All-In 峰会：克莱尔·科尔米耶·蒂尔克谈中国，Flexport 的瑞安·彼得森问答

Speaker 1 (00:00:00): We're really excited to have Claire with us. Come on, not Claire. Are you Claire Cormier (00:00:04): here? Right. Speaker 1 (00:00:05): What are we welcome, Claire. Jason Calacanis (00:00:07): What will we be talking talking about today? Claire Cormier (00:00:10): We're gonna be talking about China, you know, just as everything has been all spicy. Jason Calacanis (00:00:14): We'll Well, what just again, we're we're trying Speaker 1 (00:00:17): to make today about just easy breezy topics that, you know, the most easiest things to manage. So we armaments, Ukraine, let's go to China. Sure. Please welcome, Claire. Hawaii Speaker 4 (00:00:33): winter of Friedberg. Rainman, David Saffens. Speaker 5 (00:00:39): And I said -- We open Claire Cormier (00:00:49): We are going to actually keep this pretty apolitical today and maybe talk a bit about the parts about China that are less discussed in the high in the headlines. And, you know, Jason reached out, and he said he wanted to to really understand what were some some problems And I wanted to see salt that we wanted to see salt. So I'm a property developer. I run Greater China Hines. We're the largest private real estate firm in the world. And we have an incredible Greater China team. I know I see these folks in the front. They're like, where is she? I can't possibly spot her in there. So So we have a team that is working across Beijing, Shanghai, Shenzhen, and Hong Kong. And we get to work really across the real estate spectrum. So we built the greenest skyscraper In in China, we built some of the 1st international service departments in the country and are doing some really interesting innovative projects like in Hong Kong. We bought a distressed hotel that we're turning into, really, a new kind of living collaborative living that's super technology enabled for a young population there where the average white collar young person, it takes them 20 years of salary. to be able to buy an apartment. So we get to approach these problems that are not unique to our part of the world, but often the solution is a combination of East meets West. So back to kinda what's the the problem. Well, you know, we're sitting right now in Miami a place that is super exciting, thanks to a lot of the things that are happening right here that have been hyped by a pretty awesome mayor. Right? What did he do? He got on Twitter, and he talked to all of us about what this city had to offer. It had key ingredients. It had universities. It had an upward trajectory. had young people looking to collaborate. And at the end of the day, that's where we wanna be. Claire Cormier (00:02:55): Right? We wanna be sitting together in awesome spaces like this. exchanging ideas with other interesting people. That's how you do cool stuff. And so as property developers, we think, you know, how do you create spaces where people want to be their best, right, collaborate with others and build a better future. So that's a lot of jargon. But what does that actually mean back to the problem? Well, first, these ingredients are pretty clear. I teach a class at Stanford on this called who owns your city, and the students usually pick it up in the first ten minutes. It's it's a place that has pretty good infrastructure. Can I get a job? Can I afford to live here? And if they're cool cultural stuff that keeps it from being to bland, But then, you know, you'd say, okay. Well, cities can learn from each other. Right? You can just take those ingredients and apply it, and that's what Suarez did a great job of here. But we are living in a time where the East And West have never been more divided. Right? And building a city, building buildings is really hard. It's it's like the most extreme version of hardware. So as a property developer, if we spend our time really thinking about what are the big macro trends? What are startups focused on? Where do they wanna be? Because our spaces need to be relevant for 50, 70, a 100 years, and we can't pick up our building and move it somewhere else. And so you try to take the arbitrage of what's working in one part of the world and try to apply that to another and solve problem. That's where you find great returns, but it's also where you build places that are gonna be relevant for folks. And so, you know, just a couple examples up here behind me. So, you know, we talked about the living challenges. So for folks to be able to to be able to afford a place to buy, but the concept of rental apartments So, like, multifamily, if anyone lives in a multifamily building with 1 landlord, that isn't totally a thing in Greater China. often people are left to rent from an individual landlord pay a deposit that's enormous cross pro you know, cost prohibitive and get you know, quality of of product that that really is not up to what they would expect. Claire Cormier (00:05:12): And so taking a very in some ways, kinda, western concept and applying it in a place that technologically is probably about 10 to 15 years ahead in terms of what that average user is used to. Okay? They're used to unlocking a door with their phone. Their WeChat is their ID. It's the way they meet new people. They can physically shake hands on WeChat to introduce themselves to a friend. It's where they keep their coupons. It's how they pay their rent. It's how they pay their taxes in some regards. Right? We don't have that in America, but if you're like me and you live in Greater China, you do. And so how do you combine those things together to create something that doesn't exist? You see up behind me a a logistics building, but it's actually six stories high, something we're developing. It is a a giant, almost like a refrigerator, but a high rise Supertech enabled. And that's because, you know, they got a lot of people. That building will be sitting within a 45 minute driving radius Speaker 1 (00:06:12): 45,000,000 Claire Cormier (00:06:13): people, and yet China only has a quarter of the cold storage capacity per capita that the US does. Okay? It doesn't take a genius to see that this trajectory is, you know, lower left to to upper right. And so, again, you're taking this concept of East meats meets west. Building up here just behind me is is in Shanghai. It's about a million foot tower. You have a lot of those here in the United States, big fancy office buildings, you know, where people used to go to sit at their computers and do work. But this one is very different from one that you may have walked into earlier this week. This entire building is on WeChat. You can interact with the building on WeChat. You can interact with the landlord. You can interact with your other tenants. You can have chance encounters or organize a yoga trip in the afternoon with the people, with the space using this digital interface. So in in a way, it's really combining the way we live right now. We live in a physical world, but so much of our idea sharing our collaboration is happening in the air, right, in a digital experience that we can't see. And so it's another combination of this East meets west. And so what becomes a problem and an opportunity, a problem when you sit in the middle of this world, like my team has the honor to do, is you see that there are all of these opportunities for us to be able to share this, really, the best of what the west has to offer with the innovation that's happening on the ground in China, but it is so hard to talk about in this very divided world. And so we like to take the positive side and say, you know, we're living in this world of, like, magic and Larry And how can we make each other better? So I thought I'd use just a few minutes, and then we'll hang out with the besties to to maybe share a story that that maybe y'all haven't read so much about so that you get the benefit of knowing a little bit about what's happening over there. And you can see an example of where sort of east meets west in that collaboration can make us all better. Claire Cormier (00:08:27): So up here is that Germany all will probably recognize Stone Xiaoping. You're famous for really the opening up of China. And You know, he was an experimenter. You know? He had this vision of what China could be, and he saw what the importance of the physical world, the physical infrastructure, what a role that could play in in to enable the economy to jump further. And so the picture to the other side is Shenzhen, which in 1980 was barely a a fishing village. It had about 58,000 people, very few paved roads and deng Xiaoping. You from Sichuan. So we really understood what it was like to not be from the big city. And so he declared it a special economic zones, especially economic zones, so. And that meant that it would be displaced to experiment with bits of capitalism, with free trade, etcetera. So what is it today? Well, first, there's that same road along progression just a few years after it was declared his own. And then up here behind me is what it looks like now, Shenzhen is over 12 million people The average age is twenty nine. It's really the tech hub of China. So companies like DJI, which makes 70% of the world's drones. They call this area home. And and just within this area, if you were to go shortly from where this picture is taken, you'll have 2 of the world's 5 biggest ports by tonnage. Okay? So how do you take that head start and turn it into something further, well, they took a lesson out of the book of the west. And they created something called The Greater Bay Area. It's like the Yeah. Yeah. Okay. You guys get it. And so what is the Greater Bay Area? Well, it is a collection of 9 cities. on the mainland side, some of which may be familiar to you guys. So Shenzhen, as mentioned, and Guangzhou, Guangzhou is about 18 million people. places like Zhuhai. Do y'all remember, you know, several years ago, there was this thing about China building the longest bridge in the world. Everyone's like, where is that? k? As in July. And then so 9 cities on the China side, and then Hong Kong and Macau. Claire Cormier (00:10:57): And together, this this area, it's about the size of called West Virginia, today has a GDP that's sitting right around Canada and South Korea. Okay? About Speaker 1 (00:11:09): 1,700,000,000,000. Claire Cormier (00:11:12): In Speaker 1 (00:11:12): 2017, Claire Cormier (00:11:14): they declared this great Greater Bay area name, and and it was there to really back up a lot of the investment, frankly, that had already started to join these cities together to create a super region. So within that super region, they spent about Speaker 1 (00:11:29): 300,000,000,000 Claire Cormier (00:11:31): to build infrastructure to further connect it. So within just four years, they built Speaker 1 (00:11:36): 2000 Claire Cormier (00:11:38): miles of speed rail, like high speed trains. There we have, like, a little, you know, one from here that goes to Fort Lauderdale, you know, Texas is gonna get 1 in the year Speaker 1 (00:11:48): 2019. Claire Cormier (00:11:51): And so so what does that mean? That means that I can walk out of my office with my teammates in Hong Kong, which is right next to that big ferrous wheel thing that everybody recognizes. I can take one stop onto metro in 13 minutes on a speed train I could be in Shenzhen, or I could keep on going And I could access about 23,000 miles of high speed trains and get to Beijing, get to further than Guangzhou, get to Western China. It is amazing, and it is happening so quickly, and that number will soon be 40,000. as they continue to build, but it's not just speed trains. These are interconnected nodes with further metro. Right? with transit oriented development on top of the meetings of these trains. So back to the so what? So we know that if you take cool people and put them in cool places and you give them an opportunity to interact, well, what can you do? So this area, again, the size of West Virginia, now with 70 million people who are all quite young, And, again, back to the ingredients, we talked about what sort of fosters innovation. Well, they've incentivized universities to put additional campuses here. And these are the best universities in China. So Jinhua, Fudan, etcetera. They funded further life science. They funded further tax increment zones to encourage This is to come and set up nodes of activity focused on areas of excellence. remember we talked earlier about Speaker 1 (00:13:34): 1980, Claire Cormier (00:13:35): there are 58,000 people in all of Shenzhen. So just between Speaker 1 (00:13:41): 20102020, Claire Cormier (00:13:43): In one small neighborhood on the western side of Shenzhen, they filed Speaker 1 (00:13:49): 58,000 Claire Cormier (00:13:50): patents. It's pretty amazing. And that shouldn't be scary. That should be exciting, guys. This is where we get innovation. This is how we get better back to the Magic and Larry. Right? Thank you. Yes. You can clap for that. You can clap for that. So what does that mean for us? What does that mean for folks who are sort of getting to work in this interstitial space in between getting to live within it. You know, up here, you know, behind me, I have I'll I'll clear the visual for you. It's further just connecting showing these metro lanes, these trans buses that are leading to these speed trains. Back down here, that's Hong Kong Island, and then this takes you through a bit of the Bay Area before you get out. to the rest of of China. But why does it matter? It's because these things layer together k? So China's ecommerce percentage is about Speaker 1 (00:14:55): 25% Claire Cormier (00:14:57): of their overall retail. Here, it's about Speaker 1 (00:14:59): 14%. Claire Cormier (00:15:01): Again, now we're smart. We can see where this is going. So you can take some notes on the preview and see what things and trends may be coming here in China, about 85 ish percent their transactions are mobile. Here, that's barely 30%. Where is that going? How does that work? And you can see what's happening. Another is you can look at trends that are just part of the world there that haven't made it here. And you sit there and you're like, wow. What a chance to iterate So the example there, again, will stick with with shopping and and retail, is social shopping. So this idea of streaming while shopping that's layered with the full experience and imagine what it can do. And, again, if you layer that, on top of this WeChat platform we're just talking about, a place where I can go, and I could make a new friend right now. You, by looking at you, showing my friend to you, putting them together so we can introduce a product, introduce a lecture, a concept together, imagine what we can do. Elon likes WeChat. He was just talking about it yesterday. So the point is that we all have this opportunity To really you know, again, the headlines can be exciting. They can be crispy. But to look beneath them, and to take an opportunity to further connect with the people. Because, again, those folks who are hopping on these trains for, you know, probably equivalent of about 45¢, right, to get on the public transit here. Going around and exchanging ideas These people most of them are not politicians. Right? Most of them are not big world global leaders. They're folks who were trying to to create something for themselves, to create something for their children, to build a better world. Right? So we're really all on the same team. So with that, bring the besties out, I guess. Gonna have to get too spicy. Alright. Center Speaker 1 (00:17:08): stage for you. Claire Cormier (00:17:09): Right here? Speaker 1 (00:17:10): Right there in the middle seat. Ryan Petersen (00:17:11): Oh, baby. Speaker 7 (00:17:12): Well done. Well done. Claire Cormier (00:17:14): Be nice, guys. Be nice. course. Speaker 8 (00:17:16): Of course. Well, Saks is in here, so, of course, we'll be nice. Speaker 1 (00:17:21): It's kind of by default. And meet our Ryan Peterson from Flexport. Claire. Speaker 7 (00:17:28): Maybe you guys are Ryan Claire Ryan. Ryan Petersen (00:17:30): the best of you. Speaker 1 (00:17:30): I'm introducing you 2 guys. Claire Ryan Ryan, Claire. Claire Cormier (00:17:32): Then you'll send over. Right. Ryan Petersen (00:17:35): You guys met? They help me Speaker 1 (00:17:36): out. Yeah. Claire Cormier (00:17:37): We follow each other. Speaker 5 (00:17:38): So Jason Calacanis (00:17:40): what do we, as Americans, not understand about our rival, and what does our rival most not understand about us in your estimation having operated in both countries for so long. Claire Cormier (00:17:59): You know, their term rivals and and interesting. And, obviously, I love sports analogies and came from the track and field world myself. Chamath Palihapitiya (00:18:06): Claire was in the Olympics, guys. Claire Cormier (00:18:08): Claire was injured. Claire Speaker 1 (00:18:09): was injured. -- Jason Calacanis (00:18:10): still go running sometimes? Chamath Palihapitiya (00:18:12): Kinda fast at the Olympics. Claire Cormier (00:18:16): But, you know, your job in the sport is to find the person who is better than you in some ways, and maybe they're strong where your week your week where they're strong, you find each other, and you you shore up together. Speaker 1 (00:18:34): Mhmm. Claire Cormier (00:18:35): And I think that is what becomes so clear when you, you know, live there when you live on the other side of the world, but maybe we're born here. Or, you know, I I'm a minority, so I've maybe always lived in that interstitial space personally, or even our team. Our team is very representative of modern We have people from nearly every province. They're really across the the education bracket, highly trained engineers, but who might be quite young. to folks in their their sixties who have really seen China evolve. And so I I do think the thing that can get missed is almost that concept like we talked about that as, quote, rivals, you know, they're not monoliths. Just as America, it's not a monolith. And we could take the best of each other. Jason Calacanis (00:19:26): So we're we're best of rivals in a way. Claire Cormier (00:19:28): There we go. But is Jason Calacanis (00:19:30): is is David Friedberg (00:19:31): there a model for the century for cooperation between the 2 nations that's enhancing to both? Claire Cormier (00:19:37): I think it's happening in enterprise. I really think it is. So when I look at, again, younger people, the products that they use or the things that the young tech you know, entrepreneurs in China are working on versus here. They're they're approaching a lot of the same problems. Right? So on the social side, you know, looking at Doyoon and what made it so catchy. Right? Jason Calacanis (00:20:04): Our our what it is for us. Yeah. Claire Cormier (00:20:06): It's TikTok. It's TikTok. And back to that one about, you know, cheat codes and and a preview, you know, Doyoun was popular years ago, And and so, you know, I remember first looking at the at the app and being like, wow. This is very catchy. And there's effectively no difference between the Speaker 1 (00:20:26): -- Chamath Palihapitiya (00:20:26): You read and write Mandarin fluently as well as speak it? Or Speaker 1 (00:20:29): -- Claire Cormier (00:20:29): Well, you will never confuse me for Speaker 1 (00:20:31): a loophole Claire Cormier (00:20:32): for your Honda con. But, you know, enough to get by. Chamath Palihapitiya (00:20:37): And so when you do business in China, do you conduct it in English, or do you conduct it in Mandarin Yeah. Claire Cormier (00:20:41): So with the team, we work fully across what's appropriate because we also work in Hong Kong where it's Cantonese. Speaker 1 (00:20:46): Right. Claire Cormier (00:20:47): But all of my communications that go out to my full team, everything in full team is in Mandarin. We do have a large part of our team that only functions within Mandarin. Chamath Palihapitiya (00:20:57): So when you're for example, like, you know, you showed some of these buildings and the idea that came to me is this is a massive coordination problem that's almost impossible in the United States, which is if you have this idea of, like, this living, breathing, monolithic building that is connected via the Internet, it probably be 50 organizations in the United States that would have to have a say or want to say This the perception that we get is there is a individual that can effectively make that right decision in China, whether it's at the city level or at the state level, is that how it's really like? Like, when you guys have super ambitious ideas, Is there one place you go to, and then it just kind of all gets decided? Or is it just like here where it's Claire Cormier (00:21:39): messy? So it's kinda neither, actually. And and this is where I think it takes the the best of both which is at a local level. So you have, you know, a local we have a party secretary. You have a block. leader and and, ultimately, it goes all the way up to, you know, the the big guy. But China does this amazing thing. They have a 5 year plan. They call it the 5 year plan. Last year was the 14th 5 year plan, and it sets KPIs in areas of focus for the entire country. And those are things around carbon neutrality, education, agriculture. seniors, agriculture, industry, And it's a lot like, you know, for you guys who are running companies, setting goals, and how are you gonna get there? What's the road map? But that filters all the way down And so at a local level, those KPIs for the local leader are you know, how did you make your district green how did you increase revenue from higher quality services and technologically advanced companies? Chamath Palihapitiya (00:22:46): Like, what happens if you don't achieve it? you get fired. You get kicked out of the party. Like, what is the mechanism of reward? Yeah. Or, you know Well, Claire Cormier (00:22:55): it's quite high accountability. And so if you perform very well within that system as a leader, then you could move to higher and more advanced post to a bigger Chamath Palihapitiya (00:23:04): city. -- becomes a Speaker 1 (00:23:05): -- Claire Cormier (00:23:05): Right. So yeah. So from a from a block to a bigger city to a higher you know, up to a Ryan Petersen (00:23:11): your hiring career stalled out if David Friedberg (00:23:13): you don't hit them, then it get gets accelerated if you exceed them. Claire Cormier (00:23:16): Right. And so that creates a very interesting set of opportunities. And so to to put it to maybe a a tangible example is so for the things that you know, are really great for communities like Park Space or building a building that's green. The the last building that I showed up there is right sits right on top of a metro and is next to a natural history museum, and we needed to work with the local government to ensure that we were relating to the area properly, creating, like, leaving it better than we found it. You know, we look at projects where you can't do the project. unless you show that it's going to be green and additive or restore historic buildings in the area. There's a real handshake there that I firmly believe creates better outcomes. I know our team would say the same thing. Ryan Petersen (00:24:07): Claire, what what's gonna happen with the capital markets for your business with Evergrande and, like, some of these big kind of property developers that have had major debt problems and have you seen that already flowing over? And you understand the market very well. You probably are able to navigate this, but the foreign capital and other investors, like, might group everybody into the same block and get scared off. Claire Cormier (00:24:28): Sure. Sure. So certainly, we get a lot of questions. Yes. But it's another one where the the headlines out versus in you know, inside the country. Certainly, the the built environment construction and the real estate industries. If you combine that all together, you've got about 27% of the economy. If you include the full integrated stack, one of the things in 5 year plan is to diversify away from from that in a way. But is, you know, Evergrande and the other developers, the real focus at the local and the higher level, is to help the regular people get good on their deposits and ultimately get the homes that they were promised. So it's very interesting for developers like us and acquisitions people as for some of those smaller developers who got into trouble. Speaker 1 (00:25:19): Has there Chamath Palihapitiya (00:25:19): been a bailout? is that the is that the wrong word the way that it's been characterized in the US media that the Chinese government had to step in, shore up the balance sheet, make sure Evergrand wouldn't default on some of their there were Speaker 1 (00:25:29): -- Claire Cormier (00:25:30): I think there was a concern that there would be an entire meltdown of the full Chinese economy, which is not what we feel on the ground. And I think if anything, it's created a set of opportunities to really level set, especially on the living sector. It's really accelerated some policies to make it easier to to build and to create rental housing, which creates more access, which therefore maybe takes away some of the pressure on the condominium system, You know, they're for for the debt markets to create a space that is maybe taking on projects that are, you know, appropriate for the system, a little bit, again, more diversification and development in the right places in the right markets. Jason Calacanis (00:26:14): When we look at the relationship between the United States and China, we've had Speaker 1 (00:26:19): 3, 4, 500,000,000 Jason Calacanis (00:26:21): people come out of object poverty on the planet because of this great engagement. I don't know if that's a term, but I'll call it the great engagement. We started using their factories. We started making iPhones there. This has created despite all of the hand ringing about the relationship and and all the various issues on both sides, a lot less suffering in the world. Claire Cormier (00:26:43): Absolutely. And Jason Calacanis (00:26:44): so there is something that I think we don't recognize sometimes is that people who are living for under a dollar a day of 3 or 4 500,000,000 of them are now gone. And and that leaves some areas in Africa and and Southeast Asia that we still need to do that work. which paradoxically or ironically, it seems like China is doing in Africa. What I'm curious about is what you're seeing on the ground with their middle class, which to me seems analogous to what we went through in the thirties, forties, and fifties, this establishment of a middle class, which then established, you know, education and and prosperity for for the decades to come in and specifically for the boomers and genx. So so tell us about that middle class that's emerging. We hear about it. Yeah. But how many of them are there and and qualitatively, what do they want from life? Claire Cormier (00:27:33): Yeah. Well, Jason, in a word, it's incredible. Right? Like, again, I talk about infrastructure so much because you you see it up there. Right? China's only as urbanized as the US was in about Speaker 1 (00:27:46): 1950. Claire Cormier (00:27:48): So we read a lot about these today. Today. So we read a lot about these Chamath Palihapitiya (00:27:53): Full of trains. Claire Cormier (00:27:54): Right. And so That leaves this incredible consolidation of people to cities and younger younger people to cities. It's a demographic, you know, spark that that maybe gets talked about a little bit less. But, also, if you look at the change that that person you're talking about has seen in their lifetime So they went from a, you know, rural lifestyle, frankly, most of them and something of a village setting that had not changed in decades to this future world that in many ways can only be imagined in in movies. And so I think You know, I I sort of struggle to put it into terms because he asked, you know, what what do they want? What are they looking towards? And I'd say on a, you know, to use a personal example. Right? I'm the luckiest girl in the world. I get to live in this amazing place and work with this incredible team And, you know, yet, you know, my parents, you know, graduated in a fully segregated world. The elder people, when they were growing up, were not just slaves. They were the slaves that we talk about on Juneteenth, the ones in Galveston, who walked across the bridge and followed railroad tracks to Houston, Texas. Right? That's amazing. That is amazing. And So I think when a generation or a Speaker 1 (00:29:14): collection of generations sees that amount of change, what they Claire Cormier (00:29:20): want is, first of all, they're grateful, but what do they want? They wanna be able to build and create and be people -- -- themselves. Yeah. Chamath Palihapitiya (00:29:27): I have a question. Japan in the eighties had a moment where everything came together for that country. Great population growth, great economic growth, great systems like Kaizen and all of this other stuff that they would export. And the headlines in the eighties was Japan was taking over the United States or Japan was gonna lap the United States. But, really, one of the biggest things that it had working against it was a demographic wave. Right? And you had massive negative birth rate that has really compounded Japan's stagnation. China is on the precipice of this because of this one China policy. I think the the stat that I saw, which is stunning, is there's 1,200,000,000 people in China. Speaker 1 (00:30:08): 1.4. Chamath Palihapitiya (00:30:10): By 21100, it's going to be around Speaker 1 (00:30:12): 600,000,000. Chamath Palihapitiya (00:30:15): If that's true, the point is just, like, there's just there's a real issue. Yeah. Is there something in these 5 year plans around how to become sort of more culturally integrated with the rest of the world, you know, meaning, how do you use immigration as an example to subsidize some of the negative birth rate? Do you teach English more so that you're more integrated into the world economy? All of these things. Can you just talk about that? Speaker 1 (00:30:38): Mhmm. Claire Cormier (00:30:40): So first, I think the the urbanization trend of folks consulting to the cities really can't be overstated. just in the way that it shifts sort of how how the country will work and what's happening on the ground. You know, it's still relatively early days. But when we look at things like belt and road, you know, as I walk around Beijing and I compare it to when when we first started there or when we were working with Capital Partners there, I see a lot more brown faces. Really? Going to the universities around Beijing. Now these are still Jason Calacanis (00:31:15): what Belt And Road is for folks who maybe haven't heard the term. Yeah. Claire Cormier (00:31:18): Yeah. Yeah. So many places you guys can read about it. And before I forget, talking about. So so sort of just I know everybody loves recommendations here. So if you haven't read Dahlio's latest book, I'm changing world order, or there's actually a great -- You read it. -- free bird -- She Ryan Petersen (00:31:34): read it. Speaker 1 (00:31:34): -- free bird free bird, man. Yeah. Claire Cormier (00:31:36): Exactly. -- talked about it as a Jason Calacanis (00:31:37): podcast for the last one answer now. Claire Cormier (00:31:39): So you gotta read it. Listen to your besties. There's also a very good very good illustration of it. David Friedberg (00:31:45): So you summarized that Speaker 1 (00:31:46): as a success. Claire Cormier (00:31:47): Just yeah. That's But you do do read that because, you know, China has been a major participant in the global south. So, you know, the short version of Belton Road, is working really across a a set of countries around Southeast Southeast Asia and Africa, bringing in infrastructure and kinda what it sounds like. Roads roads, ports, airports, etcetera, really building out this network for that part of part of the world. But I think what gets sort of bumped over on that is, again, things like like this so folks coming to China to be educated, the number of folks on the African continent now learning Chinese. And, again, I think this is something that is exciting at the end of the day. The opportunity to to further exchange to lift more people out of poverty to create further infrastructure. And -- Claire, I Jason Calacanis (00:32:43): was hoping you would stay with us and be a bestie for Ryan who's the next speaker, would you be willing to help us interview Ryan? Claire Cormier (00:32:50): I would be honored. Ryan Petersen (00:32:51): Yeah. How do I switch seats? No. No. There we are. Speaker 8 (00:32:54): Oh, yes. Switch sheets. Switch sheets? Speaker 1 (00:32:56): Okay. Yeah. Yeah. You'd be dumb sheets. Jason Calacanis (00:32:57): Get in. And you're the Claire Cormier (00:32:58): guest team. You're the guest team. I like it. I like it. Jason Calacanis (00:33:01): So give it up for Claire. Now, Ryan, congratulations. CNBC does their top innovator of private company awards every year. and you made it to the top 50 list today. I didn't check which ranking you got, but being on the list in and of itself is Speaker 8 (00:33:22): a is a big win. What do they call it? Disruptors list? Ryan Petersen (00:33:24): Disruptor 5th And my view of these lists is you should never share any list about your company unless you're number 1, and we were number 1 this morning, Speaker 1 (00:33:31): so I can well done. Jason Calacanis (00:33:36): You truly helped us navigate, I think, the the challenge of us asbestos and the audience understanding supply chain. We appreciate that. You've been on the show twice, I think, or 1 -- Just Ryan Petersen (00:33:47): one so far. Speaker 1 (00:33:47): -- Ryan Petersen (00:33:47): just one Speaker 1 (00:33:48): so far in the year. David Friedberg (00:33:48): So there's a second Ryan Petersen (00:33:49): time on the show. Apologies I was filming the interview for that during Palmer's talk this morning. Chamath Palihapitiya (00:33:55): You didn't wanna say something. Yeah. Speaker 1 (00:33:57): I I don't know Ryan Petersen (00:33:57): what I meant. Nothing might happen. Yeah. But when Palmer and I woke up this morning, we're writing our speeches together and deciding, you know, what we were gonna say. Oh, do would you do you have some feelings you'd like to share with Speaker 1 (00:34:07): the class? seems to be a theme. I mean, this is turning into therapy. Ryan Petersen (00:34:12): No. I don't have any Speaker 1 (00:34:12): I just send them to Ryan Petersen (00:34:13): many enemies. It's no enemies. I got I got David Friedberg (00:34:15): I get some nice things about people, Jake. Ryan Petersen (00:34:17): I got COVID. I couldn't think of a single person. Who do I wanna give this to? I was like, I like everybody. I don't know. Jason Calacanis (00:34:22): So tell us Speaker 1 (00:34:24): -- Ryan Petersen (00:34:24): He was gonna do a talk. Right? Are you doing a talk for a couple of minutes? Speaker 1 (00:34:27): Well, Jason Calacanis (00:34:27): he's gonna talk from there. Yeah. Speaker 1 (00:34:28): Look. Yeah. Jason Calacanis (00:34:28): Give me a Ryan Petersen (00:34:29): short little bit about what you're seeing. So first off, what Flexport is is we're a global logistics platform. We help businesses of all sizes ship products all over the world from anywhere in the world to anywhere else in the world. We do a lot of business in China, probably about half of all of our volumes come out of China. Claire Cormier (00:34:44): I know a landlord if you're looking for 1, Ryan's. Ryan Petersen (00:34:47): If you need to spray it Speaker 1 (00:34:48): out there. If you need Ryan Petersen (00:34:49): to have something, we'll do some business after this. And so we see a lot. We're we're sort of like a front row backstage pass to the world economy of what's really happening and unfolding. And it's been a crazy few years. We to give you context, so Flexport started in 20 3rd to first revenue was in 2014. We did $2,000,000 in revenue that year. We're on track this year to do $5,000,000,000 in revenue. So from very exhausting. Yeah. And this time period is I assume it's always like this in this industry. I have only been in the business for about 8 or 10 years here. But just to take you through that timeline, in Speaker 1 (00:35:31): 20 15, Ryan Petersen (00:35:33): there was a port strike on the West Coast, and you couldn't import anything into the United States for, like, 3 months. Total pandemonium By the way, that might happen again July 1st. Their contract that they negotiated back them is up for renewal on July 1st, so we might talk about that. 2016, there were so much excess capacity of ocean shipping. Oh, so many extra ships were purchased that the price of ocean freight hit the lowest in all of human history. It was like, $600 to ship a container, this pasture is 20,000 bucks from 2016. So we go through these boom and bust cycles. It's an asset business that'll happen. Speaker 1 (00:36:05): 2017, 18 19, Ryan Petersen (00:36:06): our president would launch a new tariff war every couple of months, and you couldn't predict anything. 2020 a pandemic hits couldn't ship anything for a couple of months out of China where, like, they they were really hard zero COVID, shut down, factories, shut down, all the purchase orders. Everyone thought the great depression was coming. canceled all the purchase orders. Then it turned out the opposite happened. It was this crazy boom, and you couldn't import anything because the ports were overcrowded. It it went from In 2019, it took about 50 days to ship a container from, like, when the goods are ready, when the factory raises their hand and says, hey, come and pick up these goods, to right now, it's about a 120 days. So doubling or more than doubling the transit time. and it it is just incredibly hard to operate in this environment if you're trying to run a business. And so we've we've had to learn how to navigate through chaos as as Flexboard. It's like, we kinda welcome it at this point. We found that it's probably it might actually be good for our business. We try not to talk about that because it's so bad for our customers, and has been hard to fulfill the customer promises. But if you put yourself in the shoes of those customers, so like a direct to consumer ecommerce business. And we ship for probably 80 or 90 percent of the hot new D2C brands, a lot of IPOs recently, a lot of a lot of really cool hot new brands. They're going through almost a perfect storm right now in a in, like, a really, really bad way, like, the movie, the perfect storm. because ocean freight rates are sky high. I mentioned there's 10, $20,000 to ship a container. Rule of thumb long term is like $2. So really, really elevated cost. Walmart announced really high cost this morning, and and so it's not just small companies, but Walmart announced Their costs were through the roof from supply chain and their stock fell 10% today, wiping off $40,000,000,000 of market cap this morning. So so it hits companies of all sizes. But these d to c brands got a double whammy because Apple last what they was last year when they changed their privacy rules, and their customer acquisition models are on Instagram, Facebook. Facebook, all these things stopped working. And so you at the same moment, your cactus stops working. Ryan Petersen (00:38:13): You can't acquire customers. Your supply chain costs are through the roof. And then add to that, the consumers are now starting to come back to conferences like this, go back to the restaurants and the clubs and doing the travel, and then during the pandemic, everybody just bought stuff. You gotta get your dopamine from somewhere and everybody who's just buying goods. So that is like a triple whammy for these companies. I'm incredibly worried about the whole d to c brand the whole d to c space. The d to c space But by the Speaker 1 (00:38:43): way, you David Friedberg (00:38:43): saw it. classical good. Chamath Palihapitiya (00:38:44): You saw it in, like, the I think it was Thrasio that just announced they're laying off 25% of their Jason Calacanis (00:38:49): Thrasio was buying a collection of those Amazon DTC brands, putting them together and trying to have economies of scale. Yeah. But when your supply and your demand both get 10 x ed in the wrong direction it's game over. Ryan Petersen (00:39:02): It's I don't know if it's game over, but it definitely changes the rules of the game. The reality is, look, people are gonna buy stuff. There are gonna be successful. There are gonna be some winners. There are gonna be brands Jason Calacanis (00:39:10): that survive. though, at what price? Ryan Petersen (00:39:12): Well, so you're so you're saying David Friedberg (00:39:13): that your thesis that you're making the statement that you're making today is, hey. We're seeing real significant risk to D2C Companies because of this confluence of issues right now, and this could be a big threat to a lot of businesses, particularly in a in an environment where venture funding Ryan Petersen (00:39:28): I think you Yeah. Venture funding Oh my gosh. We're triple store. Capital markets are driving. Capital markets are public and private. Investors are like, yeah. I will look at this and go, hey, maybe I, you know, put more into that Chamath Palihapitiya (00:39:37): or something. said it's just easier to not do anything. Ryan Petersen (00:39:39): It might be easier to not do anything. So what does that mean? How do you manage this? And Fundamentally, one of the problems that's that that comes about in all as supply chains, it's been written about the famous PhD paper from, like, the sixties or something called the the bullwhip effect. and a bullwhip if you, you know, like, crack a whip, the end of that whip is moving incredibly fast. And it's it's a bit like that in supply chains because you have imperfect information, and so the people doing demand planning are limiting one system. They're selling goods. They're looking at this data set. the people producing stuff. It's on a different system. How long is it taking to produce things? That's getting longer. The transit time's getting longer. this data is living across all these different domains and becoming very, very hard for a brand to make a decision how many goods should we buy When should we buy them? Claire Cormier (00:40:28): So right away. How much Ryan Petersen (00:40:29): do we wanna have in stock? How do we avoid being way over stock? Claire Cormier (00:40:32): Yeah. Chamath Palihapitiya (00:40:32): And then that Ryan Petersen (00:40:33): and what what we're seeing right now is these warehouses are overflowing and people can't Speaker 1 (00:40:37): -- Claire Cormier (00:40:37): So what changes that? Like, what breaks it open? So, you know, like, in China, Pinduoduo didn't exist in 2015. Now 800,000,000 plus right, users, but it was technology that broke it open. Like, what's the breakout moment to solve this exact problem you're Ryan Petersen (00:40:51): talking about? I mean, actually, China's got one of the companies to watch is Shane, s h e i n. It's this Chinese kind of like the new Zara that is taken over the world. I think they're gonna do $20,000,000,000 in revenue you're Speaker 1 (00:41:05): -- Jason Calacanis (00:41:05): Fast fashion? Ryan Petersen (00:41:06): Fast fashion. They're launching a 1000 SKUs a day. A 1000 new SKUs a day. All, like, AI generated, and then if people ordering up -- Yeah. They produce it, and it's, like, Jason Calacanis (00:41:15): really incredible. You're saying robots says make these SKUs. Claire Cormier (00:41:20): This is where this shirt is from actual No. Speaker 1 (00:41:23): Wait. You're crazy. I can't do that. Chamath Palihapitiya (00:41:25): Yeah. See. Speaker 1 (00:41:25): Be like that and Speaker 7 (00:41:26): do that. Claire Cormier (00:41:27): Sure. And it but I Speaker 1 (00:41:29): think it's gonna be I'm really not gonna be order down for you. Chamath Palihapitiya (00:41:31): Sorry. Sorry. Tell us so sorry. This shirt, you bought it. Speaker 1 (00:41:34): -- Claire Cormier (00:41:34): literally a shirt from CN. But but yes. So if Zara so if Zara is seeing something on a runway determining that that trend will hit, and then they can have it in stores, I think, within, like, 8 or 9 days, something, you know, pretty wild. She ends about as close to instantaneous as you can get. Wow. So very fast moving SKUs at sort of hyperspeed fashion. So they can have kind Jason Calacanis (00:41:56): of, like, preconstant same day. like, from minority, but they're predicting that this puffy shirt is going to be like, women are gonna wanna Claire Cormier (00:42:04): go for pie my shirt. Ryan Petersen (00:42:06): Dude, it's so hot. I agree. And and I think one of the one of the key things here is is the the transit time of how long does it take you from when the thing is made to when it gets to customer because if it it stretches out the way it has right now in ocean freight market, it was taking forever. If that takes 3 months, 4 months, 5 months Speaker 1 (00:42:21): -- My 90 6 Ryan Petersen (00:42:23): months. All of a sudden, you've placed these orders, and then the demand went away because people started going to nightclubs instead of buying their gardening equipment. Yeah. And so the tighter you can make that And it does speak to spending a little bit more on logistics where where, you know, traditional procurement person and logistics only thinks about, like, I'm just gonna buy the cheapest freight I can ever buy because they don't understand that your goods in transit are just money that's taken a different form for a period of time. and money has a cost to it. And if you're sitting there in 6 months, it's already expensive because of, you know, you gotta pay interest on that. There's opportunity cost. What else could you do with the money? But now that cost has gotten much worse because by the time the goods arrive, maybe nobody wants them. You saw that with Christmas where, you know, you import Christmas. That's the classic thing. You import Christmas stuff and January, it's worthless. Chamath Palihapitiya (00:43:09): At what price do people just find alternate ways whether it's you establish domestic 3 d print or you buy a fleet of planes or, like, there's gotta be a work. because, like, I saw this image. I think maybe you tweeted it of this entire massive traffic jam basically trying to get the ships even into China because the COVID 19 lockdowns are so strict, but that's also exacerbated all of this. Ryan Petersen (00:43:32): But and last year, Walmart, to me, announced they're spending $10,000,000,000 worth David Friedberg (00:43:36): of closing their supply chain and building out their own infrastructure for moving goods. Ryan Petersen (00:43:40): you're seeing a lot of companies do this much easier said than done. Yeah. You've seen at least a few of the big box retailers. Walmart, I wanna say Home Depot Costco, a number of these guys hey, we're gonna charter Speaker 1 (00:43:51): -- David Friedberg (00:43:51): Target was the other one. Ryan Petersen (00:43:52): Maybe target Amazon, of course. Yeah. Go charter their own ships, go solve the problem their own way. it's really hard to do, run these things at scale and operate it. It looks good at the PowerPoint slide. Hit, you know, when when when you have to get down to it, it's really hard. David Friedberg (00:44:05): So is there a big cap play here, Ryan, for the next decade? Ryan Petersen (00:44:09): I think, like, a big capital equipment, hard asset play. So the world's ocean carriers, that's what we call the people that own the ships, have actually ordered Speaker 1 (00:44:19): 25% Ryan Petersen (00:44:21): more ships increase the fleet by 25% over the next 3 years. Wow. So it could be ugly the other way real quick. Yeah. I have too many ships and nobody you know, the ship owners Speaker 1 (00:44:30): -- -- David Friedberg (00:44:30): happening in mine I mean, like, it's a similar sort of but anyway Chamath Palihapitiya (00:44:34): Ryan Ryan said it best, the problem is you can't forecast demand accurately for these long lead time categories that are highly CapEx intensive. whether it's mining or whether it's shipping, how do you make a Speaker 1 (00:44:44): $500,000,000 Chamath Palihapitiya (00:44:44): CapEx decision for a business demand cycle that's 5 years into the future? David Friedberg (00:44:49): But they're all taken they're all taking profit hits and saying we have to make this investment because we need the security, we need the redundancy. I mean Walmart did it. Right? They were optimized to to a t. Speaker 1 (00:44:58): Well, so Chamath Palihapitiya (00:44:58): the way And then all Ryan Petersen (00:44:58): of a sudden, it's like, hey, David Friedberg (00:44:59): that optimize system doesn't work. Chamath Palihapitiya (00:45:01): Look. The way that mining, for example, deals with this, which is really interesting, is they get these companies to sign up what's called take or pay agreements. Right? And so they can actually smooth out the demand curve 5 or 6 and David Friedberg (00:45:12): Is that a number? Chamath Palihapitiya (00:45:12): Take or take or pay means I'll do a deal that says, okay. I'm gonna rip the lithium out of the ground. You take it or you pay for it. I don't care what you do. Right. Right. But I'm gonna get the revenue assurance I need to go to Wall Street to get David Friedberg (00:45:24): the money. Ryan Petersen (00:45:24): We've started to see those signed for the first time. So we've signed 3 year contracts. Flexport was the first ever to sign a multi year contract where we commit. We will pay for this rate whether or not Whether or not we ship anything, we're gonna we're gonna pay upfront. Yeah. Okay. Take or pay. And and you asked a little bit air freight what's gonna happen there. Well, remember 50% of all the world's air freight flies in the belly of passenger planes. There's way less people traveling to and from Asia than there were. Chamath Palihapitiya (00:45:47): Is that right? Yeah. Speaker 1 (00:45:48): 50% Ryan Petersen (00:45:48): of the world's air freight, which is a little scary when you think about, like, what's under the belly of that gun. Jason Calacanis (00:45:52): Is that getting scanned? Ryan Petersen (00:45:54): It is. It is. There's there's good controls on that, but but you never know. It's always Speaker 1 (00:45:57): -- David Friedberg (00:45:57): Yeah. It's always Speaker 1 (00:45:57): -- -- Chamath Palihapitiya (00:45:57): chasing his camera. Ryan Petersen (00:45:58): Well, nerve racking. So and and he seemed to be not so sure. You know, you work in any industry long enough. You start to question whether everything's perfect. So we've actually got 10 passenger planes that we've leased, and we'll we'll keep doing more that are not flying any passengers we're just filling them with freight. We started doing this in the pandemic. David Friedberg (00:46:18): Are there Ryan Petersen (00:46:18): seats in them? Flying masks. Are there seats at the top? There's still seats in some Speaker 7 (00:46:22): of them. Ryan Petersen (00:46:22): Some we've ripped out the seats. Claire Cormier (00:46:23): It's like Castaway. you know, you got the big plane Speaker 1 (00:46:26): with yeah. Ryan Petersen (00:46:27): Basically, hopefully, stuff. If you wanna go to Asia, I've got a 787. There's nobody on there. It could be a private flight. It's just you. Claire Cormier (00:46:34): But is that this is why you've seen the rise of logistics real estate Speaker 1 (00:46:37): -- David Friedberg (00:46:37): Right. -- as a deeply institutional asset Claire Cormier (00:46:38): class because that Chamath that you talk about, the algorithms are determining what is ordered, how long will it sit, and how fast do people want it that takes an infrastructure on land to be able to get And Ryan Petersen (00:46:51): coming back to the question about assets, is there a play here? Probably, yes, because most of Wall Street has been trained. They've gone to all the same business schools and everybody's been trained that, like, assets are terrible. Get them off your books. Don't carry them. Don't listen David Friedberg (00:47:03): to what happened with oil and gas, you know, going into last year. Jason Calacanis (00:47:06): And and and and everyone and everyone Speaker 1 (00:47:08): you wanna be asset light. Ryan Petersen (00:47:09): It's still the trend and and and almost everywhere until somebody like TSMC comes along and says, you know what? You don't want assets until, like, fine. We'll build the fabs. another $400,000,000,000 company because they're willing to have assets -- Totally. Speaker 1 (00:47:19): -- Ryan Petersen (00:47:19): on the books. But it's a different investor -- And David Friedberg (00:47:21): now they have the patent and the equation, and they can they can get a better share of value. Ryan Petersen (00:47:26): And I've been -- You know, Jason Calacanis (00:47:27): I've been answering this question -- -- Lockheed around for sure. David Friedberg (00:47:28): That's the real estate business. Ryan Petersen (00:47:30): The hardest question for me to answer, and I'm I'm I know that there's so entrepreneurs out there who have the same question. Anytime someone asks me, is Flexport a software company or a logistics company? Are you gonna own assets or not own assets? Yes. And, you know, I think that the correct answer is to ask the investor which one they'll give you a higher multiple for and then just say that. Try to try to figure out who you're talking to, but it is on some level, you know, maybe another answer is, like, kind of Buddhist dualism. Like, you can't do logistics without the tech. Chamath Palihapitiya (00:47:57): You can't do the tech Ryan Petersen (00:47:58): without the logistics. Speaker 1 (00:47:59): -- Chamath Palihapitiya (00:47:59): bringing up something which is that today, the problem with the capital markets is actually it is very balkanized. So meaning, you know, let's just say you take a company public like yours. The problem that you'll have in the public markets is that There are folks that you'll go to in that room that understands SaaS software, understand margin structure of a software business, etcetera. and then there's folks over here who run the industrials business, and folks over here who run consumer. The problem is those three folks don't talk. They have 3 completely different conceptions of what a good business is, and the problem for you will be and I'm not forecasting this for you to be a problem. Ryan Petersen (00:48:33): correct. Chamath Palihapitiya (00:48:33): is that you can get orphaned in any one of these groups, and now all of a sudden, the capital markets could be totally shut for you. This is a very important point that you're bringing up. The the thing that I think we need to change is, like, the capital people that control the money flows do need to have a little bit more of an open mind Sure, it's true that you'd love a 90% gross margin business, but it is also true in the TSMC case, you'd rather have a business doing 20 percent on Speaker 1 (00:48:57): $500,000,000,000. Jason Calacanis (00:48:58): Well and if we look, you know, Shamalff, we also have some examples of Amazon. The market seems to have worked out this business, that's very factory and asset heavy in delivering goods to us and, Speaker 1 (00:49:11): you know, the cloud business. Chamath Palihapitiya (00:49:12): Even even Amazon, like, Amazon got escaped velocity on less than, you know, a $1,000,000,000 of invested capital. The problem is, you know, if Ryan, for example, decides hey. I'm gonna go on actually vertically integrate and buy an entire fleet of ships. That's probably a 10 to $20,000,000,000 CapEx cycle over 10 years, and you think about replacement costs, it may make a ton of sense, actually. Jason Calacanis (00:49:33): Right. I wonder when Amazon will do this cap expenses for those servers started to hit. Ryan Petersen (00:49:38): is thinking about It's it's David Friedberg (00:49:39): the thing by a fleet of ship. Ryan Petersen (00:49:41): But giving the capital markets a little boy, and he definitely wants to do that, but I don't think David Friedberg (00:49:44): it was Jason Calacanis (00:49:45): You wanna own a fleet of ships? Ryan Petersen (00:49:46): already own about you have a mental plane? No. We're not gonna do that. I don't think I you know, there's two plays. You know, fundamentally, your bullwhip effect means the data can't flow, and people can't make decisions optimally because the data's trapped in multiple places. You don't know how to run an efficient supply because you don't know how many trucks do I need when the ship arrives. Like, actually, even not even, like, long term demand foresight forecasting how many ships, but, like, literally, that ship is gonna arrive How many trucks should I dispatch? When should I dispatch them? Like, there's 2 ways to solve this problem. One is to own the asset and the other is to create a data network effect such that the asset owner benefits enough from putting it on your platform, your machine learning, your your algorithms are helping them make more money from their asset. They wanna tell you Claire Cormier (00:50:28): Or you can invest further down into the change. I mean Ryan Petersen (00:50:31): One of them is a lot. Hopefully, simpler and don't need to manage as many people, and life is easier if you can solve the data machine learning problem. Claire Cormier (00:50:37): Sorry. Alibaba and Alibaba investing down into China. Like, there is a middle road of being able to go with China. So logistics warehouse Speaker 1 (00:50:45): -- I mean, in a way -- -- for her Claire Cormier (00:50:46): to push goods out Jason Calacanis (00:50:47): as stupid as it sounds, you having purchased a shipping company and putting it over here to your point, Claire, and saying, Here's the little thing we bought. It's a bunch of ships. It's its own balance sheet, and then here's the really great business. But we have this little subsidiary over here as a potential middle ground. Ryan Petersen (00:51:03): what makes Flexboard fun business. There's like a million strategies and ways to play out. And I'm I'm not a big believer in, like, predicting the future and, you know, you wanna have a vision and know where you're going, but I think be sort of flexible Speaker 1 (00:51:14): -- Ryan Petersen (00:51:14): Yeah. -- in that -- What's Chamath Palihapitiya (00:51:15): in the name? Ryan Petersen (00:51:16): Are are we talking about our culture life? What's the goal of what's the goal of a company's culture? And Elon talked about the goal of a company. The purpose is like, hey, we've gotta create valuable products and services for fellow humans. Right? But the goal of your culture is how do you maximize your velocity in that direction. And and velocity is a really important word because we forget a lot like, normal people forget that velocity is different from speed If you remember your physics, velocity has a direction. You gotta know where you're going. And sometimes, going really really fast is actually negative velocity because you're going the wrong way. And so, do you say agile? The world's gonna throw all kinds of chaos at you, be nimble, be able to change, like we we don't know exactly the strategy. I don't have everything that's Speaker 1 (00:51:54): As as we wrap here, question for both you and Claire. which is China has Before Chamath Palihapitiya (00:52:00): you before you do your wrap question, can I just can I ask him to can you tell us the audience about what you did during the UK crisis. Jason Calacanis (00:52:08): Oh, this is beautiful. Yeah. Chamath Palihapitiya (00:52:09): It's just just, like, 30 seconds about you know? Ryan Petersen (00:52:11): I didn't go there, like, Antonio, the crazy man. But what so we started this group in 2017 called flex sport.org to do humanitarian relief shipping really at that time the crisis was Syria and trying to help refugees. And it was really a simple idea. It's like, look, we got all this stuff here. We know they need stuff at the refugee camps. What if we shipped it there. Seemed like a radical idea. We we we maintain a database of partners so we have agents that we can operate on behalf of Flexport in over a 120 countries. at that time, I simply emailed our Syria partner, who's literally based in Aleppo where a lot of this destruction was happening, and I emailed that said, hey, we'd like to ship a container to this refugee camp down there and he was like, sure. What's the address where do you wanna ship it? And I was like, wait. It's that easy. Like, I thought this was like and I realized you could do that. No. We didn't Syria because we didn't know who's gonna end up in so we ship to refugee camps in Turkey and Jordan. So we've been doing this now for 5 years, shipping to over 50 different countries, any kind of anytime there's a hurricane, earthquakes, but we're we're a war. And so when we saw this happening in Ukraine, we immediately kicked into high gear. The flexboard.org team has about 12 full time people, and then we have a model where employees at Flexport can surge onto that. So we've had about sixty people working on this. In this case, know, usually, we offer pro bono shipping because we the shipping is expensive. We can't just eat the full cost. We are profitable, but not enough to really solve the world's problems all by ourselves. So, we created a GoFundMe campaign partnered with Aschen Coacher and Mila Kunis Ashens an early investor in Flexport. and we raised 25,000,000 bucks to pay for shipping to deliver goods. Yeah. Ryan Petersen (00:53:46): Thank you. Speaker 1 (00:53:47): Well, and Jason Calacanis (00:53:47): the way you did it Ryan Petersen (00:53:48): is to in and all of our investors a lot of great people Speaker 1 (00:53:50): set up. Jason Calacanis (00:53:51): You emailed the besties and said, hey. It's $44100 a container. Was that the number 42 or 44? It depends Ryan Petersen (00:53:58): on where it's coming from. Ukraine specifically. I mean, for example, we shipped 9 ambulances from Gibraltar into Ukraine. Ukraine. I thought we wouldn't be able to ship into Ukraine because it it's war zone. It turns out most I don't know if most, but a huge percentage of European truck drivers are Ukrainian. and they were just like stoked to go and do this. So what? So we deliver 9 ambulances. That cost like around 10 grand. Yeah. So a bunch of deliverables. Speaker 1 (00:54:20): I replied back to him, and I Jason Calacanis (00:54:21): said, no problem. And he said, hey, mention on the podcast. I said, no problem. And I I donated a $44100 container. And then Shamont said, oh, I donated the plane like, 12 containers went on. He did. Speaker 1 (00:54:32): So it was a flex on a flex a flex for it. It was like a multilayer of a plaque. Ryan Petersen (00:54:38): So and then it just snowballed in this hasn't got much attention, but Yuri Milner, who's an early Flexboard investor, just donated a Speaker 1 (00:54:44): $100,000,000. David Friedberg (00:54:46): Wow. Wow. Ryan Petersen (00:54:47): Too yes. Claire Cormier (00:54:47): You're really putting pressure on their side of this team. Ryan Petersen (00:54:50): Well, you should do some Speaker 1 (00:54:51): black some guy. I didn't I Chamath Palihapitiya (00:54:52): didn't hear the last Speaker 1 (00:54:53): part. Let's Chamath Palihapitiya (00:54:55): go to the Ryan Petersen (00:54:55): well, let let me let me wrap. Everybody knows what they can. And it it is amazing model where but by the way, over 60,000 people donated a little I'm almost as just as proud of that. It's like, go to full of getting involved setting up. I was, hey. You can support dot org. Let's support dot org. David Friedberg (00:55:09): support call Ryan Petersen (00:55:10): support dot org. Speaker 1 (00:55:11): Yeah. Final final question for you too. we had this great moment where, Jason Calacanis (00:55:15): you know, we engaged China. We built a bunch of iPhones, Amazon Basics, you know, whatever it is, naked shoes. And it Speaker 1 (00:55:21): and it raised, you know, the Jason Calacanis (00:55:24): the standard of living for a lot of people. We understand China is doing this now. And they're doing it in Africa and some other places. What are you seeing in terms of that relationship, how China is looking towards other countries to become producers of goods, and and they're kind of now becoming incredibly influential. What's their intent, and how is that going? Claire, maybe you could start it. Claire Cormier (00:55:46): That's a big question. But I think it's see this is a long term play. We're all in this for a long term, right, play. And whether, you know, you take maybe the the spicier view around, you know, resources and protectionism versus one that's marched around progress. And as we may have been increasingly vulcanizing the East And West, the ability to their for there to control the the bigger piece of their own supply chain. But the end result, as you're sort of saying, is you you look at places like Niger. Right? The average mother there is having 6 children. We have a very young global south, and the important thing is that they're fed, they're clothed, and that they have an upward trajectory. So that's it. Jason Calacanis (00:56:33): People living in abject poverty will probably end in our lifetime. You know, the only places that won't end is in places with dictators. What are you seeing in terms of the the shipping containers? because you must see shipping containers increasingly leaving certain ports where is China sort of exporting production to? And and what are the up and coming production areas? Ryan Petersen (00:56:56): You know? There's some really interesting trends going around around labor costs And China, the reason people went there over the last 40 years, to be honest, was like cheap labor. And and but over time, they became quite sophisticated. They really learn how to manufacture things, especially electronics, if you wanna make electronics, you pretty much have to make them in in Shenzhen, the Greater Bay Area as she called it. So and that's but stuff that's just for cheap labor? because that's no longer about cheap labor. This is a whole supply chain ecosystem of components and other thing. And if it's just cheap labor, years ago, Mexico became cheaper than China in labor costs Speaker 1 (00:57:27): -- Ryan Petersen (00:57:27): Wow. -- which is a huge shift. And now Mexico doesn't have the manufacturing capacity. They don't have the skill sets. They don't they'll build it, you know, and and and people will respond to that trend. As long as it takes a 120 days to ship stuff from China to the US and we can't get this sorted out, brands are gonna respond to shipping closer to home. So you're that is a trend that you're gonna see more and more of. if the delays stay the way they are. I think China's big challenge is if if they become labor cost too expensive, how do they moving up the value chain. And this is what they're made in a made in China 2025 thing is it's like we've gotta they've gotta make more and more sophisticated products because it can't just be about during the shape Chamath Palihapitiya (00:58:06): of the migrate to services and Yeah. Ryan Petersen (00:58:08): And that that's a huge challenge and and very few if anyone's really done it, no one's in it at that scale because they're the biggest country in the world, but Japan and Korea kinda have done that, but not ten times India as well Jason Calacanis (00:58:20): moving to a services based economy India with IT comes to mind, and then they'll become entitled and wanna retire at 55 like you're up. Ryan Petersen (00:58:26): And I oh, by the way, on space time, my favorite answer is someone at I think it was Zuck. Although Toby from Shopify told me he lifted this line. His employees were asking him about the 4 day workweek. And he was like, well, you know, if I do think we should do some experimentation around how many days a week we work. So but we're gonna start with the 6 day work week like China does. And then we'll try the 4 day work week later. Ladies and gentlemen, Speaker 1 (00:58:49): please join me in thanking you. Chamath Palihapitiya (00:58:51): Thank you. And it's there. Ryan Petersen (00:58:52): We're all done. Speaker 5 (00:58:55): will let your winners ride. Speaker 4 (00:58:58): Rainman, David Saxon. Speaker 5 (00:59:02): And it said -- We open source it to fans and they've just gone crazy with it. on air when they're trying. Speaker 4 (00:59:15): besties are gone. That is my dog driveway. Speaker 11 (00:59:25): We should all just get a room and just have a one big huge orphan because they're all just useless. It's like this, like, sexual tension that we just need to release them out. Ryan Petersen (00:59:34): What? You're the big bee. Speaker 5 (00:59:35): What? Pure feet. What? Speaker 1 (00:59:39): We need to get mercies are back.