Facebook's week from hell, Ellen Pao on sexism in Elizabeth Holmes coverage, Newsom's win, frauds & more
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§01Segment 1
Where were you on Thursday? Were you where are you going, LA?
I was at home. I I got I got family to do.
Well, family, have you you met him? What were they like? Are they everything you expected?
I had to meet I had to meet the new kid.
He's nineteen. What? What's his nature?
to let your winter ride. Rainman, David Sachs.
open source it to the fans and they just got a reasonable
love you guys, honey.
Hey, everybody. Welcome to another episode of the All In podcast. Yes. We made it to episode 47 in 3 episodes. It could be episode 50.
No plans to do anything other than just try to record this every week for you, the loyal audience with us. Again, coming off an amazing event, a live event on Monday, Tuesday. And I don't know if I went into Wednesday, but David Friedberg, the production board event. We recorded our first live all in. It seems like it went well on an a v basis and the audience seemed to enjoy it.
What was the feedback? Freeburg.
So, you know, half of the room were scientists and they'd never heard of this podcast before, and they were like, what
the hell did we just show up too. It's like these were these poor guys on stage drinking. That's why I'm
talking about politics for an hour a half. But
--
And and dropping f bombs.
And dropping off bombs, and there was a little bit of kind of seasoning we had to do afterwards to get everyone kinda comfortable. But no. Actually, it was it was fantastic. People loved it. You guys are the highlight.
And I thought it was super fun to do that in person. I don't know what you guys thought. It's cool energy. It's super cool. It was great.
And with us again, of course, David, Sax, The Rainman himself and the dictator. Jamoth, Palihapitiya. What did you think, Saxx of the live event format? Obviously, half the audience were fans of the show half warrant --
Mhmm.
-- which is I better than putting people randomly into it, but I I I'm glad that the people who are not fans of or have never heard of the show didn't walk out. We didn't have walk out, so that was good. Zach?
Yeah. I mean, look, we were a slightly more palatable to them than Andrew Dice Clay or something like that. But -- Oh.
production board. Oh, I've got a problem for you.
It was it was a -- It's
a redick or a duck. The production board. I'm not gonna kill.
smell something you
think that's farted.
It was a good change of pace. I mean, I think some people commented that the lighting the production values weren't that great. They seemed fine to us at the time. But so we're gonna have to do better on that next time. And other people speculated that we took we're easier on each other in terms of debating topics because we were in person.
I didn't feel that while sitting there, but you guys tell me if you think that was true.
I thought you I know we
got a better read on each other in person, and we had more dialogue than we normally would over assume. I don't know if you guys felt the same. I I I
think so. And then I I kind of like the evening pod cast, the glass of wine. I think you're talking about it. Like, you're just, like, a little -- Yeah.
You come in for
a landing. Yeah. Coming in for
a nice evening. The pen with cards after It could be a thing. It could definitely be
He definitely make Harland 2012 a a regular part of taping this pod. The problem is we tape too early on a Friday. Right? If we could change the taping to, like, happy hour or something like that, it might work better.
Oh my god. That -- A Harlan 2012. What is that's a good bottle of wine. Oh
my god.
Even Jay Cal knows that. Look at him pretending -- -- that one. -- pretending to be
a man of the people. That's the it's the one with the round label. I know it. I know. I'm looking at it right now.
Oh my lord. Some of those go up in value. Those things are us. Looks like it's a high -- Do you guys think
we could do a call
where we, like, record after playing poker for 2 hours. So you're 2 hours into the wine and poker, and then you record? Wouldn't work.
No way. There's no way. There'd be 2 -- I
think the wine,
yes. -- poker note.
Yeah. I think for a first time, the audio was great. So that's, you know, job 1 is to get the audio -- Soundly great. -- 99%. Consumption happens that way.
To do, like, a line of light in Friedberg's face.
-- for all commenting.
You know,
it was my going blank.
--
actually got up and fixed that. Like, no one else crew, you know, the dozens of people working there. Did anything about it. My wife stood up and fixed the curtain.
Dude, without Al, you would be nowhere.
be nowhere in life.
She's she's a great person.
What what what was the
empty seat about between me and Shamoth? I mean, there was an -- That
was if we wanted to bring up a guest. So -- Unfortunately, all
the people's names that were written on that piece of paper are, quote unquote, besties did not show up on time.
Yeah. Right. Exactly. No old girl, and
they all showed up at, like, 9 o'clock.
Yeah. There will be a reason for that.
Yeah. I heard that actually was the back channel. There was Sky Dayton. The back channel was Sky Dayton, and somebody else waited outside because they knew they might get pulled up. I got that from I got -- You know,
you're you're
gonna have to beep his name out.
Yeah. The first time saying his name on the
-- Scott name. Well, he's he's not gonna
want no. He's not going his name guiding? -- body kidding me.
He's been on my market. He's been on this week of service.
He's one of the
first ten guests.
Okay. That
was the last press appearance he did was 11 years ago. He he literally does not I mean, everybody knows the sky genius, earthling founder, Boingo founder.
Everybody of our generation, but it's amazing how you know, quickly the tech the tech crowd, you know, moves on.
So true.
There's a there's a famous story actually when when Mark Andreessen met Mark Zuckerberg for the first time, Zuckerberg didn't know that, you know, Andreessen had created Netscape. I'm not even sure he knew what Netscape was.
I think he said something like I created Mosaic, and he's like, what's that?
Oh, right. Right, Mosaic. Yeah. Yeah. So it's like -- Yeah.
Yeah. Look. In the tech industry, we're all concerned about the future. No one pays a lot of attention to history.
Do you guys feel like last generations entrepreneurs and investors at this point?
Well, some of us are still currently creating things, free bird. Oh, man. What do you think? Woah.
You try it.
I can't mention the name of the app as per our
-- Here we go. -- for our
anti promotion rules, but I have recently launched a new product.
You could download I have we redacted -- But there's not there's not there's not a lot of there's not a lot
of kinda long careers in Silicon Valley. Right? A lot of people kinda have because, you know,
that kind of -- Well, you have system -- Kind
of if you have asymmetric success, right, you have these kind of, like, big bursts. And then you know, it's a it's a different kind of life. You don't go kind of push again for the next hard entrepreneurial project, typically. Not everyone, obviously. And then you end up seeing, like, a a generation kind of die out, like, you know, web 1.0 and web 2.0, and then, you know, you don't see them again.
You also see them betting. Right? --
percent of them.
I mean, some students are. Yeah.
I think I think there's a lot of truth to that that and I worry about this with my own kids that I think deprivation creates motivation
--
to do something as hard as create a company -- Depravation.
Create motivation. Welcome to David Sachs's infomercial.
No. No. I mean, look. I think, you know -- Thank
you for coming to my attention. -- needs to for.
You know, beep beep.
Our Friedberg --
has a has a saying that that sort of became famous when Elon then repeated it, which is that creating a startup is like to the best in eating glass. And it is really hard to create these companies when they're successful. And so not a lot of people wanna do it again once they've reached that point. And, you know, it does take a certain amount of, like I said, deprivation, you know, to to do this.
I totally agree.
which is why giving everybody the participation trophy and trying to make people's lives as easy as possible. I mean, yes, you want you you don't want to deprive people on the one hand. But on the other hand, it does often lead to to good things.
Totally agree.
we're seeing a bit of a dry run of this if people believe that, you know, they have UBI or the government's gonna take care of them. I would be fine with UBI you know, everybody getting a little bit of money and if it was a safety net, the only thing I worry about is it seems like a little bit of money if you're clever means you could never work And then what happens to those people in society? Right? Like -- Well,
I just I think it's anti compassionate because what you do is you kick out the the bottom wrongs of the ladder of economic success when you basically pay able-bodied people not to work. I mean, they need those entry level jobs that may pay much better than the UBI are an important stepping stone to where they get to next in their career. And I think it's it's demotivating. And we've already seen finally between
--
UBI is not gonna pay you to go to college, but Amazon will as an example. So you're absolutely right. There's a the the GI bill You know? There's all kinds of examples where in history, we've used, you know, entry level jobs as exactly as they're meant to be. An end tree level opportunity and on ramp to work your ass off and to make something of yourself.
If you if you all of a sudden let people opt out of it, then it's gonna be a very it's and what they're not gonna realize is by the time they get old enough where they will want to have some kind of purpose, it'll be too late because in activating yourself in your forties and fifties to essentially start your life is really hard. I'll give you an example of this. Like, you know, right now I you know, I I would say I'm, like, fairly fluent in Italian.
That's pretty impressive. Yeah.
But I but I started taking Italian lessons. And, you know, the last 4 or 5% of a language is brutalizing. Right? Because it's like it's every little grammatical thing when you wanna get it completely right. And it's very demotivating for me sometimes because I'm like, god.
Why the fuck am I doing this? I don't have to. I can get it by. Just speak it. But I've made a commitment to myself Same thing in biotech.
You know, I got introduced to it by Friedberg and and obviously, Nat, and and now I'm trying to learn. And it is a it is a grind. And I think it's so easy to quit. Now you take that to the extreme in some random person that doesn't have necessarily the ability to fall back on the success that, you know, we've all collectively had, and you have to start from scratch. My god.
It's it's really tough. It's really tough. At at our age, it is just hard. kids are screaming in the background. You're trying to manage all this stuff.
It's impossible. So
--
You think it's easier when you're in your early twenties?
Yeah. Be careful what you wish for.
But why is it easier when you're in your early twenties? Isn't it always a grind to learn something and push yourself to develop yourself? I mean
-- Well, you have nothing. So the the theory is you have some motivation to get something. Right? But
if you saw nothing -- -- nothing
-- You're gonna climb up the mountain because, like, staying at the shore means you can go watch out to sea or something that hides mountains.
Hours are not making hours working. hours and hours and hours in my twenties and thirties. Like, it was, like, 10 to 16 hour days.
I couldn't replicate the office.
Is that different today?
Yeah. I I don't work in the same way I did before because I I'm trying to do a different job, but I've earned the right And I now put myself under pressure to do a different lead because I have a different job to
do. Right.
But when I was in my twenties and I was a PM, grinding out a product or writing a feature spec or building a model and trying to put all these things together. it was so much thankless work. I learned a ton, and it was all worth it.
Right. I was
about to ask you, do you remember it or not? Yeah.
No. Look. This is the thing about what this is the thing about work life balance that the people are always complaining about. People are working too hard to realize is that, yeah, you you wanna think about work life balance, but but across your entire life, I mean, one of the things you'll do in your twenties is work much harder to set yourself up to where you wanna be in your fifties. And so Chamath doesn't have to work as hard in his fifties because he worked much harder earlier in his life.
§02Segment 2
And now he's got the skill set where he can delegate more. So I yeah. I think we're you know, we really shortchange people when we tell them as young people that they don't need to work hard. or in the extreme case of u b i that we're actually paying people not to work, that's not developing the right habits that are gonna make them successful later on.
And in fairness, though, if you look at minimum wage and you look at entry level jobs, many of them paid too little historically. These companies like McDonald's, I know it's a free market, but we're paying little. We're talking $70 an hour and no benefits. And, you know, this is kind of unnecessary greed in my mind, and I think that's what we're seeing. --
job is at Burger King. Let me 4:55 an hour.
Yeah. I made $4.25 an hour 1996 with my first job cleaning cleaning up pool. Yeah.
250 for me when I worked at Fordhams Fordhams Computer Center. I think it was 4 2 no. $3.3 it had gone to. But when I started in the workforce in 88, it was 2.50 was the minimum wage. What was the minimum wage where you are, dude?
What was it like in that 19th century sucks?
Yeah. Tell us. When I
when I when I when I was working at
-- When you tilt the field, No.
I I remember when I was in college, I worked at a bar. And, I mean, I was there drinking so much. I finally was like, why don't you just give me a job So I might as well make some money while while I'm sitting here. And they they pay me 7 bucks an hour. That's why I did my senior year.
Pretty good. Pretty good.
That's a pretty well paying job, 7 bucks a month.
What are
the other problems but what are the other problems of UBI that Larry Summers has been he's the former US Secretary treasury has been on the record of is the inflationary effect. So, you know, there are pretty smart economists like himself who kinda highlight that as you give people everyone you know, $10,000 a year. 1st of all, it's gonna cost $10,000,000,000,000 or whatever the estimate is to kind of fund that sort of program. And, you know, suddenly, the cost of a burger goes from $0.49 to $0.99 or
$0.99
to $1.99 because there's a, you know, much greater demand on that kind of area of the economy for consumption. And so you see an inflationary effect, which trickles its way through. And so what ends up happening ultimately pumping more of that money in for free without productivity coming out of it, you effectively see inflation. And so it wipes itself out. And so this is kind of one economic theory on UBS is that it can actually just end up being within 10 years, completely useless and pointless because then the basic cost of living climb so much that you need to raise the UBI again to give people basic living expenses.
And so it becomes this kind of nasty runaway So it's not really sustainable is one argument that's made against UBI. But, you know, obviously, a different point than what we were kind of saying I wanna go. Tell you what?
I think people have I think people don't know what they want. And if they get it, they're going to I think of look. A form of a form of UBI does make sense, and I do think we need to subsidize folks. But, you know, I think maybe it's probably just a fancier word welfare. I grew up on welfare, and I can tell you that I don't think our family benefited from it psychologically.
We benefited from it socioeconomically because we needed it to not starve. But the the knock on effects of you know, when you're in that loop of, again, being in your thirties, forties, and fifties, not finding purpose which my parents had to struggle through. Coping. You cope with alcohol. You cope with depression.
The knock on effects to your kids. I don't think we wanna see that. And so When people think about UBI, I think they need to understand that, you know, we've run a long experiment in this thing called welfare. You know what welfare does. A lot of us have felt it, and there needs to be a better way.
Because if you just let people opt out I don't think you really understand what happens over long durations of time when you're not doing anything.
Yeah. It's getting really weird right now. Right? I mean, the fact that restaurants are closing that have customers, but they can't operate. And so we're we're starting to actually see the effect of it, you know, in some service.
What's the
open job stat right now? It's, like, 9,000,000 open jobs in the US?
It's been bouncing from 8 to 10,000,000. Yeah.
There's more unfilled jobs, and there are unemployed people. Right?
Yeah.
Or unemployment unemployment is high, but unfilled jobs is even higher. Yeah. We've we've somehow moved away from a political consensus we had in the 19 nineties that I think made a lot of sense when Bill Clinton passed welfare reform with, you know, a lot of Republican support is So look, we we need to have a welfare system. We need to take care of people who either can't work or can't find a job for for a good reason. there needs to be a social safety net.
But if you're an able-bodied person who can find a job, you should be working. And And that that that wealth reform they passed in the nineties did lead to a lot of people finding meaningful work, which I think resulted in happier lives. And somehow we've moved off that political consensus that everyone kind of agrees, yes, social safety net, but but able by people should work. So now we have this elite it's really an ideology of UBI, which is, look, we're gonna pay people not to work, which I just think is sort of, like, un American.
Isn't it also, like, a little insulting being like, you know what? Don't even bother working. You're making too little money. We'll just give you money. It's
it's -- Yeah. like -- It
feels insulting to people's dignity. I'll I'll be honest. Like, I wouldn't wanna take it. I would rather go out and be I was a waiter, a bus boy. I'll go be a waiter, a bus boy, and make enough money to pay my rent, and
Yeah. One of the things
you -- -- want it for free.
Yeah. One of the things you hear is, well, your job's gonna be replaced by a machine anyway. It's not productive work. So why don't we just pay you to sit back and, you know, take yourself out of the economy. Well, like you said, the unfilled jobs number shows that even with all the automation that's happening in the economy, and that's a trend that will continue.
There's still a need for, you know, human labor, and I think there always will be. And and it's a little bit too soon to be throwing in the towel on the idea that entire groups of people can't productively work.
Does everybody believe able-bodied people should work and not get free Money?
It's not that it should or shouldn't. I think the question is, what's what's in folks' best interests?
Well, that's what I mean. Yeah. But yeah. So is it in best people's best interest? How phrase is what you're saying?
Is it in people's best interest?
I think the I think the point where we're gonna go wrong is when we couple UBI with actually having to work or not work. And I don't think that's the right idea. I think we have to do a decent job of letting people find the things that they want to work because everybody can find something that they want to work on. And that shouldn't exclude you or disqualify you from getting UBI so that all that does is then just raise the general standard of living. I think that idea is better.
The problem is when we talk about UBI, what we are talking about it is in the exact way, Jason, that you said, which is letting people opt out. So
I mean, think about how privileged that is. to there are places in the world where there's not enough jobs and people are like, wait a second. An American has to be fulfilled with their job selection in addition to getting a job. That just seems like the height of entitlements. Like, sometimes you just need a job because you need money to pay your bills.
Right? But you're saying if you get product If you get job job candidate, you know, citizen fit, the uptick will be better. UBI is
a benefit. It's like universal healthcare. We don't don't make a decision about universal health care based on who does or does not have a job. And so UBI should basically be about evening you know, the bottom few runs of economic viability so that everybody has a reasonable ability to have a decent that's a nice idea. I think that makes a ton of sense.
But coupling it to having to work or not work where some people say, oh, great. I could take this money and not work is the wrong way to figure this out.
We're talking politics. Why don't why don't we shift to the the the recall?
Yeah. Alright. So, folks, Martin, on the Newsom recall, he he Secretary of states says the recall cost over 300,000,000, obviously. Gavin Newsom won in a cable hand side.
on the 300,000,000 point. Let me just take care of this real quick. Okay? Because I saw this all day on social media. You know what?
Yeah. It did cost $300,000,000, but all the people crying about that, clutching their pearls about the 300,000,000. Never said a word about the 30,000,000,000, the hundred times greater EDD fraud. that was perpetrated by our state and by our 1 party rule of the state. And the recall process and the ballot initiative process is the only check we have on elected leadership in a 1 party state.
So listen, I'll start clutching my pearls about the 300,000,000 when they start talking about the 30,000,000,000. But look, let let's shift to to the result of this. What are
you wait. What are you referring to? I'm not sure I I know enough about
--
This is this is this is the this is the EDD fraud where 30,000,000,000 basically went to anyone claiming unemployment insurance and 30,000,000,000 in and fake claims were paid out. That process was so poorly administered. So, I mean, people were just creating fake addresses. They were just sending in claims. from anywhere and and 30,000,000,000 went out.
So so look. I mean, that's the kind of incompetence and corruption that we have in California.
So, Zach, your point is that because it's a single party state where the state where the Democrats have super majority in the assembly, obviously have the the the governorship. That the only mechanism for the minority, the Republican party is to kinda run recall.
Not even not their republicans. Just even us a citizen. I mean, look. Let let let let's remember how the how the recall and the ballot issue came to be that process. It actually came from progressives.
early in the 20th century who said, we need the people to have some direct democracy because special interests might usurp the the the the the electoral process and
--
Right.
--
and and get control over all these elected representatives. And frankly, that's exactly what's happened. in the state of California. But the people who, you know, have that power are progressives, and so they want to amend or abolish the the recall process. But So so look, I think 300,000,000 once every 20 years to put the fear of God into politicians is not is money well spent in my view even if this particular recall wasn't close.
There are much greater examples of waste fraud and abuse that the people complaining about this should be wanting to tackle. And I'll believe them about the 300,000,000 when they complain about the 30,000,000,000. But, look, this was a a total shellacking for supporters of the recall, and I I do think that whenever you suffer defeat, I think it's important for you to think about what went wrong. You know? And and certainly, as a supporter, of the recall, I think it's worth doing a postmortem.
I think, you know, any political party when it loses needs to do some some introspection and
So what went wrong?
Well, I think a couple of things. Okay. So if you if you go back to the polls a month ago or so, it was a dead heat. We even had that shock pole that Newsom was down by
10.
And then what happened? Well, the Republican party basically consolidated their support around Larry Elder. Prior to that, you kinda had this amorphous blob of 5 different candidates who didn't have a lot of name recognition. They were pretty moderate. They were a hard target for for Newsom to shoot at.
Once the Republican party consolidate around Elder, it provided a very convenient and rich target for for Newsom to shoot at. And so you'd have to say that tactically, the Republican party made a made a mistake there. Now I understand why they did it. I mean, elder is smart. He's charismatic.
He appeals to that base, but he's not the moderate candidate that like a Schwarzenegger was or that I, you know, Chamath wanted you to run. And so Falconer was sort of that candidate. And so you kinda had a choice on the Republican side between a moderate candidate who wasn't very charismatic, which was Falconer, and a very charismatic candidate who wasn't moderate. And it really played into Newsom's hands. And he was then able to nationalize the election in in the wake of that.
§03Segment 3
So he branded I think somewhat unfairly, branded Elder as a as a trumper and He ran against Trumpism and even Biden came to California to denounce elders as a Trump clone, which look. There's a lot of things you may not like about Larry Elder. I don't think it's fair to call him a Trump clone, but that's what they did. And so they demonized him. And so if you look at the issues that Newsom ran on.
They were all national issues. He was, you know, talking about what was happening in Texas with abortion. And he he talked about COVID. We should come back to that one because I think that is a state issue too. We should talk about it.
But he started talking about issues that were really more national issues And and so the the recall moved away from the issues that had galvanized supporters in the poll just want polls just 1 month ago, which were homelessness crime, schools, and school closures and lockdowns. And Newsom was able to very effectively change the subject.
you got everybody back to school. Right? If people didn't go back to school, it could have been a different resolution.
I think the recall was very helpful in that in in that. I mean, as you remember,
Do you think policy has shifted because of the recall Saks at this point and doesn't that ultimately kind of benefit the issues you were most kinda concerned about?
Look. 300,000,000 was worth it just to get businesses open and just to send a message to the the education units that they could not keep schools closed for another year. I you know, if you look at when Newsom relaxed the lockdowns, it was at every step of the recall process. When when the recall finally got enough signatures to get put over the top, He all of a sudden started liberalizing the lockdowns. He knew they were very unpopular and he gave up on that issue.
And he got the education unions to stand down. on the issue of school reopenings, I think, because he was facing this recall. So, look, I think the the recall was worth it just just for that. But
Do you think things could have been different if there was a French candidate? Like, I don't know, a sri lankan, billionaire, that was, you know, not kind of this this hard Republican that they could credit
charge and
target it. It's like, you know
--
I blame I blame Chamath for this. I think I think a candidate like Shamath could have won. Okay? A democratic sent centrist. Obviously, I'm Joe Burrow.
I don't I don't blame you for Chamath. I understand why you wouldn't wanna run, but but I'm saying a candidate like Chamath, which is who I supported or a candidate like Schwarzenegger, remember. Schwarzenegger, when he ran in the early 2000, he was pro choice and pro gay gay marriage. At a time that gay marriage was not very popular. He was socially very liberal.
You have to take those issues off the table Because California is not gonna vote for a live candidate.
I think he was pro gay marriage before the Clintons.
Yes. He was very early on on that. He was he was socially very liberal and very tolerant. And you gotta be in California.
In general, do you think the unions in California, you know, which is an issue that's been talked about a lot on this pod have been weakened because of the recall and the voice that kind of rose up during this period of time, or do you think the the nothing's really changed kinda long term?
I I think it's I I I think it's a long term project for to get the public to see that the education unions are like any special interest which is that they will pursue their interest at the expense of the general interest, and they have to be controlled. Again, like any special interest, I think because teachers are rightfully very popular, people haven't realized what the union bosses are up to. I think that that has been exposed because of COVID and the school closures to a much, much greater degree. And I think that's that's a good thing.
Well, I mean, if you look at the recalls happening locally too with Chesobooten and the San Francisco School Board. It seems like now the citizenship is saying, oh, we do have a recourse. It's called doing a recall and stating our opinion very strongly and then attempting to removing people. And, yeah, I think that does change people's behavior. You can be sure Chester Boone is thinking about outcomes a little bit more now The implications
of this recall, I think, are really important. And I think it plays out in who runs in two years when Newsom is up for reelection. And absolutely, it'll change who runs on the Democratic side in 4 years assuming new some wins. You have to re remember there have been, like, massive degradation in the quality of life The most populous state in America, which represents the 5th largest economy in the world, under one party control. Right?
So there is not a single law that cannot be passed. There's not a single program that cannot be implemented. There's not a single idea that can't be pursued. Yet we have had an absolute decline in quality of life under that rubric. And so when people really come to terms with that, that's I think when there's a sea change.
And I hope the sea change is not necessarily a a Democrat or Republican thing, it's back to centrism. And I think it's checking special interests exactly what Saks says and realizing that just because you use a different name like union or something else, you're still a special interest. And you need to actually be focus on the interest of the general public, our kids, the environment, water quality. And if you can't walk into a state where everybody up another ticket is on your same team and get shit done, it's a really tough report card.
Yeah. I'm just super uninspired by these guys. Like, where is there or audacious plan for California? Has anybody stated like an audacious, like, Here's what this state
is stressful. No. And -- Here's what's possible. We could
be the best economy with the greatest education system. and we can build a million units of houses.
Should that be should that be the role of the state government? I mean, like, you know, should or should the
free money -- -- competition They are they're in competition with with Florida and Texas. They have to compete for business and citizens. And if it's
not then at the state level, we're gonna have to rely on the level, and we know that that doesn't work because we have 50 states that are increasingly more diverse every day. So the whole idea with the constitution and the founding fathers was like, we have this incredible startup, but over time, I think we've decided that, you know, this startup is an umbrella organization of 50 other startups.
It's a holding company.
And and there'll be these small little, you know, rules and differences amongst these 50 states, and that'll allow us collectively to thrive.
So, Zach, you put out a tweet. Oh, sorry. Go ahead.
No. I just wanna I think we wanna believe in that idea. Like, there is no savior. You know what I mean? There's no savior for 350 people, and there's barely a savior for the sixty million people in California.
But it's not gonna happen by just throwing your hands up in the air expecting some president to come around because that's just too hard
of a problem. Each state has to act like the citizens and be, you know, just rugged individualists who are self sustaining and resourceful. And this state is not self sustaining resourceful or ambitious. and it's falling behind Texas and Florida and other competitors.
So, Zach, you put in a tweet. You're you you put out a tweet saying, off through Miami, are you Are you in the active transition phase, or where are you at?
Well, I don't know. I mean, we'll see. I think the trend line in is not good. I think what what you've already seen in in the days since the recall is that Gavin Newsom has now laid out the strategy for all progressives in, like, even from San Francisco to anywhere in the country of how they're gonna run. And what they're gonna do is this that no matter how bad things get in terms of crime, in terms of homelessness, in terms of quality of schools in cities and states that they have complete control over they're always gonna campaign against Trump and Trumpism.
And they're gonna demonize and authorize whoever the candidate is on the other side as a trumpist whether they are or not, that's gonna be the playbook from now on. And this is where I think the attacks against Larry Elder, we're very unfair as before he even had a chance to define what he was about. You have publications like the LA Times calling him the new face of white supremacy. I mean, it was it was, like, unbelievable.
But Black Klansman.
The yeah. They they basically try to make him out to be a black, which look. He is not. Okay? Larry Elder's a libertarian.
Maybe his politics are not in the mainstreaming. California, but he's on a blackkkansman. But, look, this is what the progressive playbook is gonna be for the next 2 decades, which is to demonize anybody who stands up to them as basically being a a a a Trumpist. And and and the irony of it will be that they will have total control over over the the problems that people really care care about, crime, schools, homelessness. And And somehow, you know, the they what what news improved is that you can whip people up into you can stir their their partisan political tribalism when you do that.
Right? That's why it's effective is he gets people just to see blue and and he gets a free pass on these issues that just a month ago, people were very dissatisfied with. Now I I do think it's very, very important that our Republican party not play into this. And there was a very good editorial I think there's too big
-- -- to say, how come the Republicans are still pursuing a Trumpian, you know, framework?
They're they're
screwing up.
They are. They they look.
They're so dumb.
that there it's it's a really stupid strategy, and there's 2 things they gotta fix right away. Okay? So number 1, Rich Lowry from National View had a police a piece in political where he said that this election the stolen election myth has become an albatross for Republicans. They have to get off that. I think it it's it's ridiculous.
That's gonna bring him down in 2022. And the other thing is this anti vaxx stuff. I mean, You know, voters completely forgot about the way that Newsom locked down this state and then broke his own lockdowns Why? Because he's pro vaccine even to the point of vaccine mandates, whereas the Republicans were not. And frankly, I think Chamath your instincts on this were were right on, which is people given a choice between vaccine mandates or an anti vaxx position they will take the the the facts mandates.
Speaking of instincts, you wanna go to the this week in Facebook's dumpster fire?
Sure.
Sure. So, I I mean, where to begin? This all star started on Tuesday. 2016 at the Stanford
Graduate School of Business.
Okay. Well, we'll get to your victory lab in a moment. But just to queue up this past week on Tuesday, The Wall Street Journal reported that Facebook conducted in-depth research on the impacts of Instagram on children's mental health from 2018 to 2020, but they never made the research public nor did they make it available to academics or lawmakers who requested it. You will remember that last year or earlier this year, Facebook started floating the idea of Instagram for kids, So in addition to having this research which they didn't share, and here is the slide from a presentation. It seems like the Wall Street Journal has somebody inside of Facebook giving them everything literally.
But here is the quote from presentation slides from 2019 internal Facebook presentation slides. We make body image issues worse for 1 in 3 teen girls. Teens blame Instagram for increases in the rate of anxiety and depression. This reaction was unprompted and consistent across all groups according to The Wall Street Journal. And Instagram obviously is a juggernaut over a 1,000,000,000 monthly active users, and over 40% of them are under the age of twenty two.
This is
a really interesting issue because we are this is probably first example of a broad based public policy, public health issue that tech has created. Not necessarily amplified right, or exacerbated, but actually created it now. We're gonna have to deal with this. Before I I wanna introduce
§04Segment 4
-- Well, how would you define that issue?
Well, I think it is a public health issue if you have toil on the large percentage of a cohort of our population Subject to mental health issues and eating disorders. That's not a good place to be. Right? I don't think that's what we want as a healthy society in a healthy society. our daughters, and it's probably, by the way, it's probably not more than just our daughters.
It's probably our sons and daughters that are going through these issues. The question is, now about, you know, is it really a public health issue? If you know about it, what responsibility do you have to do something? And before I apply, I just wanna give you guys a little bit of data and just get your reaction. I actually wanna go back to what's called the tobacco master settlement agreement.
And the tobacco master settlement agreement was entered in November of 1998, originally between the 4 largest US tobacco companies Philip Morris, RJ Reynolds, Brown and Williamson, and L'Oreal Yard. Okay? And the attorney generals of 46 States And essentially, it was an agreement that basically said, okay. We're gonna net all these Medicaid lawsuits together. We're gonna hold these folks responsible for the down stream implications of the product that they've been selling are kids and our, you know, adults population without the proper disclosures.
etcetera, etcetera, etcetera. The the the what happened before this tobacco MSA in big tobacco though was there was about 8 or 900 private claims that were filed from the mid fifties all the way to the midnight. David knows all this because he he made a movie about this. The reason why I think this is interesting is that whether it happens in the United States or someplace else, when I read that article, My immediate thought went to the tobacco MSA because I was like, well, okay. There's a public health issue that may or may not have been covered here.
up.
it's definitely covered. -- not have
been covered up. There could be criminal liability. There's probably civil liability. If you're, you know, a mother of father who's their kid to an eating disorder or to depression. Anxiety.
Anxiety bullying. Suicide? And I think, like, I think the article in The Wall Street Journal yesterday was about, human trafficking. I mean, these are some -- NARly. -- horribly complicated NARly issues.
To me, that's how I can edit the dots. So I just love to hear
from you. Who is the Jeffrey Wigand in this case? I mean, this is literally the movie, the insider. Like, somebody's leaking these documents out. There's a deepthroat inside of Facebook.
Yeah. Well, yeah. And and that's what the Brown and Williamson was really about is that somebody had the studies from the seventies of when correct me if I'm wrong, David, when the tobacco industry knew and did nothing and covered it up, and then they had the whistleblower. So do you feel this is exactly analogous? Sachs or how close to analogous?
Are we taking too big of a jump here?
Well, the this this idea that social media is as bad for you as cigarettes has been around for several years now. And I've always wondered whether that was a hyperbolic claim. I mean, can it really be the case that using Facebook because it's as bad for you as lighting something on fire and sucking its carbonized ash into your lungs. I mean, I just you know, I Yes. I think there's, like, a kernel of truth here in terms of, yes, it does exacerbate body image issues.
But I don't believe that Facebook or social media created those issues. I mean, these issues existed before. And what Facebook does is connect people in a more intense way than they were connected. And so it might intensify some of the social dynamics that already existed, but I don't know that it created them. And if you're gonna blame Facebook for this, there's a lot of other places you could blame too.
I mean, why don't we be why don't we blame the Met Gala? You know? Like, you know, look at all those
beautiful people. -- had actually blame on the fashion industry for making unrealistic body types and the magazines, and they sell regularly.
My my my kids can't wear the full body stalking to school that Kim Kardashian wore to the met gala or whatever. I mean and they're upset about that. So should we ban the Met Gala? Or I mean, let's look at all advertising. I mean, all advertising just about focuses on unrealistically beautiful people.
And what about TV and movies? I mean, Hollywood tends to cast people are better looking or even the people reading the news off teleprompters. I mean, So this, like, body image and self esteem issue is everywhere in our society. And I think what social media does as it does in so many of these cases is really just hold up a mirror to our society. And it's it's not and, yes, there's a lot of bad stuff happening on social media, but that's because there's a lot of bad stuff happening in our society.
Well, let me I you know, here's one thing, David. The I There there have been other industries that have influenced this, but I don't think that they were as pernicious and as frequent in their use of as social media. You know? reading a fashion magazine or watching TV, like, slightly different than an interactive version of that that you might use for 5 hours a day like TikTok or Instagram. And I just dropped in an an image into the the Zoom chat there about suicide rates in the United States.
In this chart, you'll see goes up to 2018. And right around 2006 when we were at 11 percent 11 suicides, I think per 10,000 per 100,000, you'll see from 2006, to 2008, we go from, you know, 10 or 11 basically, suicides per 100,000 Americans all the way up to 14. a 40% increase.
But
what's your -- And that
correlates directly with social media becoming part of what we're doing here.
But what's your connection to what's I mean, is that among teens? I mean, what what is the
-- This is overall suicide rates. So I I just think social media and the anxiety of produce could be actually having it. I'm open minded to that.
Can I clear up one thing, Saks? I think that your argument would be reasonable if the first of your argument made more sense, and to me, it doesn't. And when you don't think that smoking and looking at your screen for an hour a day are the same, Let me just from my perspective, explain to you why they are the same. Whether or not you're ingesting something into your lungs or whether or not it's your eyes, At the end of the day, you're still activating physiological pathways. Okay?
There are specific chemicals that are being created through smoking, specific chemicals that are created through how your brain and your mind is reacting. And all of these things when you're bathed in these chemicals for long periods of time have known deleterious consequences. Some manifests in tumors, which then result in cancer, you die lung cancer cigarettes. But what we're learning is some of these things result in long term imbalances of these critical hormones and chemicals you need in your brain to stay healthy. And that results in anxiety or the propensity to overeat or the propensity to then throw stuff up.
And so I would be careful about not assuming they're not physiologically the same. I actually think they're more similar than different at a core physiological level. It's just that we're not used to the fact that something that that is equivalent to looking at a screen could actually do that to you.
I guess the question is what's what's the what's the threshold for regulatory intervention? If if someone did this at the scale let's say there was a social network that would had a 100,000 users, and people were actively using the social network every day and having body issues or whatever the, you know, the the constant client claim might be.
We're about to find out.
You know, are we gonna end up creating kind of a regulatory framework across all of these things? And I think that this goes also to the point of scale because At the end of the day, if you end up starting a business and you're not successful, you don't really kinda find yourself in this sort of framing of, well, what are you doing wrong? all of the the companies that scale, the assumption is they did something wrong in order to get to that scale. You know, roll off both the Sachs' former colleague and and obviously famed investor at now at Sequoia Capital said that he always in he only invests in businesses. that pursue 1 of the 7 deadly sins because those are ultimately the things that consumers kind of increment their consumption of.
There has to be a 7 deadly sin driver you know, underscoring the success of any business that sells to consumers. And if that is actually true, people aren't making kind of altruistic purchasing and consumption decisions. They're making decisions based on envy and based on greed and based on gluttony and all of those drivers, we kind of, you know, are a effectively come out kind of related back to these physiological drivers. Right? And so, like like yeah.
No. Two things can be right. What you said can be right But I think what also can be right is, are we really willing to bet that now there are not 50 individually ambitious, politically ambitious state AGs licking their chops reading this stuff, wondering how many kids in their state may have suffered from a eating disorder or anxiety and blame it on one of these apps, Of course. Are we are we convinced that not a single lawsuit will get filed? Are we convinced that there's not gonna be any class action?
And by the way, that's just the United States. What is somebody that's sitting around a, you know, around a table of politicians desks in, you know, Germany, Belgium, France, Thailand, they're gonna find their issue in this treasure trove of content that's being, you know, continuously drip fed out to the public.
I guess my point is that this is today's issue, and business success, ultimately, over time, in consumer markets, will always ultimately be driven by products that have at scale deleterious effects on the consumer market. And those deleterious effects will be a result of some sort of kind of addictive or negative kind of consequence that arises when folks use these things frequently, and the market figures out how to optimize the utilization of products to increase revenue to increase profit and that's what a free market does. And I'm not saying it's right or wrong. I'm just pointing out that there isn't, in my opinion, something unique here. I mean, you know, Coca Cola is the largest beverage company in the world.
They sell 40 grams of sugar in 12 ounces of water. And everyone buys that and they feel great from that, and the sugar creates this addictive problem. Now we've got an obesity epidemic. I'm up, Blaine and Coca Cola, But that's the general trend in CPG over the last 50 years, increasing sugar, increasing salt, and then all the difference -- The
difference is that this is not sugar, which is a generic compound, this is, for example, no different than when Purdue Pharma started to make fentanyl. It's a really great drug. It has incredibly superior advantages. It's used for a lot of very important things. When that spilled over, knowingly to a level of abuse and I don't think it was a lot of abuse, but there was enough that essentially was overlooked in in the building of a business, it started with state AGs who stepped in and then it basically ultimately drove a federal agreement, states agreements, a master settlement agreement around fentanyl, and then Purdue essentially disgorging all the profits that they made.
So you're right. Free markets should act in however way they're going to act. But when those free market operators themselves are producing data that shows that, oh shit. Hold on. Something could be going wrong here.
Then I do think that politicians will step in. Regulators could step in. I mean, what's crazy here is, you know, the FDA could actually act. Like, if the FDA is willing to act on Juul, What is the difference if the FDA says they feel like? Let's just assume that somebody in the FDA says we feel like we should have a responsibility to think about mental health and eating disorders.
But that's the slippery slope. Right? What's the threshold? Right? At at what point do they say, no.
We're not touching this, and at what point do they say are catching this. Because at the end of the day, any successful consumer product will have some degree of deleterious effect. Saks OFF.
And and and and what and this is why we have to have some perspective about it. So In preparation for the segment, I asked my eleven year old girl, daughter. I know, Jake, how you don't think I talked my kids, but actually
I I
made no joke.
I made
no joke. No joke.
I was thinking of 3 or 4 funny cases. Excuse me,
were the fell She was like, why
are you?
Yeah. Real. Security.
So the first thing she said is who are you? And the second and I said, I'm your dad. And then the second thing she said is the second thing she said is I don't use Instagram. Like, okay. Well, what do you use?
§05Segment 5
She said TikTok. I'm like,
well Off
the worst.
So I'm like, what do you what do you use TikTok for? And she said, well, I I watched dance videos. And I'm like, well, the I've been reading press articles that say that the only thing on TikTok is sex and drugs and that it's, you know, it's it's bringing you into a vortex of that. And she said, I don't I don't watch that. I watch dance videos.
And then as smart as a whip, she said, the only people who end up watching that are the ones who keep indicating she didn't use her preference, but she basically said that they keep getting that stuff because they like it and they keep getting fed more of what they're watching. So, look, I think we have to have a sense of perspective about this. At the end of the day, products like Facebook and Instagram are ways for people to share content and consume content for people they follow. I mean, that's basically it. Now is there a lot of bad shit on there?
Yeah. Because there's a lot of bad shit in the world. And should Facebook be trying to control this stuff? Absolutely. But I don't, at the end of the day, think it's it's it's cigarettes.
If they ban kids from using TikTok and Instagram, until they were sixteen years old. Would you be opposed to that? Because I don't let my kids use it, and I have an eleven year old daughter. I don't wanna let her anywhere near.
We have a complete moratorium.
No social media's our rule. can't believe you let your kids use social media. I mean, I'm not passing judgment, but are
you crazy? Like, all they use it for us to watch dance videos. So I
think Saks's point is an interesting one, which is, you know, based on what your daughter said that that is effectively what's going on, it it creates an acceleration of the a revolution of these markets that historically may have taken, call it, 50 years for everyone to wanna watch. You know, MTV didn't emerge for 60 years until you know, there there was kind of radio and television broadcast signals. And then everyone said, you know what? I wanna watch rockers dancing on stage and go nuts. And whatever the kind of consumer demand world that eventually evolved there.
What's happening in social media is within seconds, you make evolutionary votes on kind of what you want in the media cycle And then all of a sudden, a few hours later, you're getting exactly what you want over and over again. And you can't say no. And that that's that's effectively what digital media generally social media in particular has some nuances to it, but digital media generally has enabled is an acceleration of the natural consumption trend that we see with humans, which is they eventually wanna go to
1
of the 7 deadly sins, and that's what they kinda get stuck with.
We've definitely talked about the danger of getting trapped in in an information bubble. and and a and a feedback loop. And I do think that is a a danger of these products. But so is cable news? I mean, you know, you look at Twitter, it's an outrage machine and people get trapped in a cycle and they only wanna they they either follow people to get outrage by them or just because they want to kind of self indoctrinate themselves.
But that is basically why people watch cable news as well. I mean, it is an outrage machine.
You're a friend Tucker.
Or Rachel Maddow on MSNBC. They're both feeding
--
Yeah.
--
different variations of of outrage. And so so my point is, look, I don't think these problems are unique to social media. I think they pervade Hollywood and the entertainment industry and even the news industry. May look. Maybe we should put warning label on them.
At the end of the day, we don't prohibit cigarettes. We have an assumption of risk argument. We put warning labels on them. Maybe we need warning labels these instagram influencers. -- more
than that. Right? You put it you put it behind a counter, and there's a strict prohibition on people under the age of eighteen. being able to use them. And when it looks like, you know, companies like Juul were trying to circumvent those things or make it appear more valuable, basically, to hook kids at a younger and younger age when they weren't capable of making those decisions, they were held liable.
So
--
Okay. So there's a really interesting topic there, which is should people under the age of, say, 16 or 18 be prohibited from using products.
Yes.
100%. 100%.
Look. If you if you think
about 16 or 18 16 or
18.
Let's 16 a 100%, 18 -- 16 a 100% and then ups. There needs to be a way of opting up because I think sixteen year olds are quite sophisticated. But here's the thing. We are living longer and longer than ever. It is very likely that we're all gonna generally live to our hundreds.
It's not the end of the world for these kids to have to wait an extra 3 years until their literal physiology is a little bit better formed so that they have better antibodies to this shit. And I think that if we, as a adult population, aren't necessarily going to take responsibility for these kids, I think we're doing them a huge disservice. You don't let your kids run around wherever they want. You don't let them hold guns whenever they want. You don't let them do a whole bunch of things that they may think is okay but you know could have really bad consequences.
And so if you know that this stuff is happening, I think it's very different to look at a twenty two year old and tell them what to do or not to do. That's not what we're debating. But what that data was about was about long term systemic health issues to a large percentage of girls. That's really fucked up.
And a lot of the research that's come out, I dropped a couple of links in the chat. You know, I haven't read the studies, but they're starting to show a correlation between suicide rates and depression in young kids with social media, and it does skew towards females. The theory is, females are more adapt or more frequently in dynamic or complex social situations. In other words, cyberbullying type situations where people use the social media to kinda both each other.
I mean, look. I I think you guys have a real point with respect to ages 13 to 16 because I don't think you're allowed to use social media or at least in terms of use prohibited
13.
So -- -- know that's a joke. You and I have -- Yeah. Yeah. -- both had to build products that have to, you know, abide by COPPA laws, and we always just kinda laugh at it because they're bullshit.
Right. Okay. Fair enough. But but what I'm saying is I think you guys have a real issue that needs to be explored around what's the usage for ages 13 to 16. But look, what I worry about with these things is you're always playing whack a mole.
Right? I mean, you basically ban social media and all of a sudden these kids because they're very tech savvy. You're gonna find themselves on text groups and text chats, and they'll be in signal, and you won't even be able to see what they're doing. I mean, at least
on such a community, you can see it. The the whole point of that, though, that makes sense to me because I remember when I was growing up and we all wanted to smoke, it was a pain in the ass to get cigarettes. So most of us just said, well, it's not worth it. But, yeah, you're right. A handful of people found a way to get the cigarettes to sneak behind the school to smoke them.
That's fine. But that's very different than Jewel walking into the middle of the lunchroom and passing out berry flavored vape pens.
Yeah. Click it up. Wow. That's what the -- -- saying.
Well, that's crazy. Obviously, that should grow.
-- it packaging. If you look at the packaging
and gravy age around jewel and berry flavor vaping, do
you care about look.
why do you care about Juul or why should we generally care about Juul and not care about soda companies making 40 grams per 12 ounces of sugar, which is truly dangerous and damaging to the health.
because we've been drinking soda for a long time, and we've already accepted it.
So we've allowed her to accept it. We we especially -- -- long time. And then we had this kind of, you know, tobacco moratorium that's now kind of
--
Well -- -- you
know, shut shut up shut up smoking.
But, Friedberg, if you say if you said right now COVID is a disease of the old and the obese. You would be canceled. Like, somebody tried to say that --
But that's not a part, Jake. I'm my my No.
No. But the point is you're talking about like, people are very sensitive about this obesity thing. And the second you say, like, we need to monitor
for you.
So they need to make 40%
of Americans with Type 2 diabetes or whatever this is.
There's also personal Friedberg, and do you wanna drink Coke 0 -- Exactly. -- water or -- And
so if you have personal freedom, why should some regulator tell you what social media tool you should
or should
use and how that Right.
The the cover up is what we're doing with that.
If we're if we're talking about minors, if we're talking about minors
-- --
gonna do with a thirteen to sixteen year old What are you gonna do with the and and figure out what you're gonna
--
That's the best part of your argument. That's the best part of your argument is when we're dealing with minors. I could I could see the argument for more restrictions and and potentially support them depending on what they are. I think that's something -- -- you'd what about I guess, for you to
be smart.
What about minors not being able to drink soda? You have to be sixteen year old to drink soda. mean, that's actually --
That's where most diabetes and obesity is rooted in this country.
I actually am open minded to that position, actually. I know it sounds crazy, but
No. I think that that that makes
an equal amount of sense. -- cola makes no sense if we have a crazy obesity. If we can actually show that,
So let's ask the
question now.
So let me ask let me ask a let me ask a second order question about this, which is Friedberg is right that drinking sodas for thirteen year olds has gotta be as harmful or or more than using Facebook. Okay? So why do we never hear about that? I would argue that there's something else going on here with this massive amount of attacks on social networking companies. There's a lot of people who hate social networking in the traditional legacy media because they've been disrupted by Facebook, by these social media companies.
And so they're looking -- -- money. they took their money and they're looking to publicize any article about the negative effects of these companies, which they're not threatened by Coca Cola. So they're not gonna publish those kinds of studies. So I just think that there's an argument that perhaps I I'm not saying you're wrong. I think there's absolutely truth in what you're saying.
It's all a matter of degree, though, and perspective. And I do think that the traditional media has an incentive to blow this out portion a little bit.
Because they have an agenda for your sense.
Yeah. Absolutely. And I think I think people in power look. I think there's a positive thing about social networking. I mean, because we haven't said, one positive thing about it.
Okay? Social networking overall, it enables us to stay in touch with people we care about, friends, family, and allows us to receive information for people we wanna follow. Okay? We never talk about those positives. I find it an incredibly convenient way
to consume users.
Okay? So We we never talk about that. But but here but here's why is because social media is fundamentally a democratizing force. Right? It enables people to coordinate in a much more democratized way than they ever had been able to before.
I do think that is threatening to people in power. And given the chance they would like to suppress it, Zuckerberg gave a speech a few years ago about social networks being the, I think, called the 4th estate, with the 3rd estate being in the press. And in the same way that that there are people who wanna empower who wanna censor the press, I do believe that there are people in power who wanna censor social networks because they don't like the disruptive democratizing force that it represents. And there is a lot of positive to that in the world.
You're I think you're mixing up a lot of things there. So Yeah. You're right. And I don't think any of us are saying cancel these companies and remove them from the Internet. I think what we're saying is they are very specific thick ways in which certain features are built, that they are expressed in features that are now apparently according to their own work and exploration are linked to mental health issues.
So I I think the point is people should now decide whether to your point we should ignore it because the good vastly outweighs, you know, what's a third of girls? Who the fuck cares? Right? I mean, they're chicks or whatever. Or you say, actually, this is a really big problem, and so let's step up and fix it because somebody needs to protect these people.
And when you're 16 or 17 or 18, do whatever you want like we let people do today. You wanna drink a Coca Cola every day, get diabetes, You can do that. Nobody tries to stop you. Right? You wanna smoke a pack of smokes a day, you can do that.
Nobody stops you. But we do a lot of other things to try to help kids.
I think I think we're only talking about ages. If we're talking about the minors, the the kids, I think you and I can find agreement on this issue. I think but But I do think that the demonetization of social media goes well beyond that. But, look, I think you've got a great point with respect to the kids.
Do you guys believe and this is a theory that's been growing? that TikTok run by the Chinese government is trying to reprogram ethics morals and doing psych psychop basically. There's something ups on our children.
§06Segment 6
No, Jake. There's big something bigger than that. I mean, I think all of you guys probably upgraded to 14.8. iOS this week. I hope if you haven't and everybody listening.
If you haven't, please go upgrade it. But, you know, the Israeli spy firm NSO had apparently created a a 0 click exploit
--
Yep. -- for the iPhone -- Yep. -- where you could turn on the camera and the microphone and basically spy on folks completely unaware And, you know, Jason and I were talking about this, and and and I think, Jason, you were the one that said you were like, yeah. We've been living with that with TikTok for years. It's not as if you know, NSO just licensed it randomly to the Saudi government.
I mean, this tool has been available for a while. So to your point
-- But do we think that the Chinese government, TikTok, are trying to program our children to be more deviant and to create social unrest. And -- No. You don't think that they're trying to steer them with the algorithm towards bad results because they're not letting their kids play video games. No. And if you look at that Wall Street did you see the Wall Street Journal article that I just sent to you guys?
Wall Street Journal article basically created a bunch of kids' accounts and then did searches or what started to go down a rabbit hole. And just with one keyword search, you know, these kids went into deep, you know, kink BDSM, look at
the results. This is a this is a pretty straightforward weighted tree algorithm. Okay. So, like, When you start on a branch of a tree and you keep clicking on those things, that's what you'll get. This is no different than how Facebook's algorithm works, how Google search algorithm works for you, Once you start behaving with clicks or swipes or likes, they use that as a feedback loop and they wait basically weigh the next set of results.
So David's daughter is right. If you click on sex drugs and rock and roll, that's it's not all you're gonna get, but it's gonna be a large percentage of what you get because the algorithm in a blunt way assumes that that's what you like. Yeah. So I'm not sure that this is repeating anything that's so you know, it it's pretty obvious that that's how it should work if they wanna have maximum utilization.
Well, you know, the thing that's slightly different about TikTok is, you know, in Facebook or Instagram, you build your feeds and Twitter, and then it serves it up algorithmically. On TikTok, it uses the entire corpus. So if you do one search for a keyword, Now it's not just a subset of what your friends posted in some ranked order. It's the entire corpus of, like, long tail. And so what they show in this TikTok is, like, how quickly a child who just types in one keyword can be have their feed be 90% drug use and, you know, say domestic whatever you're into, sex, I don't know.
I have a question now.
If if the if the content is of scene, then it should be taken down to begin with. Okay? And look. I the my takeaway from this conversation is that we need to do something different for kids. I don't know if it's a it's a it's a flat out prohibition or what.
But but but yeah. But look. So so the TikTok algorithm thing, if you wanna keep seeing more and more content related to something fine, the algorithm's gonna give you more and more of what you want as a consumer. But maybe for kids, there needs to be some guardrails around that. And we don't direct we don't direct kids towards certain kinds of content around, you know, sex or drugs or violence.
I have to constantly remind parents, like, YouTube. Kids should not use YouTube because it goes really to crazy dark places. And there's kids YouTube. In kids YouTube, they add each and every video. Now you'll still get some of that consumption and unboxing of things, and your kids will ask you to buy a bunch of stuff, but you're not gonna get straight sex violence and, you know, every class that --
I'll tell you what does have in my I I I put kids YouTube on my kids, my four year old's iPad. And then the other day, she said she saw some, like, scary horror thing on there, and she couldn't sleep. And she woke up in the middle of the night. because, you know, if we're not doing our job as parents curating the content and curating kids are doing and we're leaving it to this app, we're totally effed. And and that that that's what I realized I did.
My laziness in, like, just thinking, like, oh, there was something she wanted to watch. I put the app on there and didn't pay attention for a few weeks. And all of a sudden, she had gone down the rabbit hole, found something scary.
It's I
use a I don't know if you guys use this, but -- Yeah.
--
I use an app called custodio. It's with a q, q u s t u d i o. And you can kinda, like, lock down all these devices. And then at the end of every week, it gives you an email of all the app usage and all the links that these that my kids clicked on just my oldest one. Could the he's the only one that has a phone.
But
-- That's nice. And you had a discussion with him about that? Like, hey. Yeah. And to privilege to have this and yeah.
Tell me what you do.
I agree. It still was super, super hard, but this is why I think you need to have some blunt force instruments right now and my blunt force instruments are you're not allowed to have well, the the ones that we've we they're not allowed to have TikTok Snapchat, Facebook, Instagram, Twitter.
Yes. Hard to know. And the
the only reason we allow YouTube is because a lot of the school links art of videos inside of YouTube and so you can't lock it down, but that's why I use this custodial app to see what they're watching on YouTube. Even then though it's not perfect.
By the way, this thing that just came from the Pentagon is a total Friday news drop. I mean, talk about a Friday news drop.
I don't know what we don't know what you're talking
about. US military acknowledges Cobble, drone I killed 10 civilians including 7 children. We knew this. They're just confirming something that had been both New York Times did excellent reporting on this.
Excellent reporting by The New York Times. That was incredible journalism. I mean, did you guys see that? They were, like, watching frame for frame of like a video, then they were like going to Google Maps. They were comparing colors of cars.
They were looking at sides of buildings. incredible reporting by the New York Times.
It was really the I mean, it's obviously a tragedy. It was the final debacle of our f k a stand involvement. This was a foreign aid worker who actually he was there as an aid worker and they they had him on video loading up his car with plastic jugs of water and somehow they thought these were explosives or something like that. And he was doing his errands, and then he comes home. And they hit the the car with, you know, a massive missile from one of these Reaper drones.
And it kills him as well as, you know, it's basically 10 members of his extended family in Cleveland's 7 children. Now the I I mean, I I I think I understand why this but we don't exactly know why why this happened, and I think it needs to be investigated. Obviously, the military in Kabul was on high alert because we had just had that bombing at the airport, and it was the bloodiest day for America in Afghanistan, I think we had 3 13 soldiers killed a few days before this. But but it just shows the kind of mistakes that we can make even fighting drone warfare. know, the idea was
that -- The term casualty is of war exists for a reason. Like, this is how war works. You cannot do it perfectly. It's see everybody innocent people dies is why war is the
worst thing -- But how how do we ever
think -- -- the last resort.
Right. And how do we ever think we're gonna win hearts and minds in this country? by you know? Like, we we we made 2 wrong mistakes.
Like, they're they're not interested in democracy, like, in the way we want them to be and the west wants them to be. We By the way,
that's fine.
-- forcing it down their throats -- Yeah. -- is not gonna work. We we we could have maintained a base there. There were better ways to exit, but
let's fix the schools in California first.
Yeah. I think that's I think that'll ultimately, I think people are gonna forget those images of people on planes and just think, thank god, that's over. I think now that there hasn't been 20 and and, hopefully, there's not another 911. Alright. Let's wrap with Ellen Powell wrote a piece for the New York Times, op ed section section on sexism in tech using the Elizabeth Holmes trial as the main example She was also on tech checks, the NBC show and discussed her op ed quote, home should be held accountable for her actions as chief executive of Theranos.
And it can be sexist to hold her accountable for alleged serious wrongdoing and not hold an array of men accountable for reports of wrongdoing and bad judgment. She uses Travis Calacanis and Adam Newman as examples of men who have engaged in questionable and ethical even dangerous behavior in tech without much legal penalty. And that they both went on to start new companies. Her main example, however, if bias is tech executive Kevin Burns who is the former CEO of Juul, j u u l, who helped the ecigarette, vaping company raise $12,000,000,000, but he left Juul amidst a lot of legal blowback. And just this past
week -- With a bunch of with a bunch of cash.
With a
bunch yeah. I mean, of course, you get the you secure the bag on the way out, Adam Newman too. And -- Yeah. -- don't drop the bag. Don't drop
the bag. You have one job
to do.
Don't drop the bag.
Yes. Run. But don't do not drop the bag. So -- I mean, she
she meant she mentioned other stories like GiuseERO. If you guys remember this company a couple years ago, they raised a
$100,000,000
pre launch. Right? It was a juicer that, you know, was supposed to -- I tried
my juice for my juicer up. Yeah. I tried. The
claim the claim that they made was that inside of the packets was, like, fresh vegetables and this thing squeezed the fresh vegetables and fresh juice. Jutes came out, and it turns out that the bag was just filled with juice. And so -- No. No. I think
the bag was filled with shaved vegetables or whatever, but you could squeeze the bag. You could squeeze the bag.
So the it was already preadjuiced at what you know, Olivia Zalowski, who's now Olivia Peterson.
It was she basically put she she she kinda made a whole video and
put put on Bloomberg had juice in these packets, and they
were telling people what they thought were,
like yeah. Like yeah.
So they could've all been straw.
Sorry. Sorry.
they could have put it into a machine and paid $7.
Yeah. -- the juice, then took
the juice -- -- the packet.
Put it
in a bag. Yeah. That was supposed
to be fresh vegetables.
sold that as fresh vegetables to then get juiced.
To get juiced. I only
charged $8 a bag for this stuff, and who
invested in that? Who invested in that? Who wrote the $100,000,000 back then?
--
that anyway, a lot of people investigate what I'm saying.
It was a
huge it was a huge, like, you know, better for the planet story. But it turns out that the hardware didn't work, and then they ended up kinda faking it till you make it. It was very similar to Theranos in the sense that there was a piece of hardware that made a claim that wasn't necessarily true. And granted no lives were at risk in this particular case, but some might argue lives were at risk in the case of Juul. But I think, you know, you see this a lot more in these kind of hardware, particularly in life sciences companies, you know, there's a business.
Like like, Zymurgence is a good example. Right? It's very hard tech, very deep tech. Josh Hoffman did an incredible job fundraising. Right?
The $400,000,000 round from SoftBank, took the company public, then they go public. And a few weeks later, they're like, oh, wait. Sorry. We don't actually have any product or any revenue. And we talked about this a few months ago or a few weeks ago, and the stock completely collapsed.
There's another company called Berkeley Lights. which went public. And yesterday, Scorpion Capital, one of these short sellers put out a 160 page report on these guys. showing that Berkeley Lights's product, actually, it's a it's a hardware like science's hardware that cost $2,000,000. They've sold it into all the pharma companies.
And Scorpion saying, look, this thing doesn't work. It's a total fraud. Like, there's no the the machine doesn't do what they claim it does.
Okay. But so to Alan Powell's point, is there a double standard or not? Right. And
so these were all run by male CEO, then nothing happened to them. And Are they all
white as well?
Yeah. Yeah. They're all white.
Alright. First of all, let's take it easy on the white, guys, Jamath. It's 3 other white guys on the bottom here.
No. I'm asking a qualifying question.
It is. So here's what I'll ask
is -- I mean, is this a surprise that white dudes will get a hall pass, and I don't think that's a shocker.
It's considered it's considered entrepreneurial failure. But when it comes to the woman that everyone, I think, was excited about seeing succeed because she was a woman, it becomes fraud. And I think Elsie, you know -- There's 2 different -- -- the -- Yeah.
§07Segment 7
Go ahead. Is it free, Bert? Isn't there two different things between you know, where she obviously misled people in a premeditated way and lied to them, like taking their blood sample, and then putting it in a fake machine, then doing it in the back on an Abbott machine, and then bringing the results back and making it on her Theranos Edison machine. I mean, This is literal wire for our securities fraud. In these other cases, is it people who are ambitious if you look at the juice row, it's kind of like, this is a stupid idea that got overfunded.
He put he put juice in a packet and told you -- No.
He put shaved he put chef shaved vegetables in the packet, and then use hydraulics, which is a natural reality.
That's actually not correct. Watch the video that Olivia put on Bloomberg a few years ago just saw you pictures
of it. I mean, maybe there's a different one that was
like What they showed is that it was already squeezed. Yes. There was shitbags in there, but
it was already squeeze. Like -- Alright. Well, he said that guy should go
to jail.
Like, take it all back.
I mean, it was like it was like a crazy story when this came out, and everyone's like, oh my god. Like, it was a standard like, hardware is really difficult. you know, novel hardware technology is really difficult. So you fake it till you make it. In some cases, you launch a product that doesn't even work.
And and there's just and and this isn't just in hardware. It's also in, like, sciences. You see this a lot. Where you you ship a product?
I would probably say that if if regulators believe that those CEOs tried to commit fraud, they would have done challenges. Right?
They would
have -- They maybe they still will. They should follow-up with those folks.
So why do you think they went after Elizabeth Holmes chum up? I mean Because it was actually there
was some legal case. I think
there I think there's one really important. There are two things that play in Theranos, which is different. Number 1 is the kinds of investors that were involved here are extremely powerful folks not necessarily technology capable but very, very well known, highly connected people in the establishment. And the second was that they were operating in a regulated market, which has very strict laws Look. I've tried to build competing products to Theranos for years.
I've been pretty public about this. I've tried 5 or 6 times. They failed every single time. I couldn't even get out of the starting line. you know, these tests would never work without with a single drop of blood.
It just didn't make any sense. The only version of this problem that has been solved well is the ability to detect cell free cancer DNA in blood, right, using a very small quantum of blood, companies like Guardant and GRAIL have factually done and built a great business out of it. But it requires extremely sophisticated machinery sold to them by Illumina and others. So If you're operating in a regulated market, the bar is higher. There is a lot more scrutiny And then on top of that, I think she compounded it by including folks and raising capital from folks that may not have actually known and been able to diligence.
And so that's the cycle of fraud that may or may not have occurred there. And she has to or they have there's a burden to prove that. It's very different, I think, over here in an unregulated market where you can just kind of build whatever you want. And if smart investors look, Nick just put in the group chat. So the investors in Josero were Google Ventures, Kleiner Perkins Thrive Capital.
I mean, these are all very sophisticated folks that you know, made a decision and you know, it's probably not the case that they were lied to.
I understand why they made the juicero mistake because at the time, fresh pressed juice using hydraulics was a thing. And this guy said, that's what I'm gonna do. I'm gonna use hydraulics. I'm gonna squeeze the vegetables so you get some good stuff done. Right?
I understand why they felt for because my wife was buying
that press -- What the fuck are you talking about?
My wife Jay was buying that pressed juiceery juice in LA. You remember this trend?
It's pure sugar. That stuff is pure sugar.
Well, it's vegetable juice too, but it would cost, like, $11 because they would use so much vegetables. And I saw these presses they used. It's incredibly inefficient, but the juice tastes really great. But the thing I have a problem with with Ellen Powell's story is she brings up, you know, the harassment stuff and you know, this is an issue of gender, etcetera. But on this week in startups, I've been covering fraud after fraud.
I don't know if you saw App Annie got an FCC fine yesterday.
What what happened, Jason? because I saw you.
Annie, they told people who are using their analytics products, building apps, There's, like, 8 million people that they would never sell their data except in aggregate. And then they went to Wall Street people and said, here's actually we'll sell you the data. and you can trade on it. And so yeah. Yeah.
So I don't think that's, like, insider trading exactly, but it b. But, anyway, they got, like, a 5 10
b. Like, that's the whole point of that that's the whole point of reg FD. The whole point is if somebody knows something, if you're a financial actor, Jason, and you know something. So, like, if if all of us were sitting around a table, you know, and somebody said something about a random public company,
If that's not public information --
If that's not known, 2 things have to happen. Number 1 is I, when I receive it, must not do anything with it, And that second that person who disclosed it needs to then file an 8 k and say, oops, I accidentally said this.
Right. So there's there's so -- If
this is an end around around things like regular tea, I think that's a really big deal.
Well and
then I guess the question is, like, what happens with people who use planet labs or whatever to you know, to satellite images of the Target parking lot or put people at Spoters outside of Starbucks and count the people coming in and out.
Is that public information? That's public
but if if you a
service that says one thing. Yes. And you're violating that, but then you may also be violating reg FD.
So they haven't gone after people for on the other side of the trade for securities fraud, but they charged him with securities fraud. He pays 10,000,000 bucks. I think he's in the penalty box can't be, you know, run a be a public officer for 3 years. Then we had HeadSpin. I don't know if you saw that SaaS company, but HeadSpin was involved in just basically straight up lying about their SaaS software.
Then you have Tether, the stable coin. They've been banned from New York by the DOJ. They've been banned by the Canadian regulators for the first 2 crypto exchanges there. supposedly the DOJ is investigating them. And then there's about 5 ICOs in New York that have been prosecuted already.
So I know Ellen's saying, like, they're not processing
them then.
But I'm seeing them all time. Yeah. They're just not -- Right. The press is not obsessed with them because let's face it. Elizabeth Holmes was -- --
Elizabeth Holmes. Yeah.
She was weird. I mean, the voice There's a lot of peculiar things about her that you don't see in other folks who are boring. Right?
By the way, what you just said is is part of the sexist claim that Ellen made. which is that we talked about her dress and how she dressed and how she talked. We don't talk about that kind of stuff when it comes to other entrepreneurs, and that
was it. Of course, they did. Adam Newman, they were talking about him being a hippie walking around with bare feet being 67, every profile. She's she's wrong in that case. Every profile of Andy Newman talked about his personal life, and his wife is married to, what's her names?
No. When is Paul Trow's cousin
-- It went outro. Yeah. So Alan's a 100% wrong on that one.
Yeah. And did it didn't Elizabeth Holmes make it relevant by dressing deliberately styling herself in the fashion of Steve Jobs with the black turtleneck and the glasses? I mean, you know, she she portrayed herself as the Nextiva Jobs. I mean, it was part of the grift. So now yeah.
Exactly. Now did gender play into it? Yeah. But I think not in this sense that the media wanted to believe so badly that the next few jobs was gonna be a woman that they kinda look past what should have been staring them in the face. I mean, look, if a man had gotten out there wearing the black turtleneck and the John Lennon's glasses or whatever.
They would have said, who is this clown, Marie? I'm yeah. Exactly. But they suspended. They suspect
-- You have to dress up as Steve Jobs in the next episode of Free Bird. You can make it work.
Can we all do it? Can we see
this special? -- episode where we all show up do Elizabeth Holmes for Halloween episode.
But no. But that's, like, a nested Steve Jobs. So, like, you're gonna be Elizabeth -- Yeah.
You should all do our own versions of yes.
Very men.
Elizabeth, that Steve Jobs. I I I think Saks you're entirely right. I think you're absolutely right.
I think this is the way that gender has played into it is that there's a lot of people who really wanted the Elizabeth Holmes story to be true. And frankly, she used that
--
Yes. -- in order to perpetuate her flaw.
Well, she may not have used it, but she was definitely influenced.
Or she benefited from it.
She definitely used it.
I wanna you guys kind of a a controversial question. You know? because this story made me think a lot about some of what's gone on in businesses that I know of and where I know that there is to some degree fraud and misrepresentation happening by the CEO and founder. And this is a little known secret in Silicon Valley or a little spoken of secret, which is that, you know, more often than not, if you know about fraud at a company in Silicon Valley, you're encouraged to keep your mouth shut. Because the idea is at the end of the day, if they're gaining lots of capital, you know, more capital floats all boats and more money will rush into that market.
And so if there's businesses that you're competing with that are committing fraud rather than raise your hand, which then people say, hey. Look. If you're gonna raise your hand and claim fraud and talk negatively about another company, people are gonna start doing that about you, and they're gonna start doing that about your portfolio. And so you guys know this. Right?
Like, you're discouraged from calling out these sorts of moments when you see them in Silicon Valley, because there is the perceived kind of look. We're all at a club together. We're all in it together. We gotta be careful not to talk smack because then capital will stop coming in. People will come after you.
and we're much more of kind of a supportive open communities. But they're in
have you guys -- -- experienced that, Toronto?
I have with at least 2 companies in the last year, and, you know, I've kept my mouth shut because And by the way, I don't think that there's necessarily harm going on, but I know of misrepresentation. But the investors are like, look. We'd love to see these guys succeed because that would be good for you in this way because then you would there'd be more money flowing in and yada yada, and there's always a narrative runway. You don't wanna do this, you know, why you don't wanna call these things out.
I called it out, and I've still got a crazy founder denouncing me years later. I mean look. I I hate
-- Who has an SEC enforcement against him?
Yeah. Exactly. A sanction. So Yeah. I mean, look.
I you're you're right, Friedberg, that there's very little upshot to doing it. But but, look, I I hate But we we have to distinguish between fraud and sort of puffing. Okay? Here's the thing that I think, you know, Ellen Powell's kinda missing is when she criticizes all these founders who are visionary and evangelical and and promoting something that ends up not working. That is not fraud.
I mean, every startup, we ask the founder how are you gonna change the world? What is your big idea? What is the big dream? And then they lay out this really pretty unrealistic set of things. Unrealistic in the sense that it comes true maybe one out of a thousand times.
Right? Every startup, their founding mission is a bit of an overpromise. And just because it doesn't come true, doesn't make it fraud. I think that a lot of people out in the non Silicon Valley investing world would interpret that as fraud. because a founder told them something that ends up not happening, not ends up being true.
And this is why you really it's very dangerous to take money outside of Silicon Valley because people don't really understand this distinction. Okay? Just because it doesn't work out and what you said ended up not being true does not make it fraud. What is fraud is when you lie about like I said it before, when you lie about the past, and what Elizabeth Holmes is accused of doing by these prosecutors is, again, lying about the present day capabilities of our product and actually falsifying documents. She actually falsifying documents.
That is the fraud. That is the line you cannot cross.
They changed blood test results. Listen, said another way, Saxx. Elizabeth Holmes' vision of taking less blood and letting and doing more tests with it and being more efficient is a completely valid thing to pursue. Chamath just said. He pursued it five times in fail funds.
Completely fell. -- lying. Completely fell. Tens of 1,000,000 of dollars burned in a pile. But what we all buy into here is what if it does work one at a 1000 times?
What would we what what was the honest with you was, she'd lied about the results. And she so how did she lie about the results? She lied about real people's blood test results. Like, actual civilians.
§08Segment 8
Well, I have some empathy for Elizabeth Jobs in the following way.
When I was told
when I when I was told -- Wait.
Hold on. When I was told -- -- Holmes.
There. Hold on. When I was told I think I told this story. I was asking an investor, hey. What's the hottest company around?
This is in, you know, 2013 or 14. He said Theranos. and there was no way to get connected to the company. So then I was like, you know, I had heard just the the bullet point, one drop of blood, full characterization of your you know, be able to do a blood test, etcetera. I thought this is an incredible idea.
But because I had no way of getting connected. Now thank God that turned out to be a good thing. I was like, well, fuck it. I'll just start my own version. I'll figure out how to do this.
And and Jason, as you said, it turned out to be much much larger than I thought and 5 different iterations, 5 different teams, and, you know, PhDs from MIT, Stanford, everything. We couldn't Caltech. We couldn't figure it out. So it's not wrong to wanna believe that something is possible, and it's not illegal to do that. But as David said, the minute that you try to you tell lies about the past in order to basically then change the future in a way that should happen, That's real that's really unfair.
Yeah. It's what do you think of the defense that Balwani, the Spangali defense? I saw Kara Swisher and some New York Times reporters and other reporters were basically not buying it.
But we talked about this last time, didn't we?
Yeah. Yeah. I'm just curious if you're have been following the trial.
I I I think it's hard for somebody who in the moment took credit for every decision, for every piece of press, for claim to be the jobs he and micromanager. To all of a sudden, now turn around and say, no. That wasn't me making the decisions. I was under the spell of somebody else. I think that's a tough argument to make.
Yeah. Also, I think you know, this is gonna come out, but she actually fired Balwani. So if she fired him, how was she Yeah. It's harder to do the Schrengali defense, I think. Well,
maybe they're both guilty. Schrengali. You know? Maybe they're both guilty. It could be an aunt
--
golly. Sven. Sven the Valley.
Alright. Listen. We'll close on this. Mailchimp has sold to Intuit for $12,000,000,000 in the largest bootstrap acquisition ever. We all know Mailchimp and we all know QuickBooks.
It's a huge deal.
I have one issue with this, and I don't know if it's true or not. But apparently, none of the employees have any equity.
Yes. And that was what I was about to get to. Employees didn't have equity. However, and I have no Mailchimp for a while for over a decade been using the product. I know the founder had him on the podcast before.
Have they been a sponsor of your podcast?
They sponsored in the 1st year, I think, or 2. And --
Were you an angel investor?
I was not. I tried to be, and he said we're never gonna ever raise money. and -- He also tried -- -- said
he was never ever gonna sell.
And he was also never gonna sell. I I they gave --
He had 12 billion reasons to change his mind.
Exactly. They gave him the 20 percent my understanding was employees got a 20% cash bonus, and they were amongst the highest paid. you know, in the industry. So their plan was instead of giving people some big reward at the end, they
They were just distributing basically.
They were just distributing cash. So if you had a hun if you were a 150 k developer, you got 30 k on top.
That's not an unreasonable way to run a business that has no outside investors that you know, and employees know that going in. They didn't go in with the expectation of equity. They went in with the expectation of a high salary and a big bonus, and they got it.
I do that. So -- -- few companies few companies that I own, I do that. But what I also do is I let them buy into the company every year. I just think that it's a good principle to have like an ownership in the business. I think you should be paying a lot of money and we should pay cash bonuses for for achieving results, we do that.
But then what we also say is if you wanna buy equity, come and buy it.
But you're probably right from a performance I don't think it's necessarily a moral obligation to do that. Right? How this guy wants to run his business up to him? You know?
I mean -- Yeah. People made the choice. -- voted.
Yeah. I mean, peep people that work at your house, you don't give them equity in your house. Right? I mean, you own the house. You give them cash.
Or people who play for a basketball team are not allowed to get equity in the team But in other countries, right, I think in soccer, you can.
Yes. But I think one of the best things about Silicon Valley is the fact that there's a there's a practice of giving broad based options to everybody in the company. And there's all those great stories about the chef at Google who got rich and the secretaries. at Microsoft who got rich, and that is a beautiful thing about the techy Christmas.
It's beautiful. It's wonderful.
You never and you never hear about that when all the press is doing is writing stories about greedy VCs and all kind of stuff. They they talk about VC, but they don't bring up the point that in these non VC companies, the employees never end up with anything.
someone who came from nothing can afford a beautiful home and have their life taken care of forever because they work really hard at a great company that worked out. And that that's that's the most common story, and it's never reported.
But -- Yeah.
And by the way, look. There's there's nothing wrong with bootstrapping your company. So congrats to this Mailchimp founder for doing it. I mean, certainly, you know, like, as a investor, I have
no desire.
Just describe what just explain what bootstrapping is, sex.
Bootstrapping is just when you don't raise outside money and he did it himself, and he basically
-- Find the profits. Yeah.
He founded the company with the profits, which is just amazing. But but but here here's the thing about that is he did this he started the company back in 2001 at the nadir after the dot com crash, and there was very little money going into new starts back then. And he managed to create this So kudos to him. But the environment now is very different. If you look at the amount of funding that goes into start ups, I mean, it's now in the hundreds of billions every year.
And so If you have this mentality of I'm gonna bootstrap it, you're you're probably gonna lose to a competitor who's simply willing to raise money and pursue that same idea with more funding. Now, look, I'm not in the business of pushing money on people who don't want it. I'm just saying, realistically, the times are different now. If you can boost out my business, great. Go for it.
But I do think that if you're in competition with someone who can raise VC money, you're gonna be a disadvantage.
Hard to compete yourself.
Yeah. What about AOC? What she wore to the Met Gala? Tax the rich. She wrote she wrote tax the rich dress to the Met Gala.
Dave Portnoy Dave Portnoy had the best tweet this, which is she's about to go have the best night of her life parting her ass off with all these rich people, and she's wearing this tactic tax of rich. It's total hypocrisy. This is classic Socialism where they do this virtue signaling while being friends and hanging out with the the people, the owners of capital they're purporting to derive. And frankly, it's just like the mask things. I mean, you've got the servant class working at the Met Gala wearing mask while every while all the guests of the the gala are don't have to wear a mask.
I mean, it's
It's like police come all over again.
snooch. Well, she she she also drops a merch. You can buy a tax the rich. There's an official AOC team shop. I can't
believe that that's true. That's what makes it the most Losum. She goes to the thing, and now she's selling $58 sweaters -- -- sweatshirts.
A
$58
sweatshirt, $28 dad hat a $10 sticker pack, $27 tote bag,
and a $27 mug. What's a dad hat?
It's like a hat for dads. It's like for us. You know?
Oh, yeah. Tax the rich dad.
Tax the rich. Yeah.
Wow. I didn't know Dad Hat was a category. I know Dad Jokes and Dad Bods. I've never saw Dad Hat. Dudhut.
Fantastic. Fantastic. Yeah. I thought it was kinda gross.
Is it wrong to buy some of this? I I think that that's kinda cool, actually.
I mean, the tax the rich had. It's pretty funny. Beautiful. Oh my god. If you were a tax act -- --
sweatshirt. I think the best thing is if I bought this sweatshirt and wore it around.
Wear it on CNBC. your next scene. If you were at Tax the rich Chamath CNBC, that would be Pete Chamath. I think that would be peak.
That'd be great.
Get a sign by Alright. Anybody got any plugs? Anybody have plugs?
The the craziest thing about that Dave Portnoy tweet was that it got fact checked. Can you believe that? It got fact checked. I mean, it was just mind blowing that this is what
When you say fact checked, they put a fact check. It's warning on.
They put a warning label on.
Oh, god. So in other words -- -- warning, Liberals, and socialists at Twitter don't agree with this tweet.
Right. No. Exactly. -- warning somebody in the crowd. Dave Portnoy is criticizing somebody in the in crowd.
That, by definition -- He
definitely Portnoy definitely gets to see that all in Summit. He definitely it's a it's a
is the ivermectin fake story from Rachel Maddow. Is that fact checked or no? No.
She posted some update or other, but but grudgingly presenting other information. But, I mean, this story should have been completely retracted, and it wasn't.
No. No. I'm just curious whether there's a fact check double stand.
No. There's oh, absolutely. There is no fact check on that. For some reason, the Rachel Maddell tweets went un fact checked As far as I know, they're still on fact checked.
You know what? You should wear the get the rich hat and then get your buy the Hamptons shirt trough and wear those on your next
vehicle hit. What a great combo.
-- handbags the red -- Wait.
Can I show you guys can I show you guys a great piece of merch hold on, sir? I'll be back Yeah.
Oh, because I merge.
But can I just say, I don't look good in hats. It's
merged for the beep app. I don't
I don't look good in hats.
No. You don't.
No. No. I've wanted to wear a hat for a long time, but I just it just doesn't get good on me.
Let's see his --
This is my favorite piece of merch.
Merck.
Which is somebody made
a buddy. Like friends. That's fabulous. Absolutely.
Wait.
Can we just say, by the way, there's a person that did make a bestie's merch site. None of us knows who he is, but there's an incredible thing that he tweeted at us. Right? Jay Cal, which is he's paying his way through college?
Yeah. He puts a note into it. He he told me he made, like, $5 over the summer. And so, you know, he's probably making, like, $30 a year off of merch
If you're any anybody's interested in Symvesty's merch, we don't make a single dime from it, but there's a young, hardworking dude paying him paying his way through school.
I don't know. It's a bestie a apparel. He's bestie apparel. Right? Bestie apparel.
bestieapparel.com. We don't really want to encourage too many people to go crazy doing this. But this is our guy, I guess. And mean, no. He did his way through school.
For him. Yeah. And I think they did you know, the the the shirts that people wore on their all in bar crawl came from that. But I really wanna do the I wanna do all this -- --
the rich. I'm buying this tax, the rich sweatshirt boys and the t shirt and the sticker pack. I'm going for all of it. You got me AOC. You got me on
the hook. Do they have a a man's bikini with tax to Rich on the backside for you?
God. I would -- For when
we're in Italy.
I would buy that.
We could how about we keep matching Speedos? Well,
let me show you.
Let me -- -- walk.
I always threatened to buy a Speedo. She always says, well,
we have to buy Speedos next we're in Italy. She won't love it. And we have to do our bestie walk from peer to peer on the beaches of Italy in the Speedo. Can you imagine if that image got leaked of us in Pinos.
I did I did a best of luck with sex. Alright, boys. I gotta go. I gotta eat lunch with you. Alright.
Love you besties. Love you, guys. Take care.
we'll let your winners ride. Rainman, David Sachs. And it said --
We open store sit to the fans, and they've just gone crazy like that.
like, white hair when that's right. Besty's are bad. I don't understand. That is my dog thinking, and I was driveway.
We should all just get a room and just have a big huge aura because they're all just useless. It's like this, like, sexual tension, and they just need to release them out.
What? You're the bee feet. What?
Where did
you get Murphy's our back? going all day.