Coffeezilla: SBF, FTX, Fraud, Scams, Fake Gurus, Money, Fame, and Power
嘉宾：Coffeezilla
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本篇目录28 章节
§01Transcript · 00:00–08:00§02Transcript · 08:04–16:39§03Transcript · 16:40–25:03§04Transcript · 25:05–33:28§05Transcript · 33:30–42:00§06Transcript · 42:02–50:26§07Transcript · 50:30–58:50§08Transcript · 58:52–1:06:51§09Transcript · 1:06:52–1:14:35§10Transcript · 1:14:37–1:22:41§11Transcript · 1:22:43–1:30:02§12Transcript · 1:30:04–1:38:19§13Transcript · 1:38:20–1:46:51§14Transcript · 1:46:55–1:56:05§15Transcript · 1:56:06–2:03:50§16Transcript · 2:03:53–2:11:28§17Transcript · 2:11:31–2:20:11§18Transcript · 2:20:12–2:28:55§19Transcript · 2:28:58–2:36:56§20Transcript · 2:36:57–2:45:13§21Transcript · 2:45:15–2:53:17§22Transcript · 2:53:21–3:00:47§23Transcript · 3:00:49–3:09:29§24Transcript · 3:09:32–3:17:29§25Transcript · 3:17:31–3:26:01§26Transcript · 3:26:02–3:34:29§27Transcript · 3:34:31–3:43:43§28Transcript · 3:43:44–3:46:12§01Transcript · 00:00–08:00
Do you think he is incompetent, insane, or evil?
The following is a conversation with Coffee Zilla,
an investigator and journalist exposing frauds,
scams, and fake gurus.
He's one of the most important journalistic voices
we have working today,
both in terms of his integrity and fearlessness
in the pursuit of truth.
Please follow, watch, and support his work
at youtube.com/coffeezilla.
This is the Lex Friedman Podcast.
To support it, please check out our sponsors
in the description.
And now, dear friends, here's Coffee Zilla.
How do you like your coffee?
Dark and soul-crushing?
That was the number one question on the internet.
Do you like your coffee to reverberate deeply
through the worst of human nature?
Is that how you drink your coffee?
I've gone through a lot of phases on coffee.
I used to, in college, I would go super deep
into grinding fresh beans, all of that kind of stuff,
water temperature exactly right.
And then I hit a phase where I was just,
it was the maintenance dose.
Then I went to espresso because I could get a lot more in.
And now I go through phases of sometimes I like it
with a little oat milk,
sometimes a little half and half and sugar.
Oh, you've gotten soft in your old age.
I've gone a little, I have.
But hey, if I'm doing a SBF interview,
it's black that day, nothing less.
It's black, no sugar.
- The lights go down.
What do you actually do in those situations,
like leading up to a show, do you get hyped up?
Like how do you put yourself in the right mind space
to explore some of these really difficult topics?
- I think a lot of it's preparation.
And then once it happens,
it's mostly fueled by sort of adrenaline, I would say.
I really deeply care about getting to the root cause
of some of these issues because I think so often people
in positions of power are let off the hook.
So I really care about holding their feet to the fire
and it translates into like a lot of energy the day of.
So I never find myself, like funny enough,
I usually drink a lot of caffeine
leading up to the interview.
And then I try to drink like minimum the day of
because I have so much adrenaline,
I don't wanna be like hyper stimulated.
- I have to say of all the recent guests I've had,
the energy you had when you walked into the door
was pretty intense. - I'm excited!
Are people not excited to be here?
- I don't know.
I think they're scared. - And you're a big deal, Lex.
I mean, I don't know if you know.
- I think they're scared.
I feel like you were gonna knock down the door or something.
You were very excited.
Like that just energy, it was terrifying
because I'm terrified of social interaction.
Anyway, speaking of terrifying--
- You chose a good living of interviewing people.
- Face your fears, my friend.
So let's talk about SBF and FTX.
Who is Sam Banquetfried?
Can you tell the story from the beginning
as you understand it?
- Yeah, so Sam Banquetfried is a kid who grew up
sort of from a position of huge privilege.
Both his parents are lawyers.
I believe both of them were from Harvard.
He went to MIT, went to like,
or sorry, backing up a bit more,
he went to like this top prep high school,
then to MIT, then he went to Jane Street.
And after that, he started a trading firm
in I think 2017 called Alameda Research
with a few friends.
Some of them were from Jane Street,
some of them worked at Google.
And they were sort of the smartest kids on the block
or that's what everyone thought.
They made a lot of their money
on something called the Kimchi Premium,
or at least the story goes,
which just to explain that,
the price of Bitcoin in Korea was substantially higher
than in the rest of the world.
And so you could arbitrage that
by buying Bitcoin elsewhere
and selling it on a Korean exchange.
So they made their money early
doing kind of smart trades like that.
They flipped that into market making,
which they were pretty early on that,
just providing liquidity to an exchange.
And it's a strategy that is considered delta neutral,
which means basically,
if you take kind of both sides of the trade
and you're making a spread, like a fee on that,
you make money, whether it goes up or down.
So in theory, there shouldn't be
that much risk associated with it.
So Alameda kind of blew up
because they would offer these people,
people who are giving out loans,
they'd say, "Hey, we'll give you
this really attractive rate of return.
And we're doing strategies that seemingly are low risk.
So we're a low risk bet.
We're the smart kids from Jane Street,
and you can kind of trust us to be
this smarter than everyone else kind of thing."
Around 2019, Sam started FTX,
which is an exchange.
Specifically, it specialized in derivatives.
So like margins, kind of more sophisticated crypto products.
And it got in with Binance early on.
So Binance actually has a prior relationship to FTX,
which we'll explore in a second,
'cause they're gonna play a role in FTX's collapse actually.
Binance is the number one crypto exchange,
and they're led by, he's called CZ on Twitter.
I don't wanna butcher his full name.
But really smart guy has played his hand really well
and built up a quite large exchange.
And Binance was funding a bunch of different startups.
So they funded, they helped invest into FTX.
Early on, they invested 100 million.
So these guys were kind of like teammates early on,
SBF and CZ.
And FTX quickly grew.
They got like, especially in 2020, 2021,
they got a lot of endorsements.
They got a lot of credibility in the space.
And eventually, FTX actually bought out Binance.
They gave them $2 billion.
So pretty good investment for CZ in a couple of years.
And now lead that up to 2022, what happens?
Luna collapse, Three Arrows Capital collapse,
which if you don't know,
there's just these kind of cataclysmic events in crypto
led by some pretty risky behavior,
whether Luna was a token
that promised really attractive returns
that were unsustainable ultimately,
and it just kind of spiraled.
It did what's called a stable coin death spiral,
which we can talk about if we need to.
- A stable coin death spiral.
I can't wait till that like actually enters the lexicon,
like a Wikipedia page on it,
like economic students are learning in school.
That's like a chapter in a book.
Anyway, I mean, this is the reality of our world.
This is a really big part of the economic system
is cryptocurrency and stable coin is part of that.
- Yeah, it's weird because on the one hand,
cryptocurrency is supposed to somewhat simplify
or add transparency to the financial markets.
The idea is for the first time,
you don't have to wait for an SEC filing
from some corporate business.
You can look at what they're doing on chain, right?
So that's good because a lot of big financial problems
are caused by lack of transparency
and lack of understanding risk.
But ironically, you get some people
creating these arbitrarily complicated financial products
like algorithmic stable coins,
which then introduce more risk and blow everything up.
So anyways, three hours capital blew up
and all of a sudden this crypto industry,
which everyone thought was going to the moon,
Bitcoin to 100,000 is in some trouble.
And FTX seems like the only people who,
besides like Binance,
who's also really big and stable and Coinbase,
they seemed like they were doing fine.
In fact, they were bailing out companies in the summer.
I don't know if you remember that SBF
was likened to like Jamie Diamond,
who's the CEO of Chase,
who like kind of was like the buck stops here.
I'm like the backstop, right?
So SBF was supporting the industry.
He was like the stable guy.
So come to like around October and November,
there's all this talk about regulation.
Everything's been blowing up.
SBF's leading the charge on regulation.
And CZ, the CEO of Binance gets word
that maybe SBF is kind of like cutting them out
or making regulation that would maybe impact his business.
§02Transcript · 08:04–16:39
And he doesn't like that too much.
They start kind of feuding a little bit on Twitter.
So when it comes out, a CoinDesk report came out
that FTX's balance sheet wasn't looking that good.
Like it looked pretty weak.
They had a lot of coins that in theory had value
if you looked at their market price,
but for a variety of reasons,
if you tried to sell them, they'd collapse in value.
So it was sort of like this thing, a house built on sand.
And a friend of mine on Twitter,
he goes by Dirty Bubble Media.
He released a report and he basically said,
"I think these guys are insolvent."
Well, CZ saw that and he retweeted it
and started adding fuel to the fire of like the speculation.
'Cause up to this point, everyone thought FTX is super safe,
super secure.
There's no reason to not keep your money there.
Tom Brady keeps his money there, whatever.
And CZ kind of adds fuel to the fire by saying,
"Not only am I retweeting this,
adding kind of like validity to this speculation,
but also I'm going to take the FTT that I got,"
which part of their balance sheet was this FTT token,
which is FTX's like proprietary token.
And Alameda and FTX control a lot of it.
They were using this token to basically be
a large amount of collateral for their whole balance sheet.
So it accounted for this huge amount of their value.
And the CEO of Binance had a huge chunk of it as well.
And he said, "I'm going to sell all of it."
And the fuel that that introduced to the market is,
if he sells all this FTT,
and this FTT is underwriting a lot of the value of FTX.
- Does FTT almost approximate like similar things
if you were to buy a stock in a public company?
Is that kind of like a stock in FTX?
- It sort of was this proxy
because what FTX was committed to doing
was sort of like buying back FTT tokens.
They would do this thing called the buy and burn.
I think there was some amount of sharing
in the revenue fees of FTX.
It was kind of this convoluted thing.
In my opinion, the exact value of FTT
was speculated from the beginning.
And it was clear that it was very tied
to the performance of FTX,
which is important because we'll get to later,
FTX sort of built their whole scaffold on FTT,
which meant that this scaffold was very wobbly
because if FTX loses a little bit of confidence,
then your value goes down.
When your value goes down,
you lose more confidence and this goes down.
So it was kind of like this thing that,
this flywheel that when it was going well,
you got huge amounts of growth.
When it's going bad, you get a exchange death spiral,
so to speak.
- Actually, this structure,
it's a pretty non-standard structure.
Did the architects of its initial design
anticipate the wobbliness of the whole system?
So putting fraud and all those things
that happen later aside,
do you think it was difficult to anticipate
this kind of FTT, FTX,
elementary research, weird dynamic?
- No, because I think sophisticated traders
always think in terms of diversification and correlation.
So if you're trying to,
the way to think about risk in investing is like,
if I invest in you, Lex Friedman,
and then I also invest in some product you produce,
the performance of those two things
will be pretty correlated.
So whether I invest in you or I invest in this product
that you are completely behind,
I'm not de-risking.
I'm basically counting all on you doing well, right?
And if you do bad, my investments do very bad.
So if I'm trying to build a stable thing,
I shouldn't put all my eggs in the Lex Friedman basket
unless I'm positive that you're gonna do well, right?
And these people--
- As your financial advisor,
I would definitely recommend
you do not put all your eggs in this basket.
- Right, and so you can think about it like,
if I know that,
these people were trained to think like this.
And so the idea that you could start this exchange,
you're worth billions of dollars,
and you underwrite your whole system by betting,
putting most of it on your own token is insane.
And what's crazy is we'll later find out
that they were basically taking customer assets,
which were real things,
like Bitcoin and Ethereum,
with risks that were not so correlated to FDX,
and they were swapping them out.
They were using to go basically gamble those
and putting FTT in its place as quote value.
So they were increasing the risk of the system
in order to bet big,
with the idea that if they bet big and won,
we'd all be singing their praises.
If they bet big and lost,
I don't know if they had a plan,
but I think they were being extremely risky,
and there's no way to avoid their knowledge of that.
- So when you say customer assets,
I come to this crypto exchange,
I have Bitcoin or some other cryptocurrency,
and this is a thing that has pretty stable value over time.
I mean, as crypto, relatively so,
and I'm going to store it on this crypto exchange.
And that's the whole point.
So this thing, to the degree that crypto holds value,
is supposed to continue holding value.
There's not supposed to be an extra risk
inserted into the thing.
- Right, and FTX was pretty clear from the beginning
that they wouldn't invest your assets in anything else.
They wouldn't do anything else with it.
They wouldn't trade it.
That's what made FTX such like a horror story
for investor confidence,
is basically they made every signal
that they would not do anything nefarious with your tokens.
They would just put them to the side,
put them in a separate account
that they don't have access to,
and they just kind of wait there
until the day that you're ready to withdraw them.
That's explicitly what they told their customers.
So going back to the story a little bit,
CZ then says, "Hey, I'm selling this token
"that underwrites the value of FTX."
There's a total panic.
SBF during this time says several lies,
such as, "FTX assets are fine.
"We have enough money to cover all withdrawals."
And a day later, he basically admits
that that wasn't the case.
They don't have the money, they're shutting down.
And then a few days later after that,
they declared bankruptcy.
I should be clear, there's Alameda Research,
FTX International, and FTX US,
which is the US side of things.
These are three different entities.
All of them are in bankruptcy,
and it's not clear to the extent
that they were commingling funds,
but it's clear that they were commingling funds
to some extent.
So they kind of were taking from each other.
And that is where the fraud happens, right?
Because if going back to our earlier analogy,
if you're supposed to set funds aside,
and I find out you were using it
to go make all these arbitrage trades,
or do market making, or all these activities
you were known for, for your hedge fund trading firm thing,
that's a huge problem, because he basically lied about this.
And especially when he's saying explicitly
that we have these things, we have these funds,
and these things turn out to be lies,
well, again, the question of fraud comes in,
and it's just like, there's no way he didn't know.
So the obvious question might be,
well, why isn't he locked up?
Why is he running around?
And it's because really his story
is that he didn't know any of it.
He found out that they had, to steel man his position,
he would say he was totally disconnected
from what Alameda was doing.
He had no idea that they had such a large margin position
that they'd had an accounting quirk,
and that accounting quirk hit $8 billion from his view.
And so when he was saying that they had money to cover it,
he was saying that truthfully to the best of his ability,
and he just was so distracted at the time
that he made a series of increasingly embarrassing mistakes.
And now he owes it to the people to right those wrongs
by publicly making this huge apology to us.
You might've seen him on,
I mean, he's been talking to nearly everyone,
about basically how he's just didn't know what he's doing.
He's the stupidest man alive.
It's basically it.
- So what are some interesting things
you've learned from those interviews?
- I think I've appreciated
why you don't talk in that position.
Most people wouldn't talk.
§03Transcript · 16:40–25:03
Most people would listen to their legal counsel and not talk.
I do not think any lawyer worth their salt
would tell him to talk, because right now,
I think the danger of what he's doing
is he's locking himself into a story
of how things happened,
and I don't think that story is gonna hold up
in the coming months,
because I think it's impossible,
from the insider conversations I've had
with Alameda Research employees, with FTX employees,
it's impossible to square what they are telling me
with no incentive to lie
with what SBF is telling me with every incentive to lie,
which is fundamentally that he didn't know
they were commingling funds.
He didn't know they were gambling with customer money,
and it was basically this huge mistake,
and it's Alameda's fault,
but he wasn't involved in Alameda, a company he owned.
- So like a compassionate,
but hard-hitting gangster that you are,
very recently, you interacted with SBF on,
I like how you adjust the suspenders as you're saying this.
You interact on Twitter Spaces with SBF,
and really put his feet to the fire
with some hard-hitting questions.
What did you ask,
and what did you learn from that interaction?
- Sure, I should say first,
this was not a willing interaction.
I mean, I thought that was kind of the funny part of it,
'cause I've been asking him for an interview for a while.
He's been giving interviews to nearly everyone who wants one,
big channels, small channels.
He didn't give me one,
but I managed to get some by sneaking up
on some Twitter Spaces and DMing the people,
and being like, "Hey, can I come up?"
So I didn't get him to ask everything that I wanted,
because he would leave sometimes,
after I asked some of the questions.
But really what I asked was about this eight billion,
and zooming in on the improbability
of his lack of knowledge.
It's sort of like if you run a company,
and you know the insides and outs,
and you're the top of your field, top in class,
and all of a sudden it all goes bust,
and you say, "I had no idea how any of this worked."
I didn't know, it's like the guy who runs Whataburger
saying, "I didn't know where we sourced our beef."
I didn't know where we, that's a Texas example, actually.
- Thank you, I appreciate that.
- Let's take it worldwide, Walmart.
I didn't know we used Chinese manufacturers.
That's impossible.
To become Walmart, you have to know
how your supply chain works.
You have to know, even if you're at a high level,
you know how this stuff works.
- Can I do a hard turn on that,
and go as one must to Hitler?
Hitler's writing is not on any of the documents
around, as far as I know, on the final solution.
So in some crazy world, he could theoretically say,
"I knew, I didn't know anything about the death camps."
So there's this plausible deniability, in theory.
But that, most people would look at that and say,
"It's very unlikely, you don't know."
Especially if all the insiders are coming out
and saying, "No, no, no, of course he knew.
"He was directing us from the top."
I mean, what was clear, what's interesting
about the structure, and I love the nitty-gritty--
- Sorry, we're back to SPF.
- Yeah, sorry. - We went to Hitler,
now we're back to the SPF. - I wanted to turn us
as fast as possible away from Hitler.
(laughing)
- So the insiders in what, Alameda Research?
- Alameda Research.
What was interesting is that there was this
sort of one-way window going on,
between Alameda and FTX, where FTX employees
didn't know a lot of what was going on.
Alameda insiders, and I would say by design,
knew almost everything that was going on at FTX.
And so I think that was really interesting
from the perspective of a lot of the so-called,
like what you could, what he's trying to ascribe to
as like failures or mistakes or ignorance and negligence.
When looked at closely, are much more designed,
and they sort of don't arise spontaneously.
'Cause like let's say, so there's this thing in banking
and like trading, where if I run a bank
and you run like a trading firm,
we need to have informational walls between us,
'cause there's huge conflicts of interest that can arise.
So the negligent argument might be that like,
oh, we just didn't know, we're sort of these dumb kids
in the Bahamas, so we shared information equally.
But when you see a one-way wall,
that starts to look a lot different, right?
If I have a backend source of looking at,
or sorry, you're the trading firm.
So you have a backend way to look at all my accounts,
and I have no idea that you're doing that,
that all of a sudden looks like a much more designed thing.
When it would be plausible, let's say going to use
another analogy too, if you're saying, look,
I commingled funds 'cause I was so bad
at corporate structures, you would expect those companies
to have a very simple corporate structure
'cause you didn't know what you're doing, right?
But what we see with FTX and Alameda,
is they had something like 50 companies and subsidiaries,
and this impossibly complicated web of corporate activity.
You don't get there by accident, you don't wake up and go,
oh, I designed like this watch that ticked
a very specific way, but it was all accidental.
If you really didn't know what you were doing,
you'd end up with a simple structure.
So even just like from a fundamental perspective,
what SBF was doing and like the activities
they were engaging in were so complicated
and purposely designed to obfuscate what they were doing,
it's impossible to subscribe to the negligence argument.
And I wanna quickly say too, like,
I don't think a lot of people have honed in on this.
There was insider trading going on
from Alameda's perspective, where they would know
what coins FTX was going to list on their exchange.
There's a famous effect where,
let's say you're this legitimate exchange,
you list a coin, the price spikes.
Insiders told me it was a regular practice
for Alameda insiders to know that FTX
was going to list a coin and as a company buy up that coin,
so they could sell it after it listed.
And they made millions of dollars.
How do you do that accidentally?
- Yeah, and that's illegal.
- Totally illegal.
So that's illegal from like,
and if an individual does it, it's illegal, it's fraud.
What if a company is systematically doing it?
And you can't tell me that FTX or someone at FTX
wasn't feeding that information to Alameda
or somehow giving them keys to know that.
And that would happen at the highest level.
It would happen at SPS level.
And this is why his arguments of, I was dumb, I was naive,
I was sort of ignorant are so preposterous
because he's dumb and ignorant
the second it becomes criminal to be smart
and sophisticated, right?
- But then also coming out and talking about it,
which is a--
- It's a bizarre move.
- It's a bizarre and almost a dark move.
Can you tell the story of the 8 billion?
You mentioned 8 billion.
What's the 8 billion?
What's the missing 8 billion?
- Yeah, so it's really interesting
because it's sort of like wire fraud.
You're sort of, he's sort of copping to like smaller crimes
to avoid the big crime.
The big crime is you know everything
and you were behind it, right?
The smaller crimes are like a little wire fraud here,
little wire fraud there.
So what the 8 billion is,
is that FTX didn't always have banking.
It's hard to get banking as a crypto exchange.
There's all these questions of like,
where's the money coming from?
Is it coming from money launderers?
So for a variety of reasons,
it's always been hard for exchanges to get bank accounts.
So before when FTX was just getting started,
they didn't have a bank account.
So how do you put money on FTX?
Well, they would have you wire your money
to their trading firm.
Their wiring instructions would go to their trading firm.
It's easier to get banking as a trading firm.
So you'd put your money with the trading firm
and then they'd credit you the money on FTX.
Okay, first of all, this is a whole circumvention
of all these banking guidelines and regulations.
That's the first like thing that I think is legal.
But basically what SBF argued
is that there was an accounting glitch error problem
where when you'd send money to Alameda,
even though they'd credit you on FTX,
they wouldn't safeguard your deposits.
Like your deposits would go into
what he called a stub account,
§04Transcript · 25:05–33:28
which is just like some account that's not very well labeled
kind of like a placeholder account.
And he didn't realize that those were Alameda's funds
or they were playing with those funds
and that they basically should have safeguarded that
for customers.
That's his explanation.
It's preposterous 'cause it's $8 billion, but anyways.
- Just poor labeling of accounts.
- Of an $8 billion account.
I mean, it's like-- - What's a billion?
- A billion, this is like--
- I do this all the time in programming.
- This is the craziest thing.
Like he was talking to me
and at one point in the conversation, he's like,
"Yeah, I didn't have precise knowledge."
'Cause he said, "I didn't have knowledge
"of Alameda's accounts."
And I said, "Well, Forbes a month ago
"was getting detailed accounting of Alameda."
And he goes, "Oh, that wasn't detailed accounting.
"I just knew I was right within 10 billion or so."
What is that error margin?
$10 billion for a company that is arguably
never worth more than 100 million.
Probably never even worth more than 50 billion.
Your error margin is $10 billion.
You have to be, this is a guy who is sending around
statements that like there was no risk involved.
And you're telling me he had a error margin
of $10 billion.
That is the difference between like a healthy company
and a company so deep underwater you're going to jail.
So you have to believe that he is impossibly stupid
and square that with the sophistication
that he brought to the table.
I think it's an impossible argument.
I don't even think it's.
- Do you think he is incompetent, insane or evil?
If you were to bet money on each of those.
- Incompetent, insane or evil.
- Insane meaning he's lying to everyone,
but also to himself, which is a little bit different
than incompetence.
- He's not incompetent.
So I think he's some combination of insane and evil,
but it's impossible to know unless we know
deep inside his heart how self-deluded he is
versus a calculated strategy.
And I think if you look at SBF,
I think he's a fascinating individual.
Just, I mean, you know, he's a horrible human being.
Let's start there.
But he's also somewhat interesting
from a psychology perspective
because he's very open about the fact
that he understands image
and he understands how to cultivate image,
the importance of image so well
that I think a lot of people,
even though they've talked about it,
aren't emphasizing that enough when interacting with him.
This is a man whose entire history
is about cultivating the right opinions at the right time
to achieve the right effect.
Why do you think he would suddenly change that approach
when he has all the more reason to cultivate an image?
- So he is extremely good naturally or--
- I don't know if he's good,
but he's like, he's hyper aware.
- So he's deliberate in cultivating a public image
and controlling the public image.
- You know about the like Democrat donations.
Like he knew to donate to the right people, $40 million.
He says on a call that we released with Tiffany Fong,
he says on a call
that he donated the same amount to Republicans.
There's speculation on whether this is true
'cause he's a liar or whatever.
So caveat there.
But he said he donated to Republicans the same amount,
but he donated dark
because he knew that most journalists are liberal
and they would kind of hold that against him.
So he wanted all the sides to be in his favor, in his pocket
while simultaneously understanding the entire media landscape
and playing them like a fiddle
by cultivating this image of,
I'm this progressive woke billionaire
who wants to give it all away, do everything for charity.
I drive a Corolla
while living in a million dollar penthouse, multimillion.
But that was sort of the angle.
He understood so well how to play the media.
And I think he underestimated when he did this,
how much people would put him under a deeper microscope.
And I don't think he has achieved the same level of success
in cultivating this new image.
'Cause I think people are so skeptical now,
no one's buying it.
But I think he's trying it.
He's doing it to the best of his ability.
- But it has worked leading up
to this particular wobbly situation.
So before that,
wasn't there a public perception of him being
a force for good, a financial force for good?
- 100%, yeah.
Somebody from Sequoia Capital,
wrote this glowing review
that he's gonna be the world's first trillionaire.
There's so many pieces done
on he's the most generous billionaire in the world
that he was sort of like the steel man of,
it's possible to make tons of money.
This is like the effective altruism movement,
make as much money as you can, as fast as you can,
and then give it all away.
And he was sort of like the poster child for that.
And he did give some of it away
and got a lot of press for it.
And I think that was kind of by design.
I wanna address a real quick point.
A lot of people have said that like Binance played a role.
And while they catalyze this,
insolvency is a problem
that will eventually manifest either way.
So I don't put any blame on CZ
for basically causing this meltdown.
The underlying foundation was unstable
and it was gonna fall apart at the next push.
I mean, he just happened to be the final kind of like,
I don't know, the straw that broke the camel's back.
- Yeah, the catalyst that revealed the fraud.
- Yeah, but it's like, I don't think he's culpable
for FTX's malfeasance in how they handled accounts,
if that makes sense.
- So what role did they play?
Could they have helped alleviate some of the pain
of investors, of people that held funds there?
- Yeah, I mean, probably, I don't know.
I would see some kind of weird obligation
like with the 2 billion they made on FTX.
Remember they got 2 billion, some of it in cash,
some of it in FTT tokens.
I don't know how much actual cash they have from that deal,
but they have billions from the success
of what seems to be a fraud.
It seems to have been a fraud from early on.
They had the backdoor as early as 2020,
from what I can tell.
- So the backdoor between FTX and Alameda?
- Alameda, yes.
- Alameda, I see.
Do you think CZ saw through who SPF is?
What he's doing?
- No, I think CZ is like, he's a shark.
I think he's good at building a big business.
- Like a good shark or a bad shark?
I don't know.
- I don't know, I think sharks just eat.
I mean, I don't know.
I think--
- My relationship with shark has like a finding Nemo,
there's a shark in that.
- Sure. - I don't know.
- I think like Jeff Bezos is a shark.
So whether people have loaded connotations
of like how they feel about Jeff Bezos.
I mean, I would say like,
I think CZ is a ruthless businessman.
I think he's cold, he's calculated, he's very deliberate.
And I think what he should do in this position
is forfeit the funds that he profited from that investment
because largely I think it was,
it's owed to the customers.
There's so much hurting out there.
So I think they could do a lot of good around that.
I don't know if they will,
'cause I don't know if he sees it in his best interest.
I think that's probably how he's thinking.
But yeah, I think they could have helped
or they could still help there.
- Who do you think suffered the most from this so far?
- The little account holders, this is always true.
So one of the big temptations with fraud,
I've covered a lot of scams, frauds,
is everyone looks at the big number.
Everyone, that's the headline, billions of dollars,
the top 50 creditors, what everyone thinks at first.
But quickly when you dig down,
you realize that most people who lost $10 million,
I mean, I'm sure that's terrible for them.
I wish them to get their money back,
but it's usually the people with like 50,000 or less
that are most impacted.
Usually they do not have the money to spare.
Usually they're not diversified in a sophisticated way.
So I think it's those people.
§05Transcript · 33:30–42:00
I think it's the small account holders
that I feel the worst for.
And unfortunately they often get the least
press time or air time.
- That's the really difficult truth of this
is that especially in the culture of cryptocurrency,
there's a lot of young people who are not diversified.
They're basically all in on a particular crypto.
And it just breaks my heart to think
that there's somebody with a 50,000 or 30,000 or 20,000.
But the point is that money is everything they own.
And now their life is basically destroyed.
Like, you know, imagine you're 18, 19, 20, 21 years old.
You saved up, you've been working, you saved up.
And this is it.
This is basically destroying a life.
- What's so brutal about this is that
this all comes on the back.
The entire crypto market comes on the back of,
comes from the deep distrust of traditional finance.
Right, yeah, 2008,
everybody lost trust in the banking systems.
And they lost trust that if those banking systems
acted in a corrupt way,
that they would receive the justice.
It turned out that the banks received favorable treatment,
people didn't.
So people lost faith in the structure
of our financial system in a way that is,
we're still feeling the reverberations of it.
And so when crypto came along,
it was like kind of this way to reinvent the wheel,
reinvent the world for the like sort of lowly
and the like less powerful
and kind of level the playing field.
So what's so sad about events like this
is you see that fundamentally
a lot of the power structures are the same
where the people at the top
face little repercussions for what they do.
The people at the bottom are still getting screwed.
The people at the bottom are still getting lied to.
And law enforcement is way behind the ball.
- Do you think this really damaged people trust
in cryptocurrency?
- For sure, way bigger than Luna,
way bigger than Three Arrows Capital.
It's because of who SBF was.
It's not just the dollar figure behind it.
It's because he wooed so many of our media elites
who should have been calling him out
or at least investigating him and not rubber stamping him.
It's an indictment of our financial system,
even our most sophisticated people in BlackRock,
in Sequoia who didn't see this coming,
who also rubber stamped him.
And you just wonder like if you can't trust
the top people in crypto who are supposedly the good guys,
the guys saving crypto,
just a month ago or two months ago,
he was the guy on Capitol Hill
that was talking to Gary Gensler,
to all the top people in Washington.
He was orchestrating the regulation of crypto.
If that guy is a complete fraudster, liar, psychopath,
and nobody knew it until it was too late,
what does that mean about the system itself
that we're building?
- So you are one of, if not the best,
like fraudster investigators in the world.
Did you sense, was this on your radar at all,
SBF over the past couple of years?
Were any red flags going off for you?
- Yes, so funny enough,
one of my videos from six months ago or so blew up
because I gotta give a lot of credit to Matt Levine
of Bloomberg, great journalist, great finance journalist.
And I wanna say when I talk about media elite,
there are people doing great work
in these mainstream institutions.
It's not a monolith.
Just like independent media isn't all doing great work
and all the corporate media is bad or whatever.
There's like these overarching narratives
that I don't subscribe to.
So Matt Levine's a great journalist.
He did an interview with SBF where he got Sam
to basically describe a lot of what was going on in DeFi,
but it kind of a larger philosophy around crypto.
And he described a Ponzi scheme
where he just described this black box.
It does nothing, but if we ascribe it value,
then we can create more value and more value and more value.
And it kind of was this ridiculous description
of a Ponzi scheme, but there was no moral judgment on it.
It was like, oh yeah, this is great.
We can make a lot of money from this.
And Matt is like, well, it sounds like you're
in the Ponzi business and business is good.
I made a video about that.
I said, this is ridiculous.
This is absurd, whatever.
It's obscene.
But I didn't explicitly call SBF a fraud there.
And I think if I'm being, I think I saw some of it,
but like many people, I think a lot of us were kind of like,
I think a lot of us missed how wrong everyone could be
at the same time.
I did notice leading up to the crash, what was happening.
And I called it out a day or a day and a half
before it happened.
'Cause I saw my friends post a Dirty Bubble Media.
And this was the first real look
into the heart of their finances.
'Cause they're this black box.
You just kind of had to evaluate them without knowing much.
And once we got a peek under the hood
of what their finances were, I realized, oh my gosh,
these guys might be completely insolvent.
So I made a tweet about it.
I hope some people saw it and got their money out.
But pretty quickly after that, I caught the narrative
of what was really going on at Alameda,
that it was basically this Ponzi scheme that they had built.
- Do you ever sit like Batman in the dark
since you fight crime and wonder, like sad,
just staring into the darkness and thinking,
I should have caught this earlier?
- Yeah, I think--
- In your $10 billion studio.
- $10 million studio. - $10 million studio.
- We're working our way there.
- With a bunch of cocaine on the table.
- It's never enough.
It's never enough.
You always could be catching stuff sooner.
You always could be doing more.
- I mean, the fascinating thing you said
is that one of the lessons here
is that a large number of people,
influential, smart people,
could all be wrong at the same time
in terms of their evaluation of SBF.
- This is one thing that I don't understand too,
is like, I think it's one thing to not see something.
I think it's another thing to like rubber stamp
or explicitly endorse.
I feel like a lot of people didn't look too close at SBF
because I think a lot of the warning signs were there.
But my feeling is, if you're a Sequoia,
if you're a BlackRock, wouldn't you do that due diligence?
I mean, like before just endorsing something,
especially in the crypto space,
this is just why I don't do any deals
in the crypto space ever,
'cause it's impossible to know which ones
are gonna be the big hits or the big frauds or whatever.
But if you're gonna make that bet,
if you're gonna make that play,
you would think that you would do all the research
in the world and you would get sophisticated looks
at their liabilities, at how they were structured,
all that stuff.
And that is the most shocking part,
is not that people missed it because you can miss fraud,
but that there were so many glowing endorsements,
like this guy is not gonna be that thing.
We explicitly endorse him.
I saw a Fortune magazine.
He was called the next Warren Buffett.
It's just crazy.
- Do you think it's possible to have enough
like Tom Brady endorsements
that you don't really investigate?
So like, that there's a kind of momentum,
like societal social momentum.
- I think that's the problem.
I actually think that's hugely a blind spot of our society
is we have all these heuristics
that can be points of failure,
where like a rule of thumb is,
if you go to an Ivy League, well, you must be smart.
A rule of thumb is,
if both your parents are Harvard lawyers,
you must know the law.
You must like kind of be sophisticated.
The rule of thumb is, if you're running
a billion dollar exchange,
you must be somehow somewhat ethical, right?
And all of these heuristics can lead to giant blind spots
where you kind of just go, oh, we'll check.
Like I don't really,
it's a lot of energy to look into people.
And if enough of those rules of thumb are met,
we just kind of check them off
and put them through the system.
So yeah, it's been hugely exposing
for sort of like our blind spots.
- And you don't know maybe how to look in.
For example, there's a few assumptions.
§06Transcript · 42:02–50:26
Now there's a lot of people are very skeptical
of institutions of government and so on,
but perhaps too much so.
- I agree.
- But for some part of history,
there was too much faith in government.
And so right now I think there's faith
in certain large companies.
There's distrust in certain ones and trust in others.
Like people seem to distrust Facebook,
extremely skeptical of Facebook,
but they trust, I think Google with their data.
I think they trust Apple with their data.
- Sure. - Much more so.
Like search, people don't seem to be Google search.
Like, I'm just gonna, I'm gonna put it in there.
Have you ever looked at your Google search history?
Your Google search history has gotta be
some of the darkest things.
- Oh, I don't think I've ever looked
at my Google search history.
- You should. - I'm pretty careful
with like browser hygiene and stuff like that,
because I think it's--
- Well, Google search history,
unless you explicitly delete is there.
I recommend you look at it.
It's fascinating.
Look, because it goes back to the first days
of you using Google search history.
- Fun fact actually about that.
No, no, no, I am aware of that.
I just mean for like certain sensitive topics
where like I'm investigating some fraud
and I go sign into their website, right?
Log in.
I won't use like a traditional browser.
I'll use a VPN and I'll like put it on like Brave
or something like that.
- You log in, your create an account as Lex Friedman.
- Yeah, exactly.
Exactly, exactly.
- You mentioned effective altruism.
- Yes.
- So SBF has been associated with this effective altruism,
which made me look twice at EA and see like, wait,
what's going on here?
Was this used by SBF to give himself a good public image
or is there something about effective altruism
that makes it easy to misuse by bad people?
What do you think?
- Yeah, it's interesting.
He could have endorsed a wide range of philosophies
and I guess you just have to wonder,
would those philosophies also be tainted
if he had gone bad?
I guess effective altruism is sort of unique
because he used it as part of his brand.
It wasn't like he described himself as a consequentialist
and like that ended up mattering.
It was like he described himself as an effective altruist
and he used that part of the brand to lift himself up.
I guess that's why it's getting so much scrutiny.
I think the merits of it should speak for themselves.
I mean, I don't personally,
I'm not personally an effective altruist.
I personally am motivated by giving in part emotionally
and for some reason that I can't exactly describe,
I think that's somewhat important.
I don't think you should detach giving
from some personal connection.
I find trouble with that and like I said,
it's for reasons I can't describe
because effective altruism is sort of the most logical
ivory tower position you could possibly take.
It's like strip all humanity away from giving,
let's treat it like a business
and how many people can we serve
through the McDonald's line of charity
for like the dollar, right?
I just personally don't resonate with that,
but I don't think the entire movement
is like indicted because of it.
Typically most people who care about giving and charity
on the whole are nice people.
So I can't speak for the whole movement.
I certainly don't think SBF indicts the whole movement,
even though I personally don't subscribe to it.
- Yeah, it made me pause, reflect and step back
about the movement and about anything
that has a strong ideology.
So if there's anything in your life
that has a strong set of ideas behind it, be careful.
- Yeah, I mean, look, I kind of feel like
what it teaches me and what I kind of think about
when I think about systems
is that no system saves you from the individual.
No system saves you from the individual,
their intentions, their lust for power or greed.
I mean, I think one of the great ideas
is the decentralization of power.
And like, this is why I think democracies are so great
is 'cause they decentralize power
across a wide range of like interests and groups
and that being an effective way
to kind of try as best as you can
to spread out the impact of one individual
because one bad individual can do a lot of harm,
as I mean, clearly as seen here.
But no, I don't think it has anything to do with ideology
because it's not like being an effective altruist
made Sam Bankman free to fraud.
He was a fraud who happened to be an effective altruist.
That makes sense.
- So there is something about, yes,
no system protects you from an individual,
but some system enable or serve as a better catalyst
than others for the worst aspects of human nature.
So for example, communist ideology,
I don't know if it's the ideology
or its implementation in the 20th century.
It seemed like such a sexy and powerful and viral ideology
that it somehow allows the evil bad people
to like sneak into the very top.
And so like, that's what I mean about
certain ideas sound so nice that allow you,
like the lower classes, the workers,
the people that do all the work, they should have power.
They have been screwed over for far too long.
They need to take power back.
That sounds like a really powerful idea.
And then it just seems like with those powerful ideas,
evil people sneak in to the top
and start to abuse that power.
- Yeah, I think, I mean, I don't have a lot of
probably big brain political takes,
but what I can say is that you can never get away
from both the system and the individual mattering.
For sure, some systems incentivize some behaviors
in certain ways, but some people will take that and go,
"Okay, all we need to do is design the perfect system
"and then these individuals will act completely rationally
"or responsibly in accordance to what our incentives say."
That's not true.
You could also say, "All we have to do
"is focus on the individual,
"and all we have to do is just create a society
"which raises very well-adjusted people,
"and then we can throw them into any system
"with any incentives, and they will act
"responsibly, ethically, morally."
And I also don't think that's true.
So incentives are real, but also the individual
ultimately plays a large role too.
So yeah, I don't know.
I come down sort of in the middle there.
- And some of that is just accidents of history too.
Which individuals finds which system, you know--
- You become the face of that.
- Yeah, with FTX versus Coinbase versus Binance,
which individual, which kinds of ideas
and life story come to power.
That matters.
It's kind of fascinating that history turns
on these small little events
done by small little individuals.
That Hitler's a failed artist, or you have FDR,
or you have all these different characters
that do good or do evil onto the world.
And it's single individuals, and they have a life story,
and it could have turned out completely different.
I mean, it's the flap of the butterfly wings.
So yeah, you're right.
We should be skeptical as attributing too much
to the system or the individual.
It's all like a beautiful mess.
- The Lex Freedman podcast.
That was like a Lex line.
I've heard quite a few episodes,
and that's like such a Lex line.
It's a beautiful mess.
Beautifully said.
- All right.
- Sorry, I'm a fan of the show!
- Okay, all right, I love you too.
- All right.
- Can you think of possible trajectories
how this FTX, SBF saga ends?
And which one do you hope for?
Do you hope that SBF goes to jail?
That's the individual.
And in terms of the investors and the customers,
what do you hope happens?
And what do you think are the possible things
that can happen?
- So A, yeah, I definitely think SBF should go to jail.
For nothing else, for a semblance of justice,
the facsimile of justice to occur for all the investors.
I also think there are people probably
several steps down the chain that probably knew,
§07Transcript · 50:30–58:50
at least Caroline Ellison.
You can have questions about sort of their,
you know, Dan Friedberg,
who I'd love to talk about as well.
There are a lot of people in that room
who I think knew.
I think we do so much of like,
the one guy is all to blame,
let's throw everything at him.
When clearly this was a company wide issue.
So everyone who knew, I think should face
the same punishment, which I think should be jail
for all of those people.
- In part to send a signal to anybody
that tries this kind of stuff in the future.
- Yeah, absolutely.
I mean, one of the big things that you saw,
like, okay, take a microcosm of all of this action
and just look at like the influencer space, right?
There's a ton of deals that were done
that I've covered ad nauseum about influencer finds out
they can make a lot of money selling a crypto coin.
The first thing they wonder is, am I gonna get caught?
If I do this, is there a consequence?
And if the answer is no,
then it's a pretty easy decision
as long as you don't like have any moral scruples about it,
which apparently none of them did,
or a lot of them didn't, I should say.
So as soon as somebody steps in and regulates,
that math changes.
And all of a sudden there's a self-interest reason
to not go do the bad thing.
So for example, and I can give a concrete example of this.
There was a NFT, the first ever NFT
sort of like official indictment
or the DOJ released this press release
that they're charging these guys who ran a NFT project
that they didn't follow through on their promises.
They made all these promises, lied,
and then ran away with the money.
First ever consequence for anyone in the NFT space.
That day that that press release came out,
I saw several NFT projects come back to life from the dead.
Why?
Because all those founders are freaking out
and they realized we scammed people.
We have to go at least make it look like
we're doing the right thing, right?
Even just, so that's on the optic side,
but there's also tons of people who now go,
oh, basically law enforcement is on the scene.
We can't do the same thing.
So there is a very pragmatic reason for this punishment.
It's very much just because people work it into their math
of should I commit fraud?
And the last several years have been very,
sort of has been like a little bit of a nihilistic landscape
where no one was getting punished.
And so there's this question of you're almost an idiot
if you didn't take the deals.
And so I think it's really important,
extremely important for kind of law enforcement
to play a role, regulation to play a role,
to make it harder to commit those crimes.
And if you commit those crimes,
there's actual real world punishment for it.
To your point about like what's gonna happen
to the investors, I think that was kind of your question.
It's tough because if the money's not there,
the money's not there.
I mean, there's gonna be the guy,
they got the best in class guy.
It's the guy who ran the dissolving of Enron.
So I mean, I can't imagine someone better equipped
to run a complicated corporate fraud like dissolution.
But yeah, it's tough 'cause everyone's gonna get probably,
I don't know, 10 cents on the dollar, maybe less.
- I wonder if there's a way
to do a progressive redistribution of funds.
So I'm just really worried about the pain
that small investors feel.
- Yeah, I think there's a lot of thought around that.
I forget if they actually do do this.
I mean, I know there's a lot of law
about like you can't treat creditors differently.
You have to treat them all the same.
So I think it'll be some kind of proportional payback.
It's certainly not gonna be that the guys at the top
get a significant amount of their money back
and the rest get nothing.
Unfortunately, I think there's such a small amount
of assets that back this whole thing in the end.
And that value is actually declining every day
because it was inextricably tied to FBF.
It was like the FTT tokens, which now what are those worth?
The serum tokens, that was his project
or the project they made.
What is that worth?
Basically nothing.
So it's a hard situation.
And there's a bigger ethical concern, which is FTX US,
it's unclear how backed it was,
but it was clearly more backed than FTX International.
Do you take all that money and throw it into a big pot
and give people money back?
Or do you give the US people back their amount of money,
which is probably gonna be significantly more
and leave everyone internationally out in the cold.
And to add to that ethical issue,
let's say you're a liquidator and you're US based.
There's a tremendous question, like legal questions
about how do you ethically do that?
It's not clear.
There's a tremendous incentive
to just favor the US people over everyone else
'cause it's our country, America, whatever.
But I don't know if that's necessarily fair.
It's really hard.
It's like, it's impossible.
- And some, I forget where you said this,
but one of the, I mean, it probably permeates
a lot of the investigations you do,
which is this idea that it's really sad
that the middle class in most situations like this
get fucked over.
So the IRS go after the middle class,
they don't go after the rich.
It's basically everyone who doesn't have a lot of leverage
in terms of lawyers, money, get fucked over.
- Yes, and then they're the ones,
like it's always the rich and powerful
who get the favorable treatment.
As like a microcosm of this, it's a funny story.
So one of the big criticisms of crypto,
and I think rightly so,
is the irreversibility of the transaction.
So if I accidentally send a transaction somewhere,
it's gone, right?
So crypto.com accidentally sent a lady $10 million,
and now they want the money back, and they're suing her.
But the funny thing is, is if you are on crypto.com
and you send, let's say I accidentally send you money
and I come knocking on your door,
Lex, I didn't mean to send you like $1,000,
I need my money back.
Or if I go to crypto.com and I said,
hey, I sent that to the wrong person, can you reverse it?
They'll say, screw off, no way.
If I go to court, they'll kill me in court
'cause they're gonna go, look,
this is how the blockchain works.
But then they do it, they do the exact same thing.
They send this lady $10 million,
they're suing her and they're gonna win.
Now what's in court is not whether they get the money back,
it's should she be liable for theft, I believe.
So, and that's just another case of
the same rules apply differently to different people,
whether you have the money to back you or not.
It's a very sad thing.
And that's why I think people like,
you need journalists fighting for the little person.
We really need it.
And it's kind of like this unfortunate thing
where that's the most risky thing to do, like legally.
You should not be doing that,
but I think it's important to do.
- It's the ethical thing, it's the right thing to do.
What do you think about influencers and celebrities
that supported FTX and SBF?
Do they, should they be punished?
- Yeah, I think they should take a huge reputational hit.
I mean, I think they should be embarrassed.
I think they should be ashamed of themselves.
- But it was really hard to know, sorry to interrupt,
for them to know, like for example,
I think about this a lot.
It's like, who do I, because I don't investigate,
like sponsored by Athletic Greens, okay?
It's a nutritional drink.
Should I investigate them deeply?
I don't know.
You just kind of use reputational,
like it seems to work for me.
Should I like investigate them deeply?
- I think your credibility hit will depend
on what domain you're an expert in.
If you're sponsored by a robotics company
and you're an expert in robotics,
if that company turns out to be a disaster and a fraud,
then you should have looked more deeply.
We're talking mostly about,
like I hold Tom Brady a lot less accountable
than financial advisors, financial influencers,
because that is their world of expertise.
And you treat their recommendation differently,
proportionally to what you think their expertise is.
So in some ways, I don't actually think,
Tom Brady, I'm sure he reached a lot of people.
§08Transcript · 58:52–1:06:51
I personally didn't feel at all moved by his recommendation
'cause you know it's just money.
But when you hear somebody who should be an expert
in that thing, endorse a product in that space.
You hold that opinion to a higher standard.
And when they're completely cataclysmically wrong,
it's gonna be a different level of accountability.
And I think rightfully so.
When Jim Cramer was saying Bear Stearns is fine,
he made that terrible call with Bear Stearns in 2008.
He was rightfully reamed for all of that.
Even though it could be considered that like,
well, did he have all the information?
Maybe not.
But he's a financial advisor.
He does this for a living.
If you go on and you make a big call
and you turn out to be wrong and people lose tons of money,
you are going to take a hit and I think rightfully so.
But no, I don't think these people should go to jail
or anything like that.
- No, but it's such a complicated thing.
I mean, I just feel it personally myself.
I get it, but you still feel the burden of the fact
that your opinion has influence.
I know it shouldn't.
I know Tom Brady's opinion on financial investment
should not have influence, but it does.
That's just the reality of it.
That's a real burden.
I didn't know anything about SBF or FTX.
It wasn't on my radar at all.
But I could have seen myself taking them on as a sponsor.
I've seen a lot of people I respect,
Sam Harris and others, talk with SBF
like he's doing good for the world.
So I could see myself being hoodwinked
having not done research.
And the same thing, it makes me wonder.
I don't want to become cynical, man,
but it makes you wonder who are the people in your life
you trust that are like, that could be the next SBF
or worse, big, powerful leaders, Hitler
and all that kind of stuff.
To what degree do you want to investigate?
Do you want to hold their feet to the fire,
see through their bullshit, call them on their bullshit?
And also as a friend, if you happen to be friends
or have a connection, how to help them
not slip into the land of fraud.
I don't know, all of that is just overwhelming.
- Yeah, I mean, we should be clear.
Finance is sort of a special space
where you're talking about people's money.
You're not talking about whether someone
takes a bad supplement or like a supplement
that is just, they're $50 out.
I think the scale of harm and therefore responsibility
escalates depending on what field you're in.
Just like I wouldn't hold Tom Brady as,
like if he gives a bad football opinion,
and he should have known better,
that is a different scale of harm
than a doctor giving bad advice, right?
Like he tells you a pill works
and the pill kills you or something like that.
There's just different levels of accountability
depending on the field you're in,
and you have to be aware of it.
Finance is an extreme, you have to be extremely conservative
if you're gonna give financial advice
because you're playing with people's lives
and you cannot play with them haphazardly.
You cannot gamble with them.
You cannot play with them on a bet
'cause you're getting paid a lot of money.
It's just the nature of the space.
And so with the space comes the responsibility
and the accountability.
And I don't think you can get around that.
- Who was Dan Friedberg that you mentioned?
Some of these figures in the SBF realm
that are interesting to you.
- Super interesting kind of subject
because Dan Friedberg is the former general counsel
for Ultimate Bet.
Ultimate Bet was a poker site
where famously they got in a scandal
because the owner, Russ Hamilton,
was cheating with a little software piece of code
they called God Mode.
God Mode allowed you to see the guy across from his hand.
Obviously you can imagine you can win pretty consistently
if you know exactly what your opponent has.
Very unethical.
They, I should be clear that for some inexplicable reason,
I don't think they were ever charged
and convicted of a crime,
but they were investigated by a gambling commission
that found they made tens of millions of dollars this way.
For sure.
And Dan Friedberg is the general counsel.
He's caught on a call,
basically conspiring with Russ to hide this fraud.
He's saying we should blame it on a consultant third party.
And Russ Hamilton famously says,
"It was me, I did it.
I don't wanna give the money back.
Find basically a way to get rid of this."
So that's Dan Friedberg's big achievement.
That's what he's known for, he's most known for.
And this is the guy they pick
as their chief regulatory officer for FTX.
Why do you hire somebody who, I get it,
not formally charged and convicted, investigated,
there's all the, and there's tape out there.
So I wanna be clear about
what's actually available evidence.
But someone who's seemingly only achievement
is hiding fraud, why do you hire that guy
if the intention is not to hide fraud?
So this is a question I put to Sam Bankman Fried
and his answer was, "Well, we have a lot of lawyers."
And I said, "Well, it's your chief regulatory officer."
He's like, "Well, it wasn't, we did regulate a lot."
And it was just this big dance of,
basically he's done great work, he's a great guy.
And I think that tells you everything you need to know.
- And there's figures like that probably
even at the lower levels,
like just infiltrate the entire organization.
- Well, it's just like, yeah, why wasn't there a CFA?
Why wasn't there anyone in that space
who could seemingly be the eyes that goes,
holy whatever, we're in dangerous territory here, right?
So yeah, it seems very deliberate.
I mean, I talked to one FTX employee
that they talked about, who's told me they talked about
taking, I think it was taking FTX US public.
And Sam was very against the idea.
And the employee in retrospect speculated
that it might've been because you'd faced so much scrutiny.
Like regulation-wise, like you'd have to go through a lot,
like more thorough audits, all that kind of stuff
that basically he knew they would never pass.
So yeah, I mean, it's red flags all the way down
with that guy.
- And you hope all of them get punished.
- Everyone who knew.
I mean, I think for sure there are people at FTX
who didn't know.
I think there are some people at Alameda who didn't know.
- There's degrees, sorry to interrupt,
but there's degrees of not knowing.
- Yes.
- There's a looking away when you kind of know shady stuff.
That's still the same as knowing, right?
That's might be even worse.
- Well, yeah, like I was talking to one insider
and we were talking about the insider trading.
They were telling me about this insider trading.
And I said, do you think this was criminal?
And they said, it was probably criminal in hindsight, yes.
And the question is, someone who answers a question
like that, what does that like mean?
You know, like it was probably criminal.
So you're right, there are different degrees.
I mean, I'll say at the most basic,
I would be very happy if everyone
who had direct knowledge went to jail,
which I don't think will happen to be clear.
I think a lot of people are gonna cut deals.
Prosecutors are gonna cut deals
so they actually nail Sam Bankman-Fried.
I think that's their only focus.
- What about his reputation?
What do you think about all these interviews?
Do you think they are helping him?
Do you think they're good for the world?
Do you think they're bad for the world?
Like, what's your sense?
And like, say you get a sit down interview
with him for three hours,
and I'm holding the door closed.
Is that a useful conversation or not?
Or at this point, it should be legal.
And that's it.
- I think it's useful.
I mean, I think it's all about how you interview him.
You can interview someone responsibly,
you can interview him irresponsibly.
I think we've seen examples of both.
- What's an irresponsible?
I keep interrupting you rudely.
- That's okay, no, no, no.
- It's unacceptable.
- No, no, no, I think it's fine.
There was like a New York Times interview,
which spends any amount of time talking about his sleep.
And he's like, "Yeah, I'm sleeping great."
§09Transcript · 1:06:52–1:14:35
I mean, I think that's so deeply disrespectful
to the victims.
And especially when you're not even releasing
an interview live, it's like,
you have time to triage what you're gonna talk about.
Why would you spend any amount of time
talking about the sleep that a fraudster is getting?
It's just so weird.
- Well, let's do it.
Can I steal a man in that case?
I don't think it turned out well.
- I think that's true.
I think, okay, here's the thing.
I could see myself talking about somebody's sleep
or getting in somebody's mind
if I knew I have unlimited time with them.
If I knew I had like four hours.
'Cause you get into the mind of the person,
how they think, how they see the world.
Because I think that ultimately reveals,
if they're actually really good at lying,
it reveals the depths, the complexity of the mind
that through like osmosis, you get to understand
like this person is not as trivial as you realize.
Also, it makes you maybe realize that this person
has a lot of hope, has a lot of positive ambition
that has developed over their life.
And then certain interesting ways, things went wrong.
- Yes.
- They become corrupt and all that kind of stuff.
- That's all fine.
But this conversation was not properly contextualized
in the world of what he did.
I've asked about this interview
'cause I was like so curious.
It was out of the New York Times.
And there was not much mention of fraud or jail
or the big crimes like misappropriation
of even client assets.
It was just sort of this, Sam sat down with me,
he's under investigation, but there's not much specifics.
And then it's like, yeah, he's playing storybook brawl,
he's sleeping, and it's just like,
okay, this isn't adding to the conversation.
- Especially when the New York Times,
it's like you should be grilling.
- Right, right, exactly.
So, but as I said, it's all range, the gamut.
And some interviews, some of it's okay,
and then some of it's weird.
The Andrew Sorkin interview,
he asked some hard-hitting questions,
which I really appreciated.
And then at the end, he goes,
"Ladies and gentlemen, Sam Bankman-Fried,"
and everyone gives an ovation for Sam.
I mean, the steel man of that, of course,
is they're actually applauding Andrew Sorkin.
But the way you lay it up,
I wouldn't go like, ladies and gentlemen,
it's like an applause line.
It's like, ladies and gentlemen, the Eagles,
Elton John, Lex Friedman.
And so to go, so you have this like deal book summit
where you have all these important figures
that are positively important.
And at the end, you have Sam Bankman-Fried, a fraudster,
and you go, "Ladies and gentlemen, Sam Bankman-Fried,"
everyone's applauding.
That I think is a net, like I think that's a negative.
I think the way that the optics of that just were all wrong.
And so I think, yeah, you have to be very responsible.
I think it's useful,
going back to how you can usefully do this,
you can, even when somebody's determined to lie to you,
it's always important to pin them down
to an accounting of events,
because that is unimaginably helpful
when it comes to a prosecutor
trying to prove this guy's guilty,
is if you say you didn't do a crime,
but you don't tell me any details about it,
day of the trial,
you can basically make up any story, right?
But if you tell me in detail where you were that day,
I can go hunt down, you say you were with Joe,
I go hunt down Joe and he says he wasn't with you,
boom, you've lost credibility,
and now you're much more likely to be convicted.
So it's really important to get SBF's exact accounting
of how things went wrong,
because right now he's positioning himself
to throw his Alameda CEO, Caroline Ellison, under the bus.
Like she did everything, she knew everything,
I knew nothing.
Well, if Caroline Ellison's gonna take the stand and go,
"Well, I have all these text messages,
"and this is all a lie,
"then Sam Megman Freed is gonna be completely ruined,
"self-ruined by his own design."
So I think it's important.
- So more like a legal type of,
like get the details of where he was,
what he was thinking, what the--
- I think it's like, yeah,
I think the public probably cares
to get to know what happened to,
and again, I think if you're careful,
you can expose someone as they lie to you
without giving into those lies, right?
Like without capitulating to,
"Oh, I'm just gonna assume you're correct."
I think you can point to,
"Well, Lex, you say it happened this way,
"but you've lied about X, Y, and Z,
"why should we believe you?"
That's a suddenly a totally different conversation
than just being like, "Oh, okay, that's how it happened."
- The thing I caught that bothered me,
and the thing I hope to do in interviews
if I eventually get good at this thing,
is the human aspect of it,
which I think you have to do in person,
is he seems a bit nonchalant about the pain
and the suffering of people.
I have red flags about,
in the way he communicates about the loss of money,
like the pain that people are feeling about the money,
I get red flags.
Forget if you're involved in that pain or not,
you're not feeling that pain.
- Well, he'll say he is,
but he'll be playing a game of League of Legends
while doing it.
- No, but I just see it from his face,
that the dynamic, and that needs to be grilled,
like that little human dance there.
I considered, I talked to him,
I considered doing an in-person interview with him.
- Are you still considering it?
- I don't know, do you think I should in person?
- I think it depends if you think you have anything
to add to the conversation.
A lot of people have already done.
- Yeah, there's been already, you did an incredible job.
- Thanks.
I think--
- I think I would like to grill the shit out of him
as a fellow human, but not investigative,
like Coffee's Ill Investigator.
- Yeah, yeah, yeah.
- Like another human being,
another human being who I can have compassion for,
who has caused a lot of suffering in the world.
Like that, that grilling,
like basically convey the anger that people,
and the pain that people are feeling, right?
Like that.
- Yeah, I think it'd be really hard.
I mean, like that guy is sort of a master dancer,
and what he would say at the end of it,
'cause I've listened to so many interviews of him,
I probably am like a GPT model for Sam.
I think he would do some kind of thing about like,
yeah, I really hear you,
and it's just terrible.
I feel such an obligation to the people who've lost money,
and it's just, it's a lot of money.
It's a lot of money.
You know, he'd do something like that,
and it would be very superficially like, okay,
but when you drill down to the details of what he did,
it's just impossible that he didn't know.
And one of the things that I wish I had asked,
maybe I can talk about like,
I wish I had gone on this,
just so hard when you're doing a live interview
to kind of focus on one thing.
Everyone's asked about the terms of service.
So in the terms of service, there was like,
we can't touch your funds, your funds are safe,
we're never gonna do anything with that.
Anytime anyone brings that up, he says, oh,
well, there's this other terms of service over here
with margin trading accounts.
Remember we talked about it, it's a derivatives platform.
If you're in our derivative side,
you're subject to different terms of service,
which kind of lets us like move your money around
with everyone else, okay?
So we treat it as one big pool of funds.
And that's sort of the explanation
of how this all happened is,
we had this huge leverage position,
and we lost everything.
But what no one has sort of done a good enough job
getting to the heart of,
is that this pool of funds never was segregated properly.
It was all treated under the same umbrella
of we can use your funds.
§10Transcript · 1:14:37–1:22:41
There was no amount of, we have the client deposits,
which were just deposited with us
and not like used to margin trade or do anything over here.
These funds over here, we have saved, they didn't.
Fundamentally, they lied from the get go
about how they were treating the most precious assets,
which is your customer deposits
that you said you didn't invest.
Clearly you put them all over here, you YOLO gambled them.
And then when everyone starts withdrawing from here,
they don't have any money over here.
So that is like one of the most fundamental things
that I haven't seen anyone grill him on.
And the next time if I get the chance to ambush him again,
that's what I'm gonna drill down on
because it's impossible for that not to be fraud.
There's no world where you had a pool of funds over here
and now you don't have them
without you somehow borrowing over here.
'Cause if you deposited one Bitcoin
and I never sold that Bitcoin and it's earmarked,
Lex Friedman, and you come and it's not there,
something had to happen, right?
- Well, so this is so interesting.
So for me, the approach that,
like you said, the most important question of,
'cause for you it's like,
were those funds segregated?
For me, the question is, as a human being,
how would you feel if you were observing that?
So like, you know, that like marshmallow test with the babies
like it's the human thing,
this is a human nature question.
Like I can understand there's a pile of money and you,
the good faith interpretation is like,
well, I know what to do with that pile of money
to grow that pile of money.
Let me just take a little bit of that.
Like, how willing are you to do that kind of thing?
How able are you to do that kind of thing?
And when shit goes wrong, what goes through your mind?
How does it become corrupted?
How do you begin to deluge yourself?
How do you delegate responsibility for the failures?
Like, as opposed to getting facts,
try to sneak into the human mind of a person
when they're thinking of that.
Because the facts, they're gonna start waffling.
They're gonna start like trying to make sure
they don't say anything that gets them incriminated.
But I just, I want to understand the human being there
because I think that indirectly gives you a sense of
where were you in this big picture?
- I think I've talked to so many people
who have sort of committed some range of like outright fraud
to like misleading marketing.
No one thinks they're a bad person.
Nobody admits that they did it and they knew they did,
or almost nobody does.
There's actually one funny exception.
But I had a guy who admitted like,
"Yeah, I did it, it was wrong.
And, you know, but I did it and I wanted the money."
Which was kind of like almost refreshing in its honesty.
But the reason I focus on like the facts
is because unless you find a bright red line,
humans can rationalize anything.
I can rationalize any level of like,
"Well, I did this because I had the best of intentions."
And if you play the intention game,
you'll never convict anyone
because everyone has good intentions.
Everyone's honest, everyone's doing the best they can
and got misleaded and got misguided and dah, dah, dah, dah.
Ultimately, you have to drill down to the concrete
and go, "Look, I get it.
You're just like the last 50 guys that I interviewed.
You had the best of intentions.
It all went wrong, I'm very sorry for you.
But at the end of the day, there's people hurting
and there's people that have significant damage
to their life because of you.
What did you actually do?
And what can we prove taking intention out of it,
taking motivation out?
What can we prove that you did
that was unethical, illegal, or immoral?"
And that is sort of what usually I try to go to
because I will do those human interviews,
but it's just like the same record on repeat.
I mean, a lot of people go to the same-
- I'm with you, I'm with you on everything you said,
but there is ways to avoid the record on repeat.
I mean, those are different skillset.
You're exceptionally good at the investigative,
like investigating.
I do believe there's a way to break through the repeat.
There's different techniques to it.
One of which is like taking outside
of their particular story.
Yes, when everyone looks at their own story,
they can see themselves as a good player doing good.
But you can do other thought experiments.
I mean, there's-
- But they'll follow you.
They'll know what the thought experiment is.
- No, well, it depends.
It depends, my friend.
I mean, to me, there's a million of them,
but just exploring your ethics.
Would you kill somebody to protect your family?
And you explore that.
You start to sneak into like,
what's your sense of the in-group versus the out-group?
How much damage you can do to the out-group?
And who is the out-group?
And you start to build that sense of the person.
Are we like the two mobsters that we're dressed as?
Do we protect the family and fuck everyone else?
You're with us and the ones who are against us, fuck them.
Or do we have a sense that human beings
are all have value, equal value,
and we want to, we're a joint humanity.
There's ways to get to that.
And you start to build up this sense of like,
some people that make a lot of money are better than others.
They deserve to be at the top.
If you have that feeling,
you start to get a sense of like,
yeah, the poor people are the dumbasses.
They're the idiots.
If you believe that,
then you start to understand that this person
may have been at the core of this whole corrupt organization.
- Yes, two things.
One, I think you should join me on this side of the table.
We'll put SBF over here.
We'll good guy, bad guy, human, facts.
- You're the bad guy.
I'm like, no, no, no, slow down, coffee.
- What is your feeling about humanity?
Yeah.
- Have you been getting enough sleep?
- Yeah, right.
So I think, no,
I think there's a lot of truth to what you said.
One thing I've noticed that is hard to combat
is sort of like preference falsification.
And just like,
just the outright lying about those things
is tough to kind of pin down.
But yeah, you're absolutely right.
There's ways to interview people.
There's all sorts of interesting techniques.
And yeah, I don't disagree.
- Good cop, bad cop.
We should do this.
This should be like a sitcom.
Okay.
You did an incredible documentary on SafeMoon.
The title is "I Uncovered a Billion Dollar Fraud."
Can you tell me the story of SafeMoon?
- Sure.
So SafeMoon was a crypto coin that exploded on the scene
in 2021, I think at this point.
Sorry, I'm losing track of my years.
One year in crypto is like five years in real life.
But it kind of gained a huge amount of popularity
because of this idea that,
it's in the name,
you go safely to the moon.
How they were gonna do this
is with sort of a sophisticated smart contract idea
where there's,
I kind of have to explain the way some contracts
get rug pulled for a second,
or there's scams happen.
So sometimes it's called like the shit coin space,
the alt coin space,
anything like below Bitcoin, Ethereum,
and maybe the top five or 10
is kind of seen as this wasteland of gambling.
And you don't know if the developers
are gonna become anything or not.
You're kind of like reading the white paper,
trying to figure it out.
So there's this big question about like,
how can you get scammed?
How can, back to the interests,
you don't want the developer to have some like,
parachute cord where they can pull all the money out.
So one way this happens is that in decentralized finance,
there's something called the liquidity pool.
Okay?
It's basically this big pot of money
that allows people to trade
between two different currencies.
So let's say like SafeMoon and Bitcoin, right?
Or Ethereum, or it's actually on the Binance Smart Chain.
So it'd be BNB.
§11Transcript · 1:22:43–1:30:02
And this pool of money can be controlled by the developers
in such a way they can steal it all, right?
They can just grab it.
I don't wanna go too much into details
'cause I feel like I'll lose people here.
But the point of SafeMoon was,
the core idea was we're locking this money up.
You can't touch it.
And actually every transaction that you buy SafeMoon with,
we'll take a 5% tax of that.
We'll do a 10% tax, but 5% of it,
we'll go back to all the holders of SafeMoon.
Okay?
And 5% of it, we'll go back into this little pool of money.
Okay?
So the idea is as you trade,
as this token becomes more viral,
two things will happen.
One, the people who are holding it long-term
will be rewarded for holding it long-term
by receiving this 5% tax that's distributed to everyone.
And two, you can kind of trust
that your money's gonna have this stable value
because this pool of money here in the middle,
that's kind of guaranteeing you can get your SafeMoon out
into this actually valuable currency,
it's not gonna move.
So the story of SafeMoon was that fundamentally,
this was not the case.
They promised that this money was gonna be locked up.
It was not actually locked up at all.
They said it was automatically locked up.
You don't have to worry about it.
Well, it was very manually locked up
and they didn't actually lock a lot of it up.
They took a lot of it for themselves, for the developers.
So there's a lot of players in this.
A lot of them have left by now.
There's kind of this main CEO
that everyone knows, John Karony now.
And despite saying that they were gonna lock up
all the funds for four years,
somehow he's gone from,
as everyone else in the token
has lost 99% of the value of the token.
So they've lost 99%.
He's gotten like a $6 million crypto portfolio,
multimillion dollar real estate portfolio,
invested millions into various companies.
So he's accrued this huge wealth.
And so I made a video basically exposing that
and showing how this coin,
which once had a $4 billion market cap,
is just viral everywhere.
Everyone was talking about it.
Because of these viral ideas,
it is sort of a captivating idea
that by holding it, you could get returns, right?
Like you just hold onto it, you automatically get money.
And it's a viral idea that this money
in the middle in the pot isn't gonna leave you.
When those things turned out to be false,
this community has had a slow death
as a lot of people realized it was a scam.
And there's been a core part of the community,
which gets to an interesting dynamic
we can talk about if you want to,
where they have like doubled down on the belief in Karony.
And so part of it was out of a hope
to let those people know what was really going on
in their coin and like hopefully save some of them.
Not in like some altruistic sense,
but like, or not in like some like, I'm like a hero sense,
but in the sense of like,
I think a lot of them didn't know,
like literally didn't know.
So just sort of like as a public service,
letting them know so they could get their money out
and hopefully save themselves a lot of pain and suffering.
So yeah.
So they really dug in.
So there's- Some did, some did.
Some did, some left.
I mean, a lot of people have left,
but the people who are left
are people with large amounts of safe moon holdings
that are down immensely.
And you can imagine at a certain point in losses,
there's a tremendous psychological pressure to go,
look, I'm in it.
I got to go for the long haul.
And then you want to believe that this thing is legitimate
and will succeed because A,
there's an ego component around, I haven't been scammed.
I'm too smart to get scammed.
It's tremendously,
it hurts psychologically to acknowledge
you've been taken for a ride.
And also you just want this thing to succeed
for your financial wellbeing.
So you like want to believe it.
So there's tremendous psychological pressure
to build cult-like communities around these tokens.
And I've noticed with the incentive of like community built,
it's sort of new to finance.
There's like these meme coins or these cults.
I don't want to,
it's not really fair to call all of them cults.
Like some of them are open to criticism,
but one of the things that defines cults
is they're not open to sunlight or criticism.
There's these financial communities that are opening up
with crypto, with a few stocks,
where if you criticize them, you are attacked.
And the entire community has every incentive
to kind of like downplay your legitimate criticisms
or kind of go after you.
And so it creates this interesting dynamic
that I'm fascinated by.
- What do you think about Bitcoin then?
Do you think it's one of those communities
that does attack you when criticized?
So which, I guess, which coins do you think
are open to criticism and which are not?
- It's kind of tough.
Like no community is a monolith.
So just like, it's just a spectrum of how open they are.
There's just like, there's always this core contingent
of extreme believers who will go after anyone
who criticizes them.
And it's just about how wide of a band
that makes up of the entire token.
- Sure.
How intensely, how active that small community is.
- Correct.
- So it's in Bitcoin, they're called Bitcoin maximalists.
- Yes.
- But you could also call any community's subgroup
like that maximalist, whatever the belief is.
- Correct.
- I don't know.
Dunkin Donuts maximalists.
That community is probably small
in terms of attacking online.
You know which community has a very intense following?
So I got attacked on the internet
when I said Messi's better than Ronaldo.
- Oh yeah.
That's controversial.
- And so that's a very intense maximalist community there.
The other one that surprised me is when I said,
now I did it in jest, okay folks?
I said Emacs is a better ID than Vim.
- I love Emacs.
I agree.
- Listen, I have trauma.
I wake up sweating sometimes at night thinking-
- Emacs master race.
- The Vim people are after me.
They're everywhere.
They're in the shadows.
No, Vim is an amazing,
and it's actually a surprise.
I've recently learned that it's still even more so
than before, an incredibly active community.
So a lot of people wrote to me.
- But do you use SpaceMax?
It's just Emacs and Vim?
- No, I haven't.
I use Raw.
- Old school Emacs?
- But-
- Oh, you gotta use, yeah, yeah, yeah.
- But hold on a second.
I actually recently, I have recently said,
"You know what?
"Let's make love, not war."
And I went to VS Code.
I went to a more modern ID.
- Sure.
- But, 'cause I did most of my programming in Emacs.
I did most of anything as one does in Emacs,
just 'cause I also love Lisp,
so I can customize everything.
Then I realized, like,
like how long will Vim and Emacs be around, really?
I was thinking, as a programmer,
looking like 10, 20 years out,
you know, I should challenge myself to learn new IDs,
to learn the new tools
that the majority of the community is using
so that I can understand what are the benefits and the cost.
I found myself getting a little too comfortable
with the tools that I grew up with.
- Sure.
- And I think one of the fundamental ways
of being as a programmer,
as anyone involved with technology,
based on how quickly it's evolving,
is to keep learning new tools.
§12Transcript · 1:30:04–1:38:19
Like, the way of life should be constantly learning.
You're not a mathematician or a physicist
or any of those disciplines that are more stable.
This is like, everything is changing.
Crypto's, like you said, a perfect example of that.
You have to constantly update your understanding
of digital finance, constantly,
in order to be able to function,
in order to be able to criticize it,
in order to be able to know what to invest in.
So yeah, that was why I did,
I tried PyCharm a bunch,
the whole JetBrains infrastructure,
and then also VS Code, 'cause that's really popular.
I mean, you know, Atom and Sublime, all of those.
I've been exploring, I've been exploring.
But VS Code is amazing.
- You should check out SpaceMax.
I'm just gonna give one more pitch for it.
It's just basically like a customizable configuration.
Well, Emacs is already customizable,
but it's pretty useful.
I'm not even much of a coder,
but for like certain journaling applications
or like time management, like I find it really useful, so.
But anyway, we're so like,
I feel like half this podcast is what it should have been,
and half of it's just us nerding out
about our own engineering, like idiosyncrasies.
Sorry, sorry guys.
- All right, so what were we talking about?
SafeMoon and Bitcoin, Bitcoin.
What do you think, is there,
have you made enemies in certain communities?
What do you think about Bitcoin?
- So I've made certain enemies
in the sort of crypto skeptics space,
'cause there's sort of this range of skepticism
you can have about cryptocurrency.
I'm obviously a skeptic of a lot of it,
but there are certain aspects of crypto
that I think are inevitable,
and I'm gonna do my best to kind of describe those here,
but I'm not committed to any crypto specifically,
but there are some, I've taken a lot of heat,
ironically, for not being skeptical enough.
There's some people who believe that like the entire thing
is a complete waste of time.
There are r/buttcoin on Reddit.
It's an amazing community, actually, it's very funny.
They have--
- What's a buttcoin?
Is that-- - It's like a play
on Bitcoin.
They're like, they're just like,
at least we admit it's a scam.
Very funny guys, very funny people there.
So, but they'll be like, you know,
Coffee's Alicia just admit
that all of it's a giant Ponzi scheme.
All of it's basically like not real.
- So everything including Bitcoin?
- Yeah, it's all basically, all the Ponzinomics,
it's Ponzinomics all the way down.
It's like there is no fundamental use case
that is that useful.
I don't know if, I guess I don't wanna straw man them here.
I don't wanna say that,
I don't know if they're saying that it's all useless.
At minimum, they're saying the level of interest
in cryptocurrencies is far,
the actual usefulness of it is far less
than the amount of attention and time and money
that's being poured into it.
So like the revolutionariness of this technology
is not at all revolutionary.
Let me kind of steel man what I think the pro crypto take is.
I think that technologies are sort of this inert thing
and the success of them in my opinion is not based on PR,
it's not based on marketing,
it's based on cheaper, faster, better.
Fundamentally, the success of any technology
relies on those three things and longevity of it.
So I have two employees
and both of them are out of the country.
So I have to frequently make
international wire payments to them.
- Is one of them SPF, just as a reporter I have to ask.
- No. - Okay.
He's not on the payroll.
- Yeah, I think he'd have to pay me.
- I'm trying to do my best Coffeezilla words,
I can hard hit investigative questions.
- So with these international payments,
you face all sorts of slow fees
and you face like kind of like this time thing
and it's this painful process.
So if I use different cryptocurrencies,
some of them are like really fast,
some of them have really low fees.
I just believe in a world where digital currencies
with fast payments, with cheap payments,
revolutionize the global exchange of currency.
And I don't know if this is going to include the blockchain,
it's just that the blockchain is the first thing
that's really embraced truly digital currency,
which doesn't need to go through this complicated system
of wire transfers and just happens.
So I can send you,
let's say I wanna send you Ethereum or Bitcoin,
I can send it to you just as fast,
if I send you a dollar or a billion dollars
and I can send it to you just as fast
if you're across from me
or if you're across the world from me.
That I think is a step change in easier, faster, better
in terms of like just this really basic
international payments kind of idea.
So I think at like its core,
if the lowest form use case of cryptocurrencies is that,
I think it will change the world in some variety.
It's just kind of the larger question is,
is that technology going to include
the blockchain specifically or not?
The other benefit is transparency,
which I personally like as an investigator.
It's just that previously it's like hard to describe
how opaque our financial system is
until you've tried to investigate someone or something.
Understanding finances, unless you have a subpoena,
unless you're like the FBI or like the SEC
and you can get a subpoena for someone's finances
or you're going through discovery,
you don't know what someone has.
You're basically playing poker with everyone
and the cards are face down.
For the first time, the blockchain to some extent,
'cause there are ways to obfuscate it.
And in some ways cryptocurrency has enabled more fraud,
which is kind of this irony.
But in some ways it's enabled people
to also audit a lot better and in real time.
And I think that is a structural change
that is fundamentally for the better.
The question of all this is,
do those betters outweigh the cons that this introduces?
And how much can regulation mitigate those cons?
Some of those cons being like fraud, money laundering,
all these negative externalities
that are easier with cryptocurrency.
- Why do you think cryptocurrency in particular
seems to attract fraudulent people?
Like scammers and fraudsters?
- 'Cause it's unregulated, it's the wild west
and you can transmit large amounts of money
very quickly across the world.
- What about-- - With very little oversight.
- Creating new crypto projects, like new coins.
Because you have to show very little actual use case,
you can just promise.
So it's like true of any emerging technology.
So much vaporware happens at the beginning
when it's all promise.
Because fundamentally, let's say you're legitimate,
I'm illegitimate.
We look the same at the start of a technology.
'Cause both of us are promising what this can do.
And in fact, the less scruples and morals I have,
in some ways I can out-compete you.
'Cause I can say mine does what Lexis does,
but like way better and way faster
and it's gonna happen in a year rather than 10 years.
You're being honest, I'm playing a dishonest game,
I look better.
Once this space matures
and you actually have some people actually doing the things
that they say they're going to do,
suddenly this equation changes.
Now you're Amazon, you're delivering in two days,
I can say whatever I want.
You do the thing you do and I have no credibility.
So I think that like part of the fraud is,
just the ability to transmit so much money so quickly
with such little oversight.
Part of it is like, this just happens
with any emergent technology.
Vaporware is a real thing.
And hopefully as this space matures,
as regulation comes in, things will improve.
- Well, let me ask you your own psychology.
- Sure.
- You're going after some of the richest,
some of the most powerful people in the world.
Do you worry about your own financial,
legal and psychological wellbeing?
- Yes.
Yeah, I do.
I mean, I'm not totally oblivious to the precariousness
of like any kind of journalism like this.
Obviously there's risks.
§13Transcript · 1:38:20–1:46:51
I've always believed, there's a quote
and I'm going to butcher it,
but I hope you guys understand the spirit of it.
News is when you print something,
someone else doesn't want you to print,
everything else is public relations.
I really believe to do meaningful journalism,
you have to go after people.
Like it's not inherently a safe profession.
I mean, if you're going to do important work,
you have to have risk tolerances.
And I think everyone has a line
of what that risk tolerance is.
And it's different for everyone.
I don't think I could do what Edward Snowden did.
I think that would be my bright red line,
is going against my own government.
It's such a, in my opinion, I really see him as a hero.
Like it's such a selfless act of self-destruction.
You know that the party you're going after
has all the power and will crush you.
And you do it anyway out of the like the true,
I don't know, platonic ideal of journalism.
I think that's beautiful.
I don't think I could do that.
I think I need some ability to live and subsist
in the society that I am in.
And I think my bright red line would be like,
if I'm forced to flee the country for my work,
I think I'd finally have to say no.
But for as journalists go, I'm pretty risk,
I take risk pretty well.
I especially like think risk is important to take
when you're young and when you can do that.
I think when I have, I mean, I'm married.
So when I have a family,
I think I will probably dial this risk thing down,
just being honest.
I mean, I think you kind of have to.
But right now, I mean,
I'm kind of like running on all cylinders.
I'm willing to take on quite a range of people,
but I think a lot about it.
- Wolfpack of one or small.
- Yeah.
- As opposed to having like a New York Times behind you
or a huge organizations with lawyers,
with a team, with a history.
- These people are less courageous.
This is the dirty truth.
The bigger the organization,
the more conservative a lot of them are.
It's true that sometimes they like,
and this is not to bash big organizations.
I'm just saying this as an observation
of someone who's talked to a lot of people.
And especially in the world of fraud,
a lot of them are scared to engage in fraud
that is obvious, but hasn't been litigated yet.
This is why you'll never see documentaries
about ongoing fraud on Netflix.
It's too much of a liability.
They'll sue Netflix to hell.
And they know that if they win,
Netflix has the money to pay it.
So corporations like the New York Times,
a lot of these, some of them are very,
like they're as courageous as they can be.
But at the bottom line,
if someone sues you to hell and back
and you have to pay up,
you will disappear.
And you're relying on liability insurance,
which you're already paying out the ass for
to try to cover you if you get sued.
But if you get sued, even if you win,
that liability insurance now goes up in price
the next year.
And if you're the New York Times,
it goes up by a lot.
So, I mean, I think there's work
that independent journalists can do uniquely
that they can actually take like in some ways more risk
than a giant institution,
which has a lot more in my sense to lose,
even though it would appear like they have
more in terms of defense too.
- But you get, you can be bullied legally.
- Yeah.
- Do you get afraid of that?
- Sure, I mean, I just,
all these things are things you have to be aware of
and then forget to do your job.
Like you have to be,
you know, it's like being like a snowboarder
and it's like, do you realize you could hit your head?
And it's like, yeah, of course.
But in order to go do the flip or whatever,
you have to just accept the risk,
mitigate the risk as much as possible and move on.
So we have like insurance,
we keep like a pool of funds for that kind of thing.
Like I'm very conservative with how I spend my money
basically all on production
and like trying to make my life as secure as I can.
And then I just do the work that I, you know,
I want to do because.
- So 99% of your fund goes into the studio
and then into that elaborate space of yours.
- Yeah, of course.
- How many kittens had to die to manufacture that studio?
But anyway, that's my investigation for later.
What keeps you mentally strong through all of this?
What's your source of mental like strength
or your psychological strength through this?
- I think there was a time
when I was getting a lot of cease and desist.
Some people were like actually like saying
like they're gonna show up to my house,
all that kind of stuff.
I don't think I was that,
I think I was pretty worried about that for a while.
My wife was a huge source of strength here
where she was like, hey, if you're not comfortable with it,
you need to get out of the game
or you need to basically like suck it up
and like, this is what it is.
If you're gonna go after these people,
you have to basically be mentally strong around this
and seeing her have that realization
helped me have the same realization
and I really deeply admire and respect that about her
and it solved a lot of my concerns around that.
It just made me realize every profession has risks.
It is what it is, you mitigate and then you move on.
- Why do you think there's so few journalists like you?
You're basically the embodiment,
at least in the space you operate,
of what great journalism should be.
Why do you think there's very few like you?
- That's such an enormous compliment
and probably overstatement,
but I first want to pay respect.
There are a lot of great journalists
and a lot of them are like,
I don't wanna just kind of take it and go,
yeah, it's just me.
There's so many great journalists.
Matt Levine, Kelsey Piper,
you've got anonymous journalists like Dirty Bubble,
you've got citizen journalists like Tiffany Fong,
but I think if you're gonna be in this space
in the long term, you do need to accept certain risks
and I think in the long term,
it's like I don't know how easy it is to play that game
for a long period of time
because you make,
to do great journalism, you don't get paid a lot
compared to what you could get paid
if you did press pieces or anything like that.
You take a lot of risks legally,
you take physical risks, you take,
it's just like if you care about money,
it's not the profession
and I feel like a lot of people,
when they get notoriety, they move to like,
well, I can just maximize the money security side of things
and I think it takes out a lot of would-be great journalists
- And also, so first of all, comfort
of physical and mental wellbeing.
- Yes.
- And also being invited to parties with powerful people.
- Absolutely.
- You make enemies, rich and powerful enemies doing this.
- Yes.
- But that's why it makes it, that's why it's admirable.
I mean, it's an interesting case study
that you've been doing it as long as you have
and I hope you keep doing it,
but it's just interesting that it's rare.
- I'll say, I wanna make a call,
like I think societies can create better journalists
and worse journalists insofar as they support the journalists
who are doing great work
and I wanna call out Edward Snowden specifically
because what we have done to him is such a travesty
and the only lesson you can learn
if you're a logical human being
is that you should never whistleblow
on the United States government
after looking at what they did to Snowden.
So as a society, we can put pressure on lawmakers
to make it easier for people to do the great work
by not punishing the people who do great work,
if that makes sense, and de-risking it for them
because we shouldn't expect journalists to be martyrs
to do great work, right, to do important work.
And part of that comes from protecting whistleblowers.
There's like very common sense things.
I love like, it's great to heroicize,
§14Transcript · 1:46:55–1:56:05
people like Edward Snowden and stuff like that,
but we shouldn't expect them to be heroes to do that work.
- Do you ever think about going,
you've been focused on financial fraud.
Do you ever think about going after other centers of power?
Like--
- Government. - Government, politics.
- Politics, it seems to me, you can't do good work.
Like everybody doing good work in politics is to some extent
from my limited perspective, as I said,
I'm not that into it.
It seems like everyone has to take a side
because even if you do great work,
whoever you're exposing, half the other people,
no matter how good your work is,
are going to claim it's just for partisan hackery
and they're going to malign you.
So it seems like a lot of journalists have to take a slant,
even if it's not explicit like bias,
they have to take a slant on who they expose.
I hate that.
I would really like a world where you could freely expose
both sides without having a constant malignment of like,
you know, who are you working for?
Or you did this for X, Y, Z or whatever.
Like, I really find that deeply problematic
about our current journalism in the political sphere.
As far as government stuff, I think it's easy to do,
not easy, but like, it's much more enticing
to do foreign journalism than to do local journalism
on positions of power.
'Cause if you question, it's so easy to just get,
the bigger cases you expose locally, you get in danger.
Like it's just like very clear cut.
The bigger the case, the more your financial wellbeing,
your access, your entire life is like sort of in jeopardy.
Whereas if you do foreign journalism,
you can do great work and largely you're protected
by your own government.
So it's kind of this weird thing where if you want
great journalism on America, sometimes going abroad
might be the way to go.
- But the politician thing, that's interesting
you mentioned that and going abroad.
I think the way you think about your current work,
I think applies in great journalism in politics as well.
So what happens, I have that sense,
'cause I aspire to be like you in the conversation space
of like with politicians.
I tried to talk to people on the left and the right
and do so in non-partisan way and criticize,
but also steel man their cases.
What happens, I've learned, is when you talk to somebody
on the right, the right kind of brings you in,
it's like, yes, we'll keep you comfortable, come with us.
And then the left attacks you.
And so, and the same happens on the left.
You talk on the left, the right attacks you
and the left is like, come with us.
So like there's a temptation, a momentum to staying
to that one side, whatever that side is.
The same with foreign journalism.
You can cover Putin critically.
There's a strong pull to being pro-Ukraine,
pro-Zelensky, pro, basically really covering
in a favorable way to the point of propaganda,
to the point of PR, the Zelensky regime.
If you criticize the Zelensky regime,
there's a strong pull towards then being supportive
of not necessarily the Putin regime,
but a very different perspective on it,
which is like NATO is the one that created that war.
There's narratives that pull you.
And what I think a great journalist does
is make enemies empathize and walk through that fire
and not get pulled in to the protection of any one side
because they get so harshly attacked
anytime they deviate from the center.
- Well, and I think also like there's a criticism
of all centrists, which I think in some way is fair.
And I say that as someone largely who's a centrist,
which is that this, what about is, or like this,
like what about the left or what about the right
can skew when it's not a both sides issue?
So in the case of like Russia, Ukraine,
I think like I'm strongly in favor of Ukraine,
even though I tend to go like on both sides.
And that might be partly because
one of my employees is Ukrainian.
And I think what a great journalist does,
especially like in politics,
is I think they criticize the regime that's most in power,
most controls the keys and is the most corrupt at that time.
And they might appear to be like,
let's say during the realm of Trump,
a great journalist would criticize Trump,
but that same journalist who held Trump's feet to the fire
should be capable of holding Biden's feet to the fire
four years later, if that kind of makes sense.
- That's exactly right, yeah.
So any revealing any, so attacking any power center
for the corruption, for the flaws they have.
- Irrespective of like your political agenda
or your political ideas.
- So that, and that's what I mean about
sort of the war in Ukraine.
There's several key players,
NATO, Russia, Ukraine, China, India.
I mean, there's several less important players,
maybe some of the like Iran and like Israel and maybe Africa.
And what great journalism requires
is basically revealing the flaws
of each one of those players,
irrespective of the attacks you get.
And you're right that throughout any particular situation,
there is some parties that are worse than others
and you have to weigh your perspective accordingly.
But also it requires you to be fearless in certain things.
Like for example, I don't even know
what it's like to be a journalist covering China now.
- Oh, that's an exact case of like,
China has made it so difficult to be a good journalist
that they've effectively squashed criticism
because to be a journalist in China
means constantly risking your life every single day
to criticize that government.
And so the best journalists
are a lot of times outside the country
or they have sources inside the country
who are like, there's like this,
different, there's layers to the journalism
where there's insiders who are leaking information,
but they themselves cannot publish
because it's like, it's extremely risky.
So yeah, I think as a society,
one measure of how healthy the political structure is
is how well you can criticize it
without fearing for your safety.
- In that sense, the chaos and the bickering
going on in the United States politics is a good thing.
That people can criticize very harshly.
- Very harsh.
- And be in terms of safety are pretty safe.
- Yes, absolutely.
I think our only challenge is like,
where it gets dangerous is around top secret information.
The government comes down so hard
that the danger in covering politics here
is you can expose something that's top secret
that should be exposed and they'll ruin you.
- So that's where you again give props to Snowden
for stepping up.
- 100%, 100%.
- What's the origin of the suspender wearing Batman?
How did you come to do what you do?
Like we talked about where you are
and how your mind works, but how did it start?
- I've kind of always been interested in fraud
or at least I saw fraud early on
and I was just like curious about what is this?
I didn't know what I was really looking at.
So basically my mom got cancer when I was in high school
and it was pretty traumatic.
I mean, she's fine.
She had thyroid cancer, which is,
we didn't know it at the time.
It's like cancer is cancer,
but it's fairly easily treatable with surgery.
It's one of the better survivable ones.
And I just watched her get like bombarded
with all these like phony health scams
of just like colloidal silver,
all these different like remedies.
And she was very into all the different ways
that she might treat her cancer.
And obviously surgery is very daunting.
And I was just confused.
I was like, why are we doing so many different remedies
that all seem a very dubious health value?
Later I'd find out that these are like all grifters.
I mean, they take advantage of free speech in America
to like advertise their products as life-saving miracles,
whatever, when they're of course not.
Eventually she got the surgery, thank God.
But I know people in my life who their parents passed away
because they didn't have the surgery.
They instead took the alternative option.
I know like, I don't wanna go into specifics
'cause I don't wanna mention their specific like case,
but their family member went to Mexico
for some alternate treatment, health treatment,
instead of getting an easy surgery and they died.
And so it's like, I realized,
where is the outrage about this?
Where's the, who covers this stuff?
And I realized, well, not many people do.
Then I went to college,
I was getting a chemical engineering degree
and all my friends were like telling me,
hey, you should come to this meeting.
§15Transcript · 1:56:06–2:03:50
We don't need this.
Like you're doing this engineering stuff, that's great.
You're gonna make like 70K a year,
but don't you wanna get like rich now?
Like why wait till you're 60 years old to retire?
Like you can be rich now, Lex.
So I'd go show up to a hotel and there'd be an MLM,
like multi-level marketing pitch for Amway
or whatever it was that day.
And I was once again fascinated.
I didn't know what I was looking at, but I was like,
what is this weird game we're all playing
where we sit in this room,
we're looking at the speaker who says he's so successful,
right, but why is he taking a Friday or a Saturday
to do this pitch at night?
And they're gonna telling me I'm gonna be financially free,
but they're working on their Saturday and Sunday.
And so it's like, how financially free are they?
So I was just like confused.
I was like, none of my friends were rich.
They all said they were gonna be rich.
No one ever seemed to get rich.
And so I was sort of baffled by what I was looking at.
Later, I graduate.
I had no interest in doing engineering,
which we can kind of get into,
but I wanna do something in media.
And I started covering a variety of topics,
but eventually I sort of revisited this interest in fraud.
And I started talking about these kind of
get rich quick grifters that were online,
sort of the Tai Lopez variety, 67 steps or whatever,
like five steps to get rich, five coins to 5 million,
these get rich quick schemes
that a lot of people were interested in.
No one seemed to get rich once again,
except for the people at the tippity tippity top
selling the get rich quick thing.
And I was fascinated by the structure of it.
I was like, does nobody see what this is?
Does nobody get it?
So I started making a series of videos on that.
And the response was like palpable.
I mean, it was like, I've made a lot of stuff before that.
I'd made stuff that got a million views.
I'd had like some marginal success,
but the response of like the emails that came in,
I could tell this work,
even though it had far less views at the time,
was having a different level of impact.
And that's what I was really interested in.
One of my problems with engineering was from my standpoint,
I did chemical engineering at Texas A&M.
And I was like, is my future
just gonna be in a chemical plant,
improving some process by 2%?
And that's like my gift to the world.
I didn't see the hard impact.
And that maybe that's a lack of imagination
'cause chemicals matter,
but I wanted to see an impact in the world.
And so when I did started doing this fraud stuff,
exposing fraud, I clicked in my brain.
I was like, whoa, this is kind of doing what I want to do.
And so I started posting videos.
At first it really focused on like get rich quick scheme,
grifty advertising, which I think is super predatory
and we can go into why,
but it eventually graduated to crypto
and it snowballed I guess,
'cause now we're talking to Sam Bagnett-Fried.
- Okay, grifty advertising.
So actually there's a step back.
What is a multi-level marketing scheme?
'Cause I've experienced a similar thing.
I remember I worked at,
I sold women's shoes at Sears in a bank.
And I just remember like some kind of,
I forgot the name of the company,
but you'd like, you can sell like knives or whatever.
Like that's a common.
- Oh, I know what you're talking about.
- I'm sure there's a lot of things like this, right?
And I remember feeling a similar thing, like why?
To me, what was fascinating about it is like, wow,
like human civilization is a interesting,
like a pyramid scheme.
Like I didn't, maybe didn't know the words for that,
but it's like, it's cool.
Like you can like get in a room
and you convince each other of ideas
and you have these ambitions.
There's a general desire, especially when you're young
to like, like life sucks right now.
Nobody respects you.
You have no money and you wanna do good.
And you wanna be sold this dream of like,
if I work hard enough at this weird thing,
I can shortcut and get to the very top.
I don't know what that is.
And I also in me felt that like life really sucks
and I could do good.
And I'm lucky I found a way to do good.
I'm like, and I don't know, you connect with that somehow.
I think there's like this weird fire inside people
to like, to make better of themselves, right?
I don't know if it's just an American thing or if it,
but anyway, that was fascinating to me
from a human nature perspective.
- Grifters play on this though, right?
Like this is, so the best salesmen play on true narratives
that you already believe.
So the true narrative is, you know, life is unfair.
It is tough.
The American dream as described by go to a job,
work at the same company for 40 years and then retire
to a safety net that you're positive is gonna be there.
That is largely dead.
And so they like play on those fears and those problems
to then sell you a pill, a solution, a thing.
And the problem is that the solution is usually worse
than even the problem they sketched out.
Like you will do better most of the time
by going with the regular company
than you will by going with these goofy
multi-level marketing.
But let me answer your question.
What is a multi-level marketing?
So there's a criticism, first of all, that,
well, let me get to what it is in theory.
Like at its most ideal, multi-level marketing
is where you have a product that you're selling.
And one of the ways you help sell it
is by rather than going through traditional marketing,
like where you go and you put out print advertising,
it's like sort of a social network of marketing.
I sell to you and then actually Lex,
not only can I sell to you,
you can then go sell this product
and you'll make money selling it.
And you know what, to incentivize me to get other salesmen,
'cause when I get another salesman,
I'm actually giving myself competition.
So that's bad.
So to incentivize me to do that,
they'll pay me part of what you make, right?
And then you go out and you go,
okay, well, I can sell this product.
I also can get new salesmen to like sell for me
and I'm gonna make money from you, whatever.
So it goes down the line of you create multiple levels
where you can profit from their marketing, right?
The problem with this system
is that however well-intentioned it is,
is that usually the emphasis of that selling
and making money ends up not being about the product at all
and ends up entirely being about recruiting new people
to recruit new people to recruit new people.
That's the real way to make money in multi-level marketing.
This is where the very true criticism
of most multi-level marketing, if not all,
are pyramid schemes in structure.
Because what a pyramid scheme is,
is it's all about I put in $500
and I recruit two people to put in $500
and that comes up to me.
And they get two people to put in $500 and it goes to them.
And the reason it's a flawed business model
is in order for it to work and everyone to make money,
you'd have to assume an infinite human race.
And so that's not the case.
Most people end up getting screwed in multi-level marketing
and in pyramid schemes, that's what that is.
That's that thing.
- And the quality of the product,
it doesn't necessarily matter what you're selling.
- To people who are financially incentivized
to buy this thing.
- Yeah, and so you're selling the dream of becoming rich
to the people down in the pyramid.
- That's the real product of multi-level marketing,
unfortunately.
And so you look at the statistics of these companies
and although they'll make it seem like it's so easy
to be the top 0.1% who's making all this money,
the statistics are that 97% make less than a minimum wage
doing this.
They spend an enormous amount of time.
And just what's so cruel about it is
that's not advertised up front.
I mean, it's like, if I go work at McDonald's,
I know what I'm getting.
If I go work at Amway, I have visions of,
they've sold me visions of beaches and whatever
and more than likely I'm losing money.
So better than 50% of people lose money,
but 97% of people make less than minimum wage.
It's like, it's such a bad business
for the vast majority of people who join it
§16Transcript · 2:03:53–2:11:28
and the people at the very top
who are lying to the people at the bottom
saying they all can do it when they can't
are making all the money.
So it's, yeah, it's really messed up.
- The interesting thing I've noticed,
maybe myself too, 'cause I've participated
in the knife selling for like a short amount of time.
That's probably the experience that most people have.
- That's Cutco, is it?
- I don't know.
I don't think it was Cutco.
- I know what you're talking about.
It's killing me.
- There's several variations of it.
I think I was part of a less popular one.
It doesn't, I keep wanting to say it was called Vector.
- Yeah, yes.
Something with a V was what I was gonna say.
It might be Vector.
Yeah, I get what you're saying though.
It's a multi-level marketing knife selling.
- But the thing is, I just remember
my own small experience with it
is I was too, I was embarrassed at myself
for having like participated.
I think there's an embarrassment.
That's why people down in the pyramid
don't like speak about it, right?
I'm trying to understand the aspects
of human nature that facilitate this.
- Well, this is one of the problems with fraud
is there's a tremendous embarrassment to being had.
Also, if you buy, so slightly different human nature
is that if you buy into a get-rich-quick scheme
and then it doesn't deliver,
you're more likely to blame yourself
than blame the product for not actually working.
You go, well, there must be something flawed with me.
- That's true.
- And they constantly reinforce this.
They go, well, it's all about your hard work.
The system works.
Look at me, I did it.
So if you're failing,
it must be some indictment of your character
and you have to always double down.
You have to double, the system can't be flawed.
You must be flawed.
And so, yeah, it's a really messed up system.
It really preys on people's psychology
to keep them in this loop.
And that's why in some ways these things are so viral,
even though they don't actually get most people
a significant amount of wealth
and they cost most people money.
So it's very unfortunate.
- Most people do have the dream of becoming rich.
Most young people.
- Right, and the thing is,
is that everyone knows in business, what do you sell?
You sell solutions to problems.
So if so many young people wanna get rich,
the product is that pitch.
It's you sell them the dream.
Why this gets so grifty and so cruel and predatory
is because there is no easy solution to this.
There is no solution that people are gonna buy
because the real solution people want is no work,
no education, no skills required, no money upfront.
And people will pay any price for that magic pill
and people are happy to sell that magic pill.
And I think those people are very cruel
and I think deserve to get exposed for it.
- So somebody that's been criticized
for MLM type schemes is Andrew Tate.
Somebody that I'm very likely to talk with.
So for people who have been telling me
that I'm too afraid to talk to Andrew Tate,
first of all, let me just say,
I'm not afraid to talk to anyone.
It's just that certain people require preparation
and you have to allocate your life in such a way
that you wanna prepare properly for them.
And so you have to kinda think who you want to prepare for.
'Cause I have other folks that have more power
than this particular figure that I'm preparing for.
So you have to make sure you allocate your time wisely.
But I do think he's a very influential person
that raises questions of what it means
to be a man in the 21st century.
And that's a very important and interesting question
because young people look up to philosophers,
to influencers about what it means to be a man.
They look up to Jordan Peterson,
they look up to Andrew Tate,
they look up to others, to other figures.
And I think it's important to talk about that,
to think what does it mean to be a good man in this society?
Of course, in the other gender, there's the same question,
what does it mean to be a good woman?
I think obviously the bigger question
is what does it mean to be a good person?
But-- - It's for men podcast.
- I swear to God.
(laughs)
Now we're into, okay.
So that said, one aspect of the criticism
that Andrew's received is not just on the misogyny,
is on the MLM aspect of the multi-level marketing schemes.
So is there some truth to that?
Is there some fraudulent aspect to that?
- So yeah, I definitely think so.
I mean, that's the main reason I criticized him.
So let's back up.
There's a few clarifications I need to make.
What Andrew Tate is selling is not multi-level marketing,
although he is selling the dream.
He's selling an affiliate marketing thing,
which is slightly different.
So in multi-level marketing, if I sell to you,
and then you go sell to two other people,
I make money from those two other people down the chain,
multi-level.
Affiliate marketing is sort of like one level.
I only make money.
So Andrew Tate had this affiliate program
where if you sold Hustler's University to somebody else,
which sounds like something people would,
boomers would put on Facebook in like 2010,
like I went to Hustler's University.
School of Hardware.
- By the way, you were a member of Hustler's University.
- Yeah, I joined.
I joined, I became a Hustler.
That's in large part due to why I'm so successful
is because of my Hustler University membership.
I'm just kidding.
But so it's an affiliate program.
So you'd sell, like I sell to you this $50 course,
and I make like $5,
and Andrew Tate in perpetuity makes $50 a month off of you.
Okay.
What does this course actually sell, right?
'Cause ultimately he's selling the dream.
He's selling, hey, the matrix has enslaved you.
He's really gone down this like neo rabbit hole.
So the matrix has enslaved you.
Your life is controlled by these people
who wanna keep you like kind of weak, you know, lazy,
whatever, you need to break out,
and you need to achieve the new dream,
which is sort of like hustling your way to the top.
You don't need the antiquated systems of school.
You can just pay me $50 a month,
and I will teach you everything.
Okay.
So what do you actually get?
Well, and why is it a scam?
So you actually,
I think it's just a scam in terms of like value
and like you're selling based on
these completely unrealistic things.
He's like, let's get rich.
Okay.
You get a series of Discord rooms.
So you, do you know what Discord,
most people know what Discord is.
It's like a bunch of, you know, chat rooms basically, right?
- So it's like AOL or is it like-
- Yeah, yeah, yeah, right, right.
Well, I'm talking to the guy who quit Emacs,
so I don't know.
There's Discord servers,
and in these like, there's like seven different rooms
you can go in, or there's several rooms,
and each one is like a different field of making money.
- Yes.
- E-commerce, trading, cryptocurrency,
I think fulfillment by Amazon,
like copywriting.
Okay.
So I went to all of these, I checked them out.
I checked all their money-making tools.
The first funny thing is that Andrew Tate
is nowhere to be found.
The supposed successful guy that you like bought into
is nowhere to be found.
It's these professors that you have now,
he is hired and said, "These guys are super qualified."
So like looked up some of what some of these guys have done,
and some of them have launched like scammy crypto coins.
The cryptocurrency professor was like shilling
a bunch of coins that did bad,
and then like deleted the tweets.
I mean, just completely exactly what you'd expect.
Behind the paywall, it's nothing of substance.
You're not gonna learn to get rich by escaping the matrix
and going to work for Jeff Bezos.
Fulfillment by Amazon is not escaping the matrix, right?
§17Transcript · 2:11:31–2:20:11
Like that's not the way to hustle to the top.
It's literally a field of making money
that everyone in the world has access to.
If you wanna differentiate yourself and make money,
the first thing you realize is going into skill sets
that literally anyone with an internet account can do
is a bad way to do that,
because you have to have some differentiating factor
to add value.
So it's just such a obvious and complete scam,
because there is no value to this like so-called education.
The professors are crap.
The advice, they're like hiding
some of the bad things they've done,
and Andrew Tate's nowhere to be found.
Ultimately, that's why everyone joins.
What he's done is very interesting,
because, and I'll give him credit in his marketing,
he's been very savvy to like make the reasons
you admire him, not the thing he's sort of selling,
which is weird.
Like he's selling get rich quick,
which seems like it relates to his persona,
but is actually very orthogonal to it.
His persona is like the tell it how it is,
like tall, buff, rich guy.
It's like actually his persona that you're buying into,
and then he's selling you this thing to the side,
which when people get in there
and they're not delivered on the product,
he still is those things that you first thought he was.
So it's like, I think to some extent,
he's made a lot of money by making the thing
that he makes money on,
not the thing he gets so much pushback online for,
and what he's also loved for.
So people will push back for his misogyny,
but the real way he's making money is just like basic
get rich quick schemes that are super obvious to spot,
but everyone's distracted by like,
oh, he said some crazy stuff about women,
or all these various other scandals he's gotten himself in.
- To get more and more and more attention.
So with the persona,
is the Hustler University still operating?
- I think they've rebranded it.
I'm part of their pitch now.
I'm like, they put me on as like,
I mean, as like, the Matrix is trying to take us out, Lex.
And then it's me saying like,
you know, they put me in like saying,
I'm part of the Matrix.
They put me in saying, oh, this guy sucks.
You know, I joined, it sucks.
And so they'll play that and they do like a bass drop
and it's like, you know,
don't listen to people like this, da da da da.
I mean, it's, I'm basically like a-
- Oh, so you've been co-opted by the Matrix to attack.
- Yes.
- You're an insider threat that infiltrated
and now is being used by the Matrix to attack him.
Well, to-
- Everyone who criticizes him as part of the Matrix,
he won't say who the Matrix is.
It's just the shadowy cabal of rich, powerful people.
It's just like the easy narrative
for people who are disaffected
and who feel cheated by the system.
You just collectivize that system
and you make it the bad guy and you go, look, look,
those guys, those guys who have been cheating you,
they're the bad guys.
They want me shut up.
And then now the person that, the people who harmed you,
they want this guy shut up, you're gonna listen to him.
So that's like, it's like the most basic
psychological manipulation
that everyone seems to constantly fall for.
It's really trivial and stupid, but-
- Can you steel man the case for Husserl's University
where it's actually giving young people confidence,
teaching invaluable lessons about like,
actually incentivizing them to do something
like Fulfillment by Amazon, the basic thing, to try it,
to learn about it, to fail, or maybe see like,
to try, to give a catalyst and incentive to try these things.
- As much as it pains me, I will try to give a succinct,
maybe steel man of it as best as I can,
thinking that it's such a grift.
But I think what you would say is that some people,
in order to make a change in their life,
need someone who they can look up to.
And men don't have a lot of like strong role models,
like big male presences in their life
who can serve as a proper example.
So the most charitable interpretation would be,
Andrew Tate would encourage you
to go reach for the stars, I guess.
My problem is I have a deep, like,
I have a deep issue with the like,
lust and greed that centers all these things.
It's like this glorification of wealth equals status,
wealth equals good person,
wealth and Bugatti equals you are meaningful, you matter.
And like the dark underlying thing
is that none of that, none of that matters.
Like, it matters that you make a decent living,
but past just like that,
I think the like lust for more stuff
and the idolization of these people
that is just like opulence is a net bad.
So that's like, my steel man has to stop there
because I really disagree with like the values
that are pushed by people like that.
- Yeah, no, I agree.
That's the thing that should be criticized.
I shouldn't say it doesn't matter.
I think it's just like an amazing meal
at a great restaurant, it matters.
Money and Bugattis for many people make life beautiful.
Like those are all components,
but I think money isn't,
you can also enjoy a beautiful life on a hike in nature.
There's a lot of ways to enjoy life.
And one of the deepest has been tested through time
is the intimacy, close connection,
friendship with other people or with a loved one.
They don't talk about like love.
- Yeah, I--
- What it means to be deeply connected with another person.
It's just like get women, get money,
all those kinds of things.
But that, I think, I don't wanna dismiss that
'cause there's like value in that, there's fun in that.
I think the positive,
I haven't investigated Hustlers University,
but the positive I see in general is young people
don't get much respect from society.
I know it's easy to call it the matrix and so on,
but there's a kind of dismissal of that.
As human beings, as capable of contributing,
of doing anything special.
And then here's, you have young people
who are sitting there broke, with big dreams.
They need the mentors, they need somebody to inspire them.
So like, I would criticize the flawed nature of the message.
But also it's just like, you have to realize
like there needs to be institutions or people
or influencers that help like inspire, right?
The problem is though, is the people who are pitching
unrealistic versions of that
are getting a lot of attention.
Whereas like, there's so many great free courses
where you can learn everything and more
about fulfillment by Amazon or about copywriting
or all these different things.
That I think like so often the air is just,
the oxygen is sucked up by all the grifters
who promise everything.
It's back to what we said about vaporware.
This is one of the reasons that like educational products
can so often be co-opted by grifters,
is vaporware is very hard to distinguish
because prompt, like the feedback loop on education
is not clear.
It's not obvious immediately.
So I can sell you a book and I can say,
this is gonna change your life if you apply it.
If you don't, if your life doesn't change,
I just say, well, you didn't apply it, right?
Like it's, there's this weird relationship.
It's not clear the value.
It's not so easy to like quantify education.
So that gets co-opted by people who make all the promises.
They get a ton of attention, a ton of money.
And then those people are often left confused
and like kind of disillusioned, maybe thinking,
well, this didn't work in one year.
So it's not gonna work at all.
And so I think, yeah, there are problems there.
There's certainly a need for like male role models.
There's certainly a need for somebody kind of
to speak to a younger generation.
I just think that person shouldn't be maybe Andrew Tate,
like personally.
- Yeah, so you have to criticize
those particular individuals.
I also--
- And yeah, I think like the Bugatti aspiration
is so stupid.
Like it's like, it's so--
- Let me steal Matt.
So I'm a person who doesn't care about money,
don't like money.
The women maybe appreciate the sort of the beauty
of the other sex, but like, yeah, cars in particular
is like, really, is this really the manifestation
of all the highest accomplishments
a human being can have in life?
§18Transcript · 2:20:12–2:28:55
Yes, I can criticize all that.
But to steal man, that case is a young person,
a dreamer has ambition.
And I often find that education throughout my whole life,
there's been people who love me,
teachers who saw ambition in me and tried to reason with me
that my ambition is not justified.
Looking at the data, look kid, you're not that special.
Look at the data.
You're not, and they want you to like,
not dream, essentially.
And then again, I look at the data,
which is all the people, I just talked to Hodger Gracie.
This Hodger Gracie is just a person,
widely acknowledged as probably the greatest of all time,
dominated everybody.
But for the longest time, he sucked.
And he was surrounded by people that kind of,
you know, don't necessarily believe in him.
So he had to believe in himself.
It's nice to have somebody, I just,
as older I get and I've seen it,
it's so powerful to have somebody who comes to you,
an older person, whether it's real or not,
that says, you got this kid, I believe in you.
- Sure. - Yeah.
- Yeah, it does.
I mean, I think, so I think dreaming
is actually really important.
I'm more protective over,
people co-opt those dreams for money.
- Yes, yes, absolutely. - And like,
I do think it matters so much
that we encourage people to take risks.
It's one of the great things about America,
is it lionizes like sort of people who have taken risks
and won, but I think it's just a weird vapid thing
when like the reason you do all of it
is for this thing you can get out at the end of the day.
When we all know, and you, like,
well, you've just heard a million interviews,
like nobody ever is, gets through Bugatti and goes,
this now completely fulfills me.
Everyone knows the beauty and the like fulfillment
actually comes from becoming obsessed
about what you're doing for its own sake,
sort of the journey, the beauty of that thing.
And I think money's just this thing we have to deal with
to be able to do cool stuff.
Like I acknowledge that, you know,
you need money to build a $10 million studio,
like you gotta get the cameras, you gotta get the lights
and I'm very blessed to be able to have gotten that.
But past a certain point, like I think that is really
the function of money is to just do cool stuff.
But ultimately, if you can't fall in love with the process
and like the craft itself, you will be left very unhappy
at the end of it.
And so to start people off on that journey
by pointing to the shiny object and going like,
that's what you should care about,
seems to me so backwards.
We should learn from the actual people who have done it
and said, that shiny thing did nothing for me.
Learn to love the journey and like,
that's the thing we pitch people,
as unsexy as that might be.
- Yeah, absolutely, that's awesome.
And the same applies to like the Red Bull community
that talks about dating and so on.
That there is, it's not just about the number of hot women
you go to bed with, it's also about intimacy and love
and all those kinds of things.
And so like, there's components to a fulfilling life
that is important to sort of educate young people about.
- Totally.
- But at the same time, feeding the dream is saying,
take big risks.
- Sure.
- The little you that has no evidence of ever being great
can be great because there's evidence time and time again
of people that come from very humble beginnings
and doing incredible things that change the world.
- Yeah, and there's just a tremendous like funny thing
where you can't become great without having
a willful denial of the statistics.
Like in some ways you have to take the chance,
even if that chance is so improbable.
And it's always those people who did take that chance
who end up winning, so I agree.
- Probably SBF and FTX is the biggest thing
you've ever covered, but previously you've called
the Save the Kids scam the world's influencer scam,
like the biggest in the world influencer scam
you've ever seen.
Can you describe it?
- Sure, so Save the Kids was a charity coin
that was launched by a number of extremely popular
influencers, I think they had over 50 million followers
together, huge names, and they basically said,
"Hey guys, invest in this coin, we're gonna save the kids.
"A portion of the proceeds go to charity."
And this coin, it's unruggable.
So rugging is the term for, remember earlier
we talked about SafeMoon, you just grab the pool
of funds in the middle and you take them out.
Okay, it's unruggable because we have this smart code
that is gonna prevent people who are quote whales,
which is a crypto term for saying you have a large portion
of the tokens, it'll prevent those people from selling
a large amount of that at one time, right?
And so basically you don't have to worry about trusting us,
it just is what it is, join and we will change the world,
save the kids, whatever.
It was really skeezy from the beginning and sketchy
because their logo matched the Save the Children logo,
which is like an actual charity that, you know,
so they basically copied it and said,
"We're saving the kids," like a knockoff brand.
And almost immediately the project rugged,
they stole the money and tracing back through,
the code was changed at the last second before launch.
Like if you looked at their code that they launched
as a test versus the code they launched in actuality,
they changed only like two lines and it was the whale code
to basically make the whale code non-existent.
Like you can sell as much as you want, as fast as you want.
And it turned out that some of the influencers
had not only sold that and made money,
but also had a pattern of pump and dumping tokens.
So we can talk about what that is like.
- Yeah, what's pump and dump?
- A pump and dump is just where, you know,
you have a huge following,
you promote your little Lex coin to everybody
while holding a big portion of it.
And as everyone rushes in to buy it,
the price is gonna pump and you dump at the same time.
So that's where the name comes from, pump and dump.
You pump the price, sell all your tokens,
make a lot of money.
So I traced basically their wallets on the blockchain
and found that two of the actors specifically
had had a long history of doing this,
which really proved malicious intent.
And why I called it the worst is not,
it certainly wasn't the worst in terms of like
the amount of people affected.
It relatively was like a small pump and dump
'cause it rugged almost immediately.
But in terms of the amount of people
that were involved in it,
in terms of the amount of malicious behavior before it
that like sort of proved that this wasn't an accident,
the fact that there was like this whale code,
it was one of the most cynical attempts
to just take the money of the followers you had
and just like, that's mine now.
So that's why I called it that, but that's to save the kids.
- So that was-
- That was a lot of the FaZe members.
And it was, I think Addison Rae.
There were a lot of people who seemed like
they were kind of taking shrapnel on it.
There was like this guy, Tico,
who he didn't even sell the tokens.
He just like held onto it the entire time
and lost like a few thousand dollars or maybe even,
I forget the exact amount.
He lost a lot of money, a decent amount.
And so like he took a lot of shrapnel with that,
but there were also people who were maliciously doing this.
So in that investigation,
like several of the members of FaZe got kicked out.
One of them got like permanently banned.
And then this other guy that I talked about fled the country
like he sold all his belongings and like fled the country
and hid out in London or wherever he is now.
I don't really know where he is.
Somewhere in the UK area.
- So the basic idea there is to try to convert
your influence into money.
- Correct.
- Okay.
- That's the basic idea behind
a lot of influencer crypto promotions.
- Well, but, right, but that little word influencer
means something 'cause there are most crypto scams,
influencer scams, they're not, right?
Most kind of-
- Right, the most high profile ones,
like just by nature,
they tend to be made high profile by the influencer.
So sometimes they are, but you're right.
A lot of money has been lost and like nobody finds out
because there's no one big sort of attached to it.
They just steal a lot of money.
But influencers are great salespeople
because like in order to overcome the resistance
of getting you to buy some random coin,
§19Transcript · 2:28:58–2:36:56
there has to be a reason.
And so much of the 21st century content creator generation
is defined by these strange parasocial relationships
where people feel like they know you,
not the character you play, but you,
and you have some friendship with them.
When in actuality, you don't know the viewers.
You know, you have a sense,
but you don't actually know all of these people.
And so that relationship is extremely powerful
in terms of persuasion.
So you can say, I believe in this,
and I've watched you for years,
and all of a sudden I say, if Lex believes in it,
I believe in it.
I trust him as a human.
And so that differentiates these coins.
And all of a sudden the coin blows up, gets really popular.
You made this side deal and you make a ton of money.
- I have to say podcasting in particular is an intimacy.
Like I'm a huge fan of podcasts
and I feel like I'm friends with the people I listen to.
- Right.
- And boy, is that a responsibility.
- Yes.
And that's why it really hurts me to announce
that I am launching LexCoin.
No.
No, man, I hate money.
I hate this kind of, the schemingness of all of this,
the use of any kind of degree of fame
that you have for that kind of stuff.
There's something just--
- What makes it so like frustrating is these people--
- Disgusting about it.
- I have a general sense of what they were like,
sort of what I'm in the,
even though I wouldn't describe myself as an influencer,
I make content on YouTube.
I know that especially since they were taking
these huge corporate sponsorships,
they were making tons of money.
They didn't have need for these scams.
I mean, I think it's one thing to scam
if you're like broke on the street,
you know, and you're playing three card Monte to like live.
And I think it's a whole other ethically cruel thing to do
if you're basically trying to upgrade your penthouse
to the building next door.
And like you're already well off
and you just kind of wanna get even further ahead.
I think that's where it--
- Well, this is the fascinating thing.
So I've been very fortunate recently to sort of get,
you know, whatever, a larger platform.
And when you find out it's like, life is amazing.
I always thought life is amazing,
but it becomes more amazing.
Like, you meet so many cool people and so on.
But what you start getting is you have more opportunities
to like, yeah, like scammers will come to you
and then try to use you, right?
And I could see for somebody could be tempting to be like,
ooh, it'd be nice to make some money.
- I wanted to say like on this kind of,
we're on this topic of opportunities you get,
you know, kind of when you get a platform.
So one of the reasons kind of I railed a little bit earlier
against materialism or whatever,
I think to the extent to which
you can moderate your own greed,
you can play longer term games.
And I think so many people end up cutting
an otherwise promising career short
by just wanting it too fast.
So I think it's like a huge edge,
just like discipline is in terms of like,
achieving what you want.
I think I'm like a very moderate,
like being comfortable with a moderate existence
and finding happiness in that is a huge edge
because really your overhead is so much cheaper
than the people who need a Ferrari
or a super nice house to feel fulfilled.
And when your overhead is less,
you have the luxury to say no to like sketchy offers,
to the different, you have freedom
that other people don't have
'cause a lot of times people don't pitch it this way.
They pitch a Ferrari as freedom
or like a big house is like you've made it.
In a lot of ways, those shackle you back to like,
you gotta find the cashflow for those things.
It's never a free ride.
- Yeah, that's really beautifully put.
I've always said that I had fuck you money
at the very beginning.
I was broke for most of my life.
The way you have fuck you money
is by not needing much to say fuck you.
- That's right.
- I mean, that's the overhead that you're talking about.
If you can live simply and be truly happy
and be truly free, I think that means
you could be free in any kind of situation.
You could make the wise kind of decisions.
And in that case, money enables you in certain ways
to do more cool stuff, but it doesn't shackle you,
like you said.
Too many people in this society, you would shackle
'cause material possession is kind of like
draw you into this race of more and more and more and more.
And then you feel the burden of that,
bigger houses and all that kind of stuff.
And now you have to keep working.
Now you have to keep doing this thing.
Now you have to make more money.
And if it's a YouTube channel and so on,
you have to get more.
And the same, it's not even just about money.
That's why I deliberately don't check views and likes
and all that kind of stuff,
is you don't want that dopamine of like,
of pulling you in.
I have to do the thing that gets more and more attention
or more and more like, yeah, like money.
And- - Yeah, that's so wise.
Yeah, agreed.
- It's a huge negative hit on your ability
to do creative work.
- Can I ask you about that?
'Cause I'm always interested in this.
I completely agree.
I think it's funny because when you abstract yourself out
to the people you admire and respect
who inspired you to do the creative work you do,
you never think about like the views they were getting
or the money they were making or the influence they had.
All you ever think about is the work itself.
And it's funny when a lot of people get in this position,
your temptation is to focus on that which you can measure,
which is like all the stuff you said,
like the likes, the views.
That's not actually the target or what you got into it for.
If you get into it for like, 'cause you're inspired
or whatever, your goal is inspiration, it's impact.
And like that can't be quantified that same way.
So it's interesting, you have to find a way
as a creator of any of this stuff
to like deliberately detach yourself from the measurable
and focus on this thing, which is kind of abstract.
And I was wondering if you have any like ideas for that.
- So one, yeah, there's a bunch of ideas.
So one is figure out ways where you don't see
the number of views on things.
So I wrote a Chrome extension for myself
that hides the number of views.
- That's really funny.
No, what's funny is I have-- - For me.
'Cause it's useful for other people's content.
- Right, oh my gosh, I'm gonna need to borrow this.
That was my problem.
I actually have some Chrome extensions for,
like I don't like going down like recommendation rabbit holes
when I'm at work.
I just wanna like search for a video, find it.
I don't wanna see like all the up next
'cause all the waste time.
So I use Chrome extensions for that.
But the views is a problem because it's relevant to me
as a creator, like, is this a big video?
Is it a-- - Yeah, which is why
I really hurt when they remove like likes and dislikes
'cause I wanna know for tutorials and so on.
I mean, that's probably really useful for you,
the dislikes, yeah. - Yeah, do you have that?
Do you ever consider making that Chrome extension public?
- Sure, actually, yeah.
And there would be a good philosophy behind it, right?
Like don't, if you're a creator--
- I really like it, I love the idea.
I've wanted this thing before.
I don't know if it necessarily exists.
- 'Cause I don't think I've made a Chrome extension public.
That'd be cool, I would love to see,
yeah, I would go to that process of adding it to the,
'cause I love like open sourcing stuff.
So yeah, I'll go add it to the Chrome extension,
like the store. - Yeah, 'cause I totally have,
I've hated this for like a long time.
YouTube made a change and they just continue
to make the analytics front and center,
which makes sense from their perspective.
They're trying to give people better data
on what is successful and what makes something successful.
They're trying to train their creators,
but in the process, it can lead to some unhealthy habits
of thinking views define a video.
And so I've long thought, okay, I've learned analytics,
I understand retention.
§20Transcript · 2:36:57–2:45:13
Now I sort of wanna do like the zen, like forget it all.
And you can only do that if it's out of your sight.
- Depends how many friends you have who are creatives.
The other really important thing,
and I found this, this has nothing to do with creatives,
but people I respect very much in my life,
some of them people would know that they could be famous.
They will come to me and say,
they will comment on how popular a video was on YouTube.
They will sort of compliment--
- The success.
- The success defined by the popularity.
Even for a podcast where most of the listenership
is not on YouTube, or Spotify now is getting crazy,
they will still compliment the YouTube number.
So one of the deliberate things I do is I either,
depending if it's a close friend,
I'll get offended and made fun of them for that,
and sort of signal to them this is not the right thing.
I don't want that.
And for people more like strangers
that compliment that kind of stuff,
I show zero interest.
I don't receive the compliment well,
and I focus on the aspects of the compliment
that have to do with what do they find interesting.
I kind of make them, reveal to them
that you shouldn't care about the number of views.
- It is strange.
There's like this weird hypnotism that happens
once you get past a certain number,
and that number is some approximation.
It's always like hard numbers.
It's like 100,000, a million, 10 million.
People just see a number and they just go like,
wow, that is, and they assign a quality to it
that may not, it usually means nothing at all.
So I agree, I've never been good at handling that
'cause you're like, thank you?
- Yeah. - And it's like, okay.
- That said, I do admire, very different from me,
but I admire Mr. Beast, who unapologetically
says the number is all that matters.
Like basically, the number shows,
like the number of views you get
shows how much, I don't know,
joy you brought to people's lives
because if they watched the thing,
they kept watching the thing,
they didn't turn to now, that means they loved it.
You brought value to their life, you brought enjoyment,
and I'm going to bring the maximum amount of enjoyment
to the maximum number of people,
and I'm gonna do the most epic videos
and all that kind of stuff.
So I admire that when you're so unapologetically
into the numbers.
- Yeah, he's sort of, it's interesting.
He's like, gosh, we're getting way too in the way.
Is this a, I don't know, I'm like constantly
self-monitoring about like what topics we're on,
but if we can, Mr. Beast is so interesting
'cause he's almost done what,
have you ever seen Moneyball?
- Yes.
- It's the story of how someone brought statistics
to baseball and it revolutionized everything.
He's Moneyballed YouTube.
He took statistics to YouTube and it changed everything.
And everybody now, so many people are playing catch up.
I think it would be interesting in a few years
to see how he develops.
And now that he's like kind of revolutionized
like the data side of things,
how he then approaches future videos.
Because there's a point at which you've optimized,
you've optimized, you've optimized,
but optimizing for short-term video performance
is not the same as optimizing
for long-term viewer happiness.
And how do you do that?
Assuming the YouTube algorithm does not perfectly
already do it for you, which it doesn't,
but they're trying to obviously do that,
optimize for long-term happiness, but.
- And also growing, optimize for long-term creative growth.
- Sure.
- I think the thing that people don't,
I mean, maybe I don't know,
I actually don't know enough about Jimmy.
But like, to me, the thing that seems to be special
about him isn't the Moneyball aspect.
That's really important.
It's like taking the data seriously.
But to me, it's the part of the idea generation.
The constant brainstorming and coming up with videos.
So it's nice to connect the idea generation with the data,
but like how many people, when they create on YouTube
and other platforms, really generate a huge amount of ideas?
Like constantly brainstorm,
constantly, constantly brainstorm.
At least for me, I don't,
I don't, like, I don't think I go
so many steps ahead in my thinking.
I don't like try to come up
with all possible conversations.
I don't come up with all possible videos I can make.
- But you can't, so the one mistake to make
is to map Jimmy's philosophy onto every genre,
'cause not every genre fits that model.
Your model is not an idea-centric model.
It's a people-centric model.
And so you, like, if you were in the business
of creating just mass entertainment
for the sake of mass entertainment,
you might focus on, okay, the reason going idea-focused
instead of person-focused is such a revolutionary idea
in some senses is because ideas can be broader,
more broadly appealing than any single human can be.
But you're not going for that.
You're going for a podcast interview.
And I think for you, the goal should always be
how deep can you get with interesting guests
and, like, finding the most interesting guests,
which is a different, probably, set of skills.
- Well put, really well put.
But I think the right mapping there
is finding the most interesting guests.
- Yeah, right.
- I think I don't do enough work on that.
So for example, I try to be,
something I do prioritize is talking to people
that nobody's talked to before.
'Cause it's like, I kind of see myself as not a good,
like, I know a lot of people that are much better than me.
I really admire, I think Joe Rogan is still the GOAT.
He's just an incredible conversationalist.
So it's like, all right,
who is somebody Joe's not gonna talk to?
Either he's not interested or it's not gonna happen.
Like, I wanna talk to that person.
I wanna reveal the interesting aspects of that person.
And I think I should do a Mr. Beast-style rigor
in searching for interesting people.
- And you should probably find people to help you search.
- Sure, he does that.
But if we're being honest, he does that, of course,
with other folks, but he's the main engine.
- Yeah, you need like sort of like a pre-filter,
you're the final filter.
'Cause your problem is you're only able to think of humans
that you've thought of before or been exposed to.
And most of the world you've never been exposed to.
So you need people to like pre-filter and go,
okay, these guys are just interesting humans.
Lex has never heard of them.
And then you sort of take a batch of like 100 people
and you go, who seems the most interesting for me?
- But by the way, on that topic, we're wheezing into wheeze,
I've almost done, I'm building up,
I programmed this guest recommendation thing
where I wanna get suggestions from other people.
'Cause I really wanna find people that nobody knows.
This is the tricky thing.
Not, you're not famous, but the idea is
there's probably fascinating humans out there
that nobody knows.
- Correct.
- That, I wanna find those.
And I believe in the crowdsourcing aspect will raise them.
And now of course the top 100 will be crypto scams.
No, but yes.
So like I have to make sure that these kinds of swarms
of humans that recommend, I can filter through
and there's whole kinds of systems for that.
But I wanna find the fascinating people out there
that nobody's ever heard from.
And from a programmer perspective,
I thought surely I could do that
by just building the system.
- Yeah, that's how programmers always think.
They'll just automate a system to do it.
- Well, that's the Jimmy Moneyball, right?
Like looking at the data.
- Yep.
(laughing)
Weeds on weeds.
- How do we get to Mr. Beast exactly?
- I'm not sure.
- Okay, save the kids.
Influencer.
- Influencer, that's probably how.
- Let me ask you more on the guru front.
You've, okay, let's start with somebody
that you've covered that I think you've covered a lot
and I'm really embarrassed to not know much about him.
I think this is like old school coffee.
So you've been through stages, okay?
- I've been through stages and phases, true.
- So a character named Dan Lok.
§21Transcript · 2:45:15–2:53:17
- Yeah.
- Who is he?
You've exposed him for a cult-like human
and his cult-like practices.
Who is he?
What has he done?
- So Dan Lok is sort of,
he's gone through a number of iterations,
but he was kind of this like sales trainer guy
who really made a hard push
into what he called high ticket sales.
And he was telling people that they could kind of escape
the nine to five rat race
if they just learn high ticket sales
and they can have the life of their dreams.
Basically, it's like, I'll teach you to sell,
but I'll teach you to ask,
like not only will I teach you to sell you that pen,
but I'll teach you to sell it for $50,000
instead of a dollar, right?
So I talked to a lot of the people
who had taken this course 'cause it was pretty expensive.
I think it was like $2,500 or $1,000.
And mind you, the people who are taking it are like teachers
and like people who don't have a lot of money.
And then you take the course and immediately you find out,
okay, well, there's an upsell.
At the end of the course, you're not ready.
You need to go from like high ticket closer,
which is one of the products to inner circle
or like the level up, right?
And all of these courses are structured like this.
So they spend a tremendous amount on Google ads
to get people in the door, promising the dream.
And then once you're in,
you're actually not done being like the product.
You're actually in the system that tries to upsell you
again and again and again and again.
And eventually you're paying monthly
and you're getting more and more.
You're constantly paying for access to Dan Lok's wisdom
and like ideas.
And fundamentally,
the sales system wasn't working for people.
I mean, I talked to like, for example,
a teacher who put in like $25,000,
was in debt at one point and has nothing to show for it.
I know, and it was sort of these tactics
of pressuring, pressuring, pressuring.
And then anytime anyone would complain,
he would try to silence them.
So I heard from like, funny enough,
this lady was a teacher as well.
She put together a Facebook group,
basically saying, I think this guy's a scam.
His course didn't work.
It's not working for a lot of people
because fundamentally the promise of turning someone
from a non-salesman into a person
who's making six figures selling
is not an easy thing to do.
It's not just a matter of just like take my course.
But anyways, it wasn't working.
She created a Facebook group about it
and he like sues her
or, and it was like legally pressuring her
to stop doing that.
And I realized like somebody has to speak out about this
and everyone who is, is getting silenced.
So I was like, I'm gonna use my platform
to raise awareness to this.
And people came out of the woodwork.
I mean, saying that this guy defrauded me or he scammed me.
And I wanna just really quickly take a second,
take a beat to explain why get rich quick schemes
are different than let's say selling a water bottle
and saying it's the greatest water bottle ever.
Right, 'cause sometimes people wonder,
they go like, well, doesn't like Nissan
say their car is gonna make you happy
and then it doesn't make you happy.
Like, why is that different
from the kind of advertising of a get rich quick course?
I mean, both of them are sort of promising things
that aren't true, but you get something,
you take some kind of a training.
You know, isn't it the same thing?
No, here's why.
There's this concept in economics called elastic demand
and inelastic demand.
What it essentially means is that if I raise the value
of this water bottle, there's a point at which
you're just gonna be like, no,
it doesn't make any sense, right?
But there are areas in our lives
where we have desperation around them
that can get deeply predatory very quickly
because they have no,
there's no elasticity around their demand.
For example, your health.
If you get cancer and I have the pill that will solve it,
or at least let's say I don't, I have a sugar pill here,
but if I can convince you that this pill
will solve your cancer or treat your cancer,
you will pay any amount of money you have on this earth
to get this pill.
But obviously that gets really predatory really quick
because selling something that isn't real
is almost as compelling as selling something
that is real, right?
So this happens in the get rich quick space too.
There's any amount of money you would pay
to make a lot more money, right?
So these products have inelastic demand.
That's why you see what is essentially a few webinars
getting sold for $2,500.
Courses that literally have identical videos on YouTube,
like very similar course curriculums
that are selling for such extravagant amounts of money.
And I think there can be comparisons made to college
'cause obviously there's similar questions about benefits,
but in this case, there's not even statistics available
that even shows the average person
gets something out of it.
That's true of like, if you go to college,
your average income will improve, right?
That's the justification there.
There's none of that.
There's no case studies.
There's nothing backing their extravagant claims
of you're gonna make all this money,
you're gonna make all this wealth.
Instead, they're just, as we said before,
they're selling you a dream.
So that's why I find all those types
of get-rich-quick schemes so problematic,
and it's why I've railed against them
for a significant amount of time.
- What have you learned from attacking,
exposing some of the things that Dan Lok is doing?
What have you learned about human nature
and frosters and gurus and so on?
- That's a great question.
So I think one of them is that
there's this systemic problem that the phrase,
there's a sucker born every minute, is very true.
There is no end to the people
who will fall for something like this.
And the problem is, is because there's just no end
to need and want and just lack.
I mean, it's easy to, on the one hand,
criticize people's greed, but a lot of times,
you have to put yourself in their shoes.
If you're at a dead-end job, you have nothing going for you,
you don't have the money to go to college,
you don't wanna get in debt, fair play,
where do you go, right?
As you said, there's somebody who's there saying
they believe in you, they believe you can make six figures.
You're gonna believe in that.
And so I really felt like it made a lot more sense
to tackle it from the other side,
from the side of people that can stop,
that can basically be exposed and basically be,
have sort of like a negative put on their work.
I mean, they're largely going under the radar.
So I kind of felt like, do you wanna educate,
do you wanna blame it on the victims and say,
you should have known better, you should have done this,
you should stop, but there's no end to that.
Or do you go after the grifters themselves?
And so that's what I realized.
I realized that's the tactic that I went with.
And it's tough 'cause it's a little
legally risky to do that, but yeah,
you just kinda gotta be smart about it, I guess.
- So your platform has gotten really big,
so there's some responsibility to that.
- Weirdly big, yeah.
- Yeah.
Let's say--
- 'Cause like only a year ago, it was like a lot,
a lot smaller, and then it's hard to make that adjustment.
'Cause like to me, it's just the same,
it's the same show I've been doing.
- So how do you avoid becoming a guru yourself
or your ego growing?
There's different trajectories it could take,
one of which is you can start seeing everybody as a scammer
and only you can reveal it.
And like you have a audience of people
who love seeing the epic Coffeezilla grilling,
and you can destroy everyone,
and that power now is getting to your head.
How do you avoid that?
- Well, I mean, this is like less optically obvious.
I think the main way is like,
my circle of friends doesn't care about any of that.
Like my wife doesn't care.
The people whose opinion I value has no relation
§22Transcript · 2:53:21–3:00:47
to like a subscriber metric or anything like that.
I think that's like tangibly the most important thing
to just staying grounded.
As far as like becoming a guru,
I just don't have anything to like sell.
I mean, I'm not interested in teaching people finance,
I'm not interested in teaching people,
not interested in selling a course.
And I've kind of given myself a hard line on that,
which I think has helped me a bit,
is there's a temptation to go,
well, I can tell what's a scam,
so let me tell you what's not a scam.
And a lot of people have offered a lot of money to do that,
and basically be like,
hey, I have such and such legitimate product,
come be like an endorser.
And I just don't do that,
because I think it undermines a lot of what I do,
is if you get like,
if you're taking money in on the side to say this is legit,
and you're saying this isn't legit,
that's a huge conflict of interest.
So I think it's about managing conflicts of interest
and keeping people around me
that are grounded.
And also I think,
yeah, my only interest really is just like,
make cool stuff,
and I guess I'll do that until people stop watching.
- A question on that topic
from the Coffeezilla subreddit, shout out.
- Shout out.
- How does Coffee find the strength
to maintain his integrity
and resist temptation of being paid a great amount of money
to advertise or promote a potential scam?
- I think that goes back
to what we've been talking about a lot,
which is just on what you prioritize, what you value.
I've just never,
I guess I grew up kind of lower middle class,
and I had a great time.
Like I had a great childhood,
I had very loving parents.
And because of that,
I guess intuited at an early age
that money doesn't do a whole lot.
And I knew a lot of people who were way better off,
who had miserable childhoods,
because whether their dad was always gone at work,
or like they just had other family issues
that just money can't buy.
And I realized,
I guess quickly,
that money's a very like,
it's a glittery object that isn't what it appears to be.
And so to me, I'm like,
I'm having the time of my life making my show.
I'm not gonna have the time,
like I could,
you could ruin all that
just trying to go for this quick check
when it's like, no, I'm having a great time.
- Yeah, it's actually,
maybe you're probably the same way,
but for me, there's a lot of happiness in having integrity,
in looking in the mirror and knowing
that you're the kind of person that has that.
In fact, walking away from money is also fun.
'Cause it's like promising yourself,
like it's showing,
it's easy to like just say you have integrity.
It's nice to like,
ah, I actually,
I've discovered several times in my life
that I have integrity.
- So you get put,
yeah, you get put like basically to the test.
- Yeah.
I've said,
like, I don't know if I publicly said,
but to myself, I say like,
you can't buy,
there's a lot of things you can't buy with me,
like for a billion dollars,
like a trillion dollars.
But it'd be nice to get tested that way.
It'd be cool to see,
'cause you never know until you're in that room.
- It's true.
- The same with power, given power.
I'd like to believe I'm the kind of person
that wouldn't abuse power,
but you don't know until you're tested.
So anyway,
you're in a really tricky position
because you're doing incredible,
I mean, you are a world-class journalist,
straight up.
And so there is pressure on that
of like not having,
like erring on the side of caution
with like having conflicts of interest
and stuff like that.
It's tough.
It's a really tough seat to sit in.
It's really tough.
It's really tough,
but it's unfairly tough, I feel like.
But it's good that you're sort of weighing all of those.
That said, go donate to Coffeezilla.
Donate everything.
Support him.
He's a really, really important human being.
The other guy I did,
I think is the first person I discovered
that you investigated is Brian Rose of London Real.
Can you talk about his story?
- Brian Rose, he was sort of this interesting figure
'cause he was like trying to be
to one level or another,
the Joe Rogan of London,
which I don't think he did a terribly bad job of,
especially initially.
He had some really interesting podcasts
with some really interesting people.
And it's funny enough,
I started out as like I would watch him.
I mean, I don't know if I was like a huge fan,
but I was like, I like some of his interviews.
He had some really good, like big gets
in terms of great guests.
However, when kind of COVID started,
he went down this really weird grifting rabbit hole
where he did like this interview with David Icke,
who's, as you know,
like a pretty big COVID conspiracy theorist.
And I mean like actual,
like he believes some of the royals are literally lizards.
So he got shut down for that.
And he kind of made a big stink,
which I think it's fine.
Nobody likes to be censored.
And I'm not even saying
that he should have been censored.
But his reaction to that was to like
raise a ton of money from his audience,
promising this digital freedom platform.
And at first it was like,
oh, we want to raise $100,000.
And then they raised it like within a day.
So he's like, well, we got to raise a lot more money.
And so eventually they raised a million dollars
and he's trying to raise $250,000 a month
to kind of keep putting his viewers money into this stuff.
So I started digging into the platform they were building
and there was nothing free about it.
They had censorship guidelines
and there was nothing about a platform at all.
There was no underlying infrastructure.
He just got some white label live streaming thing.
So I criticized him for that.
It was just this ridiculous thing.
All the donators expected one thing.
They thought Brian Rose was going to take on Google
and Facebook and like bring free speech back for everybody.
And of course he didn't.
And then it kind of got worse
because he started taking a lot of heat for that.
And he really pivoted hard into like the DeFi grift.
So he started selling this course about DeFi mastery.
And this is a guy who knows nothing about crypto
or very little at the least.
So it just got really kind of,
he just kind of doubled down on this course model
of you're going to be rich if you just follow me.
And it was ultimately, you just type in Brian Rose on YouTube
you can see what his audience thought of that.
'Cause almost all of them have left him at this point.
He's getting like a thousand views a video.
And it wasn't because of me.
I mean, it was like people lost taste
in just the constant ask for more money,
more money, more money.
At some point people get sick of it.
And it's like, everyone has an understanding
that like no one works for free,
but when it starts to be ego driven
and driven around money, everything's about money,
it drives people away.
- Well, you're a part of that sort of helping.
It's nice to have a voice.
- Yeah, I certainly spoke out.
I mean, it wasn't like I was quiet.
I was very loud about it at the time.
But I mean, in the sense that there,
if you look at someone like Andrew Tate,
I've made a video about him,
even though he's been banned off all the platforms,
§23Transcript · 3:00:49–3:09:29
he gets more views than Brian Rose.
And I think it's just like,
it was a Testament to how much Brian Rose
was like doing like the grift that people could,
even people who were fans
and didn't care about what I said,
like couldn't look past,
just the constant ask for more and more money.
People just get burned out.
- Is there some aspect that you worry about
where with a large audience,
there seems to be a certain aspect of human nature
where people like to see others destroyed?
- Sure.
- Do you worry about hurting people that don't deserve it?
Or rather sort of attacking people that are grifter light,
but they get like a giant storm of negativity towards them
and therefore sort of overpoweringly cancel them
or like hurt them disproportionately?
- Sure.
I mean, I try to be sensitive to my platform.
And as I've grown,
I've tried to make sure my video topics have grown with me.
And like, it does reach this tricky point
where if you're exposing a grifter with like 50,000 subs,
who's doing some harm, are you punching down?
- Right.
- And so far there's been enough high profile things
that I can distract myself with
to where this has never been a problem.
You don't ever wanna be,
sort of like Sir Lancelot in retirement.
Where have you heard this analogy?
Okay, so there's this great analogy where it's like,
Sir Lancelot's the guy who slays the dragon, right?
He gets a lot of fame
and he gets a lot of fortune for saving the dragon,
or at least a lot of people love him.
But what happens after he slays the first dragon?
He's gotta go find a bigger dragon.
So he goes find a bigger dragon.
And eventually, depending on how many dragons
you think are there in the world,
maybe he kills all the dragons.
And one day people go see Sir Lancelot
and he's in a field with cows and he's chopping their heads.
And he's sort of put himself in retirement,
but he can't even enjoy the fruits
because his whole thing is like, I'm killing the dragon.
So I try to be cognizant
and I try to always make myself willing
to hang up my suspenders, I guess, hang up my hat.
I try to be aware, if I significantly improve the problem,
I put myself out of business,
I want to be okay with that, basically.
And just be fine with it.
The funny thing is I was more worried about this
as an issue earlier,
because I thought there was a finite,
I was like, I'm gonna solve this faster,
especially as it started gaining traction.
I'm gonna solve this fast, I got this.
Classic naive, we all think we're so influential.
- RTX comes along.
- Well, yeah, and you just get,
with time you get humbled 'cause you talk to people.
I've talked to versions of Coffeezilla that are older
and it's like, oh yeah, they didn't solve it
and they probably were better.
- I just imagine a smoke-filled room
of just retired Batman
and you're this young, bright-eyed,
fiery-spirited investigator.
- Yeah, exactly.
- What's the process of investigation that you can speak to?
What are some interesting things you've learned
about what it takes to do great investigations?
- Sure, great investigations reveal something new
or bring something to light.
So I think what everyone thinks in terms of investigations
is a lot of Googling or searching through articles.
I think that's the first thing you wanna get away from
and you wanna try to talk to people,
doing the non-obvious things
and just trying to get perspectives
that are beyond just what is available.
So a lot of it's just having conversations
is so enlightening, both to victims
and also obviously trying to get,
talk to the people themselves.
Secondly, there's sometimes some analysis you can generate
that's meaningful, like blockchain evidence.
So in the case of SafeMoon, for example, going back to that,
I found someone's secret account
where they were pumping, dumping coins.
They were saying things like, "Who sold?
"I'm so mad at the guy who sold, F the guy who sold."
And you look at his account and he was the guy selling.
And it's like, that is just, that's great stuff.
So digging through the blockchain,
I've gained some skills there and that's kind of this fun,
I guess I would say it's this weird edge I have right now
because a lot of people don't know too much about that.
And so I have this weird expertise that works now.
I don't think that'll work forever
'cause I think people kind of figure out
how to do very similar analyses.
But so it's like kind of an interesting edge right now
that I have.
- So that's like a data-driven investigation,
but you also do interviews, right?
- Yeah, definitely.
And then also recently I've tried to get more response,
speaking to your point about like,
as your platform gets bigger,
you need more responsibility.
I've tried to get much more responsible
about like reaching out or somehow giving the subject
some way to talk.
Because I think in early on, I was such a small channel
that A, if I asked them, they wouldn't answer.
But B, I kind of felt like I was launching these videos
into the abyss.
And when some of my videos had real traction,
I was like, okay, hang on a second.
Let's double check this, let's triple check it.
Let's try to make sure all this stuff is correct.
And there's no other side of the story.
I'll say this has interesting implications
because for example,
I investigated this thing called Genesis,
they're a billion dollar crypto lender.
And my conclusion was that they were insolvent.
That's a huge accusation.
So what do you do?
Well, I emailed their press team, everybody.
I said, hey, I think you're insolvent.
I think you're this.
I think I laid out all my accusations.
And I said, you have till, I think 2 p.m.
the next day to respond.
At 8 a.m. before I made my video,
they announced to all their investors
that they're freezing withdrawals.
They don't have the money.
So they front, I don't know if they saw the,
like I don't know if they actually saw that email.
I don't wanna take credit for collapsing them or whatever.
But my point is, had I not taken that level of kind of care
and just said, hey, you're a scammer, you're frauds.
Ironically, could I have done more good
by allowing people to withdraw their money early?
I made some tweets that people did see
that like some people got their money out,
but my YouTube audience is much larger.
And could I have helped more people
had I not given them basically the ability
to know what I was gonna produce when I produced it?
- Boy, your life is difficult.
'Cause you can potentially hurt the company
that doesn't deserve it if you're wrong.
Or if you're right and you warn the company,
you might hurt the, whew.
Well, I'm glad your wife is a supporter and keeps you strong.
That's a tough, tough decision.
Ultimately, I guess you wanna err on the side
of the individual people, of the investors and so on.
But it's tough.
It's always a really, really tricky decision to make.
- Very tricky.
- Oh, boy.
That's so interesting.
And then the thing I've seen in your interviews
that I don't remember, 'cause I think when you,
I watched you earlier in your career,
you were a little bit harsher.
You were like trollier.
You're having a little more fun.
- Sure.
- And when I've seen you recently, you do have the fun,
but whenever you interview, you seem respectful.
Like you attack in good faith,
which is really important for an interviewer.
So then people can go on
and actually try to defend themselves.
That's really important signal to send to people,
'cause then you're not just about tearing down.
You're after like the, it's cliche to say, but the truth.
Like you're really trying to actually investigate
in good faith, which is great.
So that signal is out there.
So like people like SBF could,
like he should go on your platform, I think.
I mean, now it's like in full,
not just like a half-assed conversation
on Twitter space, but in full.
So that's great that that signal is out there.
But of course the downside of sort of,
as you become more famous,
people might be scared to sort of go on.
§24Transcript · 3:09:32–3:17:29
But you do put that signal of being respectful out there,
which is really, really important.
- You know, it's interesting.
It surprises me.
I know it surprises other people
'cause other people have commented,
but it consistently surprises me
how many people still talk to me.
And maybe it's because they,
and I really do give a good attempt
to try to argue in good faith.
I try not to just like load up ad hominems
or anything like that.
I just try to present the evidence
and let the audience make up their mind.
But it surprises me sometimes
that people will just be like,
"Yeah, they wanna talk, they wanna talk, they wanna talk."
I think it's very human in a way.
And I think it's like almost,
it's almost like good.
Like one of the things that is always told
to everyone who's gonna talk to the cops
is like, "You should never talk to the cops, whatever."
Which is true.
You shouldn't talk to the cops.
'Cause even if you're innocent,
they can use your words,
they can twist your words, da-da-da.
But there's something that gets lost
in that like almost robotic, like, you know, self-interest
that I think having open conversations,
even if you've done something wrong,
I think there's something really compelling about that
that continues to make people talk in interrogation rooms,
in Twitter spaces, wherever you are,
regardless of whether you totally shouldn't be talking.
And I don't wanna downplay that.
That's actually really important.
I mean, it's like a lot of cases get solved.
A lot of investigations go farther
because people sort of make the miscalculation to talk.
But I think it's like almost important in a way
that we have that human bias to like connect
in spite of self-interest.
- Yeah, but also they're judging the integrity
and the good faith of the other person.
So I think when people consume your content,
especially your latest content,
they know that you're a good person.
I found myself,
like there's a lot of journalists that reach out to me
and I find myself like not wanting to talk to them
because I don't know if the other person on the side
is coming in good faith.
Even on silly stuff, I'm not a-
- Same way.
- Like I'm not a, I don't have anything to hide.
Like you don't really have anything to hide,
but you don't know what their like spin is.
- Can I tell you an example?
I'm dying 'cause I believe so strongly
that journalists have done themselves such a disservice.
Okay, one of the truest things is that like
everyone loves journalism in theory
and almost everyone dislikes journalists as a whole.
Like there's a deep distrust of journalists
and there's a deep love for journalism.
It's this weird disconnect.
I think a lot of it can be summarized in,
there's this book called the,
God, what it's called?
I think it's called "The Journalist and the Murderer."
It's written by Janet Malcolm.
The first line of this book is that like
every journalist who knows what they're doing,
who isn't too like, is smart enough to know
what they're doing, knows what they're doing
is deeply unethical or something like that.
And what they're talking about
is that there's a tradition in journalism
to betray the subject, to lie to them
in the hopes of getting a story
and play to their ego and to their sense of self
to make it seem like you're gonna write one article
and you stab them in the back at the end
when you press publish
and you write the totally different article.
This is what actually everyone hates about journalists.
And it's happened to me before.
So I did a story like way back in the day,
I got interviewed about something
that was like data with YouTube.
I made a few comments about data and YouTube.
And somehow by the time the article got published,
it's about me endorsing their opinion
that PewDiePie is an anti-Semite.
And I'm like, I reached out to this person,
I said, I never said that.
Like, what are you talking?
How did you even twist my words to say that?
And I felt so disgusted and betrayed
to have like, I'm like this mouthpiece for an ideology
or like a thought that I do not actually agree with.
So, and when journalists do this, they think,
well, I'm never gonna interview this person again,
so it's okay.
So it's like, it's almost like the ends justify the means,
I get the story.
But the ends don't justify the means
because you've now undermined
the entire field's credibility with that person.
And when that happens enough times,
you end up sitting across from Lex Friedman
and it's like, well, I don't know
if they're gonna represent me fairly.
Because the base assumption is that
regardless of what the journalist says,
they could betray you and they might betray you
at the end of the day and be saying you're great
while they're secretly writing like a hit piece
about like, you know, how much, you know,
you're a bad force for the world.
Where, whereas there's an alternate universe
where if the journalist was somewhat upfront
about their approach, or at least didn't mislead
and didn't say like, I love you, I think you're great,
you would end up with less access,
but you would end up with more trusted journalism,
which I think in the long run would be better.
- I think you get more access.
- I think in the long term, yeah, but all of these,
like everything we're talking about is long-term games
versus short-term games.
- Yeah.
- In the short term, you get more access
if you suck up to the person,
if you say this, say this, say this,
and you stab them in the back later.
Long-term, you build a long-term reputation,
people trust you, it actually matters more.
- And it's nice when that reputation
is your own individual.
So like you have a YouTube channel, you're one individual.
So people trust that because you have a huge disincentive
to screw people over.
- True.
- I feel like if you're in the New York Times,
if you screw somebody over,
the New York Times gets the hit, not you individually.
So you can like, you're safer,
but like the reason I don't screw people over
is I know that, well, there's my own ethics and integrity.
- Sure, but yeah.
- Also there's a strong disincentive to like,
'cause you're now, I'm going,
that person is gonna go public with me screwing them over,
completely lying about everything,
how I presented the person, for example.
And that's just gonna, you know,
that's gonna percolate throughout the populace,
and they're gonna be like,
this is the person that's a lying sack of shit.
And so there's a huge disincentive to do that.
Yeah, journalists don't have that.
- That is what's interesting about, yeah,
the move towards independent journalism.
I think we'll probably end up at a space where,
it's so interesting.
Mainstream journalism has so much work to do
to repair the trust with the average individual.
And it's going to take a lot of like self-reflection.
I've talked to a few mainstream journalists about this,
and a lot of them will admit it behind closed doors,
but like there's this general sense that,
oh, the public's not being fair to us.
Like they're very self, they're defensive, I guess,
in a way.
And I understand why, because sometimes
it's just a few bad apples that ruin it for everybody,
but without the acknowledgement of the deep distrust
that they have with a good portion of our society,
there's no way to rebuild that.
Just like when there's no acknowledgement
of the corruption of the 2008 financial crash,
there's no way to rebuild that.
Even if most bankers, most traders are not unethical
or duplicitous or they're totally normal people
who maybe aren't deserving of the bad reputation,
but you have to acknowledge the damage that's been done
by bad actors before you can like heal that system.
- Well, what do you think about Elon just opening the door
to a journalist to see all the emails that were sent,
the quote unquote Twitter files?
- Yeah, that's really interesting.
I mean, I saw a lot of, I'm like in this weird thing
where I see, I follow a lot of independent people
and I follow a lot of mainstream journalists
and that there are very polar opposite takes on that.
- People really quickly politicize it,
§25Transcript · 3:17:31–3:26:01
but to me, the thing that was fascinating
is just the transparency that I've never seen from,
one of the really frustrating things to me,
is a lot of this podcast has been about interviewing
tech people, CEOs and so on,
and they're just so guarded with everything.
It's hard to get to, and so it's nice to get,
hopefully this is a signal, look, you can be transparent.
Like this is a signal to increase transparency.
- Hopefully so.
I don't, yeah, it's been tribalized so quickly,
it's like I've lost a lot of faith in that.
And unfortunately it's been this like bludgeon match
of like, if you're on the right,
you think it's uncovering the greatest story ever
about Hunter Biden.
If you're on the left, you think they were just sharing,
they were just silencing revenge porn pics of Hunter Biden.
So therefore it was justified.
And by the way, Trump also sent messages to Twitter.
So doesn't that mean that like we should be criticizing?
It just like, this is goes back to why I don't touch
politics is 'cause I think as many problems as I have,
I think when you become a journalist that,
not even a political journalist,
when you become a journalist in politics,
you have like twice the problem.
So I'm like, I'm happy to be well outside
of that kind of sphere.
- But it's an interesting--
- It is interesting.
- It, you know, forget Twitter files,
but Twitter itself is really, really interesting
from the virality of information transfer.
- Yeah.
- And from a journalistic perspective,
it's like how information travels,
how it becomes distributed, it's interesting.
- What do you think about Twitter?
I'm always conflicted on Twitter
'cause I almost hate how much I enjoy using it.
'Cause I'm like, this is like this mindless bird app
is consuming my time.
It's this incredible networking tool.
But what's weird is when I think about my own presence
on Twitter, they've almost made it too easy
to like say something that you've half thought.
Like the friction to send a tweet is so much less
than like if I'm gonna make a YouTube video,
there's several points at which I'm like,
well, what's the other side?
What's this, what's that?
There's no friction there.
And so one thing I've noticed
is everyone I follow on Twitter,
a lot of them after reading all their tweets,
I think nothing more of them, nothing less of them.
But there's a lot of them that I think less of.
And I don't think I've ever had an experience
where I've read someone tweets
and I think more of them in a way.
And I'm like, what does that say that?
- Yeah, what is that?
Like there's so many people I admire
that the worst of them is represented on Twitter.
Like there's a lot of people.
- There's a million examples.
- They become like snarky and sometimes mocking
and derisive and negative and like emotional messes.
I don't know, yeah, what is that?
Maybe we shouldn't criticize it
and accept that as like a beautiful,
raw aspect of the human being,
but not encompassing,
not representing the full entirety of the human being.
- But it does reflect like,
it's impossible to not reflect it to some extent.
Or you'd have to counter that bias really carefully
'cause that is them.
It is a thought they had.
It's just probably something
that should have been an unexpressed thought perhaps.
So yeah, I kind of wonder like my,
I'm like, should I be on Twitter?
But the problem is, is it's such a great place
where so many, like so much of the news happens on Twitter,
so much of the journalism breaks on Twitter.
Even people in the New York Times,
they'll tweet their scoop.
And they'll like, they'll put that out on Twitter first.
So it's this really weird thing where I'd love to be off it
and it's like too useful for my job,
but I kind of hate it.
- No, no, you need to, well, it depends.
But from my perspective, you should be on it.
- Oh, I definitely am, yeah.
- So like Coffeezilla should definitely be on Twitter.
But have developed the galluses
and the strength to not give into the lesser aspects.
'Cause you're silly, you're funny,
you could be cutting with your humor.
I wouldn't give into the darker aspects of that,
like low effort negativity.
If you're, the way you are in your videos,
I would say if you're ever negative or making fun of stuff,
I think that's high effort.
So I would still put a lot of effort into it,
like calmly thinking through that.
And also not giving into the dopamine desire
to say something that's gonna get a lot of likes.
I have that all the time.
You use Twitter enough, you realize certain messages
that are going to get more likes than others.
- And are usually the ones that are extreme, more extreme.
And like emotional, like Lex is an idiot.
Or like Lex is the greatest human being ever.
It's much better than,
oh wow, what a polite nuanced conversation.
I can tell you right now which of those three tweets
isn't gonna perform well.
- Yeah, yeah.
So I think the extremes are okay if you believe it.
Like I will sometimes say positive things.
I said that the Twitter files release was historic.
Of course, this before I realized,
I mean, the reason I said it is not,
is because the transparency.
It's so refreshing to see some, any level of transparency.
And then of course, those kinds of comments,
the way Twitter does, is every side will interpret it
in the worst possible way for them,
and they will run with it.
Or some side, when it's political,
yeah, one side will interpret, yes, I agree with Lex.
- It's historic.
They might not have even read the article.
They just like, they literally, or the tweet thread,
and they're just like, it is historic.
- Historic because Hunter Biden was finally the collusion,
or whatever it is.
And then the other side is like, no, it's a nothing burger.
But yeah, that aspect of nuance, and that it's frozen
in time, even with editing, there's a--
- So tough.
- It's tricky, but if you maintain a cool head
through all of that, and hold to your ethics and your ideas,
and use it to spread the ideas,
which you do extremely well on YouTube,
I think it'd be a really powerful platform.
There's no other platform that allows
for the viral spread of ideas, good ideas, than this.
And this is where, like, especially with Twitter spaces,
I mean, where else would I see, I think,
twice impromptu conversations with coffees
with Yolo and SPF, like--
- Never, yeah, nowhere else.
'Cause he wasn't gonna come on my show.
He wasn't gonna come on some big prepared thing.
It's like, hey, Yolo, let's go on a Twitter space.
And I like pop up, and you know what's funny?
And this, I hope this release is late enough,
or well, SPF probably won't see this.
Although I'm sure he's--
- And unfortunately, unfortunately he will.
- Oh, okay. - Yes.
- Well, hopefully I'll have time to enact my little plan,
but I'm hoping if he goes on any future spaces,
I can haunt him from interview to interview,
where just I keep showing up, and he's like,
ah, I hate this guy.
- But I think he's already kind of probably
has PTSD of in the shadows lurks a coffeezilla.
- That just would, that would just,
it's just like, that really amuses me.
- I mean, there is, I think he honestly
would enjoy talking to you.
There's an aspect of Twitter spaces
that's a little uncertain of what are we doing here,
because there's an urgency,
because other voices might want to butt in.
- Exactly, exactly.
- If it's an intimate one-on-one,
where you can like breathe, like hold on a second,
I think it's much easier.
So that sense, Twitter spaces is a little bit negative,
that there's too many voices,
if especially if it's a very controversial kind of thing.
So it's tricky, but at the same time,
the friction, it's so easy to just jump in.
So I can just, I mean, I could,
I mean, you just imagine like a Twitter space
with like Zelensky and Putin.
Like how else are these two going to talk, right?
Like, can't you imagine?
- If you try to set it up on Zoom,
like it never happens.
- It's never happening.
- Too many delegates, like the only way it happens.
- Just imagine Putin like sitting there like.
- Zelensky's live.
§26Transcript · 3:26:02–3:34:29
- Just live, right, just jumping in.
- It's hilarious.
- (speaking in foreign language)
Okay, actually just on a small tangent.
So how do you have a productive day?
Do you have any insights on how to manage your time optimally?
- Yeah, I mean, I've gone the gamut of,
from obsessive time tracking in 15 minute buckets
to kind of like the other extreme
where it's more kind of like large scale,
some deep work here, two hour bucket,
account for an hour of lunch and some other thing.
But now, I just roughly, because I manage a team
and there's some things that kind of come up,
it's only a team of two, it's not like big,
but I just have things that are not necessarily
controllable by me.
I like have to take some meetings or whatever.
It's not as easy to plan out my day ahead of time.
So I do a lot of retrospective time management
where I look at my day and that's what I mostly do now.
And I account, did I spend this day productively?
What could I do better?
And then try to implement it in the future.
So a lot of this I realized is very personal for me.
I do very well in long streaks of working.
And if I can't do a lot of work in 15 minutes,
I can't do a lot of work in even an hour,
but if you give me like three hours or five hours
or six hours of uninterrupted work,
that's where I get most of my stuff done.
- So from the, it'd be fun to explore those,
when you did 15 minute buckets.
So you have a day in front of you
and you have like a Google sheet or a spreadsheet
or something.
- Yeah, I did an Excel.
- Excel.
And you're, do you have a plan for the day
or do you go like when you did it,
or you just literally sort of focus on a particular task
and then you're tracking as you're doing that task
of every 15 minutes?
- Yeah, I would kind of do it live.
I'm not, so one of the reasons I'm so obsessive about it
is 'cause I'm not organized by nature.
And I lost, like in college I learned how much
lack of organization can just hurt you in terms of output.
And so I realized like I just had to build systems
that would enable me to become more organized.
So really, I think that doing that really taught me a lot
about time in the same way that tracking calories
can teach you about food.
Like just learning accounting for these things
will give you skills that eventually you might not need
to track on such a granular level
because you've kind of like figured out.
So that's kind of how I feel about it.
I think everyone should,
if you care about productivity and stuff,
should do a little bit of it.
I don't think it's sustainable in the longterm.
It just takes so much effort and time to like,
and I think the marginal effect of it in the longterm
is kind of minimal once you learn these basic skills.
But yeah, I was basically tracking like live what I did.
And what I saw is that a lot of my real work
would be done in small sections of the day.
And then it'd be like a lot of just nothing,
like a lot of small things where I'm busy,
but little is being achieved.
And so I think that's a really interesting insight.
I've never figured out how to un-busy myself
and focus on the like core essentials.
I'm still getting to that.
But it is interesting realizing most of your day
is like a lot of nothing.
And then like some real deep work
where most of your value comes from is like 20% of your day.
- Yeah, I tried to start every day with that.
So the hardest task of the day,
you focus for long periods of time.
And I also have the segment of two hours
where it's a set of tasks that I do every single day.
The idea is you do that for like your whole life.
It's like longterm investment of Anki
and it's just like learning and reminding yourself of facts.
You know, they're useful in your everyday life.
And then for me, also music.
I'll play a little bit of music.
- Play a piano.
- Piano.
And so like keeping that regular thing
is part of your life.
- And one thing that I've really taken from this
is 'cause I've read all the like,
I had a self-improvement phase in my early 20s.
And one thing you learn is that everyone wants to give you
a broad general solution.
But really the real trick of figuring out like optimizing
is figuring out the things that work for you specifically.
So like one interesting thing you said is like,
oh, I like to do my hard work at the beginning of the day.
I know a lot of people recommend this.
I've tried so many times
and I just do better work late at night.
And so usually my streak of work is like from like
after dinner, 7.30 to like 2 a.m.
That's my prime time.
And so like a lot of my videos, which you'll see,
which is like lit from this studio,
which appears to be daytime,
it's like shot at 3 a.m., you know,
just like in a caffeine fueled rush.
But that's kind of how it works for me.
And then also like with the social outlets
and stuff like that, which it's easy.
And I know, I feel like we think similarly on this.
So it's easy to discount these things as less relevant
'cause they don't have quantitative metrics
associated with them.
But in terms of longevity and like,
I think to be able to do creative work,
there's an amount of recharge and like re-inputting stuff
that is frequently discounted by people like us
who are like obsessed with quantitative metrics.
And so I really found that some of my best work
gets done after I take like a break
or I'll go play like live sets of music.
And I mean, like that's like for me really recharging,
but nowhere on a spreadsheet is that gonna show up
as productive or like meaningful.
But for me, for whatever reason,
it recharges me in a way that like
I need to pay attention to.
- Yeah, for sure.
I usually have a spreadsheet, a 15 minute increments
when I'm socially interacting with people.
And I evaluate how--
- I'm getting roasted right now.
- No, I'm not.
It's actually, I'm probably roasting myself.
But I do find that when I do have social interactions,
I like to do with people that are in,
outside of that exceptionally busy themselves.
'Cause then you understand the value of time.
And when you understand the value of time,
your interaction becomes more intimate and intense.
Like the cliche of work hard, party hard
or whatever the cliche is.
- Play hard.
- Play hard, damn it.
Whatever the--
- In good social interaction.
No, I'm just kidding.
- I mean, that cliche, there's a truth to that.
But the intensity of the social interaction,
even like, you know, it's not even the intensity,
it's not even the party hard.
It's like, even if you're going hiking and relaxing
and taking in nature, so it's very relaxed,
but you understand the value of that.
When you put a huge amount of value on those moments
spent in nature, that recharges me much more.
So you have to surround yourself with people
that think of life that way,
that think about the value of every single moment.
That's one of the things you do
when you break it up in 15 minute increments,
is you realize how much time there is in the day,
how much awesomeness there is in the day
to experience, to get done and so on.
And then so you can feel that when you're with somebody.
And then for me personally, like when I interact with people
I really like to be fully present for the interaction.
- I can tell this is, for anyone who has, you know,
I've been the audience forever.
So I haven't been on this side of the table before.
You're very intense.
You look right in the eye.
- Well, I don't know about right in the eye.
Eye contact is an issue, but yes, I'm there.
- Lex has a soulful gaze, guys,
just in case you were wondering.
It's very soulful, it's very comforting.
It's like a warm hug.
- Back to serious talk.
Okay, you've studied a lot of people who lie,
who defraud, cheat and scam on a basic human level.
How do you have trouble trusting human beings
in your own life?
What's your relationship with trust of other humans?
- It's a great question.
So funny enough, before I did this,
I was like an incorrigible optimist.
Everything, the sun shined, every which place.
I always saw like everybody as fundamentally good.
Nobody was bad.
It just was like sort of that wrong place,
wrong time, bad incentives.
§27Transcript · 3:34:31–3:43:43
That view has darkened significantly,
but I just try to remember my sample set
and just like, I'm just sampling sort of the worst.
And I try not to let it bleed into my day-to-day life.
And I think it's probably because
I was such an optimist early on
that I've been able to kind of retain some of it.
I call it enlightened optimism.
Like choosing to be optimistic in the face of
a realistic sense of the problems in the world
and with a realistic sense of like the scale
and the challenge ahead.
I actually think it's much braver to be an optimist
when you're aware of what's going on in the world
than to be a cynic.
I think being a complete cynic is maybe,
I'm not saying it's wrong,
but I'm saying it's maybe the easier way
just mentally to cope with so much negativity.
It's like just saying, well, it's all bad.
It's all doomed to fail.
It's all gonna go bust is easier.
- Yeah, that leap into a believing that's a good world
is a little baby act of courage.
- At least I think so.
I don't think it's naive.
- No, it can be.
Some people are naive that are optimistic,
but oftentimes just because someone's optimistic
does not mean they're naive.
They could be full well aware of how troubling the world is.
- And I also believe some of the people you study,
you know, I'm a big believer that all of us
are capable of good and evil.
So in some sense, the people you study
are just the successful ones.
The ones who chose sort of the dark path
and were successful at it.
And I think all of us can choose the dark path in life.
That's the responsibility we all carry
is we get to choose that at every moment.
And it's like a big responsibility.
And it's a chance to really have integrity.
It is a chance to stand for something good in this world.
All of us have that because I think
all of us are capable of evil.
All of us could be good Germans.
All of us could in atrocities be part of the atrocities.
- Yeah, I think it's, I really have,
especially in recent years,
tried to somewhat depersonalize my work
and see it almost like as like a, I don't know,
like a force of nature that I'm fighting
more than like individuals.
Because of this exact thing, I think like sort of,
therefore, but the grace of God, there go I,
is kind of a really profound way to understand yourself
rather than it's just like fundamentally good
and like full of integrity.
Acknowledging that so much of that
is a product of your environment
and your family and your upbringing.
And so much of the people who don't have that
is a product of their environment.
It doesn't absolve them,
but it gives you more perspective
to like to sort of deal fairly, if that makes sense,
and not approach it from a place of anger
or a place of outrage.
There is a sense of like sadness for the victims.
There's a sense of outrage for the victims,
but approach the individual who's done the thing
from that place of understanding of,
this isn't just this person.
There's like a whole broader thing going on here.
Do you have advice for young people
of how to live this life?
How to have a career they can be proud of?
So high school students, college students,
or maybe a life they can be proud of?
- That's a great, well, let me think about this
for a second.
I think, don't be afraid to go against the grain
and sort of challenge the expectations on you.
Like you sort of have to do this weird thing
where you acknowledge how difficult it will be
to achieve something great
while also having the courage to go for it anyways.
And understanding that other people
don't have it figured out, I think is a big theme of my work,
which is that everyone wants like the guru
to show them the way, to show them the secrets.
So much of life and achieving anything
is learning to figure it out yourself.
And like the meta skill of being an autodidactic
where you can, I don't know if I said that word right.
Basically you self-teach.
You learn the meta skill of like learning to learn.
I think that's such an underrated aspect of education.
People leave education, they go,
when am I gonna use two plus two?
When am I gonna learn, use calculus?
But so much of it is learning this higher level
abstract thinking that can apply to anything.
And getting that early on is incredibly important
and incredibly powerful.
So yeah, I would say like a lot of it is,
is I guess to some extent,
like you kind of have to do that Steve Jobs thing
where you realize that nobody else in the world
is smarter than you.
And that both means that like
they can't show you the perfect way,
but it also means you could do great things
and kind of chart your own path, I don't know.
That's so cheesy.
This is why I hate giving advice.
(Zubin laughs)
I feel like it's cheesy.
I mean, and I don't think it is.
Like I think my journey is so full of luck
and like specific experience.
I wonder how generalizable it is.
But if I've learned anything
and if I could talk specifically to myself,
I guess that's what I would say.
- I mean, you've taken a very difficult path.
And I think part of taking that path,
like of a great journalist, frankly,
is like I can be that person.
Like just believing in yourself that you could take that.
'Cause like if you see a problem in the world,
you could be the solution to that problem.
Like you can solve that problem.
I think that's like, it's really important to believe that.
It depends.
Maybe you're lucky to have the belief inside yourself.
Maybe the thing that you're saying is like,
don't look to others for that strength.
- And also like be really comfortable failing.
I think one of the best things
that like you would never know about me,
just looking at my background,
that helped me was playing music live.
I had incredible amounts of stage fright growing up,
mostly because I was terrible at piano.
I was like, sucked.
And I specifically, I taught myself how to play.
And I joined jazz band in like high school,
did it through college.
I remember all my recitals,
I messed up every single solo I ever did.
I never like actually nailed it.
And every time I'd go up there,
I'd like have so much dread around this.
And it was easier to get up there
'cause there were sort of some people up there.
But eventually I started like playing live too.
And I sucked at that.
And I've just gone through the trenches
of like just like being publicly sort of,
in my mind humiliated,
like that prepared me so much for what I do now
of trying to basically being fearless of failure
in the face of like a wide audience.
I don't have that anymore
'cause kind of I've experienced so many iterations of it
at a smaller scale of just like abject public humiliation
to where it's like not something that bothers me.
I have no stage fright that doesn't bother me anymore.
But you'd think like,
oh, maybe he just was always good at this.
I was terrible at it.
I had a complete phobia about public anything.
So it was that rapid iteration of just failure.
And eventually I just like came to the conclusion
of like, I wanna love it.
I wanna like love like getting up on a stage and bombing.
If you can learn to like love that and be fearless there,
there's almost nothing you can't do.
- Yeah, that's brilliant advice.
I'm with you, still terrifying to me, like live performance.
But yeah, that's exactly the feeling
is loving the fact that you tried.
And somehow failure is like a deeper celebration
of the fact that you tried.
'Cause success is easy.
But like failure is like bombing.
I mean, music, yeah, on small scale,
on the smallest and the largest of stages,
I'm not gonna say who, but there's a huge band,
huge band that wanted to be on stage.
And it probably will happen.
But like, but I turned it down because I was like, no.
'Cause I'm gonna suck for sure.
So the question is,
do I wanna suck in front of a very large live audience?
And then I turned it down 'cause I was like, no, no, no.
But now I realize, yes.
- Embrace it.
§28Transcript · 3:43:44–3:46:12
- It's gonna be good.
It's gonna be good for you.
It's gonna crush your ego to the degree it's remaining.
And it's just good for you.
It's good not to take yourself seriously
and do those kinds of things.
But honestly, I feel that way in an audience,
like in an open mic.
It hurts.
That's why I really admire comedians.
And like, I go to open mics all the time
with comedians and musicians,
and I just see them bomb and play in front of
like just a few folks,
and they're putting their heart out.
And especially the ones that kind of suck,
but are going all out anyway.
- I think open mics are the best place to learn though,
because it's the lowest stakes you can get
while still being public.
If you're gonna face like fears around this,
'cause we're talking very specifically like public speaking
or any kind of like, you know, being in front of a camera.
If you're gonna face your fear, you have to do it.
And the easiest way to do it is to lower the stakes.
You're not gonna start being Lex Friedman on stage
with a huge band.
You don't wanna be.
Like it's like in that way, it is so impossible.
But the more you lower the stakes
and just like open it up to like two strangers,
five strangers, like the most dive bar open mic
you can go to and like start performing.
That's really what I did is like,
like I love open mics now,
'cause it's like low stakes on the one hand,
but you really get the feeling of like going for it.
- And you get better and better and better at that.
Yeah, for sure.
And then you'll get the strength to take a bigger
and bigger and bigger risks.
Listen, Koff, I'm a huge fan of yours,
not just for who you are, but for what you stand for.
People like you are rare and they're a huge inspiration.
I just, I'm inspired by your fearlessness,
that you're taking on some of the most powerful
and richest people in this world and doing so
with respect, I think, with good faith,
but also with the boldness and fearlessness.
Listen, man, I'm a huge fan.
Keep doing what you're doing
as long as you got the strength for it,
'cause I think you inspire all of us.
You're doing important work, brother.
- Thanks for having me.
- Thanks for listening to this conversation
with Koffee Zilla.
To support this podcast,
please check out our sponsors in the description.
And now let me leave you with some words
from Walter Lippmann.
"There can be no higher law in journalism
than to tell the truth and to shame the devil."
Thank you for listening and hope to see you next time.
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