviously, that fiction is starting to fall apart in Russia,

SPEAKER_02: where the white supremacists and Nazis, right? But it's what you're doing. So you know, this is asking crypto exchanges to freeze the accounts of all of these people, all of these citizens, a spokesperson

SPEAKER_04: for Coinbase told Vice's motherboard that they will not comply with Ukraine's request. Coinbase cited economic freedom and the harm that a ban would bring to average Russians as to why they will not comply. But Coinbase did say that it's complying with existing sanctions and so did Binance. Right. So there is

SPEAKER_37: absolutely no doubt that Binance and Coinbase, if asked by the government or forced to by our government, will do that, right. So there's no world in which they would not comply with sanctions, because there would be the risk of ruin, their company would be shut down and the executives would face being arrested, actually, right. If they don't participate in the sanctions, our government says to do. And this is where sanctions are a dicey topic, what I would remind people is, what is the purpose

SPEAKER_42: of sanctions? The purpose of sanctions to cause pain and suffering that is significant enough to stop the pain and suffering that is greater of a murderous invasion. If it was not painful, it would not be a sanction. Right. And so in order for us to put pressure on the government, we do need to put pressure on

SPEAKER_01: the citizens of the country, I think is the point of some of these sanctions when the suffering of Russia collectively, whether it's the oligarchs, or sadly, citizens becomes great, and they start to suffer revolutions occur, or potentially could occur, and change can occur. So instead of sending troops to

SPEAKER_10: kill Russian men, who are invading Ukraine, I think the point of these sanctions is to create suffering

SPEAKER_01: that is economic, or inconveniences that are economic or just inconvenient. You can't get your news, you can't get your email, so that people say what is going on here. And they pick up the phone, or they do email, or they get a VPN. And they start looking at Western media. And I think Russians have pretty, somebody can correct me if I'm wrong here on the live stream, youtube.com slash this weekend, you're listening to these in all likelihood on the pockets, but we have a live audience that listens to

SPEAKER_10: us hash these things out. And sometimes they'll give us some information, as much information is censored in Russia, people generally there have access to VPNs. And the populace generally has ways to get to the New York Times or CNN, or, you know, any of this information on social media. It's it's very different than let's say, China, where they really do have a great firewall. And even there,

SPEAKER_139: people do have VPNs on the margin, this is a jump ball, but we do have to put pressure on the populace there to promote this change to get Russia to leave so that Putin has to face his own citizens

SPEAKER_10: were like, why can't we get our money? Why can't we get our crypto? Why can't we read the news? Why can't I check my email? Why can't I pay my phone bill or whatever else Russians are using the internet

SPEAKER_02: for? Yeah, the will of the people really does matter. It really does, right? Like there's no such thing as targeted sanctions. I think a lot of people want there to be the perfect response. And there is not a perfect response to a madman with nukes invading a country. There just isn't. There's all the things that we want to happen. It's kind of like how we all just wish that COVID didn't exist. And so we're mad. We wish that this weren't happening. And we're mad. And there isn't some, you know, perfect solution that's going to spare everyone. There isn't Russian citizens are going to suffer from these sanctions. They may even not just be able to, you know, not get money out of the ATM. They might be hungry, right? Like it that sanctions are bad. They're not as bad as nuclear war. And raising that awareness in a country like we can't overstate how dangerous it is that people in Russia are protesting this, protesting someone actually putting themselves at risk for torture,

SPEAKER_10: rape, murder, their families being tortured, raped, murdered, put in jail for a decade or two. Yep.

SPEAKER_38: Um, just to say we have to stop this war. I mean, these people are brave. The people at St. Petersburg protesting against Putin are taking their lives in their hands for another country. Yep. Uh, that is

SPEAKER_146: just climate minister, like a high level minister inside the government at a climate convention where

SPEAKER_28: they released this new IPCC report yesterday, the day before. And they were talking about it. And they were talking about how the roots of, you know, the invasion of Ukraine and the climate crisis are

SPEAKER_02: effectively the same. It's fossil fuels. It's fossil fuel dependence and a high level Russian minister apologized to the members of the UN who were discussing this report and said, those of us in the government who failed to prevent this, we're sorry. And now the Ukrainian climate minister is saying, I'm just praying that he's okay because he had to go back to Russia and we don't know what's going to happen. So yes, is there a, is there a chance that sanctions will backfire and Russian citizens will blame the U S instead of Putin? Sure. There's a chance, but we have to try to

SPEAKER_28: understand that that's the goal is to lose the will of the people. And it's not like Putin himself is going to listen. It's more like the people around him or the oligarchs will have had enough at some

SPEAKER_10: point. You know, there's an argument that anybody with a Russian passport, um, if you really want to take this to the conclusion, if we really think there's a chance that, uh, Russia will continue this, uh, excursion, this adventure as Putin, you know, kind of frames it to other countries, like that is not an

SPEAKER_01: unrealistic concept to think about. And, you know, then you're starting to think, well, anybody with a

SPEAKER_37: Russian passport, uh, is going to just have to be denied going anywhere in the world. And these oligarchs are, you know, they love to go gallivanting around the world. And if their planes get grounded and they're sent back on a commercial flight and their yachts are impounded and you say, you know what, you're just not welcome here. And there were all of these stories coming out about people, um, one person sinking a yacht or something, you know, who knows what's true. And I think we have to be careful as to figuring out what's true. There's images that are from five years ago that are trending

SPEAKER_10: now. So, but there's a lot of, um, a lot of popular Russian social media stars are coming out publicly against this Russians, uh, most popular rapper. I'm reading Oxy Miron put an angry video message out according to France, uh, 24 on a social media account declaring, declaring he was against quote, this war that Russia is unleashing against the Ukraine. So the cracks are there. If you're a

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SPEAKER_01: twist at boast.ai slash twist. That's boast.ai slash twist. One thing I think is worth discussing is

SPEAKER_10: some leadership from Netflix here. Yeah. And I think I'd like to see some increased leadership

SPEAKER_154: from Apple in this regard. Can you explain to the audience what's what Netflix's decision was?

SPEAKER_71: Absolutely. Because this is the end of this is the end of Netflix in Russia. This was a nail biter, too, if I'm being honest, like it was just a

SPEAKER_28: it was an at the last nanosecond show of leadership from Netflix, which was that the company announced

SPEAKER_02: yesterday, Monday, that it has no that will not add Russian broadcasters to its service in Russia. It was Netflix was about to be forced as of today, March 1, to air something like 20 Russian channels

SPEAKER_28: that are all propaganda. And literally up until yesterday, Netflix had been saying what don't know what you're talking about. And speaking to the power of that international pressure, Netflix now said, we're not going to add these channels to our service, which will almost certainly result in Netflix being effectively banned from Russia, that could be the end of its Russian business.

SPEAKER_66: Oh, it's going to be banned 100%. Yeah, basically, they just gave up that market.

SPEAKER_37: They just gave up the market. I mean, read Hastings, and to the Russia to the team and Netflix. Well done. Here's the thing about being successful in life. Dare I say having a few money, read Hastings, is that you get to say a few that is the goal is to be so powerful that you can stand on principles. And you can say I don't need the money from Russia. Russian, you know, needs Netflix, Russia needs the West, Russia needs to have these business relationships, kudos to read Hastings for saying, you know what, screw it, I'm not I'm not participating. We're out. And we'll give up that market, we'll give up the whole region, who cares. And I think that's the right decision. I think it's

SPEAKER_10: a decision the NBA should come to and Hollywood should come to with China. Yeah, at a certain point, you have to, if you have the F you money, say F you. And that is what Reed Hastings did. He says F you to Putin, and F you to war. And we're done here. So the question is, will Apple do the

SPEAKER_01: same? And Apple has bigger stakes, I think. Tim Cook tweeted that he was deeply concerned. I'm deeply concerned with the situation in Ukraine. This is on February 24. We're doing all we can for our

SPEAKER_10: teams there and will be supporting local humanitarian efforts. I am thinking of the people who are right now in harm's way and joining those calling for peace. And I quote tweeted him.

SPEAKER_160: Quote tweet is the most under undervalued part of Twitter. That's when that's when you know,

SPEAKER_163: like forget about ratio and I always just look at how many quote tweets are there. I go right to quote tweets. That's where the action is quote retweets. That's where the action is. If you care

SPEAKER_01: deeply Tim Cook, perhaps you could start by having Apple stop supporting authoritarians with your devices or just stop selling iPhones in Russia until they leave the Ukraine. And I don't know, actually, somebody can fact check me or what Apple's are there Apple stores in Russia? Are is the iPhone popular? Are people buying Apple laptops there? I think they are. This is what I think, you know, Apple needs to decide pretty quickly here is do we want to support Russia? Do we want to operate there? And when you operate in these countries, you do so at your peril. And Apple has $200 billion in cash. What pot what could possibly be the footprint in Russia? 1% who percent? Who cares to the people working at Apple to Tim Cook? You want to be there supporting and engaging this maniac who is just going to invade another country and kill their children and kill their citizens? Of course you don't. Yeah, so then pull the plug on it, right? Like what's the what's the justification

SPEAKER_38: for Apple being in Russia now? Give me the counter argument there has to be. Yeah, I mean, this is a

Jason Calacanis: tough one, honestly, because you have to at some point, be the better option. Like we know that,

SPEAKER_02: you know, decades and decades of sanctions against Cuba only kept an entire country in poverty and never got rid of Castro. And the idea that Russian citizens who have done nothing wrong and who have been lied to by their government in a lot of cases would have to not have iPhones feels like a way to engender negativity that wouldn't be directed in the right place. I mean, I think this is the conversation we're having now, which is what is the right response? And what is the right response that

SPEAKER_28: is targeted at Putin or his government or the oligarchs? And there is a degree to which, like I just said, you can't target sanctions and you have to you're going to assume that some citizens are going to suffer. But I think like these companies are also all doing business in China, they're also all taking money from Saudi Arabia. And, and there's, there's not going to be an ability, it's not going

SPEAKER_04: to be realistic for us to say that we will pick and choose windows of time in which we're not okay with companies doing business in other countries. It's just not, it's not realistic. And it's not

SPEAKER_02: likely in a global capitalist world. And I think are like, I'm not pretending to have an answer

SPEAKER_06: here. I'm just sort of saying like, in this period of time, putting all the possible pressure we can on the economy, the Russian economy is valuable. But we're also seeing this sort of rush to, you know,

SPEAKER_02: Disney and Warner Brothers and Sony and Paramount saying, Oh, we're going to pause our film releases

SPEAKER_28: in Russia. But like, what are you doing about China? It just sort of highlights the, the built in

Jason Calacanis: hypocrisy of the, of the multinational world that we live in. So we either don't censor ourselves because China wants us to like, we either stick to our principles all the time, or we never do. But

SPEAKER_02: to do it in this sort of selected way based on sentiment, I think, starts to feel, I don't know.

SPEAKER_57: The counter I would have to the counter is if engagement, when the company is acting in good faith, and directionally moving towards better behavior, I could understand. So if you are,

SPEAKER_01: but it's China. Okay, so let's put China aside for like, and just talk about Russia, then we'll go to China. So if Russia isn't doing these excursions up until now, and it feels like Russian relations are getting better. And, you know, Apple sells computers there, or Netflix decides to start up their service there, maybe that's a fine thing to have occur. And then removing those things when they behave badly, you're now sinking engagement, and retreating from the market to behavior. Yeah, which would change behavior, you would think or could potentially change behavior. So I think the decades of engagement in China were correlated with the country engaging, uh, the West,

SPEAKER_38: human rights and worker conditions getting better, like, Apple has a very strong argument to say, listen, we are in those factories. Uh, we are demanding in our factories in China, certain labor conditions, and they, we all heard about the suicides and the work hours and the work conditions and

SPEAKER_42: factories in China. And we also heard Apple saying, Hey, we got people on the ground, and we're changing those conditions. Mm hmm. So there's an argument that when things are going well, to engage, and there's an

SPEAKER_01: argument when the country start behaving badly, to then remove the reward, right? So it's carrots and sticks. Yeah, that's fair. You know, there's no perfect answer. I think I like what you said before, Molly, which was, uh, to paraphrase, we're making the best of bad choices. Yeah. Yeah. These are all choices we don't want to make. These are choices being forced on the West, forced on NATO, forced on France, forced on Germany, forced on the American public, forced on the citizens of the Ukraine, by an evil dictator, period, full stop. Nobody wants to be making Molotov cocktails, uh, in their basement and throwing them from SUVs at tanks. And nobody in the West wants to have to shut down Netflix and have all their employees leave and, and remove that engagement. And, you know, if you look, iOS had 23% market share in, uh, Russia. So, you know, they're, they're one out of four phones over there, uh, 95 million smartphone users in Russia in 2021. Apple has about 25%. So 23 million iPhones over there. If all of a sudden Apple says, you know what, we're not selling iPhones there. We're turning off iPhones there. I think Apple could just say on a hardware level, we're gonna just turn off

SPEAKER_77: iPhones. Yeah. We're gonna brick. I mean, you want to get a message like first, there's a pop-up.

SPEAKER_02: Yeah. Right. Further first, there's a pop-up that's like Russia isn't engaging in an illegal, you know, in illegal warm war crimes in Ukraine. We at Apple cannot support that. Your phone will be, your phone will be inoperative until for, you know, further notice or in 48 hours or in 48 hours,

SPEAKER_01: download your photos, uh, you know, backup your contacts because we're turning your phone off. All Apple phones will be turned off in 40 hours. That's aggressive. Wow. I, I didn't even consider that, but that's the technique that Uber used when and Lyft used when in New York, they said they were gonna cap the number of Ubers and Lyfts. They said, Hey, email the mayor, uh, here's his phone number and here's his email address. Let them know.

SPEAKER_37: Yeah. And so, you know, the, the question is, will, uh, Tim Cook and the team at Apple take the same level of seriousness with this, uh, not just hearts and minds and prayers. Oh my, like,

SPEAKER_09: yeah, seriously. You feel terrible. You know, do what Reed Hastings did, which is just say looking at you 76% Android market share. Yeah. And you know, the thing with Android is it's open source.

SPEAKER_42: They don't have the ability to brick every phone, but there are other things that they could turn off. They could just say any IP address in Russia can no longer use Google maps. That's a good starting point. Turn off Google maps. Then turn off Gmail. Again, they're using Google maps to track the

SPEAKER_64: convoys. And I mean, Google maps did turn on Ukraine. I said in Russia. Yeah. Yeah. Yeah.

SPEAKER_01: In Russia. Fair in Russia. Yeah. I mean, there's an argument to, to support Ukraine and give them more resources while turning off and causing pain in Russia. I mean, that's the idea of sanctions to cause

SPEAKER_10: pain. So I don't want to belabor the point here. Well, but you raise a really good point, which is

SPEAKER_02: like, this is the, this is, these are the tools that tech companies have. And yes, these are the tools that you have to consider employing when something rises to such an appalling level when

SPEAKER_06: it's, you know, and I, in no way, do I mean to minimize the human rights abuses that are happening in

SPEAKER_207: China. Yeah. Separate issue. We can, we can talk about these, we can talk about these things separately,

SPEAKER_00: right? Without whatever. However, if Apple and Tim Cook did turn off iPhones in Russia or

SPEAKER_02: do some other big intervention, they would also effectively be sending a message to China. Like, we can't ignore how intertwined those two markets are. Sure. And that's, well, they make them in

SPEAKER_28: China too, but that's partly why I think you're seeing, it's almost like, again, to go back to the, the kind of IRL corollary about like, if there's Western intervention on the ground in Ukraine, then you potentially trigger a nuclear option. If there is, these tech companies are trying to walk their lines as, as well, without essentially cutting themselves off from all of, you know,

SPEAKER_10: the Asian continent. I think the lesson here and, you know, I, I've been saying this for years is, uh, you remember the CNBC clip where I said, listen, I would never operate in, I would never buy stocks in China because you have no insight into it. And I also have said many times, listen,

SPEAKER_01: I wouldn't take certainly knowingly any funding from, uh, people in, uh, uh, dictatorship. Right. And people challenged me on that number of times. Hey, well, would you take it from a family that was

SPEAKER_10: pro democracy who had left Russia or Saudi Arabia or China? And I'd say, well, I have to think that through it, you know, it's an edge case. And I think that edge case now is here, uh, in Silicon Valley,

SPEAKER_37: which is we have somebody named Yuri Milner, who has been huge advocate for startups investing. His first two funds were backed, uh, by oligarchs famously, uh, and, uh, Russian citizens, but he has not raised,

SPEAKER_01: uh, in the last X number of funds from Russia. And he's from what I understand persona negrada,

SPEAKER_10: he cannot go back to Moscow because he's now fully an American and investing here. And I know you're in, uh, I've had lunch with him one time, a really, um, sweet, sincere guy. Uh, I know I sound like I'm

SPEAKER_212: a Russian apologist here. I know. I'm like, uh, lots of opinions. Well, my interpersonal

SPEAKER_154: relationship with him was okay. This person's like an American. He's living in America. He's

SPEAKER_10: raising his family in America. Is it possible? He's some Russian, uh, double agent spy and all this information is going back. Of course it is. Uh, but I think it's kind of unlikely now. I think actually it's quite the opposite is that he is actually a target of the Russian government. Um, because he's not pro Putin and I, you know, I don't know how vocal he can be in saying that without getting himself killed. Uh, but I saw Mark Andreessen came out in support of Yuri Milner. I can't make a statement on that either way, because I don't know. How would I know? I have

SPEAKER_02: no idea. I do know that when I do know you make a lot of friends with a lot of money. Exactly. And

SPEAKER_09: that can be a tactic. Could there are a lot of, there are a lot of questions like, but this is like, I mean, this gets to even what you just said about every Russian with a passport, right? Like

SPEAKER_02: the blanket approach is hard for these exact reasons. Maybe this guy is, you know, his parents still live in Moscow. Maybe he is the, you know, part of the kind of like fifth column operation funding all these social platforms that are helping to, you know, dismantle American democracy that some people on Twitter say he is, and maybe he is a really great guy who like left Russia and then got himself in trouble and tried to cut those ties. I don't know. I have no idea. I know that money

SPEAKER_28: makes friends. Yep. And so it's hard. So like when you, when you choose who you're listening to, ask yourself if they've been made friends with as a result of the money or not.

SPEAKER_10: Yeah. And in some cases the people didn't need the money, right? It's like, not like Mark Andreessen needs, uh, any money from Yuri Milner. Um, they have a close personal relationship. I don't know the

SPEAKER_21: details of it, uh, but they work together. I like how you made that sound as sketchy as possible.

SPEAKER_13: No, it wasn't my intent. I mean, I think you summed it up, which is like impossible to know. How would anybody know? And this is why painting with a broad brush. I mean, if we said round up, I'm using that word very specifically every Russian with a Russian passport. Yeah. And let's put them in a gulag here in America. Like that's obviously not the right

SPEAKER_37: approach. I mean, we, we did that tragically with Japanese citizens, you know, uh, during a war, not a good approach. And so you have to take a case by case approach here. Yeah. But there's Mark

SPEAKER_21: Andreessen's quote. If you, uh, are on the video, we are now on video, uh, available on most podcasting platforms. You can just type in this weekend, startups video, or if you're on Spotify, I think

SPEAKER_10: it just, there's a button you can press to toggle. Uh, here's Mark Andreessen's quote. Yuri Milner has been a valued friend and partner to me, our firm and many of the U S is best new technology companies for nearly two decades. He has exhibited impeccable ethics throughout. I'm proud to know him.

David Friedberg: Uh, so Mark Andreessen could be absolutely a hundred percent correct here, or he could be a useful

SPEAKER_01: idiot in the spy terms. If Yuri Milner turned out to be a double agent, I think that's highly unlikely. Again, I don't have super information here, but, um, I know Yuri Milner's LPs are not Russians anymore. And that, you know, uh, is easily verifiable. And if they were Russian oligarchs,

SPEAKER_236: he would be expelled from the country. So that's pretty straightforward. The, um,

SPEAKER_10: I think people don't know this, but the U S government, um, tracks, uh, through something called KYC, know your customer when you are a venture capitalist or a private equity person,

SPEAKER_01: they know what transactions and who you're transacting with. Uh, they have insight into that through the financial system. If you were to sign a Russian oligarch as a venture capitalist,

SPEAKER_10: or you were to sign any dictatorship's money, North Korea, China, uh, as sovereign wealth funds from other regions that are run as dictatorships, uh, or we have sanctions against or actions against you will get a phone call. I know people who've gotten the phone call, which is, oh, you have your

SPEAKER_37: paperwork from that country and you signed a deal with them and they're putting a hundred million at your firm. Yeah. You can rip it up is what they told a friend of mine, rip it up and send the money back. Wow. They're no longer in business with you. And this is like high level state department, you know, department of justice calling you and that's game over. So just people don't know that. Uh, actually Chamath did talk about that publicly on episode 70 of all in. So, uh, you can listen to that and, you know, it's not the only person who has been told send the money back or you're not, that money's not going to clear wires. So you can rip up that agreement, uh, for them to be LPs in your fund. Yeah. You can be sure the U S government is on top of that. All right. So in a world,

SPEAKER_10: this is a, um, complicated, super complicated. And you know, we, I don't know about you, Molly, but just having been around the block media wise, I am very reticent to, um, give specific advice, not knowing what is actually going on. What percentage of knowledge do we have as American citizens as to

SPEAKER_152: what's happening? 30%, 20%, some very small percentage. Um, so we, I mean, I feel like the

SPEAKER_87: best thing we could do yet is sort of like, look, everybody's got a lot of opinions. It's just like

SPEAKER_28: with every other topic, everyone suddenly becomes an expert in this, that, or the other thing. The

SPEAKER_02: best thing we can do actually is probably not have the right. Like we don't know. There are probably

SPEAKER_04: 30 to 50 people in the world who really understand the history, the politics, the economics,

SPEAKER_28: and the ripple effects of what is happening. Yeah. And I'm most certainly, I'm not one of them.

SPEAKER_76: Yeah. And even those people, when you do hear them at a Stanford lecture or Hoover Institute or

SPEAKER_01: whatever Institute or think tank, when they come out and they get asked whether it's on meet the press or, you know, by the New York times or Washington post. And they say, what is Putin thinking?

SPEAKER_246: They're like, good question. Yeah. We don't know. We'd love to know. And we can't be guided by the

SPEAKER_83: way he acted in the past because he's not acting the way he used to act in the past. Like no one

SPEAKER_02: knows. No one is in that, inside that guy's head. Nope. Very few of us know what this is going to mean for the future. It's I, I don't, this is like, I'm going to sound like a child, but I woke up this morning with that song from frozen two in my head, do the next right thing. Yeah. That's all we got here. Yeah. Right. Just do the next right thing and then see what comes after that. Like there is some, there are hints in the cycles of history, but this is also like, this is a, this is our second hinge event this decade. So we are living in interesting times.

SPEAKER_212: Let's put it that way. We are living in wildly interesting times and the world, um, does go on,

SPEAKER_37: uh, despite COVID, despite this, uh, war. And so we will be covering things other than this. That doesn't mean we do not take this with the serious gravity that's going on, but part of living in the free world is, uh, enjoying the benefits of being in a democracy and, and showing through how we live our lives and the joy that you can have and the freedom you have in, in the democratic world. Yeah. That is part of the, the, uh, concept here is that we get to lead by example, that we have the freedom

SPEAKER_21: to talk about these issues and to live our lives, uh, and, and have some amount of, uh, agency. And we hope that the Ukrainians fight and have that continue to have that agency over their lives. So, uh, hard segue. Um, but we will talk about other news this week. Um, we're this weekend startups.

SPEAKER_212: We can still talk about startups and we have a startup of the day.

SPEAKER_88: We do backbone. Yes. This is our producers pick these and, uh, we share them with you. We're trying

SPEAKER_02: to do it every day. Yep. Cause honestly, people are working very hard on these and with a show, with a title like this weekend startups, it's the least we can do backbone builds hardware. This is actually super interesting. They build hardware that basically lets your phone be a Nintendo switch. It lets you, uh, turn your phone. And there have been a number of runs at this. Yes. Um, and so we're just waiting for the company that can get it right. So far, the money seems to suggest that there's confidence and backbone. You like, it lets you turn your iPhone into a handheld gaming device with buttons and joysticks. They just announced a $40 million Series A at a $374 million. Hey, that's a series C. I know. What is going on? Is that the hardware talking?

SPEAKER_10: Is that why this is so expensive? Yeah. You know, hardware is hard. That's the, uh, colloquialism in our business. So, but this is being led by index ventures. So that's a very high quality venture firm. Uh, discord CEO, Jason Citron is involved. Sono CEO, Patrick Spence is involved. Uh, and then they went the celebrity route and got Ashton Kutcher, Amy Schumer, Kevin Hart in the

SPEAKER_37: weekend, according to pitch book device cost a hundred bucks. Here's what it looks like. It looks like the Nintendo switch, which, you know, this is a hundred dollars to add it to your phone is,

SPEAKER_107: I think the switch is 400 bucks or something, 299 for a switch. So you can basically get

SPEAKER_00: relief to the pandemic. They were up to like four or 500 bucks, 299. I think I found one for like 350. Try buying a Corvette. I really wanted to buy the new Corvette, but I just can't get my

SPEAKER_37: heart around buying a gas car. I'm really sorry, but I have a Corvette fetish. Yeah. And I want to buy some old Corvettes and I was going to transfer them to be EVs or something like that. That was another pipe dream I had too hard, too hard and too expensive to do. So

SPEAKER_83: it is, it is kind of absurdly expensive, but didn't GM announce a kit. I'm interested in this too,

SPEAKER_02: because a friend is trying to sell me her dad's Porsche Boxster 1998. Yeah. And I'm like,

SPEAKER_28: well, that would be a ton of fun. And it would be such a great little project to try to convert

SPEAKER_25: that to electric too hard right now. There needs to be somebody who will do it for 50 grand flat rate, doesn't matter what car you bring, but there was somebody who is doing company call me because

SPEAKER_10: this actually is a company that I would consider investing. And actually, if there was somebody

SPEAKER_01: who had a credible way to make a conversion, that was 50 grand had a 40, 30% margin or something like that. So every time they did a car, they made 15 grand. And they could take shells of cars. So the

SPEAKER_216: engine blows, and they could just rip the stuff out. But I just don't know if it's actually possible. And it's totally possible. You can buy like possible at that price and that margin. Oh,

SPEAKER_02: at that price. The kits are not the limiting factor. I mean, I think you can get like an EV conversion kit if you're a super gearhead and do it at home for like six to 12 grand.

SPEAKER_10: Really? I thought the battery would be six to 12 grand. So, but I do like the idea of doing this with, you know, because a lot of times when you find, uh, you know, what they call a barn find in

SPEAKER_157: the business, you find some car in a barn, it's in perfect condition, except the engine needs and the

SPEAKER_37: tranny and everything needs to be redone. This would be a wonderful, wonderful, um, thing to do. I also saw the DeLorean is going to come back as an electric car. I looked at the DeLorean assets.

SPEAKER_13: I was considering maybe making a run at some point because I love DeLoreans. Really? Yeah.

SPEAKER_157: The IP was available. Somebody emailed me like, Hey, any interest in the IP of DeLorean?

SPEAKER_10: And then this person in Texas has all the car parts. They want to liquidate them or something. So it turns out when that company, that, that brand is like kind of like Atari. I think it's like

SPEAKER_37: people keep buying this classic loved iconic brand, but they can't seem to, to nail it. So,

SPEAKER_13: DeLorean is going to come out with an EVs.

SPEAKER_02: They're getting a ton of attention for this. It's pretty amazing. Super limited. This is your chance. You should get one of those. You should get one of those.

SPEAKER_270: I always love the DeLorean. It's like super impractical. And it's awesome.

SPEAKER_285: It doesn't have the gold wing. It's got the gold wing doors. It's got the gold wing doors. Yeah.

SPEAKER_37: It's like the Falcon doors on the model X. I think the problem with these cars is like, you're buying yourself a bunch of headaches. Like it's hard enough. Life is so hard already.

SPEAKER_13: Like, I don't know if I have enough passion. I know it totally is electric. I mean, I'm just trying to get out on the ski slope for two hours, just get a couple of runs in. I'm trying to get the podcast out on time, invest in a couple of

SPEAKER_37: companies, raise three daughters, deal with a bulldog puppy and a, and a dying bulldog who's 15

SPEAKER_40: years old. I got a lot on my plate. It's a lot, man. I can't be under a car changing the suspension. Um, no, definitely not.

SPEAKER_10: There are people who have like, they just hire somebody to be their full-time car person. And then

SPEAKER_216: they get a barn or like a, a warehouse and they just put all their collectible cars in that. I think that I could see myself doing that. Like for the last 10 years of my life is just geeking out to cars in a garage somewhere. Yeah.

SPEAKER_71: But anyway, congratulations to backbone. I think this could be successful.

SPEAKER_02: Sorry. Back on track to backbone. We all want the one that gets this right. And this is just such a

SPEAKER_28: no brainer for kids. And then also for these big streaming platforms that keep saying they're going to get more into games, Netflix, um, certainly Amazon and Sony already in this game, Xbox, you know, they've got these, they're going to potentially call them cross-functional game

SPEAKER_04: subscriptions. That would be awesome. Like if you could plug this into your phone and just immediately start playing your Xbox games, like if I could go from halo on the Xbox to halo on the

SPEAKER_88: iPhone, cause now they may have the processing power to pull it off. I would think. I think they

SPEAKER_10: do have the processing power to pull off most of these games. And then I, the only question I have is how do these things attach to the phone? Because apple is pretty notorious for changing the size of the phones. And then you ever buy like a $30 or $40 case for your phone. You replace the phone and you're like, all right, I sold the phone back to apple. I got a $200 credit.

SPEAKER_216: Now what do I do with the case? And the person's like, throw it in the garbage. And I'm like, can I just give it to the next person? They're like, no, that's gross. And I'm like,

SPEAKER_83: or even they're, they're notorious for changing the connector itself and the pins inside the connector

SPEAKER_02: so that like an old lightning cable won't work, even though a new one will, or like the Apple approved one won't, but the Amazon basics won't. It's just a giant pain in the ass. So that is a really,

SPEAKER_28: really, really fair and important question about the hardware integration. It's universal sizing. I would just worry about Apple software upgrade coming out and being like now that now the connection doesn't, you know how, like, sometimes it's like this accessory is not approved because

SPEAKER_21: Apple doesn't feel like it anymore. I, and just to be clear for people who are listening, not

SPEAKER_10: watching it's, this is supposed to be the backbone, like a, um, a spring, you know, like you have for your iPhone or, you know, phone, uh, cradle in your car holder, your car holder kind of has like a spring to resolve this problem of the phone size is changing. And so hopefully that works here,

SPEAKER_01: but it does also have the little dongle where it plugs into your lightning connector. So the second Apple decides that we're going to go USB C, which I think they're going to be forced to in the EU

SPEAKER_107: at some point, my Lord, we're going to all throw away all these lightning connectors.

Jason Calacanis: God damn it. I know they better have a, they had better have a program where we can box those up

SPEAKER_298: and send them to them because no, they're not. And then just throw it into a, they're going to throw

SPEAKER_10: it into a landfill. We're all going to think we're doing the right thing. And then they just throw it in a landfill. What I like is the little tiny dongle. So I have, I always travel with these.

SPEAKER_37: I'm like dongle guy. When I travel, I got like a little box of dongles. And one of the dongles I love most is this little dongle that goes on your lightning connector and turns it into a USB C is a little snap, a little snappy poo. So you don't have to carry two cables or whatever. So I love all of those. I mean, USB C to the USB two. It's an easy one, you know, on the side of your MacBook Pro, whatever you can get an old school one, but I like the idea of the lightning ones. Yeah, whatever it is, female lightning to male USB C is the, but I think Apple blocks those two. So when I buy these, I don't know if you've ever seen this, when you try to buy these things and you're on Amazon, you have to, you're not going to get them by Amazon prime because I think they Apple complains to them. So you got to use like the third party seller or you have to buy it off of eBay or whatever. And then sometimes they work. Sometimes the one I love, I don't know if you've ever had the triple headed cable. Yeah,

SPEAKER_88: that's awesome. But they keep trying to, and they keep messing with it. Like messing with it. I mean,

SPEAKER_02: I have been, I have now spent 23 years ranting about Apple's lack of universal standards

SPEAKER_28: compatibility. Apparently I'm never ever going to win this one. No, but I don't care. Fanboys. I'll never not be mad about it. They're going to get this unconscionable from a device from a freaking waste perspective. Yeah, unconscionable. Well, I think that's why the EU is putting the

SPEAKER_10: pressure to them to say, you got to change this. Sorry. But um, and even if you don't go to USBC,

Jason Calacanis: just you need to allow your old lightning cables to work with it. You like you got it. You give this

SPEAKER_02: authorized reseller and creator crap. Like that's got to stop such BS. I mean, this is why like

SPEAKER_10: when Tim cook tweets, I always feel the need to dunk on him because I feel it's so insincere because there's so many layups where they could do the right thing and they don't. Yeah, they did the right thing with iPads and the MacBooks. You can plug your iPad. iPad uses USB C and Mac. It's USB C now. Oh, okay. And MacBooks use USB C. Yeah. Um, but then I just bought that new MacBook and it has the lightning. It has the, uh, what do you call that one? The MagSafe. They brought MagSafe back. Yeah. Which I love. I love that. I love the fact that when I'm

SPEAKER_01: at a cafe, there were cafes, Molly, and we used to go to them and work with other people around, you know, in the time before masks and they shut everything down on purpose. Yeah. On purpose.

SPEAKER_163: Yeah. You just, wow. Did you like my tweet to the group shot earlier today where I was like, people used to get in cars or take the subway and they would commute to a office and then they

SPEAKER_212: would trade labor for money. Yes. That was amazing. It was such a slow burn on my part too. I was like,

Jason Calacanis: what? How did they trade labor for money? Oh, we went to offices to work. Oh yeah.

SPEAKER_154: I noticed some cities are up to 40% of people going back to offices. Like, there's a lot of

SPEAKER_146: trap. When I take my son to school, we pass by the, the San Francisco backup. And that I know it's got

SPEAKER_28: the billboard that says the time. And it used to be, I mean, it was like for the entire pandemic, right? It would be like time to San Francisco downtown, eight to 11 minutes. Now it's like

SPEAKER_02: 23 minutes. Today it was 36 minutes. Like people are going back to work in the city, no doubt. And we're like a pretty holdout region, obviously. So that's a big surprise.

SPEAKER_326: I don't, that Jeff, for people who don't know the Bay area, I mean,

SPEAKER_83: I think there's, we're going to be. The Bay area will cling to its COVID fear until the last.

SPEAKER_217: I want my, I mean, people were getting so angry at me that I was like, take the win.

SPEAKER_270: Yeah. Speaking of take the win. I was at the win. I went to Vegas on Saturday for a friend's

SPEAKER_332: birthday parties. I'm going to take the win. It's a magical segue. I took the win for four dimes. It was a blackjack heater. Nice work. Yeah. Anyway, I was there and there's no COVID in

SPEAKER_334: Vegas. Yeah. There hasn't been for. Nobody is wearing a mask. Not the staff, not the dealers. It is

SPEAKER_02: over. When I was in Arizona, I got to say, I really liked the vibe around Phoenix because it was basically, and I think that it is fair to say, this is where we are right now with COVID. It was do what you want. Like I was in a Trader Joe's everywhere. I was every restaurant, every store, it would be like half the people wearing masks, half not. Your call. Right. And it's your call. And there was no, because the thing about the Bay Area is I went into a store the other day without a mask on, and you would think that I had carried in like an AK 47 or a live

SPEAKER_342: Cobra. I mean, people were literally looking at me. You want to pet my Cobra? Right. You want to pet my Cobra? And I'm like, I just see Molly Wood walking in with a King Cobra around your neck. Just being like,

SPEAKER_00: hey guys. Hey guys. And also not a mask on. And they'd be like, that's worse than the Cobra.

SPEAKER_344: Exactly. And I'm like, I have had three shots and COVID. I am not a threat to you. Yes. And I

Jason Calacanis: am, and I myself am not concerned about this. And I was like, just everybody do you at this point. And I appreciated actually the kind of like accepting vibe that I sensed in Arizona where it was like, if you want to wear it, great. If you don't want to wear it, great. Like that's okay. And take it seriously if you want to. And if you're immunocompromised and you're, you know, please take it as seriously as you want to. And also, and also let me live. I'm not a danger to you.

SPEAKER_217: Yeah, exactly. I mean, that's the, I have a dear friend who's a founder.

SPEAKER_106: And my Cobra is super friendly. This is a, I don't know why I get so worried about it.

SPEAKER_353: This is a well-behaved Cobra. Yeah. King Cobra. I named, I named him Buffy. He's super nice.

SPEAKER_352: Buffy. He's super. He likes a snobble. He likes to cuddle. He likes to cuddle. My cuddly Cobra.

SPEAKER_216: It is. But my friend, I have a friend who is a founder of a company. I won't say his name and he's

SPEAKER_10: immunocompromised. And you know, uh, before COVID he needed to be careful not to get the flu.

SPEAKER_217: And obviously with COVID he has to be careful, but we cannot, even he was like, this is, you know,

SPEAKER_10: me being immunocompromised does not mean everybody else has to wear a mask. And, you know, he's

SPEAKER_01: pretty straightforward about that. All right. Listen, uh, next up, we have this incredible interview with Joel Greenblatt. He is a famous investor author. He was on the show a year ago.

SPEAKER_10: Y'all freaked out that he was like one of the smartest people, uh, we've ever had on the show.

SPEAKER_01: So at 60 minutes into this news, we're going to give you an 80 minute interview. That's a long show today over two hours, but this is how it's going to be now that we got Molly here and Molly and I want to hang out. And when we don't hang out for two days, like we, I think we didn't do on Monday.

SPEAKER_37: We're going to do a show because we want to talk and we want to talk about the news and what's relevant to you. So consider this a double episode for you on a Tuesday, uh, lots of news and a great interview. You're going to love this Joel Greenblatt interview. And I did ask him to come back in six months because he can speak on a lot of subjects. Enjoy. Enjoy. All right, everybody, we had this guest

SPEAKER_366: on last year and all of you freaked out and said, you know, have this guy back on. He's so smart. He's quick and you guys had a really great discussion. And so if you remember on episode 11 59, last January, we had Joel Greenblatt on, he is the managing partner at Gotham asset management. And now he's been investing for let's see 80, four decades. Uh, he's a professor teaches about this

SPEAKER_368: kind of stuff and he writes books, great books. Uh, the last book, uh, we talked about when he was on the program, common sense, the investor's field guide to quality opportunity and growth. And welcome

SPEAKER_366: back to the program, Joel. Thank you. Uh, when you were last on, we were experiencing a bull market of bull markets, like we'd never seen after the pandemic shocked the markets for, I don't know, 60 days. Uh, and then here we are, uh, the markets corrected again. And you were quite prescient, uh, when we talked last time about maybe some of these growth stocks, uh, and their valuations, their revenue didn't make a lot of sense. Um, what do you make of the growth stocks from zoom? Uh, you know, basically everybody across the board getting corrected 50 to 85% Peloton. Uh, and have we, I think a lot of people want to know in the tech business, especially in the private markets, which then, uh, feed into the public markets, buying business, capital allocation, venture capital, have we hit the bottom? Are we, are we in bargain hunting territory yet? How do you look at these growth companies that were trading at three, four or five times their

SPEAKER_374: current value just last year when we talked? Sure. I appreciate that. And I appreciate that you think I know the answer to that question. Uh, but you know, if you want to look at the,

SPEAKER_375: the major companies, the Amazons, the Googles, uh, the, uh, apples, uh, I still think they're

SPEAKER_376: reasonably priced here. You know, they've gotten a little cheaper. They haven't fallen the 80%, but they've, they've started to fall, you know, 10 or 20%. And, and so I think those still represent good values. And what was happening elsewhere in the market last year was that people thought

SPEAKER_377: hundreds of companies rhymed with these, uh, new economic models, and they all end up being the next Amazon or Google, uh, and that can't be, that's just not the way it works. Uh, but, uh, you know, hundreds of these companies were getting credit as if they were, uh, going to be these franchises and, uh, ecosystems that we've never seen before. Meaning these are the best companies, those, those major companies, the Amazons and Googles and Apples are some of the best companies that, uh, you know, you mentioned four decades, uh, that I've seen in four decades and possibly forever.

SPEAKER_378: And so what was going on last year is people were looking for the next ones and, and trying to say that, uh, this one rhymes with Amazon or this one rhymes with the next Google or what, or just that

SPEAKER_377: things would go to the moon and that never happens. Uh, even though there will be some winners from the group of high flyers and that, and that just tends to always happen. What's particularly interesting now is that, you know, we're cashflow oriented investors, you know, no, uh, private equity firm is going to go buy a business because it's a low price book or low price sales, which is the

SPEAKER_376: traditional value metrics that people would look at. But we look at cash flows and, and, uh, real economic cash flows and, and what they're going to look like in a few years. And so we, uh, you

SPEAKER_377: know, follow this fund that we've been, uh, running chosen from the Russell 1000, which are the thousand largest companies by market cap. And it owns about 750 of them. They're not equally weighted. They're skewed towards what we believe are the cheapest, meaning the, the highest cashflow generating businesses, uh, you know, with high returns on capital, but it's a very diversified

SPEAKER_378: portfolio. Uh, and we can track it over the last 30 years to see where that sits on a valuation basis relative to the last 30 years. That does not adjust for the fact that interest rates are, uh, even though they're rising are still way below the average of the last 30 years. Uh, that does not adjust for the fact that returns on tangible capital and, you know, the asset light businesses that are now the ones that make all the cashflow, uh, the returns on

SPEAKER_377: capital over the last 30 years have gone from about 20% in the S and P to closer to 70%. So it doesn't account for that adjustment. And if you can, if your money's more efficient, you have to reinvest less of your earnings back into the business to earn the same kind of growth rate, which means you get to keep more of your earnings, which means your earnings are worth more. We don't adjust for that. Okay. And so not even adjusting for that. The S and P is in, uh,

SPEAKER_381: right now over the last 30 years in the 13th and a half percentile towards expensive,

SPEAKER_377: I mean, it's been cheaper 86 and a half percent of the time, uh, forget the half a percent part,

SPEAKER_381: but I'm just telling you what the stats were when I looked this morning, uh, and expected returns,

SPEAKER_378: uh, without making the adjustments for interest rates are lower, that returns are capital higher.

SPEAKER_377: But when we've been at this valuation in the past year forward returns for the S and two year forward returns for the S and P have been about eight to 10%.

SPEAKER_378: If you, uh, looked at this value portfolio, I started talking about, you know, chosen from the Russell 1000, but a lot of names that's in the seventieth percentile towards cheap when it's been here

SPEAKER_386: in the past year for a two year forward returns have been about 44%. So you can construct. So when you

SPEAKER_377: ask about the market in general, uh, or someone asked me about the market, it's a, always a market of

SPEAKER_378: stocks. So, so when, when you asked me, I said, well, some of the major companies, uh, you know, the well-known companies are still reasonably priced, uh, where, uh, these other high flyers from last year have come down and are more reasonable than they were, but it's hard to tell because, uh, clearly, uh, they don't have the kind of franchises that, uh, the Amazon Googles have, and some of them will eventually have really good franchises, but many, most will fall by the wayside, or at least not be nearly as good. But in the, the value part of the portfolio, we're actually cheap historically.

SPEAKER_377: We're in the seventieth percentile with expected returns, you know, towards cheap with expected

SPEAKER_378: returns closer to 44% over the next couple of years versus 8% for the S and P. So it's very hard to say, you know, what's going to happen in the market. Otherwise, you know, the, um, the S and P is,

SPEAKER_376: is still richly priced. And even if we adjust up, I would still say, you know, you get a reasonable return, not negative expected returns over the next couple of years, but you know, more muted than,

SPEAKER_378: you know, markets been up 10% a year for 50 years and actually a hundred years. Uh, and so more expensive than that, probably expected returns lower than that for the S and P much higher than that for the value component in the portfolio. And for some of these busted growth stocks, uh, it's, uh, it's a stock picking game. It's not, uh, you know, over all answer to your question. Uh, some will do

SPEAKER_366: okay, but most won't. And so if we double click on that, maybe we look at an individual stock. I think you've been a big proponent of Amazon Bezos had a really interesting strategy. Hey,

SPEAKER_368: let's just not make any money. Let's kind of break even, uh, invest in the business. There's such a huge tam here. There's such a huge customer base. Let's just focus on building that customer base. And then we'll, we'll turn on, uh, revenue and cashflow, you know, maybe in decade two or three. And, uh, that's turned out to be a pretty brilliant playbook that I see in the private market all the time. Venture capitalists, uh, and founders are pretty well aligned. Let's not try to make a profit here. If we understand the unit economics and they're solid, great. And then, uh, at some point when we think we've captured enough market share, we'll, we'll, we'll turn that dial. Of course, there are counter examples like Google, which always printed money and had absurd margins looking at Airbnb. Uh, this company has been amazing. Uh, they've, uh, got a huge customer base. They're loved, but they don't really make any profit. They lose money. Most quarters. Um, they could make money, I guess, if they didn't want to grow,

Chamath Palihapitiya: uh, and they're trading at 16 times their 2021 revenue, what are your thoughts on the Amazon

SPEAKER_392: playbook and how it's infected? You know, this next generation of business leaders, is it a good thing? Is it a bad thing? And then as an investor, when you're holding these companies for a long time, is there some sort of signal that you see that says, oh yeah, they're doing the Bezos place a playbook correctly? I feel like I can get all in on this company. Well, that's, that's a really great

SPEAKER_375: question. Big picture what's changed in the economic models of, uh, these high growth businesses, uh, with, with low capital or appear to be low capital intensity, at least tangible capital

SPEAKER_378: is that when you have a big tangible capital business, you're investing in, uh, working capital, which includes inventory as well as, uh, you know, plant equipment and you get to capitalize that, uh,

SPEAKER_399: which means that you spend the money now, but it doesn't hit your earnings. It's spread over a

SPEAKER_378: period of time where you're going to use it. Uh, when you have a business that's more thinking of lifetime value of the customer you're building, you know, acquiring those people, which is, uh, advertising spend and research and development, which is developing your product. Those are all expense items. You could argue they should be capitalized if you were looking at it from an economic standpoint, right? Because you're spending money now to get that person who's going to pay off over the next pile of years. So it's a mismatch. You're spending money now. It looks like you're not

SPEAKER_377: earning anything. Uh, you get to deduct. It's great for taxes. I mean, if you're looking at cash flows and you're an investor, it's a great business model because you get to spend money, you get to deduct it, and you're going to collect over a period of time. And as long as you're keep growing, you keep spending, showing no profits. And, uh, yet you're building value over time because

SPEAKER_378: your customers last, uh, because they get into your ecosystem for five, 10, 15, 20 years. Uh, and so I think accounting doesn't pick up on that. Also, uh, you know, the multiples of sales have to do

SPEAKER_376: with the margins, you know, uh, software business, for instance, you know, like Airbnb, you know, has historically ridiculous margins for incremental customers, uh, that we haven't seen in, you know, bricks and mortar businesses. And so all those ratios really, you know, it all comes down to cash flow at the end of the day. And, and when are you going to get that cash flow? And so you have to

SPEAKER_377: really look at economic reality for all those. So the traditional metrics just don't work very well.

SPEAKER_378: You know, you're not capitalizing, uh, research and development. You're not capitalizing your, your advertising spend. You know, you're not saying, Oh, I spent now and I'm going to, uh,

SPEAKER_377: on advertising on a collect that over the next five years, as this customer pays me off,

Chamath Palihapitiya: you just expense it right now, which didn't AOL get themselves into a little bit of shenanigans. If I remember correctly, where they were saying, Hey, it's $300 to acquire the style of customer 200

SPEAKER_368: from TV ads. And then they tried to amortize it and depreciate it over three years. And I think

SPEAKER_366: the sec was like, no, bueno, uh, we, we can't have you doing this. This is just charge it now.

SPEAKER_396: Yeah. Well, you know, bottom line is your business model has to make sense. It's, it's not a question

SPEAKER_399: of how you account for it now. It's if, if you're investing a lot of money to get dial up customers, that's questionable. Uh, if you don't have a, um, a good economic moat, if dial ups going away.

SPEAKER_386: So, you know, you can make mistake. I mean, it's scary. I mean, you know, most businesses

SPEAKER_375: will fail and that's history. Most businesses do fail both because we have a capitalist system where if someone's doing well, other people come in and say, I want some of that. And, and so you need

SPEAKER_399: some kind of business that creates a unique, uh, setup, uh, you know, and, and there are a number

SPEAKER_376: of them. You can do it, um, in bricks and mortar like Costco, for instance, their model is be the low cost provider. How do they do it? Well, you become a member and that's how they make their money.

SPEAKER_377: And then they sell everything just to break even. So it's tough to break, you know, stuff to compete.

SPEAKER_376: If you're a bricks and mortar with some places, just trying to break even and give it, you know, pass on all their savings to you, they're only getting paid on being a customer and, and, and being able to, uh, you know, it's a virtuous circle where you, the, the better bargains you

SPEAKER_375: provide over time, the more people want to join your, your little club. And, you know, it just spins

SPEAKER_378: on itself. And if you're looking to make profits on those people directly without members, uh, you can't compete. So everyone has their little ecosystem and, and, uh, flywheel and some

Chamath Palihapitiya: make sense and some don't. You and I are big fans of this capitalistic system where people fight and

SPEAKER_368: they get in a dog fight and consumers win. We see it over and over at Costco. Great example, Amazon, great example, Amazon prime. We, we, they keep battling it out. Consumers keep winning.

SPEAKER_366: The cost of buying a charging cable, uh, you know, just keeps plummeting and consumers keep getting

SPEAKER_368: delighted by shorter and shorter delivery times. I mean, we're living in like one of the best times ever to be a consumer, obviously, uh, Lena Khan, uh, his, uh, now looking at our, uh, standard for

SPEAKER_366: antitrust and our standard has been, Hey, consumer harm, our consumers winning or not pretty clear test.

Chamath Palihapitiya: She recently, um, was interviewed, uh, Kara Swisher and, uh, Andrew or Sorkin did a good interview. I don't know if you caught it on CNBC, New York times, but basically said, you know,

SPEAKER_368: the new lens we're going to look at. This is does this merger or does this behavior impede future competition as if we could look at a crystal ball and say, Hey, Amazon basics or Costco's business model, or, you know, Google buying YouTube, Facebook, buying Instagram, uh, five or 10 years from now, there'll be less competition. I'm curious your thoughts on this, uh, new lens of, you know, basically refereeing, we're basically refereeing a game here and, and the referee wants to say, Hey, if this acquisition or this behavior reduces future competition, we're going to not allow

SPEAKER_411: it. What are your thoughts on that? I'm not a big fan of, uh, Soviet style, uh,

SPEAKER_375: uh, control of the economy, trying to, to make those future choices for the, uh, very dynamic capitalist economy. I mean, you know, I mean, there was my space, there's Facebook, there's tick tock. I mean, people are smart. Capitalists are people who want to make money are smart. Uh,

SPEAKER_378: if, if someone entrenched, uh, gets abusive to their customers, uh, that makes room for others

SPEAKER_375: all the time. So I really do think in general, and this is a very generalized observation that, uh, consumer benefit was a very good standard, at least as a starting point and trying to puppet master the economy and the future, uh, in a Soviet style, centralized planning way, uh, is fraught with,

SPEAKER_390: uh, I'll be nice complications. Yeah. I mean, you're basically picking favorites. You're looking

SPEAKER_366: into a crystal ball. I understand the intent. Hey, these companies are getting very big, but then on the converse, how do you know what's going to happen? How do you know the acquisition of, you know, YouTube is going to be better than the Motorola one that Google did. That was a complete utter disaster. How do you, I mean, and now we're looking at Facebook,

SPEAKER_368: their dogfight with Apple, they're losing, and they got this crazy headwind now, and they lost a quarter billion dollars in market cap. By the time Lina Khan and the government, uh, try to give out these fines or try to try to stop these companies. It's going to be like trying to, I don't know, redo the Vietnam war. Like it's, you don't get a do over in business. The business is run, competition happens, and there's winners and losers. Just seems like a fool's errand to me.

SPEAKER_420: Well, you know, the old saying, the road to hell is paved with good intentions. I mean,

SPEAKER_375: uh, it's a losing battle, uh, to try to do that. If you remember in the late nineties, Microsoft was in the crosshairs of, uh, antitrust and they had a decade at least of, uh, their business being very challenged until, you know, new management took over and, uh, you know, reoriented the business. Uh, but, you know, sort of these antitrust issues will probably come out at the

SPEAKER_399: peak of popularity. And, you know, when things are in the headlines and if you've been investing for

SPEAKER_375: every period of time, something that everybody knows is usually is often wrong, uh, is often already played out, you know, so whether it's in the stock market or in the business itself, uh, I would say that, uh, regulators would be following all the wrong signals at exactly the wrong time to try to crack down on what they perceive as monopolistic, as long as consumers

SPEAKER_366: are benefiting from good execution. Yeah. And, and the idea that we in the capital allocation business, people placing bets on these and the management teams, we can't figure out who's going to win. I mean, who saw a quarter trillion dollars getting lopped off of Facebook's market cap? I don't think anybody saw that coming. That was, we knew there were headwinds, but we didn't know it was gonna be that disastrous. And I think this is like another good, uh, jumping

SPEAKER_368: off point COVID starts to end. Uh, I think it's pretty reasonable say we're now in the endemic phase. Obviously we have this, uh, new Ukraine situation. We'll get to that in a moment. But, but looking at what happened over those two years, a group of market participants entered the market retail traders, uh, which we had seen this movie before on the dot-com era didn't end very

Chamath Palihapitiya: well. Uh, that time looks like it's not ending well right now, but there does seem to be a new

SPEAKER_368: level of sophistication in this next generation. The, the Robin hood traders, the crypto traders, they're understanding things that let's face it trading options and margin. This wasn't even available to people with E trade accounts and they were throttled with $25 per trade charges.

SPEAKER_392: We've taken a lot of the friction out. We've got people who are becoming very sophisticated through placing bets net net. Is it great, troubling, disturbing? How do you frame these new 10, 20 million Americans, young Americans participating in the stock market in college instead of maybe doing fantasy sports, participating in crypto? Uh, where do you think this would impact long-term does this have on the market and on American society, this level of sophistication and tinkering by these 20 million, I'd say new market participants? Well, that's also a great question.

SPEAKER_399: Uh, I, you know, really have to go back to Ben Graham, who was Warren Buffett's teacher. And he made a distinction between investing and speculating. There's a difference. There's a not saying they both don't exist or that there's a place for both, but you have to understand what

SPEAKER_377: you're doing. And so if you're just thinking about equities, the only intelligent way to invest in equities is to realize that a share of stock represents an ownership share of a business. And the intelligent way to invest is to be able to value that business, divide by the number of shares outstanding and decide whether you're buying it at a discount

SPEAKER_386: to your expected value and your expected value takes into account projections of what the cash

SPEAKER_377: flows are going to be for many years. It's not backward looking, it's forward looking. It's saying, you know, if you have the, if you have a variant perception that's valuable and you're right, and you think this business is trading for a bargain price, you figured out what it's worth, pay a lot less or pay somewhat less or pay a fair price on something that's going to be growing faster than maybe what people think. That's what investing is called. Okay, you're actually realizing there's a business here, and that you're valuing it in some form, and you're either good at it or bad at it and trying to get a reasonable price when you when you buy in to take advantage of that your valuation is higher than what you're able to buy at, or at least fairly priced and you'll get

SPEAKER_378: a good return from there. Okay. So I would bet that 99.9% of the people you mentioned who open Robinhood

SPEAKER_376: accounts, and it's a very hard job. And it's kind of a full time job and to know how to do it on dozens of companies is experts can't even do that. But if you have a variant perception on one or two, or an insight in particular industry or something like that, you can do it. But 99.9% of those people do not. So what Buffett would say nowadays is most people and that's 99% of the people. If you want to bet on, let's say you're buying domestic stocks, you want to bet on that, you know, we have a dynamic capitalistic economy with all its problems that will grow over time. And I want to participate over the next 1020 30 years, we still have the best of the worst or whatever you want to call it. And

SPEAKER_399: and historically, it's it's gotten people good return, then you should invest in investing would be an index type thing. If you know something about an industry or you know, you have a variant perception in some ways, and you're able to value businesses, which is what stocks are their ownership

SPEAKER_377: shares of businesses, then of course, you can invest intelligently, most people can't. So everything that's not investing is speculating. That leaves me, let's say I used to think of gold,

SPEAKER_376: I said, I can't invest in gold, not because I don't realize it bounces up and down. And some

SPEAKER_377: people are good at it. But gold will never earn money. You have to, to value something for me,

SPEAKER_378: it has to have earnings somewhere. It's down the road, I can't value fine art, it's not going to

SPEAKER_377: have earnings, it may it still has a value. I'm not arguing it doesn't have a value. I'm not arguing gold doesn't have a value. What I'm saying is, I have no way to value it. Because if something's not going to earn money over time, I there's no way for me to discount those earnings and figure out what they're worth to me. And so gold is like that and crypto falls in that category that I can speculate

SPEAKER_376: in gold, I can speculate in crypto, and maybe I can speculate intelligently. Okay, because I know it's going to have some uses or, or whatever it might be. But to me, that's not investing. That's speculation. Because there's no attached earnings to it. You don't have to earn money now, you could be losing money now. But if but any business, the reason you're buying into it is you expect it one day to pay off. You're talking about Airbnb, okay, it's not earning money right now.

SPEAKER_377: But the perception of those who are buying it is that they have a great franchise. And over time,

SPEAKER_376: it will earn money at some point, they will get to Amazon was losing money for a while now starting to earn money, they could speed it up. But if they still want to keep investing in their business and gathering clients, and look at all the great things that come from clients, they now you know,

SPEAKER_433: have infrastructure, you know, soft memory infrastructure that they they rent out to other people, which is, you know, in many ways, even a better business than than the business

SPEAKER_376: they started in. So you just have to value those things. Most people aren't capable of doing it. So they are in fact, speculating and I have fun doing that. But you got to understand what that is, I think you should have a core of investments that are if you don't know what you're doing, your core of

Chamath Palihapitiya: investment should not be in speculation. And we saw this in profoundly in many ways. And it, I think your speculation versus investing rubric varies is the perfect one. Because if anybody who's played poker,

SPEAKER_366: knows, there are people at the poker table who are just there gambling and having a good time having a couple of drinks, they look at the two cards, they look pretty, they put their chips in. And then there are other people who are actually doing math and thinking about people's previous behavior. And they're taking an approach to it and saying, Hey, you know, I know something about these players, I know something about how much money is in the pot and the expected value, if I do win, if I should make this call or not, if it's a marginal decision, they're being thoughtful. And here, people were momentum investing, they're looking at things that look like it's an interesting story. And they're placing bets. And you can see that when logic gets removed, and the EV space was,

SPEAKER_368: we'll put crypto aside for a second, because that one made no sense. But the EV space, you could actually start to look at and say, Well, Tesla has done incredible, they're delivering all these cars, the cars have a certain margin, the cars are some of the, you know, best experiences you could ever have

SPEAKER_392: driving a vehicle, the software is unbelievable. And so all these also rants come into the market, I see Rivian, I see Nicola, we have the founder of that fraud on our podcast, that guy was complete dip. And I'm looking at the space going, my god, the people are just pushing all their chips in because they think that jack queen is a pretty looking hand up against ace king, it's not, it's like, they both have pretty pictures, but these are not the same thing. And the Rivian one, when it hit 140 billion. And I'm saying, this company's delivered like 100 cars or something.

SPEAKER_366: This makes no sense. Maybe you could talk a little bit about this SPAC movement and speculation in certain categories where it was obvious people were not looking at the fundamentals. And you know, how that could even happen? Because when I said, this makes no sense to me, I mean, I was getting absolutely savaged on, you know, Twitter and social media and CNBC when I said, how do you compare these companies ones delivered a million cars ones delivered 100? We're giving far too much credit here. I think maybe that's the the the issue. How do you explain this mania that's occurred?

SPEAKER_423: I think it's helpful to look at history when you're looking at it and saying, you know, hey,

SPEAKER_375: I think there were over 100 car companies when you know, cars started coming out, and it's not like cars haven't taken off, so to speak, or pretty popular airline, you know, aviation was a big concept. You know, we didn't even, you know, have people who could fly in the air and, you know, a little over 100 years ago and, and, you know, it's taken off, so to speak. And it's been a big business, but not really a profitable business for the most part for a long period of time. You know, a lot of waves of internet businesses, we know internet, you know, I'm old enough to know

SPEAKER_433: that wasn't always here. And I thought it was pretty cool when it got started. And, you know, there was a first bubble. And of course, there's a lot of great things and a lot of great companies that come out of

SPEAKER_376: a result of the internet and the networking effects that never existed before and, and everything else as a result, but there are a lot of losers along the way. And, and

SPEAKER_433: so this has happened many times in hit television, I don't know who radio, you know, you can,

SPEAKER_376: you can think of all these things that were big, they there's no doubt it was obvious that, you know, everyone's going to want to use this, and it's a great thing and everything else yet. That doesn't mean the company you bought is going to be the winner in that space, or even a good investment. And that's always the case. A lot of these developments electric cars are going to be huge. I mean, self driving cars will be huge one day, I'm not getting in one for a long

SPEAKER_433: time. But, you know, and, and, and they can show me that the percentages, they're much safer, still not getting in one, until everyone's testing them out, because I don't want it to drive through

SPEAKER_400: a brick wall, you know, and just have bad luck. So, but I admit that electric cars and, and also self driving is huge, and will be huge, and everyone will use it. And it'll be good in so many ways.

SPEAKER_399: So that doesn't mean each company is going to be a winner. It's very hard to see the future. Look, but, you know, Buffett called it a circle of competence. Okay, you have to understand what it is, what are you able to analyze? Well, and if you looked at some of the advantages that Tesla had in

SPEAKER_376: the way they structured their business, and the fact that they could make changes to their cars in

SPEAKER_400: 24 to 48 hours versus, you know, one or two years for the traditional car makers, you know, when they

SPEAKER_445: come up with an improvement. I didn't see that at the time, that's not in my circle of competence.

SPEAKER_399: But they actually have some advantages that may stay certainly versus traditional car companies,

SPEAKER_376: other electrics, most of them will probably fail. I some will be successful. And that's not in my

SPEAKER_377: circle of competence to decide. And it's important that I know that. It's not that I won't keep looking

SPEAKER_378: and try to say, you know, does this make sense? Or does does that make sense? And can I really see

SPEAKER_376: their edge here? I still try to analyze things because you never know when you'll find that pearl, but I realized it's going to be few and far between. And I'm going to have to really feel

SPEAKER_400: like I have an insight, or someone gave me an insight, you know, I wrote in one of my books, you can't think of all the great ideas yourself. So big part of it is stealing other people's ideas,

SPEAKER_433: stealing other people's good ideas, recognizing that they that that's a skill, you don't ever have to think of a good idea yourself at all. If you're good at figuring out who had a good investment thesis, and you read it, it makes sense to you. I made plenty of money following smart people that

SPEAKER_377: have insights that I don't have, but I can at least recognize that their insights are really

SPEAKER_376: pretty incredible. And often you have time to invest even though someone you've been able to

SPEAKER_399: read it, and it's out in the newspapers, or you see an interview or something like that. And so I'm always open to that. I just think it's a hard challenge. And you know, all those millions of people who are trading on Robinhood and others are not likely to have it. And if you you talked

SPEAKER_377: about momentum, if you just take a concept like momentum, which has worked for the last 30, 40 years

SPEAKER_376: on average, not just the United States, but across the globe with one or two exceptions. But if I said to you, please give me money, I'm going to go out and invest in real estate, you know, in homes. And here's my strategy. I'm just going to buy all the homes that are up the most

SPEAKER_386: in the last year. Okay. I would hope you'd kick me out of your office and say, I'm not

SPEAKER_376: giving you money. What that makes no sense to me. And just because stocks bounce around every day, and you know, maybe they're a little bit more removed from a tangible house, people all of a sudden, you know, check their common sense at the door and say, Oh, well, he they must know there's numbers involved, and it's momentum and everything else. But if I put it into something very concrete and say, Hey, my strategy is by all the houses that were up the most,

SPEAKER_433: most people would probably say, I'm not comfortable with that.

Chamath Palihapitiya: It's a really profound insight, because we have a generation that's only existed in an up market.

SPEAKER_366: You know, if you're, you know, became an adult in 2008, which is, by the way, in 2009, when I started angel investing in companies, I mean, what a time to start the market markets at a bottom, you know,

SPEAKER_368: I watched everybody who came after me as an angel investor and early stage startup investor, basically think they were a genius. And I said, you know, think it's might be because we started

SPEAKER_76: when the NASDAQ was at 2000, or whatever that horrific moment was when the NASDAQ just, you know, lost 70% of its value. And we've only lived in an up market. Therefore, you can buy the most expensive house because stocks only go up houses only go up. And here we are. Yeah, you know, we basically have

SPEAKER_366: a crash on our hands right now in the tech industry, and these growth stocks, that is, I think, very analogous to the dotcom. When when you lose 80% of your your your peak value, the insight I had, early on was, you know, companies in this space have to keep making great product, you alluded to it, hey, there's some expense to building Airbnb or, you know, continuing to innovate. And so if you do see, you know, a really strong product cadence, just every month,

SPEAKER_392: every week, every quarter, the products improving in some way, and you can actually see it and you have competent management improving that product. My god, for me as a private market investment, that was always my thesis. These are builders, the product has to touch customers at some point. And I'm always shocked that people don't actually see that. And you actually kind of alluded to with over the air updates. And that was such a great, this is why these conversations between capital allocators, and people placing the bets become so powerful to me, and I love having them. It's because I was like, Well, how do you not see that? Because we have over the air software and iPhones and in Windows now. And it's like getting a new computer every time you get the update, right. And so once you get that you saw it on your phone, like I'm getting new features every six weeks from Apple or Google. Oh, my God, that's never happened in a car. Where else could that happen when you get new features for free, and the other people are not giving the free ones, which then leads me to SPACs and people having access to private market companies, I believe. Sure, Americans should be able to place bets wherever they want. If they want to bet on private companies, they want to go to Vegas, they want to bet on the Knicks or God forbid, the Jets, they can make those terrible decisions in their life. But then combining SPACs, and I'll just take

SPEAKER_366: a company Joby Aviation, which I really like, I think V tolls vertical takeoff and landing, these things are going to actually, I would predict you'll fly in one of those before self driving cars on a regular basis, because the technology is actually there. And it's much safer than a helicopter, you know, because it has eight rotors versus one or two. And if one fails, they just automatically adjust, but should the, it seems like the public can't process these SPACs or investing in a company like Joby Aviation that is pre product market fit, not in the market yet, should these be going public or not? Because we have this big debate going on, the company's worth

Chamath Palihapitiya: 2.9 billion right now. It's trading at $4.80. Everybody knows SPACs tend to go out 10 bucks. So it's lost half its value if you invested at the SPAC price, but I'm torn because I do think that company's got a great future. Do they get undervalued or private market company probably going for

SPEAKER_366: five or 6 billion? How do you think about these companies? And do you participate in them? And do you have any strong feelings of if they should be? I mean, not legally, but is it wise for them to

SPEAKER_378: be public companies? Look, I'm not against SPACs, in particular, it's just a structure that makes it

SPEAKER_375: easier for companies to go public. It doesn't mean it can't be abused, the process. But generally,

SPEAKER_399: there's been some money made in venture investing. Usually, it's institutions and wealthy individuals

SPEAKER_375: who can participate in this market. If through a SPAC, a relative startup company can go public,

SPEAKER_399: I'm for it. The promoters of the SPAC do get, and it'll probably keep coming down how much they get, a healthy amount of money. But obviously, if there's 20% dilution in the SPAC, but you buy

SPEAKER_377: something that's 10 times the size of the SPAC, then it becomes 2% dilution. And when companies go

SPEAKER_399: public, the investment banks usually take 6% or 7% right there. So I don't think there's anything

SPEAKER_377: inherently wrong in the business, as long as there's disclosure as to what's going on. I also think there's a benefit to owning a lottery ticket. There's a difference between putting 0.2% of your money, it's a portfolio bet. There's a difference between putting 0.2% of your money in it, in something, and 90% of your money. So when you say, oh, this thing's down by 50%, or this thing's down by 70%. You know, if you look at the insurance business, let's say you're selling term insurance. You know, if you're relatively young, for a thousand bucks, you get a million dollars of insurance, and you pay a thousand dollars to the insurance company. And if you're unlucky enough to die, your loved ones get a million dollars. It's really stupid for your neighbor to take that bet,

SPEAKER_433: hey, if something bad happens to me next year, here's a thousand dollars, give my wife a million

SPEAKER_377: dollars. Take that bet. That's a dumb bet on an individual basis. If you put together tens of thousands of people and do this for a lot of 40-year-olds, it turns into a business. It's a portfolio bet where the individual bet makes no sense because it's too speculative. The payoff is unlikely, but mathematically, it makes sense. So that's the way I view venture capital in general, and the math would bear that out that most venture capitalists make their money from a few big hits, and they have a pretty big portfolio of companies. And so if you want to look at SPACs that make it easier for companies that are more speculative to go public, and everyone can buy one share for $10,

SPEAKER_381: or they can put in $100 or $1,000, and they put those lottery tickets into a portion of their

SPEAKER_399: portfolio. You don't want to have 100% lottery tickets in your portfolio, but you could put 5% or

SPEAKER_377: 10% if you think you have an edge in this area. And I think it democratizes the ability to invest in

SPEAKER_376: venture, and I, in general, think people should take care of themselves. I think as long as the disclosure's there, I think the fact that a lot of these SPACs have gotten burned, there's the learning exercise there. Oh, you know, I only started in 2009, everything goes up. Oh, well,

SPEAKER_386: when it starts going down, you learn what every other generation has learned. That's what happens. When I got started in the early 80s, the market, I got to go to Wall Street alone because the market hadn't gone up in 13 years. And then of course, the biggest, you know, it's basically, if you really look at it, a 40-year bull market, I'm no genius. I came out of school at the exact right time, and

SPEAKER_376: I went to the right place, and things worked out very well for me. You know, I've tried to be smart

SPEAKER_377: along the way and learned lessons, but the wind behind my back has been incredible, and I realized

SPEAKER_376: that. Same when you started in 2009, you're thinking, well, you know what, that was a pretty good time to start. And you know, I got lucky that I came of age, and I started looking at this stuff at that age, and you know, it's worked out, and there's partially luck involved there. There's good luck. You know, Malcolm Gladwell wrote about, you know, hockey players in Canada where most of the good hockey players in Canada are born in January, February, and March, and that shouldn't be.

SPEAKER_399: And the reason it is, is because when they're very young, age matters, and they go by years. So if you're bigger, because you're older, by six or nine months than the guys who were born at the end

SPEAKER_433: of the year, you get channeled into the advanced leagues and the, you know, the learning. And so

SPEAKER_376: you were born at the right time. And so I was born at the right time to come out, you know, in a good place. And so the wind was behind my back, I think, and I think it's very healthy for some of these

SPEAKER_377: SPACs to, I mean, the new SPAC, I mean, SPAC markets mostly closed, but it'll come back as long as the SEC doesn't close it down. And I think it's a good thing if it comes back, and people will do it more intelligently, and they'll have to give more value, and they won't pay as much for these companies. But I think giving individuals the opportunity to buy these lottery tickets, if they have insights,

SPEAKER_376: is democratizing investing. Once again, it's, it's caveat emptor, most people are speculating on

Chamath Palihapitiya: Robin Hood don't know what they're doing. Yeah, and they're getting a quick lesson. I mean, I always tell people, if you want to learn poker, find the lowest stakes game at your local card room,

SPEAKER_368: go to Hollywood Park in LA, where when I lived in LA, we go play in the $1 $2 game you bought in for 2030 bucks, you can play in a tournament for 30 bucks on a Saturday afternoon, you can rebuy for 25 bucks. That's what it would cost you to have a poker coach or question 100 bucks an hour for poker coach, you could just play and try different strategies, and just play within your means. And I think bankroll management, and how you allocate a portfolio was not what people were

SPEAKER_392: thinking about. They were just thinking this looks like a Tesla, or this is a flying car, or, you know, space travel is going to be awesome. I'm just going to put everything into one thing, or I'm going to buy three names, and I'm just going for the most alpha doesn't make any sense.

SPEAKER_378: Yeah, I'll just say one thing. I mean, we've seen this before. E-Trade was the Robin Hood of the internet boom in 2000, you know, the end of the 90s and 2000. And I talked to one of the ex-CEOs of

SPEAKER_377: E-Trade, and the math was 90% of the people plus ended up losing money, who, you know, if you look at the individual accounts at E-Trade, and their business really became, you know, after they get burned, they still leave their money there. And so they got below

SPEAKER_376: market interest rates. And, you know, that was E-Trade's business collecting that spread, you know, with other people's money, and that's what it became. But the math was that over 90% of the people who had accounts at E-Trade ended up losing money. And so this has happened before, I think, we knew this train wreck was coming for the customers. I don't care about speculating Robin

SPEAKER_399: Hood stock one way or the other. But is there business a casino that people are playing in,

SPEAKER_376: and if they view it as a casino, and I'm here to have fun with a portion of my money, I think good luck, and some people will be perceptive, but 90% will end up losing their money. And if you know that going

SPEAKER_386: in, and by the way, when you start a business, you know, some huge percentage, 80 or 90% fail. Okay, that's capitalism. So are we going to keep people from opening businesses? You know, it's,

SPEAKER_433: it's, it's, it's dynamic, it's a, it's a complex adaptive system, the capitalism and, and sort of

SPEAKER_377: the delusion that most people have that their business will be the beat the odds and be successful actually makes our economy dynamic and to try to cut everybody off at the knees, so they don't lose a nickel will turn us into a less dynamic place and worse for everybody.

Chamath Palihapitiya: Yeah, also known as Europe. Yeah, right. I mean, Europe, people look at entrepreneurs as like pariahs. And why would you do that? And aren't you think you're better than everybody? And then here in America,

SPEAKER_366: we have this optimism, people try. And you know what, we don't need everybody to succeed, we need everybody to try and have optimism to try to solve big problems in the world. And I think that's why I'm still bullish on American exceptionalism, especially in the face of, you know, Europe, maybe not supporting entrepreneurship as much. And then China, bizarrely deciding to pull out of capitalist society, which they seem to have kind of gamed and mastered to a certain extent very quickly. Any thoughts on China just retreating when they were basically running the table with Alibaba and all these great companies DD? I mean, they seem to have figured out capitalism, replicated it and figured out a way to make it exist inside a communist country, and arguably have an advantage because, you know, they could pick winners and they could put their

SPEAKER_392: thumbs on the scale. And then they just decide to wholesale pull out when they're winning the game.

SPEAKER_462: I mean, did anybody see that coming? How do you how do you game theory that move?

SPEAKER_463: Sure. Well, big picture, our

SPEAKER_399: GP is still quite a bit larger than China's, they have four times as many people. So when you do the math,

SPEAKER_377: they're whatever they are, 20 or 25% of as efficient, overall as we are. So I don't want to copy. You know, they've, they've really moved up in the world. And you can probably adjust for the cost of living. And maybe they're better than that. But it's not, we're still many multiples more efficient economy than China is now, even after all their advances, they're very competitive, they're big,

SPEAKER_433: you can't, you know, I think when, you know, if any anybody of your listeners remembers Johnny Carson, he had a late night talk show. And he had a comedian named Richard Pryor on right after Nixon recognized China. And so he asked comedian, what do you think of Nixon recognizing China said, you know, my rule is I recognize a billion of anything. So I kind of feel that way about China. Yes, you have to recognize they're huge. They're going to be, you know, they're competitive. But as far as

SPEAKER_377: their system is concerned, is nowhere as dynamic and good as ours, even before they've made this latest turn towards authoritarianism, and central control. And when you look at all these countries that are

SPEAKER_399: run from centrally run, you know, maybe with a permanent ruler, let's put it that way, that is not conducive, because there's only one person making the rules to a dynamic capitalist country, that they can be they can, they'll, because they're so big, they'll be important. But as far as competitive with the dynamics of our society, I mean, the best and brightest are not going to run to China to go

SPEAKER_376: live there. Even if they spoke Chinese, they're going to leave there to for more free societies

SPEAKER_377: over time. And so, you know, the economy has to do, they'll still have plenty of smart people left. But the best and brightest, it's not a good plan, what they're doing now. And I don't think that's their plan. I think if I wanted to answer your question is, what are they thinking?

SPEAKER_399: They're optimization strategy is not let's be the best economy. It's like, how can we have the best economy subject to the current rulers staying ruling? And if other parts of society get too big, or too powerful? That's not part of that optimization, right? And it's, it is just that's

SPEAKER_366: another one of these crazy moments in time that none of us could have anticipated the smartest people I know, on China, people who are pouring money in their capital allocators, entrepreneurs,

SPEAKER_392: spending time there, building businesses, they're investing, starting venture funds there. They did not see this coming. They thought this was going to be like the next great opportunity. And it's turned into the opposite. Their portfolios have been demolished. They have no insight. It's just crazy that

Chamath Palihapitiya: we suspend disbelief with dictators, and pretend they're not dictators until they do something that

SPEAKER_392: dictators always do, which is circle the wagons and preserve their own power, whether it's Putin or North Korea or MBS or China, the Xi Jinping, they're going to do as you point out, they're optimizing for staying in power. And you can't have optimism if some, you know, creepy dictator decides I get to win, everybody else has to lose. That's not creating optimism, enthusiasm. Like you said, we have Americans who are delusional that they'll be the next Google, they'll be the next Tesla. They don't

SPEAKER_366: have that. And without it, you can't win. You can't win in this game, at least versus optimistic

SPEAKER_473: people who are delusional. Well, one of the the best books I've read on this was called red notice.

SPEAKER_399: Oh, yes. Bill Browder, incredible. And about who is Putin? What is their system like? And I never invested in China. Because I read that book. And, you know, it doesn't matter what the numbers are to be dynamic economy over the long term. You need the rule of law. And you need the enforcement of property

SPEAKER_377: rights. And they don't have either. Quite the opposite. And so that's the end of the story. And I don't care. I'm not saying I would call it speculation. That's what I would say a combination

SPEAKER_386: of speculation and the greater fool theory. Can I get out before this is taken from me?

SPEAKER_399: So I'm not saying people won't make money in China or investing in Russia or whatever it might be. I would just call it speculation. I'd call it what it is. And I'd call it the greater fool theory. Uh, because you don't know what you're going to capture, even if the economics end up being good. And so I cannot invest in a place without the rule of law or, or respect of property rights. And, and so I would just use that as a general rule. It's a general rule. It doesn't mean there won't

SPEAKER_375: be exceptions. They're, they're, they're obviously phenomenal companies. And, you know,

SPEAKER_399: the Chinese people are pretty amazing. Uh, with great work ethic and smart and, you know, all these great

SPEAKER_378: things, uh, but their system is not something that I can invest in.

SPEAKER_468: Yeah. It's like, uh, I got invited when I was in L when I lived in LA, I got invited to a lot of underground

Chamath Palihapitiya: card rooms back to the gambling and poker analogies. And it was like, I don't know if this game is legit.

SPEAKER_76: I won the first two times I was here. I wonder if I won so that I'd come back at their time and get demolished by people who are in cahoots, right. And, and, and, and red notice, you know, it's basically,

Chamath Palihapitiya: you know, Bill's making some nice wins and then maybe he won a little bit too much. And then, you know what, somebody goes down to a central office and incredible moment in the book. They just changed

SPEAKER_392: the paperwork at a central office of who owned the company. It'd be like, all of a sudden, if like the shareholders of Amazon didn't own it anymore, absolutely incredibly riveting story. I can't believe they haven't made that into a movie or a series. And that's where the Magnitsky act comes

SPEAKER_375: from for those people who don't know, tragically. No, it's, it's incredible book. And just to use your poker analogy, one of my ex partners who were very, very good friends was, you know, one of the finalists in the US poker champion. So he's a very good, very good poker player. And he once was in Vegas,

SPEAKER_433: just playing at a table. And, you know, went home came back eight months later, he walks into the same casino and the same guys are at the same table. And there's just one chair waiting for

SPEAKER_483: whoever's going to show up. And so that really does happen.

Chamath Palihapitiya: It's basically you're playing eight versus one, or even if it's just three versus one, two or three people, what they're doing, it's a known strategy. And there are ways to detect against it. But when you're tipping the floorman, and you're the regular there, it's pretty hard to, to catch guys doing

SPEAKER_366: this, but you get three players, they can be signaling each other. And if one is going heads up with you, and two others come along for the ride, even if you have aces, your your your 80% chance

Chamath Palihapitiya: of winning just went down to 40%. Because you're up against three random sets of cards, which have a 20%

SPEAKER_366: expected value. And you're going to get demolished, you can't beat the game, period. Speaking of beating the game. American companies at the top, some of the ones we mentioned earlier, Google, Apple, printing money, just huge cash words, hundreds of billions of dollars in some cases. And maybe we feel the tax system or some people feel the tax system for corporations a little too generous. What should happen to these massive cash words at these companies? Does it feel equitable to you? The tax treatment? It feels I mean, we both understand that capital gains losses carry forward

SPEAKER_486: all this stuff. But there does seem to be a feeling that companies maybe don't pay enough taxes. And it feels unfair to a large portion of people. And then there's just this pragmatic issue of what do they do with all that money? And how should an Apple or Google redeploy that capital, because they're not

SPEAKER_366: allowed to buy things anymore. Which is also crazy, these companies could be growing and becoming even more dominant, if they were allowed to deploy this capital. So two questions there, what should they do on a business basis, a capitalism basis, and then just on a fairness for the economy basis, any thoughts on minimum taxes, or you know, this sending your IP to Ireland running tax, you know, global revenue through tax loopholes, and the general feeling that Americans have that companies have gamed the system, not illegally, but efficiently, too efficiently? Well, I think it comes back a lot of

SPEAKER_377: their game has been growth. And so they take all their what would be called profits, and spend them

SPEAKER_376: getting more customers, and that's expensed. So they take what would have been profits if they didn't want to grow as fast as they could, and spend it on getting more customers, or reinvest in customers, or give more value to customers now, which costs them money, but over time will make them stickier,

SPEAKER_377: and their lifetime value spend made sense. Okay. And so that's a really tough question to answer, because someday, they will be paying their fair share, are they investing it efficiently?

SPEAKER_378: And then is it fair relative to companies that? Yes, you get to capitalize some of your expenses.

SPEAKER_376: You spent the cash now, but you don't get to deduct it now, you capitalized it, and you only deduct

SPEAKER_377: your depreciation, maybe one 10th of it. And therefore, it looks like you're earning more. So in other words, when you buy a machine that lasts for 10 years, the way accounting works, I was an accounting

SPEAKER_399: major. So this is why, you know, I have to throw most of that out the door, because I took it 40

SPEAKER_377: years ago. But when you buy a machine that's going to last 10 years, it's not fair to hit you up for expenses this year for buying that machine, because it's going to last over 10 years. So what depreciation would do is divide that expense over the next 10 years. But one of the things that and so it makes you look like you're more profitable, and people will buy your stock and give you money, because you're earning money. But from a tax standpoint, you only get you spent $100. But this year, for a tax standpoint, you only get to deduct $10, your $10 of depreciation. And therefore, you show more earnings for taxes, and you have to pay those taxes. If you invest that $100 into a customer, that's going to last over 10 years, but get to expense, not $10 of that amount, but $100 today, you're not paying any taxes today. So you're sort of getting a free loan for the government for one day when you earn that. And as you grow, if you can keep up a certain pace, you're just never paying taxes, because you're reinvesting every nickel into something that's expensed to get more customers. So you're asking, is that fair? Is that treatment fair between old style, bricks and mortar type

SPEAKER_399: businesses, and these businesses that are asset light, and their capital spending is actually

SPEAKER_469: just expensed away? Yeah, it's customer acquisition.

SPEAKER_400: Capitalized that from at least a tax standpoint. And I haven't given it a ton of thought. But I

SPEAKER_377: would say yes, there should be some happy medium between those two. And you should have to pay if

SPEAKER_399: you're only allowing companies that buy equipment that's going to last for 10 years, to expense

SPEAKER_377: one 10th of it each year. Perhaps a fair way for corporations to pay their way would be to to do the same thing. But let me just point out that corporate taxes are only about 7% of the money we collect. Okay, so it's a very big political issue. It's virtually meaningless for the economy as a whole. So, you know, one is sounding good, we're getting big, bad corporations to pay their fair share, and pay for everything we spend. But in reality, won't pay for anything. So I just I'm not saying it's not fair to talk about these issues and make adjustments. I'm saying though, it'll be a little

SPEAKER_399: fairer, but it won't make any difference in the overall budget, whether we 6.3% or 7.7% of the entire budget of the money we collect. The real money we collect is from the people those businesses

SPEAKER_377: employ, who pay taxes, the people who own their stock, who eventually will pay taxes on those gains,

SPEAKER_399: in addition to the corporate tax, which is a very, very minor portion of the money we get. And there's a lot of confusion as to the good that corporations, I mean, that's really, you know,

SPEAKER_377: private enterprise between paying their employees and paying their taxes. That's really the only place we get money for the government to spend, it's the only place, you know, and that's all government employees, that's all government spending. That's the only place charitable dollars really come from. So corporations business doesn't have to be incorporated. But business in general, those taxes are where everything comes from. And we want to do things to support them as much as possible. It's not like money out the door. Or if that money went to government, it's that money ends up in someone else's pocket, it doesn't disappear. You know, it ends up in shareholders pockets, it ends up in employees pockets, it ends up someplace, you know, if we get taxed away, it'll come from someplace.

SPEAKER_399: So the money doesn't disappear. So all I'm saying is, I'm for things that keep our economy as dynamic

SPEAKER_377: as possible. You know, you mentioned France before, you know, I haven't updated my info for the last three,

SPEAKER_376: four years. But you know, a few years ago, youth unemployment, you know, 18 to 25 was like, or even in I think anywhere in your 20s, it was like 25% unemployment. And it was only that low because people

SPEAKER_377: could move around the European Union and get a job someplace else. And they had a law that basically, if you hired someone, in most cases, you can fire you, you have to give them three years severance.

SPEAKER_497: Right, you got to basically go to court to fire them, eliminate the position.

SPEAKER_377: But even if you did, even if you did, you owe them three years severance, which, which prevented companies from hiring new people, well, a from getting rid of people, but also if they weren't doing their job, but also preventing them from hiring people, because if you have to pay three years salary, and you make a mistake, that's very expensive. So it sounds like, once again, intentions are good, right? You want to give people job security, you want to take care of your employees, you want to do everything. But at the end of the day, there's less you don't even get a job. And they go elsewhere where they're more friendly. And Italy has the same issues where if you're above a certain size, there's all kinds of government things that you have to do. So many of the businesses in Italy have stayed family businesses below a very small level. And they can't compete.

SPEAKER_433: And so, so young people leave. And it's really a retirement home.

Chamath Palihapitiya: It's turning into like Epcot or something. It's like Europe is becoming some, you know, version of Epcot where people go visit it, like it's some entity. It's a museum. Yeah. And if you think about at will employment, it's actually one of the most beautiful things we have in our American system,

SPEAKER_392: because either party can opt out at any time, for no reason at all, no reason given, when you do not need to give a reason to get eliminate positions at a company, you could just be saying, you know what,

Chamath Palihapitiya: I tried to do this new unit, we wanted to sell French fries, French fry stands, you know what,

SPEAKER_392: people don't want any French fries carbs are terrible, we're going to get rid of that. And we're going to start another business and at home delivery business. And you can just fire the whole group of people. And by the way, if that whole group of people realizes DoorDash pays better than working at Starbucks, they can leave on mass and if they have more flexibility now Starbucks has to raise their wages to keep up with Uber and DoorDash, Uber and DoorDash, then are in a dogfight with each

SPEAKER_366: other. And lo and behold, Elizabeth Warren and Bernie Sanders demanding all of these concessions from big companies. And Bezos did the most brilliant thing ever just came over the top. He's like, yeah, you know what, we're going to proactively pay people 18 19 $20 an hour. And we're going to pay for their college for their associates degrees. And by the way, Bernie and Elizabeth Warren, you haven't gotten that done in the government, I got it done in my company. So free market wins when

SPEAKER_373: the rules are fair, and equally, and fairly, you know, executed against

SPEAKER_381: Well, I think I think it's a great point. And this whole thing about stakeholder capitalism is very

SPEAKER_377: confused. I think there is a problem with capitalism, but it's short termism, it's agency problem, if actually the goal was to create value over the long term, if you treat your employees badly, you're not going to get good employees. So that's why you treat employees well, because you're trying to create value over the long term and management has to be incented over the long term, because there's an agency problem where if they get paid over the short term, they look for short term wins,

SPEAKER_376: where if everyone just thinks that your goal in capitalism, you know, Milton Friedman gets a lot of pushback for saying, you know, business is about making money. But if you just convert that to

SPEAKER_399: businesses job is to make money over the long term for shareholders, that if you say over the long term,

SPEAKER_377: and you pollute, if you pollute or you cheat your customers, or you cheat your employees or whatever, long term, that's not a way that successful businesses operate. And so if you just change the mantra, and it's very simple, that we are here to maximize profits over the long term, not short term, but over the long term, then it makes everything clear. Everyone has a clear challenge. And by treating employees badly or polluting or by treating your customers, you know, cheat, you know, oh, they'll just rip me off. Well, that doesn't last very long, people, especially nowadays with the internet, everything else, you have to treat your customers as well, you have to treat your employees well, because there's other places to go, as you're saying. So if we change the mantra, and there is a problem here, there's too much short termism in capitalism, because there's an agency problem, where managers who don't own a business, in many cases, businesses are get incented to maximize short term profits, they have to be incented to maximize long term profits of the business. And that's the simple tweak that has to be made to make everything

Chamath Palihapitiya: clear for stakeholders and everyone else. And that's why equity participation in the private markets and venture capital has become such an amazing driver of long term value, because people are looking at a four year vesting schedule for their shares, people might call golden handcuffs, but it really does incentivize long term thinking, we're not trying to goose the number of users by selling our

SPEAKER_366: product to people who don't need it, you know, we're trying to make our product perfect for the people who do need it. And I see this all the time, you know, company in second or third year, they start looking at the wrong metric. And the sales team is not qualifying the customers, they're selling the product to people who don't need it, and you get the short term spike in sales. And then all of a sudden next year, when the renewals come up, nobody renews because they didn't actually need the product. And this is where understanding your customer base is so important. Let's end on this. This has been one of the most confounding moments in time as a capital allocator as an American, to try to understand what's going on in the world, we got a once in 100 year pandemic, hopefully coming to an end, Putin just decided he's going to go to war with another country in the year 2022 with no clear off ramp, it seems who knows, maybe this could be a Georgia situation to last 11 days, maybe this could be the start of something horrible, let's hope it's not record number of jobs, unbelievably low unemployment, rising wages, personal balance sheets that are pretty well balanced in record savings, because people didn't go out and spend companies throwing off massive amounts of profits, but yet this crazy inflation, and we have $30 trillion in debt,

SPEAKER_392: which is just bonkers. How do you Joe make sense of this? When you look at the next five years like this, let's look at this next two to five year horizon. Because for every time somebody lists all the problems, I list all the things that seem unbelievable to me 11 million job openings. And we haven't really let people into country immigration was muted over the pandemic. So wages have risen, people have so much money, they're not going to work. It's very weird to understand this moment in time, how do you

SPEAKER_399: understand this moment in time? Well, I like the way you phrase the question, which is in five years. So what's going to matter in five years? And what's going to matter now if you

SPEAKER_375: as horrible as the situation is in Ukraine, and I wish them the best, and I think it's very important that we make a stand for the free world here. And I acknowledge all that. But I remember I gave a talk when Brexit was the big issue, you know, three, four years ago, and they had just voted for Brexit,

SPEAKER_376: and no one knew what was going to happen because we'd never seen this before and how it affects. So I

SPEAKER_375: went back in history and I looked at what has happened to the stock market, you know, after the start of World War Two, you know, December seven, or the Cuban Missile Crisis, or, you know, go back to

SPEAKER_377: every bad news event. And you just see that it's really a blip over a period of time that usually

SPEAKER_376: gets resolved within the year, meaning we either bounce back and so you know, there is there is an effect to the market, but it's very short term. And we go back to trendline at some point. And I am

SPEAKER_399: not a macro investor, but I know to ignore as horrible as that I am watching the news like everybody else, and I'm horrified and you know, all those things. And there's very important political

SPEAKER_376: decisions to make for the long term right now. But history has shown that these news events, you know, it's a complex adaptive adaptive system where if you gave me one fact, I would only know one little

SPEAKER_400: small percentage of what actually is going to happen. So yes, that's bad. And I know the pandemic will end. It's ending. I don't know what's coming next. But if you give me five years, we will be back to

SPEAKER_377: trendline on that as well, whatever dislocations will have happened with inflation or supply chain or any of those things that will also be resolved. Do I think what happens in Ukraine will affect if I own,

SPEAKER_386: I'm not a macro guy. So I'm buying individual stocks, I own Google, how you know, they invaded Ukraine.

SPEAKER_377: What's going to happen to Google? Not a heck of a lot. No, it's it's terrible. I'm not minimizing what's going on. I'm really not. But if I'm being a cold hard capitalist, I'm saying what will happen to their business long term? I don't think it'll have much of any effect. And so why should I react? Interest rates are very complicated, you know, because interest rates affect where valuations are, what are your alternatives

SPEAKER_433: from stocks, if I'm looking at stocks? Well, one of the interesting things was when I went back and

SPEAKER_400: looked post World War Two, you know, inflation was pretty high because everyone was back from fighting the war. And there was a lot of inflation, but government kept interest rates low, below inflation, and they can do that be a because it was probably temporary and be they have different levers that they

SPEAKER_376: can use to provide cheap money. And I would say given the debt that you mentioned and everything else,

SPEAKER_375: we're only going to let interest rates go up a certain amount to the extent that we can control them. And we can't totally control interest rates, but we can maybe control some amount of government bond rates and availability of money. And so I think that the skew will be towards keeping

SPEAKER_376: interest rates as low as possible under the circumstances. And that should make equities

SPEAKER_375: relatively attractive. I don't know where they end up. But I think, you know, Japan's been in a low, they spending up to what you know, they have much more debt than we do versus GDP, you know, like a multiple of maybe two to one, I'm not sure, but something like that. And yet,

SPEAKER_400: they still have, you know, lower inflation and low interest rates. So once again, macro is, I don't know anyone who's particularly great at macro on a consistent basis. Otherwise, I just go

SPEAKER_376: go find out what that person thinks. It's very hard. As I said, it's a complex adaptive system, you give me, you give me the answer on four or five key inputs, I still don't know what's going to

SPEAKER_377: happen. But I do know that Google, if they continue to grow their business at a nice pace, you know, historically ridiculous pace for their scale,

Chamath Palihapitiya: unbelievable. Yeah, I mean, how do you grow 30% on those that large of a number? They're a growth stock, and a value stock, it doesn't make any sense is unprecedented, isn't it?

SPEAKER_399: Yeah, there's this there used to be a law large numbers where you grow into your market share and, and here, they still have a small market share relative to advertising potential. And also,

SPEAKER_386: you spend if advertising is more effective, you spend more. So it's not really, you know, I don't know

SPEAKER_469: how big the market really is, depending on how good they get at it. So

SPEAKER_366: they could be, in fact, inducing a market to manifest, which is what Airbnb does. People looked at Uber, and they looked at Airbnb and said, Well, here's the number of cabs. And it's like, well, you're not taking into account that consumers might change their behavior and get rid of their cars, or they might take more vacations because vacations are cheaper. So the best products my thesis has always been induce a market to grow or exist. You're right still above my pay grade,

SPEAKER_433: but I'm always amazed. Like I just took two Ubers yesterday, and I came home and said, it was amazing. I got it in two minutes. And you know, I didn't even know I needed it until two minutes before. So there are some amazing things going on that, you know, we're all privileged to

SPEAKER_399: live at this time to be able to take advantage of, I hope we use some of these tools for the greater good. And I think it's important that, you know, I really chagrined by the polarization of society. And I hope we start pulling together, because we have a great country. And I love it. And I wanted to continue to thrive. And I think that'll be great for everyone. And so I hope people start

SPEAKER_377: appreciating, you know, we have a very flawed, we're just better than everybody else where I'm not saying

SPEAKER_386: we're, we're not flawed, and that we don't have a lot of improvement to do. But I think we are improving. I think we keep getting better and better in every way, almost every way, we're getting better. And we're not good in many ways, you know, and there's a lot of reasons for the polarization. But I think as long as people see things getting better, and realize that there's no place better, at least that's how I feel. People will start feeling proud to be American again. And that's just

SPEAKER_528: good for all of us, I think, I think that is the perfect note to wrap on here, you you look at

Chamath Palihapitiya: these, you know, incredibly vocal minorities on either side, crazy, alt, right, Republican maniacs who are praising Putin, just absolutely disgusting and insane. And then these people on the historical

SPEAKER_366: left who want to cancel everybody, and can't take the win, and want to ankle companies that are increasing wages and giving free college, it makes no logical sense. And then you have this giant silent minority majority who are proud to be Americans, and you and I get to see these great entrepreneurs build these great businesses. While Europe is in some kind of regression,

Chamath Palihapitiya: turning into a retirement community and a museum as we discussed, and China just opted out. To me,

SPEAKER_366: this is the ultimate setup for another century of American exceptionalism. And so we might want to just look at this operating system one more time, and be thankful for what we have this operating

SPEAKER_392: system seems as flawed as it can be. And you can criticize it. But you're allowed to criticize it, and you're allowed to improve it. I go try to improve the operating system in Europe, Russia, Saudi Arabia, North Korea, or China, and you will be faced with a much different circumstance.

SPEAKER_532: I agree with you, Jason. Thank you.

SPEAKER_392: It's so great to have you on the program. Again, I'm going to go ahead. This has been such a great discussion. I'm going to ask you to come back in six months. I got you to come back in one year. Now will you agree to have this discussion again in six months? Yes, or no?

SPEAKER_533: We'd love to.

SPEAKER_392: All right, there we go. Now we got them twice a year. This is how I get the smart people to just keep coming on the program and making me smarter and our audience. Thanks again, everybody for tuning in. We'll see you next time. Bye bye.

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