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Jason Calacanis (00:00:01): Do I care? I'm coming in hot. By quick time, I told you 7 times, you, Nick. You don't work for me. You're throwing furniture on your own. You're not working for Shamal. Chamath Palihapitiya (00:00:08): Do not talk to my employees, Jason. Jason Calacanis (00:00:11): You guys are gonna billionaire me, and that's gonna be the greatest revenge of all. You wanna run the show in year 4? Go in the head, chairman. You guys won the vote. Guess what Jake House gonna do? I'm gonna ski and you're gonna make my 25% worth 500,000,000. Chamath Palihapitiya (00:00:25): Get to work, bitches. Deal. Let's go. Deal. David Sacks (00:00:28): Chamath Title's been upgraded from dictator to chairman. Jason Calacanis (00:00:30): Chairman dictator. That is very funny, chairman dictator. David Sacks (00:00:33): Chairman dictator. Jason Calacanis (00:00:34): He's got the super voting. I have no say anything. I've David Friedberg (00:00:39): built this entire Jason Calacanis (00:00:40): empire, and I have nothing I built the empire. I came up with the name of the show. I came up with the format. I invited you miss more pricks. Make me race, bitch. Let's go. Distribution check. Daddy needs new skis. 3, 2, alright, everybody. Welcome back to the all in podcast. If you can believe it, We're almost at 4 years of this, Michugan. Episode 1 58 today, and we've got a full dot I'm at half speed. Chamath Palihapitiya (00:01:07): I got a little bit of, Jason Calacanis (00:01:08): the sniffles, but we're gonna power through the docket with me again today. Sniffles? I got a little bit. Can I David Sacks (00:01:15): get you a tissue? Jason Calacanis (00:01:16): Give me a little tissue and some, some juicy juice box. I'll be fine. I'll be fine. David Sacks (00:01:23): You'll tough it out. You'll tough it out. Jason Calacanis (00:01:25): Wow. Listen. I just wanna say. David Sacks (00:01:27): You can make it through this pod. Jason Calacanis (00:01:28): Of course. Of course. I'm a Chamath Palihapitiya (00:01:30): with me Jason Calacanis (00:01:30): again today, the king of beep. We can't say what he's working on. David Sacks (00:01:35): It's a lot. I mean, people understand that, like, what the beep there were so many beeps last time. That people couldn't even understand it. Jason Calacanis (00:01:42): Beep out of the show. David Sacks (00:01:43): It's so crazy. It's some process. Genetically engineering. Right? Jason Calacanis (00:01:47): But he's it's top secret. Which one is gonna They already figured David Sacks (00:01:51): it out in the comments, by the way. Alright. The comments just figured everything. They I don't know what's so grit. They're they already figured it out. Jason Calacanis (00:01:58): So can we say what it is? David Sacks (00:01:59): The horse is out of the barn Friedberg. Jason Calacanis (00:02:00): Can we fit get through introductions? Go ahead. Keep going. And chairman dictator Tremoth Palihapitiya is with us. Welcome back to the program. Chamath Palihapitiya (00:02:09): Thank you. By the way, I, I was feeling pretty bad about your sore throat. So I was I went on Google, and I found something that may be the cause of it, Nick. Can you just throw up the circle? Prescribe. You can't freeze, Joe. Get him David Friedberg (00:02:26): in the David Sacks (00:02:26): joke. Come on. Jesus. David Friedberg (00:02:29): This isn't a Tom Cruise movie. You can't pre strike it. Go ahead. Chamath Palihapitiya (00:02:33): I found an article that makes you a quick soaps. Jason Calacanis (00:02:46): Oh, no. David Sacks (00:02:47): Oh, we're David Friedberg (00:02:47): all gonna get cancelled. Jason Calacanis (00:02:53): David Sanders. And I said We open source it to the fans and they've discovered a reason for Chamath Palihapitiya (00:03:00): it. Let me I am your BIPOC Chamath, and I'm here to do the best job I can. Jason Calacanis (00:03:08): Wait. Wait. What do you mean BIPOC chairman? When you explain to what these two words mean? Jason of color, bro. David Sacks (00:03:13): Billionaire person of color. David Friedberg (00:03:15): Oh, is that what it is? Yeah. So according to Jason Calacanis (00:03:18): d we checked the DEI manifesto, and it said we needed to make a chairman of the organization. So, Sacks is leading the all in DEI group and, they voted Chamath to be the 1st chairman of all in as we get our CEO ready to come on board. And so you did a diversity token candidate. Sacks explained the process. David Sacks (00:03:39): Well, it's it's it's more like, you know, Chamath was getting a little bit touchy about being called dictator all the time, and you were kinda playing the Biden role of needlessly offending him. He's kinda playing she's in payroll. So we've elected him chairman so that you can stop calling him dictator. Jason Calacanis (00:03:54): Right. Cause you wanna gotta David Sacks (00:03:55): be more diplomatic, more sensitive. Jason Calacanis (00:03:57): More dip. Yeah. I think it's great. I'm all about the diplomatic. Listen. He's There David Friedberg (00:04:00): was there was a politburo. There was a process. It was craddock. Jason Calacanis (00:04:04): To switch everything from the chimney. And now for year 1 David Sacks (00:04:08): There's a follow-up here, consisting of me, Friedberg and Shamoff. And the Chamath Palihapitiya (00:04:12): Paul's Bureau of the selected Chip office chairman. Jason Calacanis (00:04:15): Get to work. Get to work. Let's make my 25% worth a $1,000,000,000, it is, and of course, with us, hot off his hosting of the absolute best party of the season David Friedberg (00:04:28): Well, top 2. Jason Calacanis (00:04:29): You're a distant 2, man. Chamath Palihapitiya (00:04:31): It was a top meat protein party. Mhmm. Jason Calacanis (00:04:34): Shumaz and I went to Sacks. I hope David Sacks (00:04:35): you got enough food. Jason Calacanis (00:04:37): I did. Yeah. I mean, I David Friedberg (00:04:38): the dessert table was crazy. No. The drink Chamath Palihapitiya (00:04:40): is simple. I had to I was like, I found myself beside it, and I was like, why am I near this dessert table after the go at Friedberg birds. David Sacks (00:04:47): So I Chamath Palihapitiya (00:04:47): have to go to I have to go to the other side. Jason Calacanis (00:04:50): Well, here's what Shamoff and I did. We got in there and we sniffed out the caviar. And this was top shelf caviar on potatoes. That was good. That was good. Fresh and also on bellini's. We parked it there. And then David Sacks (00:05:04): That actually is a great way to, you know, the those blinis are too, like, ready. I don't think it's a good combination with caviar, but Jason Calacanis (00:05:12): Same more in the caviar. Chip? Ah. High and low. They call it high and David Sacks (00:05:16): low in Jason Calacanis (00:05:16): the business. Yeah. High and low. David Sacks (00:05:17): Always be served on Pringles. Jason Calacanis (00:05:18): The most important thing, Nick, I'm sure you have it queued up is our annual awkward hug. This is a tradition amongst the all in every year to celebrate the holiday seasons. We engage in the awkward all in Hug. Let me explain how the hug went down. We're at the caviar, and Chamath is on his 8th Pringle. I'm I'm about 15 in. I've eaten half the 10 of caviar at this point. I'm getting my money's worth, for coming all the way up, to the city. And risking my life. And then here it is. We gotta break this down. First, Chamath is in a loving embrace with Sacks. What you see there from Saks is not a cry of joy. Fear. It's it's absolute fear. Object fear. Abject fear. David Friedberg (00:06:03): Did she not let go? Ryan Petersen (00:06:05): Too long. David Sacks (00:06:05): That was Moli. Jason Calacanis (00:06:06): Yeah. Chamath refused to David Sacks (00:06:07): go off for a while. That's what you guys don't I'm assuming. Chamath Palihapitiya (00:06:10): Because if you look at the studies in Friedberg and Natesto this, when men hug for 2 minutes, there's a release of oxytocin, and it's an incredible anti inflammatory, anxiety. So I was I was giving you therapy. That's like the therapeutic con. David Sacks (00:06:26): It was Jason Calacanis (00:06:27): a gift. That was that David Friedberg (00:06:27): was your Christmas gift. Jason Calacanis (00:06:29): Sacks, tell us what you're feeling here. We see this blood curdling scream and or cry of joy. What what were you what was going through your mind when you got to minute 2 of the hug? Pick us at the moment. David Sacks (00:06:40): I'll show you what I was I was thinking of here. Hold on. David Friedberg (00:06:43): Okay. David Sacks (00:06:43): Because you can see Jason Calacanis (00:06:44): here also if we break this down, Friedberg comes in with an Asperger side hug. I don't know if you can see that there in David Friedberg (00:06:50): the photo, but let's see see the Jason Calacanis (00:06:52): because, you know, he yeah. He got a zoom over to the left. Friedberg, looking at his shoes, is like I'm going to express joy and love with my 3 besties through a man hug, and he he gets enough of the shoulder in there that he doesn't have to have He's Chamath Palihapitiya (00:07:08): technically part of the hug, but he's not really. David Friedberg (00:07:11): Cannot make eye contact. And he Sacks, I have to. Now me, Chamath Palihapitiya (00:07:14): I'm like, this is hilarious. Ryan Petersen (00:07:16): So I just jump and I grab all three guys and Jason Calacanis (00:07:19): I just said, that's just me pure joy. Hilarious. Friendship is great. Good to have good friends in life. Chamath Palihapitiya (00:07:24): Friendship is great. I love you guys. Jason Calacanis (00:07:26): I love you guys too. Yeah. Sacks at you. David Sacks (00:07:28): Yeah. This is what I was thinking. This is what I reminded me of. Jason Calacanis (00:07:31): This is Saks's personal Vietnam. David Sacks (00:07:33): This is oh, yeah. Chamath Palihapitiya (00:07:34): That's a great scene. Great scene. Well, Jason Calacanis (00:07:36): that's it. David Friedberg (00:07:37): That's a great sense for fight club. Chamath Palihapitiya (00:07:39): From fight club. That's people. Right? David Sacks (00:07:41): Yeah. Is David Friedberg (00:07:41): that meat loaf a great scene? That's a great movie. Alright. Fair enough. He's on he's on estrogen therapy in the scene, and he grows man boobs, and then he stuff Edward Norton into his man boobs. It's a great scene. David Sacks (00:07:51): We're men. Men is what we are. Jason Calacanis (00:07:53): Let's get to work. We got a full docket here, and, the world continues to spin Into chaos, apparently, members of the Houthi movement have been attacking commercial ships in the Red Sea with drones and With missiles, this is largely underreported in the mainstream press. So we thought we would tackle it here. They are calling this revenge for Israel's a military campaign in Gaza, the Houthis say they will only stop once Israel begins allowing food and medicine to freely enter Gaza. Like something we would all like to see. Critics suggests this is a power play for more legitimacy and the reason. US allies including the UK, Canada, France, are reportedly preparing to deploy naval vessels to the region to deter more strikes. Obviously, There's a lot of geopolitics here. And this is a business story. We can link this back because the attacks have interrupted 1 of the world's Busiest trade routes. As you know, all 5 of the world's largest shipping conglomerates have paused. Transfers through the Red Sea And that means they've gotta go around cape horn. They gotta go around South Africa to get things to Europe, from Asia 1000 of extra miles from what I understand, and this has caused oil and gas prices to rise. And if this becomes acute, it could be Really, really impactful to the economy on a global basis. So in order to understand what's happening, of course, we go to our foreign war correspondent. Yes. He's got his military cap on. He's now at a total of 0 tours of duty. Sacks, can you please? With your infinite wisdom and experience in the field tell us what is happening in this. David Sacks (00:09:40): Well, you know, Jason Calacanis (00:09:41): Matchbox situation. David Sacks (00:09:42): Yeah. What's happening is, gee, what's happening? Come Jason Calacanis (00:09:46): on. You're an expert. David Sacks (00:09:47): Yeah. I'm really I'm really struggling with this one. Jay Calacanis use a lifeline? I'd like to phone a friend. Phone a friend to answer this one. Jason Calacanis (00:09:56): For the first time, Sacks is unable to us a competent answer if he's chosen to phone a friend, which we allow here on the All in Pocus? Who would you like to phone? Have you thought about are you gonna phone? David Sacks (00:10:08): Since this is, involving impact from global Jason Calacanis (00:10:11): trade Friedberg? Who? No. David Sacks (00:10:12): I'm I'd like to phone Tucker. Ryan Peter the founder of Flexport. Jason Calacanis (00:10:16): Alright. Here we go. We're going to the AT and T phone call, phone a friend, zoom We're gonna click through on zoom. And can we get Ryan Peterson from Flexport? Ryan Peterson, you're here. Chamath Palihapitiya (00:10:33): It's Jason Calacanis from the all in podcast. Jason Calacanis (00:10:35): Sure, boy, Jay Cal. Let's go skiing soon. Ryan Petersen (00:10:38): We're live. We're Jason Calacanis (00:10:40): live. We're live. You're on the online podcast live. We've got an official phone friend moment here. You, you understand what's going on there better than anybody. Ryan, obviously, runs Flexport, and he is in the business of shipping container. So, Sacks, you wanted to ask him for some help? David Sacks (00:10:55): What is the impact on global trade here from what's happening in the red sea? Ryan Petersen (00:11:02): Well, it's it's massive. About 30% of all ocean container traffic flows through the flows through the Suez and through the red sea. Most of that is going Asia to Europe. So, like, the biggest impact here is gonna be felt on those two areas. It's gonna make Chinese manufacturing that much more challenging. You have to go around the southern tip of Africa. It's adding about 20%. 20 to 25% longer journey. And now in a network business, a longer journey means less capacity. So you're talking about a 20, 25% cut in shipping capacity on the 30% of all containers. David Sacks (00:11:38): So that's containers. I also understand that about 12% of global oil goes through and about 8% of liquefied natural gas And just to explain what we're talking about there, can we zoom in? There's a very narrow street. They're called the Bob El Mandeep Supreme. I hope I didn't massacre that pronunciation. So you go around the gulf of Aden through that Bob elle Mandeb straight into the red sea. And then from there, you can go the Suez Canal and the Mediterranean. Ryan Petersen (00:12:03): Yeah. And so it's a it's a maritime choke point. By the way, this is going back. It always has been. You know, there's there's documentation, Caesar Augustus invaded Yemen in, like, Sacks BC, I forget Sacks AD. No. I forgot the dates, but it was during the reign of Caesar Augustus. So it would have been right around the the birth of Jesus Christ. And you're talking about 1000 years of this being a really important choke point. Even the Egyptians's actually built a canal The ancient Egyptians had a canal that connected the Nile River. So this has always been the place to connect east and west, an incredibly important maritime choke point. And the rebel forces in Yemen have been firing missiles at ships. And that what that does is, like, the insurance costs, obviously, it puts, the cruise day lives in danger, which they can't tolerate, but it also, really spikes the insurance costs. If you sail a ship into a region that's got missiles being fired, the insurance just won't cover it. And so you can't you can't operate a ship without insurance because if it Sacks, you go out, you go bankrupt. And so they're just taken the long way around. Which, as I said, is a 20% reduction in capacity. What we've seen remember with COVID, you had all those ships off the port. You guys brought me on to the show. The last time, I think, was when that happened, that was about a 20% reduction in capacity. But at the same what happened during COVID was there was also a 20% increase in demand. So this time, there's not an increase in demand. So I don't think it's as impactful as what we saw to shipping prices during COVID where you have, like, a 10 x run up in price. But you're already seeing prices are coming out now for January freight, for ocean freight, Asia to Europe. You're seeing about a 3 x increase in the price of ocean freight, versus where we were a month or 2 ago, which was very, very cheap a month or 2 ago. Ryan Petersen (00:13:46): So I wouldn't read too much into this. And Frankly, the Suez Canal is too valuable, in my opinion, too valuable to civilization to the modern world. To believe that, you know, a group of rebels, no matter how well funded they may be, is gonna be able to disrupt that for any period of time. I think there's too many interests aligned here to say to keep this thing flowing. David Sacks (00:14:09): Well, okay, two points on that. So we call them a rebel group. And I guess they are. It's a shia group in Yemen that rose up in 2014 and deposed the monarch there. And they based control large swaths of the country, but they're not internationally recognized. So that's why they're called rebels, but make no mistake. They basically control the vast majority of of Yemen. It's a CHIA group. They're, you can say, sponsored by Iran, but I'm not sure they're controlled by Iran. People call them proxies, and that's true to some degree, but they also have agency. Like you said, Jay Cal, they are doing this. They say in solidarity with the Palestinians. When the invasion of Gaza first began, they were firing rockets at Israel, but they had to go all the way over Saudi Arabia. They didn't make it. So now they started firing on ships that are going through the straight. They started mining the straight. And so like Ryan's saying, this is basically put a damper on on commerce unless you're a country that the Hoodie's like. Apparently, Russia's been able to move. It ships through still. They claim they're only targeting ships that are transacting with Israel, but that's not true. I mean, a lot of ships have been targeted that don't have a relationship with Israel. So let's just say broadly speaking for Western ships, they can't get through. Now what the US has done in response to Ryan point, if is that we've announced this operation prosperity guardian, which is to restore the flow of trade through, you know, the red sea. But the question is what that's gonna involve. And I think we are bracing now for the US to start taking military action against the Houthis. The problem is, I think, Ryan, when you're saying this is gonna be resolved maybe quickly is that the US was already backing the Saudis in a war against the Houthis that started in 2015. It only got sort of resolved with a ceasefire that's still pretty fragile last year. And so the Houthis have already survived almost a decade of western sponsored attacks on them not clear what we have to do to basically stop them from taking these actions. And I think if the US starts a war basically against the Houthis in Yemen. We're talking about an expansion of this conflict in the Middle East from you know, beyond what's happening in Gaza to now another front, that directly involves the US. David Sacks (00:16:32): Moreover, this is, I think, very underreported but there've been almost 80 attacks on US bases in Syria and Iraq by Chia militias, again, sponsored by Iran. Over the last couple of months. So this whole region is a powder keg, and it's not clear to me that if the US attacks the Houthis that this is gonna lead to a quick resolution. So I guess my question back to Ryan is, let's say there is a war here. Let's say the Houthis don't stop. I don't think they will. And let's say the US gets an award there, but isn't really able to bring it to decisive conclusion. And let's say that this blockade of the Red Sea continues for all of 2024, what does that do to global prices? Because I think right now the market is pricing in rate cuts next year on the theory that inflation is coming down as a solve problem. Ryan Petersen (00:17:27): It's the right question. It'll be a big impact. And if you listen to, like, retailer earning call earnings calls, they're all talking about, hey. We've had 6, 12 months of deflationary environment, prices are coming down. A lot of what they cite is the lower ocean freight prices. And if and if that goes Sacks, And it if it goes back anywhere near, I mean, we're already seeing a 3 x, but even that 3 x is sort of well. Is this gonna last? Do I need to price it all in? Do I need to and it hasn't really, taken hold of, like, that's not a true market dynamic of what is the supply and what is the demand Freight is very inelastic. Like, you're gonna ship the product regardless of the price of freight. You know, unless your business model has the tiniest of margins, the price of freight goes up. It doesn't impact how many products you ship. You're gonna go sell as many products as you can. Does it impact America as much as it impacts Europe? Absolutely not. Now this is the the fastest route for many parts of Asia to the east coast of the United States, and especially with the Panama Canal's also congested at the same moment right now, because of they say it's because of a drought, but actually they built a bigger canal It's just draining the lake faster. And that's my hypothesis, but I'd like to look into it a little further. But, the the Panama Canal is only going at about 2 thirds capacity So if you're going Asia to the East Coast, those are your options. But it to go around the southern tip of Africa around the Cape of Good Hope to get to the East Coast, It's like an 8% increase in transit time versus 20 to Europe. And there's alternatives. So definitely impacts Europe much more. It impacts China. Like, The reason I think that this there there's so many people lined up here. Like, this is not good for China. China wants to be able to ship stuff quickly to Europe and get it to market. Ryan Petersen (00:19:11): So to the extent that they have any impact, I think they're gonna be clearly on the same side as the United States here. Europe obviously has And the other thing that I haven't heard anyone talk about is like, if you look at that map, they're blockading, not just the Suez, but they're blockading Saudi Arabia. The Saudi's biggest port is in Jetta. Right up there. Well, I don't think they're gonna tolerate being cut off from the world. Yemen taking Jason Calacanis (00:19:31): on Saudi seems like an unwise idea. Well, they've been at Ryan Petersen (00:19:34): war in the past as David pointed out. So, and I'm not I'm certainly no expert. By the way, I I find this ship to be amazing. And since transited, but this is one of the ships that was there yesterday. I just going for it. And if you look at the destination, it Sacks, armed guard onboard. As they set that in the AIS, g g g p s transponder so that if anyone comes after him, you know what you're gonna get. Chamath Palihapitiya (00:19:55): I have 2 comments. When I looked at this in the last couple of days, that was sort of my takeaway, which is that the the really significant impacts are downstream to Europe consumer prices. So I think like European inflation has more chance of up taking again than America does. Because I think the practical reality is what you said, Ryan. They'll just the the need to ship is inelastic, and so they'll just pay 8% more, and they'll just go to the Coast in a more, in a longer way through the Cape of Good Hope or whatever. The second comment, I think, to me, is a little bit more macro in nature, which is if you look at what's happening now, there's a hot war in Israel and Gaza. And theoretically now there's a hot war in Yemen. I think the positive take on this is that it actually puts the Middle East in a position to resolve all of these things. And what I mean is the following, if you're Saudi Arabia or if you're the UAE or if you're Qatar, what you really wanna do is build for the next 30 to 40 years. They've said it as much. They want to pull 1,000,000,000,000 of dollars of oil and that gas out of the ground. They want to monetize it, and then they want to invest in their people. The last thing they need is to be bookended by 2 hot wars, largely propagated by a third party actor in Iran. And so I think if there was not resolve for them to get aligned. I think that the resolve now really amps up. Saudi Arabia doesn't want to be in the middle of this nonsense. Qatar doesn't wanna be in the middle of this nonsense. UAE does not. And then the fact that Canada, America, Britain, France, are now all of a sudden pulled in And China, as you said, Ryan, hadn't even think about the implications to China as a supplier of record for most of these goods. All roads, I think, lead in my opinion to a coming together of folks to say, okay, let's use this as a definitive moment to just clean the Sacks here. Chamath Palihapitiya (00:21:57): And I think that that'll put a lot of pressure on Iran, a lot of pressure on the money flows. I suspect that both of these 2 hot ores get resolved quickly because the larger multi decade implications for the Middle East are too big to let it be subsumed by the Houthi rebels or Chamath. Ryan Petersen (00:22:13): It's interesting here, how you see, like, Israel is a relatively small economy in the world and the and and, you know, when you start to see in the same way that Ukraine is not a big economy. Russia is not that big, but it has a massive the the war there has just a massive impact via the commodities markets because Russia is such an important supplier of commodities. And now you see what, you know, Israel and Gaza are relatively small, potentially a small regional conflict big global implications because of everything that goes behind it. But now you see the spread is something that really could impact. If this is an extension of that conflict, now you're saying, wow, this actually has the ability stand to global markets in a way that's similar to what happened in Russia and Ukraine, where all of a sudden commodity markets are impacted and you're seeing that inflation Jason But I I don't know, Jason, if you're your view is, hey. We're gonna have progress because progress is good. I don't know that that's necessarily the the direction that the world follows. Like, you could have Chamath Palihapitiya (00:23:07): I think you're sitting in Dubai or Saudi or Qatar, you're thinking, this is the last thing we need. For sure. David Sacks (00:23:12): Well, I think that's definitely true. Chamath Palihapitiya (00:23:14): Multi decade, multi $1,000,000,000,000 investment plans, and we're gonna let the Houthi rebels derail that. Ryan Petersen (00:23:20): And literally on ports like Saudi's trying to build a big port as part of the NeoM project there in the in the northwest of the country on the Red Sea, which would be cut off. I mean, they're not it's not gonna fly. David Sacks (00:23:29): Yeah. It looks that Saudi Arabia is in a really tough spot here because what happened is after the Houthis deposed the monarch there in 2014, Saudi Arabia start fighting war to restore the the leader in 2015. And that war went on for almost a decade, created a huge humanitarian crisis, really underreported compared to other crises. There were 100 of 1000 of civilians who were killed. Millions of people displaced when hungry. Finally, that war, again, got paused by a fragile ceasefire that was negotiated, I guess, in the last year or so. And then simultaneous to that, there was a reproach mob between Saudi Arabia and Iran that was brokered by China. And so the last thing Saudi Arabia wants to do is get involved in restarting this war or restarting hostile relations with Iran. I mean, they would like to move beyond that, which is why they're not participating in this Operation Prosperity Guardian. The problem they have is that the Houthis aren't gonna stop doing what they're doing until Israel's war and Gaza stops, and Netanyahu just in the last 24 hours made it clear that Israel won't stop fighting they will not agree to another ceasefire until Hamas is eliminated. So, Chamath, I think you're right that if there were a ceasefire that this situation would go away very, very quickly, and shipping, normal shipping would be restored. However, I'm not sure you're gonna get the parties to agree to a cease fire anytime soon. I mean, the Israelis seem pretty determined not to agree to a ceasefire. I think the Biden administration clearly would like that. I think they would like this problem to be over, but with the continuation of hostilities in Gaza, you continue to have the potential for the second order effects, these kind of knock on effects, And like I mentioned, one is the is the Hutis and other are all these American bases that are under attack right now by these Chia militias. David Sacks (00:25:23): So I think this has the potential to be a black swan in 2024, meaning that somehow the Israel Hamas war spirals into a larger regional war that pulls the US in. I'm not saying that's gonna happen, but I think the potential is there the longer this goes on. And I think that if does happen, there could be the potential for an oil shock. By the way, the Houthis have said that if the US attacks Yemen, they will light the saudi oil fields on fire. Now I'm not sure they have the potential to do that. I mean, presumably if they had the potential to do it, they would have done it during their long war. So that probably is just you know, hyperbolic rhetoric, but there's so many ways for this to somehow turn into a larger middle eastern war. Jason Calacanis (00:26:04): To your point, Chamath, I think, You know, I've been meeting with folks in Doha and Riyadh and Abu Dhabi in Dubai for the last 6 months, and I was talking to people this past weekend. You're absolutely right. There are a group of people with an agenda, which is to modernize the economies there to move off petrol and to move into technology and to move into hospitality with the Neo project, as you pointed out, Ryan. And I that's not gonna get derailed. And those are the most powerful you know, deep pocketed, influential forces there. And so, yeah, they're working with the United States and any of these rebels, etcetera. I think they're going to be dealt with because people want prosperity and they want to keep evolving these societies and moving them. And normalization. Normalization. Yeah. I mean, have you ever have you got who's been to Riyadh here? Chamath Palihapitiya (00:26:55): I have. Yeah. Jason Calacanis (00:26:56): I think Friedberg or Sacks, have you been to Riyadh? Never? Friedberg? Ever? I mean no. It's beautiful. And it's changing rapidly massively. And and, obviously, Dubai's already been changed. And then, Dolan, David Sacks (00:27:11): you know, Ryan Petersen (00:27:12): I'm smart David Sacks (00:27:12): hearing that. Jason Calacanis (00:27:13): Yeah. David Sacks (00:27:14): Saudi Arabia is in a great place, and and they wanna do the right thing here, but you're acting like that Hutis can just be dealt with. What what does that mean to you? Jason Calacanis (00:27:21): Well, I I think that the larger forces are united in wanting to have prosperity for their people, education for their people, and to build deep ties with the west and the east to do commerce. And so I think those forces are greater than maybe some of the traditional forces that are at work. And and these longer term conflicts maybe are not as important to the leaders and the citizens of these countries as prosperity is. And so when I say dealt with, I think they're gonna just focus on developing their economies over, you know, these skirmishes. David Sacks (00:27:55): But are you saying there's gonna be a diplomatic solution here? Cause I see it. I mean, here's the problem. Israel's not stopping. It's war in Gaza that Houthis aren't gonna stop until Israel stops. So how do you make them stop? Jason Calacanis (00:28:06): That's a great question. Containing these conflicts is probably the likely scenario when I I've asked that same question to the people who are in those regions. And when I spoke to them, they they're all about containment. They don't think there's a resolution, like we might think about it here in the west, that you know, there's not gonna be a conflict between Palestinians and and Israelis. They just think containing it and having it not be an all out war is success. Well, what do you think is gonna happen? I mean Well, I'm saying we David Sacks (00:28:34): have 2 we have 2 sides who are implacably resolved. The Israelis to continuing their fight against the Moss and the Houthis to continuing to lash out at Israel or the west in general until that that stops. Jason Calacanis (00:28:49): The likely scenario is that Netanyahu is losing support. That's what every Israeli and every person in the region says is that Netanyahu is not gonna last long term. So what have you heard, Sacks? What do you think the resolution? David Sacks (00:29:01): Well, I think it's interesting if you look at Israeli domestic politics, it's true that Netanyahu is unpopular, but something like 90% of the Israeli public favors the continuation of this warrant Chamath is eliminated. I mean, the Israeli people are really, I think, hardened on this question, those tapes of Hamas atrocities on October 7th were compiled into a film. They were recorded by the Hamas fighter's own GoPro Jason there's really people that watch all those things, and they are resolved to destroying Hamas. Now you can argue with their tactics and the I'm just stating the fact. Okay. I'm not judging it. And the point is just whether Netanyahu survives or not, I think the Israeli public wants to eliminate Hamas So I think they are resolved. I think the Houthis are resolved. And the Houthis control this choke point so they can stop or interfere with global trade. And I think, look, there could be a ceasefire. I mean, I think Biden clearly would like there to be a ceasefire, certainly before the election. And that would bring all this to a rapid end. But if there's not a ceasefire, I don't understand how you just stop the hoodies. I mean, the only way to stop them is if you wanna go to war with them. That's what we're talking about. So we're talking about the US using its naval assets. To go get the Jason Calacanis (00:30:21): Or the regions Shamaf mentioned could use diplomacy and or financial measures. And so those are other options on the table. David Sacks (00:30:27): Gonna work with the Udi Jason Calacanis (00:30:29): Well, no easy solutions here, Ryan, thanks for jumping on the pod with us once again. One question. How how much more resilient post COVID, if at all, our supply chains, because you you talked about wanting to make them more resilient, and that was a major focus for Flexport. Is it better now post COVID? Have we done it before? Ryan Petersen (00:30:47): I think at the physical infrastructure layer, nothing's really changed. I don't think, you know, The the bottlenecks have gone away just because demand went back down. The US had like a 20% increase in container volume. It created all these bottlenecks. We couldn't process that many containers in our ports. And then the containers now are back at 2019 levels and everything's flowing normally. But I wouldn't say that makes us more resilient. It's the same as before. And situations like this, you learn just how amazing and resilient the global trading network is, the global logistics infrastructure, but also it's pretty fragile. If it's small group of rebels can fire missiles and you go, well, even the US Navy, what are we gonna do? I mean, there's kind of an asymmetric warfare type thing. They they shoot they shoot a $20,000 drawing. We we need a $2,000,000 missile to shoot it down. Like, it's not a it's not a great setup. And it's not clear that fiery missiles back is gonna open it back up. And so, yeah, I think I think it's much more fragile than we realize. As civilization always has been, you know, it takes takes a 100 years to develop a civilization in in an afternoon to go back to barbarisms. Jason Calacanis (00:31:50): And, air freight you had talked about previously, that's still 4 or 5 times more expensive than sea freight. Is that about right? Is that multiple? Ryan Petersen (00:31:58): In general, that's a, yeah, reasonable assumption. It's about four times more. The rate networks are very small in proportion to give you a sense. Like, one of these container ships that flows through the ever given is the world's most famous container ship that got stuck in the sewers canal a few years ago. That one holds about 10,040 foot containers. 747, which is basically the biggest cargo plane out there, can hold 7 forty foot containers. And so if you have a diversion of global ocean freight, we'll rapidly flow over to it doesn't take a lot of freight going, hey. I'm gonna ship this by air instead. To suddenly have the air freight markets get impacted. So, it hasn't yet. The air the airlines are a little bit less connected to this market and haven't instantly said, hey. We're raising prices in January, but I suspect if this lasts another week or 2, you're gonna see big run ups in air freight prices. And these are global markets. The price of freight from Jason to the US gets impacted because they're pulling ships off. The supply gets redirected. The planes get rerouted. It is a global market. So an impact here will affect prices of shipping Asia to US as well. Jason Calacanis (00:32:59): Thanks so much for coming back on the program, Ryan. Peterson, great to have you here. And, oh, Congratulations on being CEO of the company. You founded Flexport again. We didn't get a chance to talk about all the craziness with this CEO and turnover, but you're back you're back in the home. And run back. Ryan Petersen (00:33:14): It's amazing. It's amazing having the time of my life back here and, work at the Flexport office every day. Jason Calacanis (00:33:19): Alright. We'll see you soon, and thanks for coming on, as Sacks lifeline. Well done. Ryan Petersen (00:33:24): Alright, guys. Take care. David Sacks (00:33:25): Ryan did bring up a really interesting point there that you don't hear enough, which was the asymmetry of the warfare that the hoodies can launch a drone or a cheap missile that costs 1000 of dollars and it costs us 1,000,000 of dollars to shoot it down. Yep. That is just not sustainable for the US. We see this happening in Ukraine as well. All these, you know, multimillion dollar expensive tanks get taken out by a land mine or by a cheap you know, RPG or something like that that costs a few $1000. David Friedberg (00:33:55): It's also the fact that if you send a drone and it blows up on a ship, It costs you a couple thousand bucks to do that. The lack of risk tolerance, the fact that the insurance companies won't insure the ship anymore, means that now that chip can't travel, and that's tens of 1,000,000 of dollars of, you know, commerce that gets shut down off of a $2000 investment. So there's there's a deep asymmetry in the sensitivity. We also have to loss. We, you know, we won't take, hey. Well, maybe one in 10 ships can blow up. Let's keep going. It's the fact that there's no margin for loss. There's no allowance for loss. As a result, any sort of threat of loss means that the whole system shuts down. Not advocating that we should, but it's just the condition we're in. I also think the other point I didn't make, I would imagine that this behavior with the Houthis is driven in part by the emboldement that arises following October 7th and the the praise, that Hamas has received globally. And if you believe that to be true. There are many other groups, like this that may get emboldened and you start to see more activity in other regions as well. That you can have these kind of outsized impacts and, folks suddenly, you know, start to take action. But I David Sacks (00:35:08): think that's why we're between a rock and a hard place here is that on the one hand, if we don't do anything, then you're emboldening that behavior. And if you do do something, you're escalating the war. David Friedberg (00:35:19): Yeah. And to your point, you know, saying like, hey. The US is gonna enter the war, I I think that there may be this moment where it's not even an option. That the US is being provoked in a way that you can't say no. You have to, you know, maybe they end up having to act. Jason Calacanis (00:35:32): The Gorilla warfare aspect of this is super fascinating because you can really do incredible damage to very expensive airplanes with hypersonic missiles that go incredibly fast or like Mach 5 or something insane, and they're cheap. So a $100,000,000 or $20,000,000 fighter jet can just be annihilated by a couple of $100,000 in you know, hypersonic missiles. Alright. There's been a ton of M and A activity and M and A deals that have been canceled. Adobe Figma has been hauled off. And Illumina and Grael has been unwound as well. The big headline is that after a 15 month review process, Adobe and Figma called off their merger. We talked about it here multiple times. It was a $20,000,000,000 cash in stock. Merger that was agreed to back in September of 2022. And there's tons to unpack here. Shareholders, employees, a startup, ecosystem and, of course, limited partners who were expecting huge pay days from Figma being sold, to Adobe are now back to a waiting game of figuring out if this company can go public, etcetera. Shamoff, you had tons of thoughts on this, and maybe you could educate everybody on the Illumina Grow deal since I don't think people understand that. Yeah. Chamath Palihapitiya (00:36:51): I think there are 3 deals or almost deals that got essentially called off or canceled or never consummated in the last few Sacks. Which show a pretty interesting trend. So the first, as you said, Jason was Adobe Figma. The second was Cigna and Humana. They were proposing a multi decabillion dollar merger, and it was very clear that the FTC was going to have a huge fit around it. So they said that we're not even gonna do it. And then Cigna just said they'll do a $10,000,000,000 buyback instead. And then in the craziest example, aluminum and grille, so alumina makes these gene sequencing machines and grille makes one of the leading tests for redDNA cancer detection. And at the time, Illumina owned almost half the company they bought the other half. They merged it in even though the regulator said, Hey, hold on. We have an issue with this. And now they're being forced to unwind the merger. So to to pull this company back out and divest it. I think the point of this is 2 things. One is that there is no viable M and A path for early stage venture capital businesses. So if you can't have a $20,000,000,000 merger or a $40,000,000,000 merger or a $15,000,000,000 or $20,000,000,000 M and A with a high degree of confidence, Then the path to liquidity to M and A is less than 20% of the outcomes, which means that the overwhelming path to get liquid is what you said, Jason, which is IPO. But the problem is the second part, which is that the capital markets in the United States are not ready or not in a position to support all this IPO liquidity. Why? The banks won't underwrite. There aren't enough researchers research analysts that'll cover these Sacks. The ways in which the banks make money have become so constrained, and so I'm kind of left pondering to myself how do you go back to a world of like the nineties where startups four and five years old would go public to raise capital? I don't think that that's gonna happen. So I don't know exactly what happens to us, except that we'll have companies just dating for 15 20 years. And I think that just has a chilling effect because it's like what investor wants to put money away locked up in highly illiquid stuff for 20 years? What rate of return do you need to give them? Chamath Palihapitiya (00:39:18): That makes them want to do that. So something has to change because if the M and A market can't exist, then we need to change the rules of the capital market so that there's incentives for these banks to underwrite companies to go public? Jason Calacanis (00:39:29): Well, I guess there's 2 things, Sacks, that could change this dramatically. One is if we put in more, conservative Republican, libertarian, etcetera, less regulatory, regime in Washington that could open up m and a, you know, as soon as 2025, perhaps Jason then the second is direct listings, dare I say Sacks and alternative ways to get companies public and may not be, the gold standard as a traditional IPO, but at least if we get those liquidity started, and I guess third, Sacks, and I'll get your your thoughts on this, for private investors and their LPs. Everybody seems to be focused on building strong, stable, cash flowing businesses, And we've seen all the companies that went public, whether it's Airbnb or Uber, are now focused on ringing the cash register and being profitable. So ultimately, maybe this log jam and M and A blockage makes everybody focused on sustainable, profitable companies, and that's a good thing long term. What do you think David Sacks (00:40:29): Look, like I said last week in relation to the Figma Adobe deal, the fact that regulators took 15 months to analyze the deal only to come to the conclusion that they basically weren't gonna allow it. And then Adobe finally killed it, is gonna have a chilling effect on M And A in Silicon Valley. I mean, if acquirers and targets can't have confidence that the deal will be approved. And in fact, they're gonna be left in limbo for over a year waiting for speculative approval, they're gonna be less likely to do deals in the first place. And I'm sure Adobe's not happy about the fact they gotta pay a $1,000,000,000 breakup fee. Which by the way was a really smart thing for Figma to negotiate. I mean, if you're if you're a company that started that's gonna get acquired, you need a pretty big breakup fee now as insurance on the deal. Because there's a very good chance that regulators aren't gonna allow it. So, yeah, absolutely. The fact that regulators got in the way the Adobe deal and moreover, the way that they it with this protracted delay, is it absolutely gonna have a chilling effect on M And A in Silicon Valley. And look, there are only 2 good outcomes for a startup. You can either IPO or you can get acquired. That's it. The third is basically you go out of business. That's the 3rd outcome. So when you take half the potential exits off the table, you're absolutely making a tougher for VCs and founders to get a good return. It's that simple. And that is gonna have a depressing effect on, you know, the investing of risk capital in Silicon Valley. I don't think it's a good thing for anyone. And by the way, even if the US sort of fixes this. Even if we get a regime that's more friendly towards m and a, you still have the EU to worry about. And you also have the UK to worry about because they're not part of the EU things to Brexit. The UK, like I said, last week, they're like the Chihuahua who's leading the Sacks, They're the smallest market, but they're the most aggressive on antitrust enforcement. Chamath Palihapitiya (00:42:15): Sacks, they may just be the beard for the US and the Europeans. David Sacks (00:42:18): It's possible. In any event, now you got 3 regulators to worry about, not just one. And, you know, like I said, last week, I think if you're a startup and you're trying to consider where to put your Europe office I would not choose the UK anymore. I used to think that the UK was number 1 because it was so easy, but you'd wanna create that nexus if you can help it. It might subject you to a competition authority you don't wanna deal with later when you get acquired. Jason Calacanis (00:42:42): Yeah. I would have just opted out of the UK. I would have called their bluff Sacks I said, last week. Friedberg, any solutions here you think to solving this problem in VC land, or do we just have to build stronger, more profitable companies and be more patient about taking them public since M and A is not on the table. David Friedberg (00:42:58): I don't know if I'd take the antitrust regime as being the core driver of M and A not being on the table. I mean, there there's a couple of these examples, but I don't think there's a predominance of this going on. I think that there's a lot of smaller deals that still end up being good outcomes. I mean, we've we've also talked a lot about the lower cost of capital in starting software businesses in the era of AI type tools. And that leads to, you know, being able to hit a a 100 x. If you put, you know, small enough amount of capital in and have a decent outcome where you're not building the market monopoly in some particular market. It doesn't feel to me like that's the biggest driver of concern here. The biggest driver of concern is just all the return on capital metrics that big buyers are having to face, you know, return on invested capital is becoming more important than it's ever been because we're talking about $1,000,000,000,000 market cap buyers. And so that's how they're measured. And so they have to be really thoughtful about how they're deploying capital in a high interest rate environment. That's there's a greater sensitivity to a faster path to cash returns than there has been historically. So it feels to me like that's and I would imagine I'm Adobe and I'm looking at this Figma deal, do I keep fighting it? Or at this point, paying a $1,000,000,000 is probably net accretive to them. I think the stock price went up when they called the deal off. Which highlights that it was probably a better investment for them to say I'm gonna pay a $1,000,000,000 to actually get out of this deal at this point. And I think we see more of that happening, which is this rationalization of you know, timelines to ROIC in a high interest rate environment. Jason Calacanis (00:44:34): Chamath, deals do get done. Chamath Palihapitiya (00:44:35): There's a David Friedberg (00:44:36): lot more tolerance for smaller deals, obviously. Jason Calacanis (00:44:38): Yeah. I mean, Salesforce was able to acquire Sacks. That was 2020. Amazon was able to acquire Whole Foods, Walt Disney, 20 1st Century Fox with the X Men. So those are a different era. Chamath Palihapitiya (00:44:48): I I I really think that's a lot. Jason Calacanis (00:44:50): Sacks to 2020. You're right. Those are all the. Yeah. I think they're Chamath Palihapitiya (00:44:52): a very different era. I don't think that that's what you can expect anymore. I don't think you can underwrite to get a $20,000,000,000 deal done in any industry. David Sacks (00:45:01): Yeah. Remember, Meta or Facebook buying WhatsApp for? Was it 17,000,000,000? I mean, that was one of the biggest venture returns ever. Chamath Palihapitiya (00:45:08): Yeah. Today, that could never happen. David Sacks (00:45:10): Never happened? Chamath Palihapitiya (00:45:10): Today, that could never happen. David Sacks (00:45:12): That Figma Adobe deal, it was a $20,000,000,000 deal, but with the rise in Adobe stock, it's really a 30,000,000,000 deal if it would have been consummated because half the consideration was in Adobe stock, and that has basically doubled. So all of those investors and employees were looking at a $30,000,000,000 exit. And, look, Figma's gonna do great. I think the numbers that came out about Figma, where they're gonna do about 700,000,000 of ARR, growing 40%. So I don't know. They'll be able to IPO anytime based on that, but what's the multiple they're gonna get? Probably 12 to 15 times. Chamath Palihapitiya (00:45:49): So 8 to 10. David Sacks (00:45:50): Maybe it's like a $10,000,000,000 company in the public markets. I mean, growing nicely. But it's just not as good an exit. I mean, that's a big big haircut. Jason Calacanis (00:45:58): The positive to this is consumers, a retail investor haven't been able to buy IPOs and get in our companies earlier. So if people build stronger companies that aren't that are more capital efficient, then companies can go public earlier, as you alluded to, Chamath, where Microsoft, Apple, a lot of these companies back in the PCR, they used to go public in under a decade, and now it's always over a decade. So maybe this will make stronger companies that go public. And then if there's a regime change and maybe people feel more frisky, they still have to get through Europe that Chamath Palihapitiya (00:46:27): You know, biotech is the only market that's always viewed going public as a transitory capital raising moment, right? Every biotech company that goes public in America, at least, are startups. They're pure startups. It's pure risk capital, but the the technology side has viewed it very differently. It used to be the same. Right? But and then it went to, like, oh, we must be mature and then It has to be growing really fast, and it has to be profitable. There were so many ands ands ands that the that's at the end of all of that. There were just very few companies that qualified. And then by the time they did go public, they're 12 13, 14, 50 years in. They're so long in the tooth that their best growth periods are beyond them. Now a couple of companies had bucked that trend But by and large, that's that's the case. And I don't think that's to to support what David what Sacks said. It's that's just unsustainable. You cannot you will not have risk capital flow into the United States if this is going to continue. Jason Calacanis (00:47:29): Yeah. This is gonna be super challenging for founders. The out of bill companies that are sustainable and can go public. Because that's really the only path right now. Chamath Palihapitiya (00:47:37): And it's exacerbated by what Friedberg said, which is then that that family office or that endowment who can rip in a check as an LP to a fund can still get 5, 6, 7% can get corporate bond at core corporate yields at, like, 8, 9, 10%. Why take on 15 year illiquidity for oftentimes funds that return less than the S and P? Which is the dirty little secret of Silicon Valley. It makes no sense. Jason Calacanis (00:48:07): It is gonna be a challenging environment for some time to come. I think as we work this out. I mean, the the thing that I find super interesting with the specs was, like, you got to invest in some companies that were very early in regular like Joby. Now how could a consumer ever make that kind of betcha mouth to bet on? And that wasn't one of yours I know, but it it was one of these, like, incredible moments where you could bet on flying cars literally as a consumer. And I think they're actually gonna figure it out. I was tempted to buy it, and I've been tracking the stock. And I'm like, Wow. If they actually make air taxis work, and it's kinda cool that the public can participate in that. And that's what they were saying when they're enough IPOs, and we had half the number of public companies. So I don't know if you have thoughts on it. Chamath Palihapitiya (00:48:50): The number of public companies, I think, has halved in the last 20 years. So are more public companies better than less? I don't know. I think that's kind of like a random statement. I think what is true is that the public markets used to be used for raising risk capital, but the public markets at the time also had a ton of research analysts. There would be a lot more coverage of these companies. There would be a lot more visibility, a lot more checks and balances because people would be meeting with ment on a regular basis, writing thoughtful research reports. All of that is constrained as the as the business of being on Wall Street has changed. So it's not enough to just all of a sudden have a bunch of companies go public if all of that supporting infrastructure isn't there. So this is what I mean by it's a catch 22. On the one hand, there's not there's there's no M and A, so you need to have more IPOs, but the banks will need to hire more people that comes at a cost, which means that they're gonna have to generate more revenue somehow, that comes at a cost to somebody else. And until that's figured out, you're not gonna solve this problem. And instead, what's gonna happen is folks will be less motivated to invest in the innovation economy because there'll be no paths to liquidity. And when you do invest, you'll invest much smaller amounts of money and you'll make it as part of your risk allocation, a smaller piece of the overall pie. What it also means is that If you're an entrepreneur and you haven't started a company yet, you may want to seriously consider raising a friends and family round using these AI tools and trying to build a very different kind of business, slow and steady, profitable from day 1, and that's never been rewarded by Silicon Valley VCs, but if the reward for VCs don't exist, then the VCs themselves don't exist. Chamath Palihapitiya (00:50:45): And so you may wanna start thinking about different ways to capitalize your business. Jason Calacanis (00:50:50): And it's interesting point you make That is very subtle. So I just wanna restate it here. The analysts who are covering companies, like, say, Joby, I'm just picking this air taxi company because I'm obsessed with it. If there's not an infrastructure, those analysts act in a way as a backstop or a bit of pressure on management, I think, is what you're saying, to, hey, perform. And we're checking on you, and we're meeting with you. So without that, there's just a company sitting out there and nobody is asking them hard questions and then making decisions to put a buy or a sell rating on it. Is that correct? Maybe you could expand on Chamath Palihapitiya (00:51:25): that missing piece is an evolution in the public market. So look, the public markets back in the nineties was a bit of a rigged game where you could call a CEO if you had his or her number, and they could tell you things that they didn't tell everybody else. And when you look at the folks in their Sacks seventies eighties who really stunned it. I'm sorry Sacks, but they profited massively from that information arbitrage. And That changed when there was a regulation called reg FD that got passed in America, which said regulation full disclosure. What you tell 1, you have to tell everybody. Right? And that was an attempt by the Sacks to level the playing field. It was a very smart piece of legislation, but what that did was it constrained the touch points that a company would have with the public markets to a few organized events, right? Analyst conferences, research days, actually banks are allowed to organize formal company dinners, and you'll get all these people together analysts across the entire spectrum from fidelity to Goldman Sachs to Morgan Stanley. And the company has to perform to them, and those folks will write both internal and external reports that say buy neutral or sell, right? That became the only check-in balance to make sure that management was held accountable to the large swap of public shareholders because otherwise it's not Jason You as a shareholder of Joby quite honestly have any say. Right? You you exert your pressure through the analyst who then represents the ability to influence your buying and selling decision. Those analysts don't even exist, there is no feedback loop between management and the people that own the stock. And that's the problem we have today. There's not enough research coverage There's not enough analysts, there's no organized way to keep companies held accountable. And so if you have a bunch more companies that go public without that infrastructure. It's very difficult. Jason Calacanis (00:53:21): Seems like there's an opportunity somewhere in there. David Sacks (00:53:23): Do you Chamath Palihapitiya (00:53:24): know the big opportunity that I that I that I think should happen is that a bunch of these banks should actually use these AI tools, Jason, to be crawling all these 8 Ks and 10 Ks and all these filings and generate statistical measurements of all of these public companies that they make free and available to everybody. These things should be a bunch of dashboards and charts that are just out there for anybody to subscribe to so that you can just do the initial work of having to parse through all of these filings, have it done by an AI, by an agent. From a bank who can train it properly, I think that would be an immense value to all shareholders. And I don't think it costs that much money, and I think it would be goodwill Robin Hood could do this. It would be great goodwill to build a lot of trust and and credibility with investors. Jason Calacanis (00:54:15): So now that you're CEO of a company, how do you look long term at potential exits going public? What what is the the thoughts you have on this as you architect the company, Friedberg, as the CEO? David Friedberg (00:54:27): Do not care Jason Calacanis (00:54:27): about exits. Don't care about stand on that. Yeah. Explain. David Friedberg (00:54:31): I just wanna build a great business that makes great products for our customers. That's it. So if you do that, all these discussions around, you know, giving shareholders liquidity. I'm the I'm the main shareholder, so I don't need liquidity. I just wanna build the business. So how do Jason Calacanis (00:54:48): you think about profitability then? Because if you have to fund it or funding might be harder to come by. How do you think about funding over the next decade this vision you have? David Friedberg (00:54:59): It freaks me out. You gotta keep businesses capitalized. So there's definitely across businesses I'm on the board of or involved in. Universally a bias towards profitability. I've seen a couple of decisions we've made that that some companies to shift from making longer time cycle investments that may not pay for many years where you had the luxury of doing that in a zirp environment, and you could always get capital to fund anything that's multiple years away from realizing any sort of return. To shifting towards a bias, towards making things that can generate real revenue and real profitability in the near term, keeping costs low and building from there. So it it's definitely, I'd say, been a flip flop in the environment. It's why the biotech landscape has largely kind of dried up. Funding landscape has dried up significantly because most of the investment opportunities are those multi year out before you know if you have a return on your investment kind of investment cycles. And so the ones that do get funded are those that have a near path to profitability and where you can build some sort of cash generative service in the near term, on the path to building a bigger product down the road. Jason Calacanis (00:56:15): So as you're strategizing, you're thinking, how can we get to cash flow positive, breakeven, whatever quicker? You're not strategizing, how do I get a huge multiple and get some dumb Tiger money, whatever? No no dick to Tiger, but they paid the highest prices at the end of the cycle. David Friedberg (00:56:29): I've got enough wisdom at this point to tell you that if you don't have to raise venture capital, you're better off. David Sacks (00:56:34): So Jason Calacanis (00:56:35): Chamath, you also, became the CEO. You have the, I think it's hustle as your company. And that's profitable and you're running it. I I'm assuming for growth, but maybe profit first, then growth. How how do you think about those 2 dials? How much growth, Chamath Palihapitiya (00:56:49): how much profits. We have the same belief that Freebrook has, which is our job is just to make really great products for our customers, When I took over the business, we had to go through a difficult layoff and a rebasing of the business, but it's It's a business that's growing kind of 45 percent a year and it's profitable. And and what I talk to the team is that, you know, we will reinvest our profits And so we have an ambitious plan. And as long as we meet that, we'll take some percentage of that profit and reinvest it. But I like Friedberg also have no plans for liquidity. I just want to build this thing to be as big as possible, and I don't want one single shred of pressure that isn't defined by our customers. And so by being profitable, we have complete control of the cap table. We can do whatever we want and The people that benefit, frankly, are the employees because they can get paid and our ability to hire people without being subject to, like, pressure to raise a new round and set a new random valuation. Jason Calacanis (00:57:49): So no unnatural Sacks. Just no enough profits. And so by the way, if Chamath Palihapitiya (00:57:54): I can grow for 10 years, if we can grow for 10 40% a year. This will be a ginormous business. Jason Calacanis (00:57:58): So they're trying to 3 x and and do it unnaturally. Yeah. David Friedberg (00:58:01): Jason, just just to showing back on the the the question you asked a couple of minutes ago. I number 1, if you can avoid raising capital, you're better off because I mean, you don't have any shareholder pressure to get liquid, and that can create contortions in what you do. And how you operate the business. And second is if you're gonna raise capital if you set too high evaluation, if that becomes the bogie, you set yourself up for challenges. Because now you've gotta have a multiple on that valuation to satisfy investor return hurdles. And the higher the the valuation, the and you apply a multiple to that, the higher the exit has to be. And suddenly all the options start to fade away, you can no longer have a modest it that can do really well for employees and the founders and early investors, and it becomes a necessity that you have a massive outcome. And by the way, we see this now, in this post zirp environment that a lot of businesses that raised a lot of capital at a very high valuation. And then you have this multiple compression that's just happened in the last 2 years. Their valuation effectively so they were to go public today or get sold is less than the capital they've raised. And that's the most extreme scenario where, you know, only all the common shareholders get wiped out in terms of their return. Chamath Palihapitiya (00:59:15): It's such a great point. Like, the thing that people used to say was, oh, it's a tech company. So we need to give it a premium. The problem is now everything's a tech company. To say you're a tech company is a meaningless statement that means nothing. You're a company so that you're company. So then there's no premium for being a company. Jason Calacanis (00:59:32): No. There's a premium for profits. David Sacks (00:59:34): Well, there there's a premium based on quality of revenue, which has to do with gross margins. I mean, obviously, in economics, obviously, a company that has 80% Gross margins is different than the company. That's 20% gross margins. Chamath Palihapitiya (00:59:46): It's not profitable. David Sacks (00:59:47): Well, no. No. No. I I totally get that. I'm just saying that you can normalize based on gross margin as opposed to the type of company it is. Sometimes we'll see a company that markets itself as a tech company only has 20% gross margins. That's an indication that something is wrong usually, or it's not truly a software company. Chamath Palihapitiya (01:00:04): It's just a company. David Sacks (01:00:05): That's just a company. Jason Calacanis (01:00:06): Yeah. I think the way to look at it. High gross margin versus lower gross margin. Just David Sacks (01:00:10): to go back and answer your question, Jake, how about how do you decide how much money to put into growth versus being profitable. I think the right answer to that is not to say there's some absolute amount of money you should burn given your round is to look at growth on an ROI basis or uneconomics Jason. What is the return on the growth dollars you're spending? And probably the best way to do that is to look at the payback on customer acquisition. How long does it take you to pay back your customer acquisition costs? And I think a lot of people don't do that analysis correctly because they just look at the revenue they make from that customer, but you actually have to look at the marginal profit. So this is how the gross margin ties in. Jason Calacanis (01:00:51): Easy example is something like Spotify. Spotify, it costs a $100 a year, and they would require somebody for $100 a year. Hey. They get to year 2. It looks like you made a $100 except Spotify has to pay a massive amount to the record label, so their margin isn't as high as maybe a Sacks company. And that's where the devil is in the details. You had Chamath Palihapitiya (01:01:07): an overhead and overhead. David Sacks (01:01:08): You gotta look at churn as well. So if that customer only lasts 2 years and half the margin goes to the record companies, well, you can't count a 100% of revenue. Now you're looking at, I don't know what's that. It's like you're dividing by 2 twice. So effectively, you know, a quarter. Jason Calacanis (01:01:26): 50 bucks of the 200, let's say. Take out what make a number? Chamath Palihapitiya (01:01:28): What are you seeing in your in the companies you're funding? You're seeing profitable companies or revenue generating companies? What like, are you telling folks you gotta grow and raise a big series a? Are you telling folks, hey, take your time and Jason Calacanis (01:01:39): Yeah. It's a great question. We invested in 100 companies this year. It's more than I've ever done. That's the same amount I did in the first seven years of my career. And a 100% of the time, they are not expecting to raise like some giant seed or series a, they're raising just the amount of money they need, and they're keeping their expenses certainly low. The biggest trend I'm seeing is outsourcing of talent. And so Americans and I'm not gonna make this like a huge anti American thing, but the level of entitlement and the effort Americans are putting into jobs, expecting a 150 k, let's Jason. And then offshoring a developer, Latin America, Portugal keeps coming up Canada. They're all looking for what's the most efficient way for me to build a ten person team, and then I'll see a burn rate of $30,000 with 10 people. I mean, how is that possible? Like, oh, our developers cost 22,000 or, you know, SDRs or 10. I mean, how is that possible? Oh, we have people in Manila, etcetera, a long way of saying efficiency efficiency efficiency, but we have to get to breakeven with the money we just got. We're not expecting a second round of funding. And a lot of them are raising, but, 500 k to 1,500,000. And if this was 2020, it would be 3 to 10. Chamath Palihapitiya (01:02:47): We talk about, like, AI is like a big disruptor to, like, the big companies and this and that, but AI may be the biggest disruptor to VC. Big time in the end. Explain what you mean. Jason Calacanis (01:02:56): I know what you mean, but I I want the audience to understand. Chamath Palihapitiya (01:02:57): Let's just say you raise $2,000,000 seed round. In in the past, what you would do to your point, Jason, is you would hire seven people at $200,000 each. Right? So now you have a $1,400,000 burn. So you basically have, and let's just say you co work someplace, you have a year and a half, and so you're peddled to the metal, right? You're basically trying to throw as much spaghetti against the wall as possible, see what sticks, buy as many ads, do whatever it Sacks, the money basically goes to AWS and Facebook and a couple of other companies to Google. And then you hope that there's enough traction where somebody then writes you a 10 or $15,000,000 series a check. Now if you take that same $2,000,000, you could have a 3 person team, 4 person team, half of them offshore, where they also use things like Copilot, which is like a 2 to 3x lever, now all of a sudden they have the same ten person team, and it costs $40,000. Exactly. And so now all of a sudden, they have 4 years. So why wouldn't they do that where they would still own 80% of that company? And all of a sudden, there is a potential to exit it for 50,000,000 or a 100,000,000, and they've made more money than at a traditional outcome if you sold Jason Calacanis (01:04:16): it for 2,000,000,000. Precisely the case. This is literally what founders are modeling right now. They previously wanted to beat the record of the person in their cohort who had who raised the most money at the highest valuation. Now they're just like, how do I get your profitability? And and how do I own as much of my company as possible? So Sacks, you've got under over a $1,000,000,000 under management. You've been one of the most successful new venture firms in Silicon Valley in the last decade. You got a lot of cash you could deploy. How do you deploy it intelligently intelligently given the circumstance of people maybe raising less or being more efficient? And and what do you think of the AI's impact on venture? David Sacks (01:04:55): Well, the most important thing is to have opportunities to invest in. And the fact is that before this AI wave, the whole cloud social mobile wave had kind of petered out. I mean, the pond of opportunities had kind of been fished out. And AI is great because it restocks the pond. I mean, there is a lot of new ways for founders to use these advancements to solve problems that they weren't addressing before. So I think you guys are being a little too gloomy. I mean, I think that the impact on capital efficiency will take some time to play out, but I think that for the first time in a number of years, it feels everything's feeling fresh again. And there's just, I think, a lot more opportunities for founders to go after now. It's the begin it's like this at the beginning of any big new tech wave, right, is this is a new platform opportunity. Same thing was true with the app store when the iPhone launched. Same thing was true when the internet launched. Now, I understand a lot of these opportunities are gonna be taken by big companies that already exist, but there's always gonna be an opportunity for founders when you have a big disruption. Chamath Palihapitiya (01:06:01): David, I agree with you. My comment is less about the the pond. I agree with you that the pond is getting restocked. My comment is that the economic impact of AI is so massively deflationary, it may be an order or 2 orders of magnitude more deflationary than AWS was. And that was massively accretive to the startup economy. So if this is a a 10xing or a 100xing of that economic impact, my only point is that the breakeven threshold for a founder will have gone way down. And then as a result, it's only a matter of time until they can put 22 together in a Excel spreadsheet to figure out that Owning 50 percent of a $100,000,000 company is greater than owning 18% of, you know, some other company when you're massively dilutive 8% or whatever. It's just like that's all I'm saying is like the the effective breakeven goes way down in a world where AI proliferates. And I think that's What do you think about? Yeah. Sacks. It's just positive for founders. David Friedberg (01:07:04): If you look David Sacks (01:07:05): at what founders do with the money when we invest in a series a or b, the number one thing is go to market. Right? So they wanna basically triple their sales. Let's say they wanna grow from 5,000,000 of ARR to 15,000,000 of ARR. They have to staff up the quota capacity to hit that number. And, you know, for every AE, you're gonna need some number of FDR, some sort of management. You're gonna need some sort of operations overhead. So you've gotta hire all of that. And then they're they want there to be a cushion in case they miss their numbers, right, because there's no guarantee you're gonna hit that. So, you know, founders still need to raise the money to staff up to go after that opportunity. Now does sales come more efficient over time because of AI or does lead gen. Yeah. I think that's possible. But in order for that to happen, you're gonna need see a rise in quota capacity. Right? I mean, that's what we're talking about is that that same AE can now hit you know, a greater level of sales because they have better tooling. We're just not there yet. Maybe that happens over time, but I think you know, your Chamath Palihapitiya (01:08:09): typical saas start. David Sacks (01:08:10): It is inevitable. Right? I just think your typical saas start right now is spending the money on more prosaic thing. David Friedberg (01:08:16): So yeah. Yeah. Yeah. Chamath Palihapitiya (01:08:17): No. I think you're right. I all all I'm saying is I think what it means is that the $200,000,000 fund today becomes 50. The $500,000,000 fund needs to be a 100 and the $1,000,000,000 fund needs to be 200. It's basically back to the future. It's like back to the 19 90 style. 2012. By the way, I'll I'll show you a table here. Nick, I need you to blur out the names. Okay? I just think it's super interesting. I walked Friedberg through this, but this was like a list of all these funds that I've invested in. Jason Calacanis (01:08:44): These are venture funds you've invested in. Chamath Palihapitiya (01:08:46): These are all the venture funds I've invested in. If you look at this, what do you notice about, like, the mega funds that just clock out DPI. Look, this is a $100,000,000 fund. Right? Look at look at clocked it. This was a $220,000,000 fund. My point in all of this is, like, if I look at my returns as an LP, I've never had success when I've invested in big funds. I've only had success in small ones. David Sacks (01:09:13): It's true that smaller funds do perform better and larger funds become more of an in-depth and achieve more average returns. When you got a multi $1,000,000,000 fund, it's way harder to achieve a, you know, outsized return. So Yeah. I agree with you. I think this dynamic would be healthy. I mean, our funds actually are not that big in the grand scheme of things. Jason Calacanis (01:09:31): It's definitely the game is changing dynamically. And This podcast is gonna be great in 2024 because we went from 4 capital allocators to 2 capital allocators, myself and Sacks, to 2 in the arena CEO. So we're gonna be having this discussion, I think, in a very granular way, now that we got 2 players on the field Sacks, that we can watch what they're doing. Well, I've David Sacks (01:09:49): got a new incubation that's gonna be launching soon. But I'm not gonna be CEO of it, but you know, I'm kind of executive chairman. Jason Calacanis (01:09:59): Oh, where is it? Is it a Sacks company? David Sacks (01:10:01): Yeah. SaaS company. David Friedberg (01:10:03): What kind of company is Sacks? David Sacks (01:10:04): It's it's basically yammer 2.0? Yeah. Chamath Palihapitiya (01:10:10): I I thought that was Sacks. So this you have a 3.0. Yeah. Yeah. Yeah. 3.0. Jason Calacanis (01:10:16): Okay. Let's go. Let's get a we'll get a little, yeah. We I think we had a push on call in. So now we need to get our 50 Jason, Yammer 3.0. Give us a little tasty poo for your best case. David Sacks (01:10:27): We sold call in. So now, you know, we've cleared the Sacks. And, I can't work on multiple incubations. I can only work on one at a time. Chamath Palihapitiya (01:10:34): Can you have your person that runs that Sacks grid thing Email me because I wanna onboard my company and just ask. Yeah. Dude, it's David Sacks (01:10:41): so good. Well, by the way, that was the last one. So I've done I guess, 3 of these now. There's call in SaskGrid. So SASGrid is now spun out completely of craft. And the the founder of SASGrid was our VP of analytics at Kraft, and now he's going full time to SASGrid. So I think it's been very successful. Chamath Palihapitiya (01:11:00): But can I get onboarded and can I get a friends and family discount? Jason Calacanis (01:11:04): Yeah. Of course. This concept to the audience since it's unique in the world and we should maybe double click on the economics, not on a specific company's acts, but just general of why VCs are doing this. You're incubating a company. You're a former founder. You have that itch. You have ideas. So instead of investing in a company, you say, hey. Let's all get to the office. I have an idea make this ourselves as craft, and then we'll put some of Craft's LPs money into it. And then there's some slug of capital saved for the new team that comes. So how does the economics on something like this work? And and why do LTs love it, or do they love it? And then why is it good for your internal team or for you to incubate a company as opposed to just finding. David Sacks (01:11:46): Well, when I first set up Craft, we actually wrote into our LPA that we had the ability to incubate companies, and we had a pre arranged economic deal with our LPs on those incubations because I didn't want it to come up later And then there's some conflict of interest between the management company and the LP. So it's a predetermined deal. And we don't do a lot of these. Like I said, I guess there's been 3 There's been Sacks grid call in and out this EMR 3.0 we're talking about. But, really, I gotta give the credit for to our VP of analytics who really, I think, pushed this idea. And it started with a simple way for us to analyze deals and dashboard deals. It started as a spreadsheet that we would give founders that would crank out their charts. And then we turned it into a website that was free. And then we realized Jason Calacanis (01:12:32): As an investor, right, needed as a investor. David Sacks (01:12:36): And then what happened is that we saw founders started using SASGrid as their dashboard to manage their companies between funding rounds. And we're like, oh, okay. That's a big, a hot moment. So, basically, there was no dedicated verticalized business intelligence tool or dashboarding tool just for SaaS Companies. And the advantages of verticalizing or massive because when you know what kind of company it is, you can just give them all the dashboards out of the box. And all the formulas can be calculate exactly the right way. Is it gonna be less room for error? Jason Calacanis (01:13:08): They don't have to reinvent the wheel. Yeah. So if you're using, like, Tableau David Sacks (01:13:12): or look or whatever. You're reinventing the wheel. You're writing all the formulas yourself at this meeting. Jason Calacanis (01:13:16): So back to the deal. David Sacks (01:13:17): Yeah. Jason Calacanis (01:13:17): We you you pre did the deal, so LPs wouldn't be surprised. That's awesome. So the management, there's a predetermined valuation. I guess at that seed stage, a certain amount of money goes in and you are holding company gets some equity, which is like a nice little extra icing on the cake for incubating it. And then the LPs get a sweetheart deal or a better deal. Is that why they would be in favor of it? David Sacks (01:13:37): Yeah. The LPs get, like, basically a VIG in the startup. Jason Calacanis (01:13:41): Got it. David Sacks (01:13:41): We kind of modeled it after YC's original deal, right, where YC got was at 7% for a $100,000. Yeah. And then on top of that, the fund can invest in the seed round at the market valuation, whatever the market. Jason Calacanis (01:13:55): Ah, okay. So they get basically 7% for free or something. For a David Sacks (01:13:58): 100,000, then plus whatever the seed round's gonna be. Jason Calacanis (01:14:02): Brilliant. Yeah. David Sacks (01:14:03): Yeah. I think it's a good deal for them. Jason Calacanis (01:14:04): And And also it's good for you because you have to want to come to work every Jason, and this keeps you mentally engaged. Like Chamath said, he felt like he was becoming a talking head and just not I don't know how you phrase it exactly in your newsletter, but Well, David Sacks (01:14:16): like you said, scratches an itch. It's nice to be able to if you have an idea for a product, you can work creatively on it. Jason Calacanis (01:14:23): Yeah. David Sacks (01:14:23): I don't wanna run companies anymore. I don't have any desire to be CEO, but it is fun to work on products if you have an idea. Jason Calacanis (01:14:30): Jamath, how has it been for the 1st couple of, months now? Are you really feeling more intellectually curious and challenged? Is it annoying to deal with employees and, you know, customers and and all that kind of stuff? What's it what's it been like? You you think you've been at 6 months, I think. It's been really challenging. Chamath Palihapitiya (01:14:49): The first part of it was quite honestly. We had to rebase the the cost basis of the company and get cost under control, that's hard. And you had to we had to lay some good people off. And then we had to kind of, like, reset the strategy, right, goals, get our values kind of in a good place. Reorient the organizational design like who will do what. Right? All of these things require just enormous amounts of time that where you don't see necessarily the obvious impact in a metric or a dashboard right away. And so you just have to commit to this process and really follow through in it. You have to find the people that have this real potential, elevate them, make decisions quickly, find out you made some wrong, undo them, find out you made some write, double down on them. So it's been a real learning process. The, the thing, and then on top of all that, I've tried to start coding again. Sunny helped me a lot. I built a couple of models. Jason Calacanis (01:15:50): Repair programming. Chamath Palihapitiya (01:15:51): Yeah. And then but then I did that to go back into our all hands, which we do every week, and I wanted to demo some stuff, mostly just to set the values that we're all grinding here. And I'm here grinding and learning the stuff like anybody else. And it's embarrassing because like it's janky code, it doesn't work, and blah blah blah. It was, but it's been really, I think in the long run, it's, I think the company is a lovely business, and I, and I want them be successful because I think they deserve to be successful. And for me, it's been a great outlet to just get back to the basics of, like, What really matters in running a company in 2023? I don't think I really knew the details. Jason Calacanis (01:16:32): That's good. And I'm finding a little humbling perhaps little humbling to get in there and be in the cockpit. Really, really humbling. Yeah. Chamath Palihapitiya (01:16:38): It's good. Yesterday, we were sitting there in e team, which is our executive team, and we're in the middle of a big deal. And the 7 of us were redlining a contract back. And I know that may sound like really tactical stuff, but it was, for me, it was amazing. I'm like, This is great work, and I felt like I accomplished something when it was done. And maybe the deal gets closed today, the the team is on the call. And I just think it's wonderful. I I get a real Jason Calacanis (01:17:00): awesome Yeah. Alright. Jason. There's another story that is under reported. We try to find these under reported stories. Things people are talking about in their group chats, but maybe not reading about or hearing about in the mainstream media or even on social media. There are a couple of unbelievable bombshell class action lawsuits that are dropping in the United States regarding our real estate industry in October, a federal jury in Missouri found the NAR. That's the National Association of Realtors and several of the brokerages that have those brokers working for them guilty of conspiring to artificially inflate commissions for home Sacks. They now have to pay at least $1,800,000,000 in damages to sellers of more than 260,000 homes between 2015 2022. This could bankrupt the NAR. And if you don't know what a racket this is, people selling homes in the United States pay 6% commissions on average, 3% for the seller. That's if you own the home and you're selling it, you give them 3% of the sale. And then the buyer, you also give them 3%. And there have been a number of companies like Redfin who have tried to change this. I actually used Redfin on a transaction and tried to use them on sale. And I was faced with brokers who I kid you not literally said I'm not gonna show your home because it's a lower commission rate and they have been working in unison to try to stop this kind of innovation, but the 6% is a tradition. It's not a rule. You can actually negotiate it. And now since this case got 1, another couple of cases have been dropped. And these new class action lawsuits all put together could be 13,000,000,000 dollars in damages. I don't know who's been following this in the group, but I have a lot to say about it. But Yeah. David Friedberg (01:18:49): I mean, I spent a bunch of time looking at this because I've done several no broker real estate transactions. Oh, so Just lawyers. Yeah. Just lawyers. And then in the in California, I don't know if you guys know this thing called MLS, the multiple listing service. Yes. Which feeds the data into Redfin and Zillow. And in order to list a property on MLS, you have to have one of these real estate consensus and be a member of that of National Association realtors. Part of the monopolistic racket that goes on is that you have to be a licensed broker in order to list your home on the service that is the monopoly and the listing of homes, which everyone looks at. So there's a a bunch of folks who have set up a a listing service where you can list your home directly. On MLS. And, basically, it's it's a guy who has a brokerage license, and you pay him a hundred Sacks, and he just has a website set up, and then you list it. And so you can kinda just list your own home, post the photos, and all the docs. And then when the agent asks for disclosures, every disclosure, they wanna see on a National Association of Realtor's form. And the MAR forms are only available if you're a member. So there's a whole bunch of ways that they've tied up the market and made it impossible for the system to operate without the NAR members being a key principle in the transaction process. When at the end of the day, having gone through this a number of times myself, there's just all these templates and data that flows into this. There's no reason why you necessarily need to have an individual that that needs to be involved here. But if you did, It's actually a data entry service. The process of entering this data could probably reduce down to a fixed fee of, call it, a couple thousand bucks per home, rather than a percentage of the home value. David Friedberg (01:20:36): And by the way, think about the craziness around this. If you buy a home and you sell it in most parts of the United States, you actually have a tax that you have to pay. That's a percentage of the gross, and most people have most of their net worth tied up in their real estate. So it's one of the few places where you will actually see a large chunk of your net worth actually Sacks on a gross basis and taken away from you if you end up selling it rather than on a net basis, meaning net of the profit you make. And then the brokers wanna get paid percentage of the gross as well. These are the commissions they get paid. From a first principle's perspective, it doesn't make sense that we're paying a percentage of the gross to agencies to, to transact this volume. The total volume in the US is an incredible number. It's a $100,000,000,000 a year in residential real estate commissions. And there's 1,600,000 Sacks who are real estate agents that are licensed making their living doing this. So it's not an inconsequential industry, and it's not an inconsequential verdict. Nick, if you could pull up that chart of the different countries, here's a good comparison. So in the US, we pay about 5 a half percent brokerage commission split between the buyer and the seller's broker. And, again, legally, you don't need a buyer's broker. You don't need a seller's broker. You're allowed to sell your home without a broker. There's nothing in the law that prevents you from doing that. So this is just an industry that's popped up to service this need, and their pricing model is to take a percentage of the growth. And that's just the way the market's developed. But in a competitive market that should be competed away. And it hasn't been because of this this behavior that's gone on with institutions like the NAR, And you can see across different countries, different pricing systems. As a percentage of gross, in the UK, you only pay about 1.3%. Total brokerage commission on buy side and sell side in China 2 a half percent in Russia 3 a half percent. Some countries like Japan and Argentina are comparable to the US at Sacks. France is at 5%. David Friedberg (01:22:22): Germany's at 4 a half. Chamath Palihapitiya (01:22:24): Can I ask you a question, Freeport? David Friedberg (01:22:25): Yeah. Chamath Palihapitiya (01:22:26): I only own one house, so I don't I've never gone through this experience, really, that I can remember because that was more than a decade ago. But today, if I wanted to sell a home Okay. I could sell it to you. Right? But if you have a broker, do I have to pay you 3% as well? David Friedberg (01:22:43): No. You could sell your home to me. And then if I have signed, who pays your broker's 3%. Jason Calacanis (01:22:49): I sell you pays the buyer's broker David Friedberg (01:22:51): but they don't have to. Yeah. No. Here, it's really important to understand this. If you're gonna go buy a home, you're typically not signing a contract with an agent when you go home hunting. The seller has an agent, and in the agent listing they say, Hey, if you're a buyer's agent, you show up, we'll give you 3% commission. And so the buyer's, agents who don't actually have a contract with the buyer are like, well, let me show you rent homes. Let me show you rent homes. And then they get to a home, and they're like, okay. This home's listed. Let's buy it. And they're gonna make a 3% commission. Which, by the way, I just wanna point out the disincentive there. They're not looking out for my best interest as a buyer. They're looking out for their commission Jason Calacanis (01:23:32): And the higher the price they get you to pay, the more they make. David Sacks (01:23:34): More David Friedberg (01:23:35): money they make. Chamath Palihapitiya (01:23:35): But I wanna understand those. If I'm gonna sell my house to you guys and you guys have a buyer's agent and I just can I just refuse the percent? David Friedberg (01:23:42): No one gets paid because there's no the buyer's agent has no contract with anyone. Jason Calacanis (01:23:45): Yeah. You could just refuse. David Friedberg (01:23:47): And you don't have a contract with anyone. The place where you end up paying a commission as a seller is if you sign a seller agent listing and where you sign a contract that sells to the seller's agent, I'll pay you 3%. And I'm also gonna buyer 3% if they show up with the main, Chamath Palihapitiya (01:24:00): how do I list my house on MLS without a seller's agent? David Friedberg (01:24:03): You cannot. In California, I mentioned, I just I recently went through this. I paid $99. I did it all myself. And I listed it on MLS without an agent. I've done a bunch of person to person sales of real estate where I haven't had any agents involved, but I knew the people on both sides, and we just did a action. So What Jason Calacanis (01:24:18): was your legal cost per transaction? David Friedberg (01:24:21): Oh, like, $15, you know, to do that? Jason Calacanis (01:24:23): That was my exact number. It was 15,000. So just to give you a comparison here, Chamath, if you were to have a $1,000,000 house, that would be Sacks% to be $60,000 So that's 15,000 in legal costs for you to sell it, right, if I wanted to sell it to you directly. And that's what happened. My friend owned a really nice house. We did it off market, and now all the brokers in my neighborhood hate me. Like, they are really upset about it. Imagine it was a $5,000,000 house or a 10,000,000 $20,000,000 house. Chamath Palihapitiya (01:24:52): Is it true for commercial real estate as well? This is this how it works? Jason Calacanis (01:24:55): I don't know commercial. David Friedberg (01:24:55): Commercial real estate is the same situation. So there's a agent that represents the building, the landlord, it's actually gonna talk about this, then the buy side Jason. Chamath Palihapitiya (01:25:04): So what they're writing Buffett owns Berkshire Realty. What is that? That's just basically David Friedberg (01:25:09): It's a residential broker, just like Coldwell banker, 24 just like all these other Chamath Palihapitiya (01:25:13): so it's picking up this 6% big? Yep. David Friedberg (01:25:16): They were part of the the lawsuit. They were named. Yeah. They were named. And if you look at listen to Buffet's earnings reports, he often talks about how many sides of a transaction they were on. And that's kind of the key measure of revenue in the in that piece of the business. And he was super ecstatic, I think, in 2020 or 21 when real estate boomed. And he's like, we got this many sides of the business. It's a great business. You know, it's cash generative. Such a great business. But that's the business. You wanna be on you wanna get as many sides as you can. You wanna get on a sell side and buy side, in the market, and you just get 3% depending on which side you're Chamath Palihapitiya (01:25:49): But now the courts basically said, hey. This is illegal. David Sacks (01:25:52): Here's how you'll know that the monopoly has ended is when the buy side commission goes away. Jason Calacanis (01:25:57): Yeah. Yeah. David Sacks (01:25:58): I mean, the sell side 3% may be excessive, but I do think that the sell side brokers do work in terms of having to market the property. Whereas on the buy side, the vast majority of the value is created by MLS. Like you're saying, Friedberg. David Friedberg (01:26:11): I think it's flipped, but in terms of where the value is. But any I mean No. Jason Calacanis (01:26:15): You have to stage the house take pictures. David Friedberg (01:26:17): Yeah. As a buyer, I just want someone to look out for me and make sure I'm not, like, all the diligence that goes into researching a home and reading all the disclosures and going through them. Don't know if you guys have gone through this. David Sacks (01:26:26): It's hundreds of agents. Through it, but I'm gonna use a lawyer for that stuff who I pay by the hour. Correct. Jason Calacanis (01:26:31): What I do. David Sacks (01:26:32): I'm not saying that the buy broker Chamath Palihapitiya (01:26:33): adjusted nothing, David Sacks (01:26:35): but I'm saying that most of what they do is to schedule appointments for tours for you after you've gone through MLS yourself and picked out what you wanna see. Jason Calacanis (01:26:44): Give them the list. And then they David Sacks (01:26:45): put it Jason Calacanis (01:26:46): on your calendar. You know, David Sacks (01:26:47): what I would analogize it to is travel agents. I don't know if you remember, like, I mean, most people watch the ship probably don't remember, but in order to book an airline ticket a long time again before the internet, You call up a travel agent because they have proprietary access Jason Calacanis (01:27:01): to your house. David Sacks (01:27:01): They have proprietary access to Sabre, which is the online ticketing system. David Friedberg (01:27:04): Totally. Totally, David Sacks (01:27:05): it's gonna happen is with the internet, you had sites like Expedia just give you direct access to Sabre and so you could book the ticket yourself. 30s and have a travel agent. Yep. Same thing has happened with MLS. It used to be proprietary access by the brokers to MLS. You couldn't even see it. Then you had sites like Zillow, basically give you direct access to MLS. So you can just go on there and find what you're looking for. And again, the main thing that the the buy side brokers do is to schedule the appointments because you can't get a tour typically unless you're represented. And if you're not represented and you reach out, then the seller's agent will try to basically enlist you. Jason Calacanis (01:27:42): Have you done a direct transaction Sacks? I'm curious. We can. David Sacks (01:27:45): You can. You can residentially. I mean, it's very Jason Calacanis (01:27:48): Oh, no. I've done it. Yeah. David Sacks (01:27:49): I mean, if you know, if you happen to already have pre identified the buyer, then, yeah, I guess you could do it. Jason Calacanis (01:27:55): But, basically, it happened within our case at in in February, I'm curious how yours went down. I had told the person or my wife had told the person we love your home. If you ever sell and let us know, And then they let us know. And then we bought it with them off market. And they said, we don't wanna use brokers. We don't wanna pay this huge commission, which would have been 100 of 1000 of dollars. And, would you agree to this price? And we're like, yes. And then done. How did yours come about Friedberg? How did you find a buyer? If you're on the sell side. David Friedberg (01:28:21): This is all, like, relationship driven people that I know and that kind of stuff. So it's like, hey. Jason Calacanis (01:28:26): I think this is the future. If 2 of the four people here have done I think this is the future. Chamath Palihapitiya (01:28:30): I don't David Friedberg (01:28:30): know if that's, I don't know if that's the common model. I don't I don't think that's true. I didn't think that was David Sacks (01:28:34): You need a marketplace. David Friedberg (01:28:34): You need a marketplace. You need a marketplace. David Sacks (01:28:36): And the brokers between the marketplace. It's a one off. It's a fluke when you ask for something that you're buyer. Chamath Palihapitiya (01:28:41): The m David Friedberg (01:28:41): the MLS is the de facto market, because, I mean, ask anyone in the country who's bought a home in the last year or 5 years, almost everyone I'm sure went on Zillow or Redfin or Trulia looked at homes. And the the place that those you know, marketplaces get their data is from MLS. They sweep the MLS. So the real kind of, you know, monopolistic breaking is can you break that marketplace? Can you break MLS? And can you get some other alternative listing services going that you know, enable this to this this brokerage commission to get competed away because it's currently locked up David Sacks (01:29:18): Right. In David Friedberg (01:29:18): the monopoly they have on the MLS. David Sacks (01:29:20): What's so perverse, here's where the monopoly comes from, is that if the buyer had to pay the 3% directly to the buyer's Jason, and that was a choice you could make Nobody would pay that much. Course. I'm not saying that the buyer's agent doesn't provide some value, but there's no way you pay 3%. But The reason they get it is because the brokers tell you, well, you're not paying that. The seller's paying that. But, of course, you're indirectly paying that because the transaction fees are so much higher. And when the seller goes to list their house, if you tell your seller's agent, hey, I don't wanna pay the buyer's agent 3%, make it a half a percent, they won't do it. You know, they they will always make it equal. So this is the game. This is where the locking comes from is the buyer doesn't have a choice, and the seller doesn't really have a choice either. Jason Calacanis (01:30:03): Sacks we wrap here, just real quick, pull up that link, Nick, and go to number 5. So that is the key issue. I don't have a horse in this race. I don't own Redfin stock or anything, but here's Redfin explaining what you talked about. It's FSBO for sale by owner, and there's now these third party sites and they kinda allude to it there. David Friedberg (01:30:19): But you know what those are? Those FSBO sites are actual real estate agents that are registered in the state and are members of NAR, and so they have a right to list on MLS. So what they're doing is they've basically set up a super simple website, and then they're posting your listing on MLS for you Jason Calacanis (01:30:36): For a Chamath Palihapitiya (01:30:37): flat fee. David Friedberg (01:30:38): For a flat fee rather than getting a commission on the sale. Awesome. Yeah. And and that's that, you know, that's kind of interesting, but for most pea most people, they're like, Well, I don't know. Now I don't wanna disparage the value of folks that are in this industry. There's obviously a lot of value for agents and brokers in this industry, but the real point is that if the monopoly breaks on the marketplace, then the business model will get competed away, and there will start to be a change here. And I think that this lawsuit and the settlement ultimately leads to, a change, a shift in the industry that could certainly benefit consumers but could have a negative, like, economic impact because of the number of people that depend on brokerage fees as their as their job. Jason Calacanis (01:31:14): The settlement is likely to be that when you hire a broker, They will give you a form and you'll pick what percentage you wanna pay. I'll pay you 2% and I'll pay the the buyer's agent 1 point 5. I'll pay you 1.5. I'll pay the buyer station too. Or they should be caps on it, right, or you should have the because of the incentives, it doesn't matter if I sell my home if it's a $5,000,000 home. It may matter to me 5,000,005.5 or 6. It doesn't matter to the broker. They're They just wanna sell it as quick as possible. If it sells for 4.5,5, it's relatively the same commission. So it really should be based upon a flat rate up to a number and then a percentage above that number to align interests. Anyway, keep an eye on this one, folks, because it's gonna have a massive impact Alright. Colorado Supreme Court has removed Trump from the state's presidential primary ballot. This was decided in a split 4 to 3 decision by the court. It's worth noting that all of the justices were appointed by democratic governors to Democratic state. The court based its decision on Section 3 of the 14th Amendment. This bar is anyone from joining Congress, the military, or any federal state offices if they have previously taken an oath to support the constitution, then engaged in insurrection against the US. This is the first time in US history that the 14th Amendment has been used to legally disqualify a presidential candidate. The 14th Amendment was originally passed after the civil war and was aimed at former Confederates. Chamath Palihapitiya (01:32:43): I'll say a couple of things. The first is that I thought that the Democrats were going out of their way to give Trump the election with the documents case. But now I think that they've basically made his winning the Republican nomination of foregone conclusion and He is the overwhelming favorite to end the presidency after this. And the reason is pretty simple, which is if you take Donald Trump out of this, The idea that you haven't been convicted of a crime But now a government agency or a government court, in this case, can deprive you of what really is like a pretty momentous sign of liberty and freedom, which is to run for president of the United States, to deprive an American citizen, unconvicted of that crime, of that right, I think, is really a bad step in the wrong direction. And so there there just needed to be a lot more prudence and thought about this, and I think that it will do Nothing except embolden the base. It'll get Republicans out to vote. I think it creates a deep wave of momentum in the direction of of Donald Trump. And so this to me was just an app absolute complete head scratcher that makes no sense and I think will surely to get overturned in the Supreme Court. Friedberg, thus. Jason Calacanis (01:34:18): Okay. For those of you not watching, Friedberg put both hands up in the air. Gave a shrug. Like a shrug emoji. So if you wanna understand Fredericks position on Trump, it is shrug emoji. Coming around the horn Sacks red meat, What are your thoughts on the Colorado Supreme Court banning Trump from the ballot? David Sacks (01:34:38): I agree with what Shamasa democracy now means the right of the people to vote for candidates approved by liberal judges. And yes, Jake Hall, all these judges were democratic appointments. I think this case makes clear that the point of all of this law fair against Trump is to keep him off the ballot until now they've been pretending it's about something else. And I think this decision rips the mask of all the legalistic bull that we've heard throughout 2023. I mean, Democrats don't really give a damn whether he paid off a porn star or kept classified documents or supposedly led a a racketeering conspiracy They just don't want him standing for a vote that he might win. And I feel like all the time we spent on this pod earnestly debating that details and legalities of the darkness case. It was a total sucker's game. That's the narrative they want us engaging in. It never had anything to do with documents. They just wanna keep them off the ballot. And I think that by being so naked about this, by ripping the mask off what they're trying to do, the Colorado Supreme Court has really done us all a favor. I mean, the Supreme Court of the United States is surely gonna reject this decision. But the lasting impact is gonna be in revealing liberalism's true faith. They are the real authoritarians. And while restricting the right of the people to vote for the candidate who is leading the polls right now. They proclaim that they're saving democracy. I mean, they they self qualify and engage in this self righteous rhetoric that they're saving democracy. I mean, the rest of the country, any normal person is looking at this, and saying these people have completely lost touch with with reality, completely lost touch. Chamath Palihapitiya (01:36:18): The other unfortunate outcome of this is that there will be a wave where people will talk about the big steel as this. And what people will say is that there was an attempt by the Democrats to really roadblock Trump's ability to be voted up and down by the American people. And that's disenfranchising the the ability for people to vote. And and I think that that's really unfortunate. And I've and I wish that the Democrats would have thought about that in their calculus before engaging in what is really a a deeply partisan thing to do that that this will will this will get overturned, but the damage will be long lasting, unfortunately. That's a shame. David Sacks (01:36:59): Totally. And I Matt Taiby had a good line. He said that only people who live in a bubble within a bubble within a bubble could ever think a decision like this is a good idea. Here are the 3 bubbles. Number 1, all of these judges were democratic appointments because that's a living within the democratic party. It's the first bubble. The second bubble was the fact that they all went to Ivy League Schools. This was actually a 43 decision. The 4 justices who went to the Ivy League's all voted for it. They thought this was a good idea. The 3 that went to Denver law school, the non Ivy League school were all against it and wrote scathing dissent against it. So that tells you the second bubble is that I believe the 3rd bubble is people who've been totally marinating in the mainstream media and their coverage of this because they think that they can just conclude that Trump is guilty of an insurrection because it's to stay fact according to the media they listen to. Trump has never been convicted of that crime. He's ever even been charged with it. David Friedberg (01:37:55): Right. So I think that's a an important distinction that, you know, the the the 14th Amendment which my understanding came about to keep members of the Confederate army out of Congress because they had rebelled against the government. And so the whole point was this amendment was passed to keep, anyone who'd David Sacks (01:38:15): No. That's right. David Friedberg (01:38:16): Who engaged in insurrection or rebellion. Or give an aid or comfort to the enemies thereof. And it may not be elected, member of the senate, Congress, or president, or vice president. So, Sacks, if that's the case, That, that is still the 14th Amendment. That's the claim being made here. It doesn't define whether or not there needs to have been a conviction of a charge of insurrection. Is that what will ultimately be the Supreme Court decision, do you think? Is that he was or wasn't actually found, you know, court of law to have been guilty of insurrection? Chamath Palihapitiya (01:38:48): No. It's that the actual article 3 of the 14th Amendment doesn't doesn't even define the presidency as applying in terms of where this applies. So even before you get to that legal threshold of the fact that he's never been tried for this thing, there is a simpler threshold, which is most legal scholars say it doesn't even point to the fact that you can actually hold the president to that standard. So there's like all all these layers and what do you mean? David Friedberg (01:39:14): It says no person shall be David Sacks (01:39:17): Well, it's unclear. It's unclear if officers of the United States include the presidency. I think that's one way you could overturn this. Another way is to point out that there was no due process. The dissent really harped on this issue of due process. You had a district court decide after a 5 day hearing in which Trump was not allowed to subpoena, no subpoena power, no calling of witnesses, no cross examination. They basically just looked at tape of the January 6th hearing, which was itself biased because Republicans didn't even get a chance to cross examine. So, basically, they just looked at MSNBC coverage. And this district court concluded on that basis that Trump was guilty of an insurrection. Again, that is a crime for which he's never been convicted, and he's never even been charged with and he's never even had the chance to answer those charges in court. Chamath Palihapitiya (01:40:01): And there was a special council at the federal level that declined to prosecute. David Sacks (01:40:05): That's right. That's exactly right. David Friedberg (01:40:07): So, Sacks, if a prosecutor had taken up the case and he had been convicted, would you support him being disqualified from the state ballots for being the nominee of her party, for president? David Sacks (01:40:18): Well, there was a very simple way to disqualify Trump from running again, which was to impeach him, was to convict him in the impeachment trial. I remember the second impeachment was all about January Sacks. David Friedberg (01:40:28): And he was I'm talking about the courts. I'm talking about the courts. He was exonerated. David Sacks (01:40:31): That was the time to do it. Now I don't know if, you know, if a conviction for incitement to insurrection would hold up in that way, Friedberg, I don't know. But the point is they didn't even try. And the reason is because when Merrick Heartland first came in, they actually did an analysis of January Sacks, and there was a memo written And it said that if we, the DOJ, try to prosecute Trump for either incitement or for insurrection, we will lose that case. And so Merrick Ireland didn't bring those charges. Then there was a story in the New York Times saying that Biden reacted really negatively to that, and he told his inner circle that Garland needed to stop acting like a ponderous judge. This is the New York Times words and that he needed to take decisive action. And Biden made clear to his inner circle. I'm gonna provide the receipt on this that he thought Trump should be prosecuted. So all of this law fair ultimately flows from that. It flows from the top. Biden is the most vindictive president we've ever had. I cannot think of it another time in American history where a president incited his own aids and advisors to basically go prosecute the leading alternative for the presidency that he's likely to face in 4 years. That is what happened. By the way, we've seen this behavior before. Remember, this is also the president who said we need to go look at this guy, meaning Elon. I mean, I can't believe that this behavior is just accepted by so many Americans. This is petty vindictive un American behavior, and it's anti democratic and the people who are engaging in it the most, again, are are glorifying themselves as somehow standing up for democracy. This is a joke. I think the average American is gonna rebel against this. And I said, I think it was like last year that all of this law fair, all these tactics at shenanigans, that the Democrats were trying, it's either gonna put Trump in the big house or the white house. And I think he said it for the white house on this basis right now. Chamath Palihapitiya (01:42:23): I agree. You would David Friedberg (01:42:24): say that it's reasonable that if he got convicted in the court of law for in charge of insurrection that he should not be allowed on the ballot? David Sacks (01:42:31): If the Supreme Court then decided that that's what the 14th Amendment. Man, sure. But that's not what happened here. There's 0 due process. David Friedberg (01:42:39): I get it. I'm just trying to understand where your threshold is. You think he'll certainly this will certainly go to the Supreme Court and they'll adjudicate what the the 14th Amendment really needs because it's never been tried the 14th Amendment. Well, again, it was written. David Sacks (01:42:50): Think about why that statute came about. Chamath is right. It was written for the confederacy. David Friedberg (01:42:55): Right. The only other time it Chamath Palihapitiya (01:42:56): was used in was in 1919 against person that was about to enter congress who was who had given comfort to the Germans in World War 1. That's the only time we've actually invoked Article 3. Section 3 of the 14th Amendment. David Friedberg (01:43:08): Were they allowed to run that person? Chamath Palihapitiya (01:43:10): They were not allowed they were not allowed to take the seat. Now that's at the federal level. And at the and at and at the state level, been used a couple of times. The the the point of this is, for me, again, take Trump out of it. You do not I think I'm pretty sure we do not want to find ourselves in a country. David Friedberg (01:43:29): No, of course. Chamath Palihapitiya (01:43:30): Where you can all of a sudden be deprived your liberty and your rights. For random acts where somebody believes that you are a threat to them, and that person in it is in a position of power to affect your liberty. That can't happen. Vote the man up or down. David Sacks (01:43:51): Yeah. And I agree with that. And I would say that, I mean, what you're speaking to is to process. These judges basically believe that because the mainstream media says something is the case that we don't need to go through a legitimate court procedure to determine that as a legal finding. They just declare that, okay, he's guilty of insurrection. That was never proven. Chamath Palihapitiya (01:44:11): People don't realize you can this thing can go the opposite direction so quickly. Imagine that there's a democratic candidate that is running against a Republican incumbent. Is this the standard we want to create where there's this political warfare that happens where each party is trying to essentially prevent the leading candidate of the other party from running in every election from here on out because that's the precedent that is being created. That's what That's why I have such an allergic reaction to this. David Sacks (01:44:43): That's totally true. Chamath Palihapitiya (01:44:44): Why wouldn't every president from here try to do this? David Sacks (01:44:47): I mean, it's already the case that every president that loses congress is probably gonna face an impeachment hearing. I mean, that's happening too. And now we're gonna have a situation where every presidential candidate can be potentially excluded from the ballot based on you know, a local court's findings. Chamath Palihapitiya (01:45:06): From the Democrats point of view, this was deeply short sighted, and I think it has a very high chance of blowing up in their face. David Sacks (01:45:12): We haven't heard from Jay Jason. Jason Calacanis (01:45:13): I get my information from 2 really good sources. The first one I recommend for our listeners is cafe.com. It's a podcast by pre fantastic. He does really deep dives on these cases. Yeah. Cafe.com. This is podcast. .Com. It's it's David pockets, but it's really detailed. And then there's actually speaking of lawfare. There's a lawfare podcast. And so I Jason to those, and it's they're they're covering this, but and also the 2 other cases that are of note, the federal election interference case in the Georgia case, highly recommend that our listeners go to those experts and get a really well balanced view of the cases against the 45th president. Alright. For chairman, Jamath Palihapitiya, the new chairman of the I don't know. I don't see a dictator. Chamath Palihapitiya (01:45:55): I don't wanna lose it. Jason Calacanis (01:45:56): Chairman dictator authoritarian. Nope. Nope. Take out. IPock. Chairman BIPOC. David Sacks (01:46:02): Chairman of the politburo dictator of the All in Pod. Jason Calacanis (01:46:05): You have my proxy vote too. All hell, the chairman dictator and for the king of beef and Wiggum. Rain man himself. Wiggum. Hi, Emily. It's greatest. Moderator. Love you, boys. And we'll see you next time. We'll let your winter's ride. Rainman David Sacks. David Sacks (01:46:29): And it Jason Calacanis (01:46:29): said we open sources to the fans and they've just gone crazy with it. Uh-uh. 13. Chamath Palihapitiya (01:46:52): You should all just get a room and just have one big huge order because they're all just useless. It's like this, like, sexual tension, but they just need to release them now. You're that's good Jason Calacanis (01:47:05): for you. Where did you get Murphy's all in.