E35: Biogen's controversial Alzheimer's drug approval, the billionaire space race, real estate, Bitcoin & more

Follow the besties: https://twitter.com/chamath https://linktr.ee/calacanis https://twitter.com/DavidSacks https://twitter.com/friedberg Follow the pod: https://twitter.com/theallinpod https://linktr.ee/allinpodcast Show Notes: 0:00 Bestie intro, Chamath's whereabouts 2:54 Breaking down Biogen's Alzheimer's drug & the FDA's controversial approval 26:46 Billionaire space race: Is Bezos going to space too risky or a smart marketing move? How the space industry is a perfect example of effective government intervention. Can anyone dominate space? 42:55 Big Tech getting back to the office: what is the new normal for companies with thousands of employees? 56:49 Recent factors on the commercial & private real estate markets, inflation head fake 1:05:01 ProPublica's report on billionaire tax returns 1:15:58 Bitcoin toxicity, Snowflake's CEO apologizes for comments on merit & diversity 1:32:48 Science corner with Friedberg: Induced pluripotent stem cells & cloning Intro Music Credit: https://rb.gy/tppkzl https://twitter.com/yung_spielburg Referenced in the show: https://www.statnews.com/2021/06/07/fda-grants-historicapproval-to-alzheimers-drug-designed-to-slow-cognitive-decline/ https://www.bloomberg.com/news/articles/2021-06-10/harvard-expert-quits-fda-panel-as-furor-over-biogen-drug-grows https://www.instagram.com/p/CP0MSOqnYEo https://www.wsj.com/articles/facebook-lets-more-employees-choose-full-time-remote-work-or-return-to-the-office-11623258049 https://news.yahoo.com/salesforce-ceo-marc-benioff-on-slack-acquisition-135151402.html https://socketsite.com/archives/2021/04/visualizing-all-the-vacant-office-space-in-san-francisco.html https://www.wsj.com/articles/if-you-sell-a-house-these-days-the-buyer-might-be-a-pension-fund-11617544801 https://fred.stlouisfed.org/series/T10YIE https://www.propublica.org/article/the-secret-irs-files-trove-of-never-before-seen-records-reveal-how-the-wealthiest-avoid-income-tax https://www.aqr.com/Insights/Research/Journal-Article/Buffetts-Alpha https://www.ft.com/content/42daca9e-facc-11e7-9bfc-052cbba03425 https://www.bloomberg.com/news/articles/2021-06-07/snowflake-ceo-offers-apologies-support-for-hiring-diversity Tweets: https://twitter.com/Jason/status/1401938511826067457 https://twitter.com/elonmusk/status/1386825367948644352 https://twitter.com/micsolana/status/1403394491143315456 https://twitter.com/Jason/status/140302318070958080

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:01David Sacks?

  Like Jacob, could you get any closer to the camera? I mean, your face is like right up in it.

• 0:05David Friedberg?

  We can see your bloodshot eyes.

• 0:07Jason Calacanis?

  Oh, God.

• 0:07Chamath Palihapitiya?

  It's really unbelievable.

• 0:08Jason Calacanis?

  9:00 AM start time. It's a little rough on Jacob. It's a little rough on Jacob.

• 0:13David Sacks?

  That's true. I want my second cup of coffee already.

• 0:16Jason Calacanis?

  This is, this is a lifestyle choice we may regret.

• 0:35Jason Calacanis?

  Hey, everybody. Hey, everybody. Welcome to another episode of the All In Podcast. It's Saturday morning. It's ridiculously early, but we're taping the show because one of the besties happens to have left the continent with us from an undisclosed location, Chamath Palihapitiya. Are you in a wine cellar or in catacombs?

• 0:57Chamath Palihapitiya?

  I am in. I am in. Look at it. Wait for it. Wait for it. Wow. Were you able to see that or no?

• 1:05Jason Calacanis?

  No.

• 1:05David Sacks?

  What was that?

• 1:06Jason Calacanis?

  Are you in, are you in the cathedral somewhere?

• 1:08David Friedberg?

  You mean the ceiling of your room?

• 1:11Jason Calacanis?

  It's incredible. You paid for the four walls and now you can afford the roof.

• 1:15Chamath Palihapitiya?

  Okay, hold on, hold on. Okay, hold on. I'll do a little, I'll do a little, uh, let's see if you can just see outside and get a sense of the view. Oh, you can't. Oh, no.

• 1:24Jason Calacanis?

  We can't, we can't. Just pause for a second. Oh. Whoa, bestie lifestyle happening there. Just gotta hold it for a second and then the.

• 1:29Chamath Palihapitiya?

  Oh, no, that's my architect. Hold on.

• 1:33Chamath Palihapitiya?

  I'm going to go out here.

• 1:35David Friedberg?

  I love how, I love how the house is already built and he's still paying the architect.

• 1:38Jason Calacanis?

  Yeah. He's like, do me a favor. This came out great, but can you rip down these four rooms and then just start over? All right. Well, we lost Bestie C as he walks around his castle in some European country.

• 1:48David Sacks?

  Welcome to Lifestyles of the Rich and Famous.

• 1:51Jason Calacanis?

  What time is it there for you?

• 1:53Chamath Palihapitiya?

  Well, it's, uh, 6:00 in the afternoon, 6:00 in the evening. I, I was in London last week and holy mackerel.

• 1:59Chamath Palihapitiya?

  The weather, if you want to see climate change, spend some time in Europe because literally day over day, London on the first day I landed was, call it 24 degrees Celsius. So whatever that is 80, 78 maybe, beautiful. Literally the next day, it was 62 and raining. And it just kept bouncing back and forth. It is the weirdest thing. And if you're in Europe right now, you, you just see some of the craziest weather patterns, literally day over day, massive thunder showers, then you know, it's completely normal. I mean, no wonder everybody here takes climate change so seriously. You actually feel it every day.

• 2:37Jason Calacanis?

  And with us as well, David Sacks is here, the Rain Man himself, tearing up the Twitter. We've been off for two weeks, so there's a lot to cover. And of course, the queen of Kinoa, Chairman of the Production Board, David Friedberg. Right off the bat, I think we got to go science and get the Friedberg ratio up from the get. Biogen has an Alzheimer's drug that on Monday, the FDA approved. It's the first new treatment for Alzheimer's in almost two decades. And Biogen's drug is not a cure for Alzheimer's, and Friedberg will get into that. It does not reverse the disease's progression, but it does mitigate it gets it getting worse. Very strange moment in time. The FDA's advisory

• 3:20Jason Calacanis?

  panel, three members of it have quit because they didn't want to approve this drug because it had such a modest efficacy. Three quit, but unanimous vote against approval. Right. So unanimous vote against, then three quit. And this is, I think, out of 10 or 11 individuals. So this is truly significant. The drug is going to cost $55,000. It still requires brain scans and all this kind of stuff, but it's hope for people's suffering. And so the FDA approved it. Friedberg, tell us on a science basis, what we're seeing here is what's happening in journalism and social media now happening in science? Or is this some other, you know, search for truth or some other issue?

• 4:03David Friedberg?

  The Biogen drug that was approved this week is called aducanumab. Remember? Any drug that ends with MAB, M A B, means monoclonal antibody. So it's an antibody. And antibodies, you know, as we've talked about in the past, are proteins that can be made by our immune system and proteins that bind to a specific target that then tells your immune system to clear that target out of your body. So that's what monoclonal antibodies do. And we have been using biological drugs, monoclonal antibody drugs for decades now to target specific cells or specific proteins in our body that we can then remove from our body and that can reverse or change, you know, human health in very significant ways.

• 4:48David Friedberg?

  So this is a, you know, a class of drugs that is very efficacious for having specific outcomes across many disease states. And so years ago, researchers at the University of Zurich were looking at people with Alzheimer's that were having slowly progressive dementia and they looked at antibodies that they could find in their brain. And they found this antibody that they saw was binding to amyloid plaque. And amyloid plaque is one of the theorized mechanisms by which Alzheimer's progresses. That as amyloid plaque builds up in your brain, you know, you start to have dysfunction and inflammation and the amyloid plaque kind of may be the driver of Alzheimer's, but that is not proven. So they then, you know, ultimately gave it to a company called Neurimmune who licensed it to Biogen and Biogen started testing it.

• 5:31David Friedberg?

  And they took this antibody that they discovered and they turned it into a, you know, an antibody you can now get injected into your body, goes into your brain. It, the idea is it binds to amyloid plaque and removes it from your brain. And so theoretically, this should slow down or stop Alzheimer's. But it turns out that as they ran this test across thousands of patients, it didn't have as much of an effect. And in fact, the data across many, many patients showed that it didn't really, off of a placebo baseline, meaning people that didn't get the drug versus people that did get the drug, that it wasn't really that different in terms of cognitive scores and tests and all this other stuff. So they abandoned it a few years ago. They kind of got this, they stopped the trial. They had this kind of negative outcome and, you know, Biogen got beat up for it.

• 6:15David Friedberg?

  And then all of a sudden, they refiled about nine months later with the FDA saying, well, look, when we look at the patients with the highest dosage of the drug, because they gave it in three different doses, so the people that got the most antibodies, this particular group of people had a 23% decline in the progression of their Alzheimer's, which is kind of one way of slicing the data. And

• 6:38David Friedberg?

  And as a result, they went back to the FDA and people were like, well, you know, some of the tests don't really show that still. There was some cognitive test results that didn't show that that was the case and they fought back against and so some people were pushing back against it. And we're not sure, no one knows for sure how it all kind of came together at the end, but the FDA ultimately approved this drug. And here's what's challenging about this. You basically will go in, you'll get an injection of this antibody, just like you do with many other antibody-based therapies. It costs roughly $5 to make antibody therapies, just to be clear. So when you make them, $5 roughly is the cost and they're charging $56,000 for this treatment. So that's problem one in the pharmaceutical kind of debate is should we be charging the, you know, the quality of life premium?

• 7:20Chamath Palihapitiya?

  Medicare Part B.

• 7:21David Friedberg?

  Yeah. And then part, you know, the kind of second issue is like, should this thing have been approved when it wasn't really that efficacious and you could slice the data slightly? And now all payers, you know, meaning all people who are insured or the government or whoever it is that's responsible for insurance payments is ultimately bearing the cost of everyone with Alzheimer's. And there's 15 million people in the United States with Alzheimer's. They're going to raise their hand and say, oh my God, anything that gives me any chance or any hope, I want to get. But if it costs $56,000, is it really the responsibility of the insurance company and all the payers to give everyone a hope, even if the drug may not work? Now, the downside and the side effect is negligible. There's no risk to taking this drug. So it's all about the cost and the upside. And that, that, that, that is the big philosophical debate right now. It's like, first of all, should we approve drugs like this? Should we allow pharma companies to charge whatever

• 8:06David Friedberg?

  they want, even when the efficacy is very low and the cost is very low to make this stuff? And how do we ultimately decide what we approve and what we pay for?

• 8:14Jason Calacanis?

  So this is a classic risk reward. Chamath, how do you look at this on a financial basis?

• 8:17Chamath Palihapitiya?

  Yeah, let me, let me, let me give you sort of like a market investing kind of view on this. Look, I've been taking biotech pretty seriously over the last 18 months, just trying to learn because I think basically Friedberg, you know, incepted me with this idea that you, you have to know it. So here's what's interesting in the setup for what I've learned and putting a little bit of my knowledge together, which is dangerous. But the setup for Alzheimer's is really scary. If you're black, you're 20% more likely to get it. If you look at the distribution of all patients, 60% and upwards of 64, 65% are women.

• 8:58Chamath Palihapitiya?

  So if you think about the distribution of this disease, it's the disease of minorities and it's the disease of women. Now, that's problematic in and of itself, because if you want to have any form of equality, it seems like this is something that we have to tackle. The second interesting thing as a setup to this is every single Alzheimer's drug that's ever gone through the FDA has been rejected and has failed. And what's interesting and the more social science around this is, this is also where two of the more infamous insider trading events ever happened was around failed Alzheimer's drug. The first, which is less known, but inside baseball is what happened at SAC, which was a huge hedge fund. But the second, that's very well known, is Martha Stewart.

• 9:42Chamath Palihapitiya?

  And why she went to jail was around the speculation and the insider trading of the phase three results of an Alzheimer's drug, which ultimately turned out to fail. It was almost the surest money on Wall Street, which is every time some, one of these drugs came to market, you just bet against it and it would turn out that these stocks would collapse. So there's the social and market setup. I am super torn, but I think there are some positive points to make on this thing. So, but let me give you the negative case. The negative case is, what is the FDA doing approving a drug where there's no clear evidence that it leads to clinical benefits and it could give families sense of false hope? What are you doing in terms of process if you have a unanimous vote against approval? So why do you even bother having an FDA advisory committee of outside experts if you're just

• 10:27Chamath Palihapitiya?

  going to do what you want? And it could set a precedent where companies can get drugs approved on limited evidence. Now, here's the positive point, which is, they may be taking a long-term view and what they could be really doing is creating a market that ultimately incentivizes other folks to come in, where then ultimately those people are the ones that find the solution, right? Because this Biogen drug, Biogen came out and basically said, "We think this is a $100 billion market." So now, all of a sudden, you must believe capitalism is going to take hold. And a lot of young startups will say, "Well, shit, I should be going after this market as well." And so by going after that, after Biogen, then maybe you actually do get to the solution.

• 11:10Chamath Palihapitiya?

  And just a kind of a little bit of trivia. It turns out that the acting FDA commissioner in 2016, this woman Janet Woodcock, she was the one that approved a different form of drug in the exact same setup. That one was etaliprasen, which is basically for Duchenne muscular dystrophy. And in a negative panel vote, she basically said, "No, we're going with this." The scientific community reacted similarly back then. But she basically took the view that, you know, you're doing no harm, exactly what you said, Friedberg, because the safety says it's fine. You're doing no harm to the patients by approving this drug, and maybe it might turn out to work in the end. And in that specific case for Duchenne muscular dystrophy, what we see four years later is that now there are a lot more companies focused on finding a solution.

• 11:53Chamath Palihapitiya?

  And they're pouring a ton of money into R and D, and maybe one of those things will break through. So I think she could just be running the same playbook here in Alzheimer's, which is important enough that somebody needs to do something.

• 12:04David Friedberg?

  You're saying the economic incentive could drive further innovation in this space that ultimately could benefit patients more truly than this current drug?

• 12:12Chamath Palihapitiya?

  I think so. And I think like, you know, what, look, a lot of, like, I think, drugs that are potential solutions, in many ways, I think what the FDA is doing are two things which I think are really positive. The first is that they're accelerating their approval timelines, right? So you can have breakthrough approval and innovations. And so you can get to market much, much faster. The best example is what we've seen in these vaccines. But the second thing is, if you have a well-structured safety study that says that these things are not harmful to humans, then yeah, David, it's basically saying, "Sell a $56,000 drug, there's a $10,000 copay." Now, we should talk about that because that shows how broken Medicare Plan B is, Part B, sorry.

• 12:56Chamath Palihapitiya?

  But yeah, they're creating a $100 billion market out of nothing.

• 12:59David Friedberg?

  Yeah, but should that be the case, Chamath? Or should it be regulated? Because ultimately, if the regulators are approving the drug and enabling the commercial opportunity, shouldn't the regulators also say, "You know what? You can have this commercial opportunity, but you can only charge X, because we're not going to have the taxpayer pay the Y."

• 13:16Jason Calacanis?

  Hey, Friedberg, let me ask you a really basic question here. Why is there no... You know, document put out by the FDA saying, here's how we came to this decision in plain English, or is there? Because I looked for that, couldn't find it. In other words, you know, the same way there was a vote, they could say, hey, listen, we understand the vote, we're overruling it for this reason. And why isn't there an interim step?

• 13:38David Friedberg?

  The FDA is not, the FDA is not your doctor, right? So I think the way things are set up is your doctor is meant to be informed about the panel's review of drugs and they, and there are labels that doctors need to be able to read and understand. And then the doctor's job is to make a decision on treatment for their patients and make a recommendation to their patients. So ultimately, the FDA is not a consumer organization. The labels that get approved, what the pharmaceutical companies have to say about their drug, all of that stuff is overseen by the regulators of the FDA. And then that is then used by the doctors to make treatment decisions and ultimately.

• 14:11Jason Calacanis?

  They couldn't kick this back and say, listen, but couldn't they kick it back and say, we want you to do one more trial or some bridge step here. Hey, you can do 10,000 people over the next three years.

• 14:20David Friedberg?

  They do that. And by the way, and they are going to do continuing studies on aducanumab as it goes into market. And they always do that. And they always ask for more data. And they do this continuous review. The FDA is a really strong body and a really strong regulatory body. And we should all feel kind of pretty well, you know, safe and secure. But, but the issue is really, I think, the economic question on the other end, which is they could approve 100 drugs tomorrow. And then what happens to the economics of healthcare? If everyone's allowed to charge any price they want for any care, if it has even the slightest range of efficacy, we're not going to be able to afford anything, you know?

• 14:51Chamath Palihapitiya?

  So just to, so this is where like, you know, regulatory bodies run into each other because the FDA, so Alzheimer's, Alzheimer's is a drug of the old, right? Healthcare expenses are covered by Medicare. And in Medicare, there's a section called Medicare Part B, which effectively is a way for these drugs to go to market. Just so you guys know, under Medicare Part B plan, a physician gets a 6% kickback of the price of the drug.

• 15:20Chamath Palihapitiya?

  Your doctor gets 6% of that $57,000.

• 15:24David Friedberg?

  That's a terrible incentive.

• 15:25Chamath Palihapitiya?

  It's an incredibly bad incentive. And so

• 15:28Jason Calacanis?

  $3,000 every time you put somebody on this. It's quite a spiff.

• 15:32Chamath Palihapitiya?

  It is. And so, and so, you know, Medicare Part B has been this mechanism that people have wanted to undo for a long time. Now, if you're sitting in the FDA, you can't change that because that's covered by CMS.

• 15:42David Friedberg?

  Yeah, that's not your, that's not your jurisdiction.

• 15:44Chamath Palihapitiya?

  I think it's like this weird intergovernmental agency warfare push and pull and trying to move the incentives. This all goes back to if Congress can't act, then all these folks have all of these other random tools. They just have to throw the spaghetti against the wall. And this is the kind of stuff that happens because Congress should actually be fixing this in a more substantive holistic way. And until they do it, this is what's going to happen.

• 16:07David Friedberg?

  This is no different than what we saw during the pandemic where we had health regulators coming in, local health regulators, public health officials saying everything shut down. Because their incentive is to save lives. Their incentive is not to balance the trade off between saving lives and protecting the people versus the economic damage and the fallout and the cost of it. And there are two different agencies and ultimately the synthesis of these decisions isn't being managed by a leader anywhere or by a leading organization anywhere. And that's where things inflate and get ugly and get nasty over time.

• 16:36Jason Calacanis?

  Okay, Sacks, as a free, as a free market monster, what do you think, Sacks? How would you approach releasing these drugs as a, no, but you're for less regulation. When you see this regulatory mess of spaghetti and, you know, costs and price gouging, you know, if we take the most cynical look at it. Because 15 million people times $55,000 a year. I'm no genius at math, but I, my SAT is telling me enough that that's going to be, this drug's going to make what 10 billion a year, 20 billion a year, something in that range? If they just get a fraction of those people.

• 17:08David Sacks?

  So, I mean, I, I agree with Free Burden Schmott that we shouldn't give doctors an incentive to choose one treatment or another. Right? I mean, that just seems totally warped. But going to the sort of larger issue of FDA approval. I would make it a little bit easier to, to get drugs approved. I mean, look, I, I think that, you know, double blind test is the gold standard. If the drug clearly doesn't work, you don't approve it. But this is a case where the evidence is a little bit inconclusive. And in a situation like that, where it's a drug that might help people who are facing a deadly disease, and you know, Alzheimer's is one of the worst. It's not only, you know, vent the prognosis is terminal, but it also is deteriorative. And it's devastating for patients and their families. These people

• 17:53David Sacks?

  have nothing to lose. And so I would let the drug through, I think, and then watch how it performs over the next couple of years. They could always revoke the approval in two years. You know, in other words, almost consider the usage of the drug over the next couple of years as a stage four trial. You know, the one group who's not complaining about this are patients. I mean, Alzheimer's patients want the ability to test this. And generally speaking, I think we should give people who are facing, again, a terminal prognosis, the ability to try these drugs.

• 18:25Jason Calacanis?

  Yeah. And and Freebro, correct me if I'm wrong. The reason, or maybe Chamath, you're better for this, but just looking at the economics of this, taking care of somebody with Alzheimer's, and if you, and this starts to hit people at 65, and people start living to 78, 85 years old, they need to have care. A person with Alzheimer's, the issue is not their ongoing maintenance in terms of their brain. It's their day to day life. They cannot be left alone. So they have to be either institutionalized or have home care. And then you're talking about 100,000 a year. And I think Medicare and some other people pay for that. So 55 K, if the person can take care of themselves.

• 19:02David Friedberg?

  That's how pricing is done, Jason. That's exactly right.

• 19:04Jason Calacanis?

  Is that how they do it?

• 19:05David Friedberg?

  So pricing is typically done based on the long term cost benefit of their of the drug of the to the to the paying system. So, you know, they'll take a look at like, hey, here's how much we're going to benefit people or benefit the paying system. Therefore, we can charge X dollars for getting this drug. That's why today you can go get a CAR T therapy or something, you know, some sort of therapy that that that is going to be highly efficacious, and they'll charge you a million dollars or genetic. There's a few that are getting approved now for genetic diseases. And that, you know, million dollar one time fee. You get you get the treatment once it costs, you know, technically nothing. The COGS are zero to make this stuff. You get that treatment. They charge you a million dollars because the long term care of the progression of that disease is so high

• 19:49David Friedberg?

  that they can economically rationalize that. And so

• 19:53Jason Calacanis?

  Is that ethical or moral?

• 19:54David Sacks?

  On the pricing, can I just clarify one thing? So we're talking about it at fifty six thousand dollars a year. That is true, but it's basically forty eight hundred dollars per shot. You get a shot once per month and that costs forty eight hundred dollars. And so you multiply that by twelve and you get to fifty six thousand number. Now, it's forty eight hundred dollars to get this monthly shot. An outrageous amount of money for what could be a breakthrough Alzheimer's treatment. I don't necessarily think so. I mean, that is the sticker price. That's not what the patient is gonna pay, right? The patient's gonna pay the ten thousand dollar copay, but divide that by twelve. You're gonna pay about eight hundred fifty dollars per month for what could be a breakthrough treatment. I mean, to me, the real issue is whether it works. And since it's

• 20:38David Sacks?

  since there are some positive indications, but it's inconclusive inconclusive. I would say tie goes to the runner here, meaning you can try it and let's revisit it in two years and see if it works.

• 20:49Jason Calacanis?

  But but it wasn't a tie as far as scientists were concerned. So what is the disconnect there, Chamath?

• 20:55Chamath Palihapitiya?

  Because I think what they were looking for, they no, but they were looking for a causal link. And the problem is, at some point along the way over the last few years, we started with the hypothesis that amyloid plaque was causal of Alzheimer's. And then we moved to a place where there was some correlation. And then we moved to a place where we said, actually, it may not do much of anything. But I actually agree with Sacks. I think the FDA did something really novel here, which is that they applied an extremely aggressive free market approach to a market that has been completely bereft of solutions. And so if you can create a hundred billion dollar market overnight. I think it stands to reason that a lot of people will look at the increase in Biogen's

• 21:39Chamath Palihapitiya?

  market cap and the profits that Biogen can make over the next 10 or 15 years and say, "I will attack that and do that cheaper, faster, better." It happens in every other market. I think the point here is that it probably shouldn't have been the FDA's role to create competition, but for whatever reason, whether it's how the capital markets in biotechnology are structured, or the way that Medicare Part B kind of works and creates these odd incentives, we are where we are. And so I tend to think that it's probably better that this drug was approved. I also agree with Sax that in general, I think as long as you have a reasonably defensible safety study, we should probably be in the

• 22:20Chamath Palihapitiya?

  business of getting more drugs approved faster. And the reason is that it allows smart, clever, hardworking people to connect the dots in ways that right now we don't know anything about, like just like a random factoid to prove this point. Like when you look inside, for example, of who wins a Nobel Prize, right, particularly in the fields of biology and chemistry, et cetera, you have people that are in their 60s and 70s that win awards for research done in their 20s and 30s. So clearly, people at some point, when they are somewhat less jaded, you know, and somewhat more naive maybe, have the ability to really transform the world for all of us. And if you can marry that to economic incentives,

• 23:04Chamath Palihapitiya?

  so folks that understand the markets can also be along for that ride, that in my mind, I think is generally better than a nanny state of babysitters.

• 23:12David Friedberg?

  I agree with that point. I think, I think that-

• 23:14Jason Calacanis?

  Let me frame this to you in a question for you.

• 23:16David Friedberg?

  Yeah.

• 23:16Jason Calacanis?

  Of those scientists on that board who voted against this, if their parent or spouse, God forbid, were suffering from Alzheimer's, how many of them would take the drug out of the 10 of them?

• 23:27David Friedberg?

  Well, this is my point is, and it's a point I was gonna make, which is, everyone wants that lottery ticket. There's no downside and only upside, because you're not paying for the lottery ticket. And so the way the system works in terms of paying right now, as a patient and as a doctor, I have no- Incentive to manage costs down, right? All I have is opportunity in front of me. And so as we add more opportunity, if we give everyone the ability to have a lottery ticket that potentially could cure their disease or could, or you know, make them kind of live forever or have a healthier state of being, uh, you know, we are going to see this proliferation of approvals that end up costing all of us so much that the inflation that we've already experienced in terms of paying costs for healthcare continues to climb.

• 24:10David Friedberg?

  So the challenge is like, you know, i- i- if we are going to continue to operate a socialized model of medicine, or even partially socialized, where the government's paying some amount of, of the, uh, of the premium, or employers are paying part of the premium, where the individual that's getting the treatment doesn't bear the cost, you're going to end up seeing everything inflate because you're creating this incentive now. Companies are going to rush in, they're going to try and get 10 things approved. Everyone's going to be taking an Alzheimer's drug in a couple of years because there's going to be so many available on the market and none of them may actually be curing Alzheimer's. Maybe 10% of people get cured, 90% don't, but the cost is going to be millions of dollars, you know, per person for these treatments and everyone pays that. I'm not saying that's necessarily a bad thing, you know, we need to have a proliferation of innovation, certainly.

• 24:53David Friedberg?

  The challenge is in the interim period, the inflation we've already experienced in healthcare, which is just extraordinary, will continue to climb. If, you know, we don't regulate, uh, the actual market for pricing on these things. And on the other side, we pay all the bills or there's some socialized pool to pay all the bills. You can't have it both ways.

• 25:12Chamath Palihapitiya?

  I'll give you the other side of the argument as well, which, um, is the reason why this could be so valuable. Again, if you look back to what Jane Lockwood did, um,

• 25:23David Friedberg?

  Was it muscular dystrophy? Yeah.

• 25:26Chamath Palihapitiya?

  In Duchenne muscular dystrophy, you know, for Janet Woodcock, sorry, pardon me, Janet Woodcock. But if you, if you know anybody whose child has Duchenne muscular dystrophy, my gosh, what an incredibly debilitating disease. You would not want anybody in the world to have it. And again, by approving that drug, what she did, I think is something pretty incredible because now there are, the, the number of companies that have, again, come after that market opportunity because she helped define a market, four of them are already public, just to give you a sense of it. And they're, you know, and so the odds. At least numerically are greater today than they were four years ago.

• 26:07Chamath Palihapitiya?

  And that was a, you know, potentially non-efficacious drug that, that frankly though, had a, had a legitimate safety study.

• 26:13Jason Calacanis?

  To your guess, Chamath and Friedberg, 10 out of 10 of those people on the FDA board would have a spouse or a loved one. Take it because there's no downside. If you look at Biogen's market cap, just to wrap up here, they added $20 billion in market cap in the five days since, you know, this announcement happened. So in terms of incentives, you got to think every other drug company is saying, hey, I've got something that kind of sort of works and it's really expensive. Can I get a free ticket now? Can I do this compassionate thing?

• 26:40Chamath Palihapitiya?

  Hopefully it's just the former thing, kind of sort of works and then, you know, they go from there.

• 26:44Jason Calacanis?

  All right. Moving on to our next topic. Bezos has decided that he will be the first billionaire in space. Uh, three people are going to be going to space in quotes on an 11 minute flight on July 20th, 2021. Uh, Jeff Bezos in a promotional video on his Instagram, uh, sprung this on his best friend, his bestie, his brother Mark, who agreed to go with him. And there's bidding of $3 million, I guess, to go on Blue Origin. Oh my God, 4.8 now on Blue Origin's site. Uh, and, uh, just doing back of the envelope math, which I, which I did, uh, last week when I heard this announcement. 600 people or so have gone to space. Some of them have gone multiple times.

• 27:26Jason Calacanis?

  Blue Origin's done 20 some odd flights, two of which went south and probably would have resulted in death. So I think 5 to 10% of Blue Origin's flights would have killed, uh, sadly Bezos if he had been on them. But obviously they've made progress since then, two of the 120 plus flights that SpaceX have done, but none in the last six years, um, have had an accident. Uh, and obviously, uh, Virgin Galactic had one tragic accident as well. So is this a wise idea and where would we put the percentage risk of ruin slash fatality? I just, I just want to, I just want to do statistics for a second, Jason. Sure. Yeah.

• 28:03David Friedberg?

  Just because there were Blue Origin accidents in the past doesn't necessarily mean that it has any bearing in predicting the future likelihood of there being an accident, because the data from the past is from different machines and different techniques and different processes. So I don't think, you know, to your tweet and the controversy with your tweet and, you know, your point now, I don't think you can necessarily look at the past. This is much more of a kind of deterministic conversation about like, hey, look, here are the things we have done with our systems and here's why we have a high confidence in this thing, you know, kind of working.

• 28:34Jason Calacanis?

  Which is obviously why people don't go on the first 50 rockets or first 20 rockets, whatever it happens to be. But statistically, it's not zero. So I guess the question is, is this a wise move? And where would you actually put the odds at?

• 28:46Chamath Palihapitiya?

  Well, it could, it could very well be zero now.

• 28:48David Friedberg?

  Could, yeah. You don't know, right? We don't know how well their safety systems have been developed. I mean, we don't know how, you know, the, I don't know anything about this, but I'm pretty sure that if Bezos is go, he's a pretty smart guy. He's not going in anything that's going to have some high, some even nominal likelihood of death, right? Like-

• 29:02Chamath Palihapitiya?

  And he knows probabilities and he's been there in the last 15 test flights and he's seen the data and he's probably seen a string of nominal flights. And at some point, you just feel like, you know, okay, this is, this is really dialed in here.

• 29:16David Friedberg?

  My prediction is Bezos is going to come back and he's going to announce that he's going to be the CEO of Blue Origin. I think this is what-

• 29:21Jason Calacanis?

  God, he's going all in on Blue Origin.

• 29:23David Friedberg?

  I think this is what he wants to do with the rest of his life. I think it's been pretty clear that this is such a passion for him and like, you know, he's, he's got the world's greatest money machine ever. It's a flywheel. It'll run as a monopoly for decades. He can do whatever he wants to do now. And so when he takes a look at this, what's greater after you've conquered Earth than leaving Earth and moving on? So to me, this seems to be so intellectually interesting to him and, and so kind of existentially interesting. My guess is he goes in full time on Blue Origin now that he's kind of transitioned to the chairman role and he's kind of been pretty public about it.

• 29:52Chamath Palihapitiya?

  Hundred percent. Hundred percent.

• 29:55Jason Calacanis?

  David, you're conservative and typically very scared of anything dangerous. Go ahead. Give us your prediction.

• 30:01David Sacks?

  Well, I'll give Bezos credit for dog fooding his own product, but to be, I would take a contrarian view overall. Um, you know, I think sometimes people get so rich and so powerful that there's nobody around them to tell them when they have a bad idea. And quite frankly, I think this is a brain fart that the people around him are telling him smells like perfume. And they should be telling him, dude, what are you thinking? You know, if, if Jake out said to me, he was going up on a rocket, I'd be like, dude, you got at least 30 good years here. You know, Bezos.

• 30:35Jason Calacanis?

  Don't screw up the podcast. Yeah, we need the host.

• 30:38David Sacks?

  We need you down here. Like, what are you thinking? Bezos has got like 170 billion after the divorce. He's, you know, still a young guy and he's going to risk it to go up in space for like three minutes. Um, I mean, now, yeah, they, this is the, they have sent the crash test dummy up there successfully 15 times, but this is the first manned flight, the first flight with humans on it. He's determined to be on it. If I were his advisor, I would say, put a GoPro on the head of the crash test dummy and experience it in virtual reality.

• 31:15David Sacks?

  No risk of ruin. Exactly. What are you thinking?

• 31:18Jason Calacanis?

  Yeah. I mean, if this was a stunt that, you know, um, Richard Branson did early in his career, remember he did the ballooning things and he was trying to become a billionaire and trying to get excitement around his brand. But I, I think this is totally unnecessary and it is not a, the, the risk of ruining is not zero. It might be close to zero, but it's definitely not zero. I mean,

• 31:39David Sacks?

  Well, now Branson is trying to beat Bezos into space. So he's announced he's going to go up too. And, you know, so these guys are both, um, being daredevils.

• 31:49David Friedberg?

  Is he going up on the, um, uh, galactic, uh, Chamath? What's he, how's he going up to space?

• 31:56David Friedberg?

  Is that a Virgin Galactic flight?

• 31:59Chamath Palihapitiya?

  What do you want me to tell you? Of course, of course I'm here. I'm also chairman of the board.

• 32:03David Friedberg?

  What do you want me to tell you? You have a company here on the board of that does spaceflight. I didn't know if it wasn't public. Is it? You're saying, sorry, did you say it was a public thing?

• 32:11Chamath Palihapitiya?

  No, I said it. Virgin Galactic is a public company of which I'm chairman of said board of directors. I'm not saying anything about anything.

• 32:18David Sacks?

  Branson is trying to beat Bezos into space by going up before him. There is now a space race going on and you have to wonder. And then meanwhile, Elon, I wonder how much of this is because of Bezos' pride because Elon tweeted that Bezos couldn't get it up because his rocket, Bezos' rocket is only-

• 32:38David Friedberg?

  Doesn't go to actual space.

• 32:40David Sacks?

  Yeah, it goes to like suborbital, like low earth orbit, you know.

• 32:44David Friedberg?

  I mean, he gets it halfway up. I think he's somewhere in the 50 to 70 range. I think if he had a little blue pill, Blue Origin, if he got the little Blue Origin pill, he might get to 100%. How great is this space race, by the way? This is so friggin' cool, right? I mean, like, the government comes in-

• 33:01Chamath Palihapitiya?

  Pretty amazing.

• 33:01David Friedberg?

  I mean, the government creates all these great contract incentives. This is, this is a good role for government, right? They come in, they create all these contract incentives. SpaceX has been making all this money from the US government. And then they take that money and they invest in creating this space race, this industry that, you know, could absolutely transform humanity for the centuries to come. It really speaks to kind of like how semiconductors and computing came out of the space race of the mid 20th century. And we could see this kind of like next industrial age arise for the space industrial age because of these incentives that have been created by the government. It seems to me like there's a good role here that government's played and this is super, super cool, man.

• 33:38Jason Calacanis?

  Isn't this in stark contrast to the government doing the space shuttle program? Which, if you look at the fatalities, there have been about 30 fatalities in going to space, 14 of which were on the two shuttles. One that tragically blew up on the way up and one that disintegrated on the way down in our childhoods in the 80s, I believe, for most of-

• 33:56David Sacks?

  And it was also incredibly expensive. Look, this is privatization for the win, right? Instead of having the government doing all the R and D, and the government is good at some things, but R and D is not one of them. So you, you let the private sector do the R and D and then NASA's contracting with these private sector companies.

• 34:15Chamath Palihapitiya?

  The government is a phenomenal balance sheet.

• 34:17Jason Calacanis?

  Yeah, Sax, how do you feel about the government funding this work, right? Because they're not doing the work, but it's the taxpayers' money that's going to SpaceX and others for contract services that ultimately fuels this innovation engine. Do you feel like this is a good role for government spending? Is to kind of

• 34:32David Sacks?

  Well, the question, the question for government as a policy matter is whether we want to go to space. And then the question is, how do we get there? I definitely believe that if we believe it's important to have a space station, to get to space, to kind of advance the frontiers of, you know, humankind.

• 34:49Jason Calacanis?

  Yeah.

• 34:49David Sacks?

  Then, then, then it's a worthy program to fund. And then the question is, well, how do you get there? And I think, you know, funding SpaceX and these, or it's not funding, it's contracts with SpaceX to deliver the product is a much better idea than having the government trying to develop it itself.

• 35:05Chamath Palihapitiya?

  Right.

• 35:06Jason Calacanis?

  Yeah, because those are milestone based with some level of competition, even if people might complain about the bidding process, et cetera. The contract is for a duration of time and for deliverables. If the deliverables are not met or the contract expires, then we start the whole process over again. And this, correct me if I'm wrong, is a must do for us because we cannot let the communists and authoritarians own space. We have no choice being the democratic West of owning space and getting there before them and dominating space.

• 35:36Chamath Palihapitiya?

  Nobody can own space, but I think the United States is an incredible balance sheet.

• 35:42Jason Calacanis?

  Nobody can own space? I mean, are you kidding me? What if somebody gets up there who decides to put nuclear missiles up there and decides anybody else who puts satellites up there, we're going to just nuke them and laser them?

• 35:53Chamath Palihapitiya?

  You're not going to own it.

• 35:54David Sacks?

  You don't even need a nuke, quite frankly. You could drop a tungsten rod from space. Okay. Just like a giant steel rod. And by the time it hits the ground, it's going so fast that it basically can blow up or assassinate anybody.

• 36:09Chamath Palihapitiya?

  What the hell are the two of you, I mean, have the two of you become?

• 36:12David Sacks?

  No, this is real.

• 36:14Chamath Palihapitiya?

  Like, the two of you are like the, like Bea Arthur and the Golden Girls.

• 36:18Jason Calacanis?

  We're like the guys in the Muppets on the balcony.

• 36:20Chamath Palihapitiya?

  B. Arthur here, blathering on.

• 36:23David Sacks?

  No, the military applications of space are very important.

• 36:26Jason Calacanis?

  Have you not seen the Chinese? Putting rockets over Taiwan in military exercises. These people are not

• 36:31Chamath Palihapitiya?

  Jason.

• 36:32Jason Calacanis?

  Playing games.

• 36:33Chamath Palihapitiya?

  Jason, I understand. Nobody, all I'm saying is, there's no owning it, okay? It's too vast, it's effectively infinite, you can't own it, okay? You can have certain areas where maybe

• 36:44Jason Calacanis?

  You can dominate it.

• 36:46Chamath Palihapitiya?

  You can't.

• 36:47Jason Calacanis?

  Of course you can dominate space. If they go up there and they don't play by the rules. I mean, did you guys not see what happened with Hitler in Europe? He dominated Europe for a number of years.

• 36:56Chamath Palihapitiya?

  Jason, listen. Of all parts of space that you can dominate, maybe the one planet is Uranus. Other than that, there's nothing that you can.

• 37:06Jason Calacanis?

  You guys are so naive about the intentions of Russia and China. It is phenomenal. They have hundred year plans to dominate humanity. And they are willing to put millions of people into concentration camps. They have no problem going to space and deciding, we're going to own the satellites. And we're going to knock other satellites out of the sky.

• 37:26David Friedberg?

  I can't believe you were so anti-Trump and, and, and the things you say. It's just, you're, you're so incredible.

• 37:31Chamath Palihapitiya?

  You're so funny. Can I just say one thing? I think, I think back to what we said before, the US is an incredible balance sheet. And what Freebrooke said is so true, which is like coming out of the Apollo program. We really created so much technological innovation, it propelled the US forward. We unfortunately gave a lot of it up. But hopefully this time around, we can do it again. And by the way, just last week, I guess it was, or I guess it was last week.

• 37:55Chamath Palihapitiya?

  Or a month ago, you know, where we, we got that CHIPS Act in play, which is a quarter trillion dollars, you know, for semiconductors and other things. So we're slowly getting there, but this is where the US can do a lot of good, which is just to act as a funding source. And then let private markets kind of take over the rest.

• 38:10David Friedberg?

  By the way, we've talked about this on the past couple of podcasts, but there is, I think $90 billion earmarked in this new bill for enabling American manufacturing progress. And so it will be through a similar sort of funding mechanism, it looks like, as what we're seeing here. It could be a fantastic boon for innovation and, and infrastructure.

• 38:28Jason Calacanis?

  Yeah, I was trying to say, what other category should we model this after SAK? Should we do this for nuclear? Should we do it for education, for housing?

• 38:34David Sacks?

  Before we move on, I mean, look, Jake, I want to come to your defense. On this point, because I think it's it's um because I think it's just wrong to say that there aren't like vast and important military applications of space. The fact of the matter is you look at the history of warfare. It's critical to have the high ground. Whoever has the high ground ultimately wins the war. This is why the first thing we do, oh, the Greeks, the Greeks had the high.

• 39:00Chamath Palihapitiya?

  Says the guy that's five foot three.

• 39:05Jason Calacanis?

  You haven't seen me with a spear in a shield or a mace.

• 39:08David Sacks?

  Let me finish the point. The first thing we do in a in a war or a conflict is establish total air superiority. It's the reason why our infantry doesn't take massive losses. It's, you know, we want to establish, you know, artillery. That that sort of protects the infantry. Look, the future artillery is going to be from space. It is the ultimate high ground. It is, I agree with J Cal. It's naive to think that the other side, that the other powers are not pursuing military applications. We have to have the ability to defend ourselves against space-based attacks. And to have those those abilities ourselves, those capabilities. And so that is part of what's factoring in here with the space.

• 39:50Chamath Palihapitiya?

  I get it. I get it. I know what you guys want. A giant laser.

• 39:55Jason Calacanis?

  A giant laser in space.

• 39:57David Sacks?

  I don't, I don't think it has to be a laser. I think it can be low tech, you know?

• 40:01Jason Calacanis?

  Well, I mean, just if you just literally shot ball bearings at other satellites, it would rip through them, right? I mean, the tungsten rod program is an actual program, right? Yeah, yeah, it's a funded military program.

• 40:12Chamath Palihapitiya?

  Oh, my God.

• 40:13David Sacks?

  By the time, if you drop something from space, it hits the ground at like Mach 35.

• 40:17Chamath Palihapitiya?

  Phil Hellmuth has invaded our podcast and taken the body of David.

• 40:22Jason Calacanis?

  No, but in all seriousness, this program that we're seeing great success with inspiring the greatest, you know, entrepreneurs of our time to go after big prizes like this. Could we not do this with nuclear energy, housing and education? Or are, is that kind of out of the question because of unions?

• 40:39David Friedberg?

  Let me just point out, by the way, the things you just pointed out are the things that are now most regulated. And it's the regulatory burden which ultimately stifles innovation. Whereas in this case, we're enabling innovation without putting a lot of regulatory burden on space at this stage. Right. And so as soon as ITAR, which is one of these regulatory bodies starts to step in and maybe we start to limit things that can be done in space and so on and so forth. You may see things kind of get damaged like nuclear energy got damaged because the fear of the downside ends up, you know, kind of counterbalancing the opportunity of the upside. And it's something we've seen time and time again with every innovation cycle in every industry. And you know, you're right, right now, we're in this opportunistic moment in the space race.

• 41:22David Friedberg?

  But as soon as kind of the regulatory burden becomes heavy, you're going to see the same thing that happened with housing, the same thing that happened with nuclear energy and all the other kind of innovation cycles. That that kind of got stifled, not just in the US, but globally.

• 41:34Jason Calacanis?

  Yeah. So we don't think for nuclear, we'll see this happening anytime soon. Man, that would be an incredible.

• 41:40David Sacks?

  Nobody, nobody wants nuclear. There's a huge NIMBY problem with nuclear, right? Which is who really wants a nuclear power plant in their backyard? I mean, not going to happen. I don't think it's realistic. It's one of these ideas that, you know, sounds great in theory, but then in practice, no one's willing to raise their hand and say, I want that.

• 41:58Jason Calacanis?

  I have a really easy solution for that. Why don't you just make anybody who has to live within X zone of a nuclear power plant have a tax credit of a million dollars a year.

• 42:06David Sacks?

  They still don't want it. Look, I think the future of alternative energy is solar. It's, it's an inexhaustible supply. The cost of solar panels.

• 42:16Jason Calacanis?

  It's not going to be enough. We can't get it out there fast enough.

• 42:19David Sacks?

  Keeps going down exponentially. The cost curve is going down exponentially. And look, ultimately, all life on this planet is solar powered, right? Because fossil fuels come from the remains of dead dinosaurs who were ape plants and plants are solar powered. So ultimately, the sun is the ultimate source of energy, not wind, not nuclear, not windmills.

• 42:40David Friedberg?

  Well, geothermal.

• 42:41David Sacks?

  It's going to be solar.

• 42:42David Friedberg?

  Geothermal capacity is still like 100 billion years, based on our current. Yeah, consumption rate, but there's limited research relative to the opportunity in geothermal. But yeah, totally agree with you, Sacks.

• 42:55Jason Calacanis?

  In a microcosm of, you know, the reopening of the pandemic, we've been at record low caseloads and deaths are so low now from COVID-19 in the low hundreds that it's probably hard to know, Friedberg, you tell me if I'm wrong or right, if people are of those 300 or 400 people dying a day, that's with COVID, from COVID, et cetera. But anybody, I think it's intellectually correct to say that anybody who, over the age of 12, who wants a vaccine could get it, and anybody who's in a high-risk group certainly now has had over six months to get a vaccine. So we're basically done. And now the question becomes, what happens to society? Are we going to go back to work? Apple employees wrote a

• 43:37Jason Calacanis?

  letter about Apple's "demand," I'm using air quotes here, that people come back to work three days a week. Amazon just adjusted their return-to-work policy, backing off their claim of, in March, that they're going to return to an office-centric culture. They announced that employees can do two days remote, three days in the office. That seems to be the three for two. Google has a similar policy. They're expecting people to return to the office three days a week in September. Twitter said you can work from home forever because Jack is an introvert and doesn't want to come back to work, I guess. Facebook employees either need approval to continue work from home full-time, or they will need

• 44:19Jason Calacanis?

  to be back in the office 50% of the time. But Zuckerberg personally said that he is embracing remote work. Here's the quote, "I found that working remotely has given me more space for long-term thinking and helped me spend more time with my family, which has made me happier and more productive at work," which I guess is either devastating for real estate, or this is a great negotiation that's going on. You had some choice quotes about Apple employees doing three.

• 44:46Jason Calacanis?

  Uh, letters slash petitions in three weeks.

• 44:51David Sacks?

  Yeah. Yeah. So, look, I, I don't have a problem with the work from home policy. My, my problem is with the fact that the Apple employees keep doing what they do, which is sign these petitions. And of course, it's all this snowflake language around, we're not being listened to, we're not being heard, you know? And then they want to dictate to management the way that the company should work. And so they've circulated petitions to get other employees fired. They've circulated petitions to make Tim Cook take a stance against Israel. Now they're circulating petition on work from home. And of course, that is what Apple employees do. And Apple management is doing what it seems to do, which is cave to these petitions every time.

• 45:32David Sacks?

  And so they're in an infinite loop where the employees have realized they can run the company by forming these, these sort of boycotts and petition mobs. And it's working. Now, again, my objection is not to work from home. Most of my portfolio companies are now working from home or fully distributed. They're hiring employees everywhere. It's been very liberating for them to be able to hire talent anywhere in the world. And so I think the work from home question, the, the reason why these big companies are struggling with it, I think, quite frankly, is this because it's about their ability to supervise their employees. I think that work from home makes the best employees better, but it allows the worst employees to hide. And I think what this really comes down to is a fear on the part of Apple and Google and Facebook.

• 46:17David Sacks?

  They've got thousands of employees who aren't really working and are going to be able to completely hide. And, and I think that's what this policy comes down to.

• 46:25Jason Calacanis?

  Failure of management or just the nature of work.

• 46:27David Sacks?

  I think it's the nature of these gigantic companies where they've got so many employees that they're trying to figure out how to supervise them all and make sure they're actually doing work. There's this funny tweet that's going around. I don't know if it's true or not, but it got retweeted about somebody saying that I've, I've gotten six jobs during the pandemic. They're all work from home and I'm waiting to get fired from them for, you know, people realizing I'm not doing anything. And so I think this work from home controversy ultimately is about the ability of these large companies to supervise a workforce that they don't know what they're doing, if anything.

• 47:00Jason Calacanis?

  Oh my God, what a brilliant idea.

• 47:02Chamath Palihapitiya?

  The big unsolved problem in the pandemic with respect to work from home is how do you onboard new people? In my opinion, like if you have an established company with established people where everybody knows each other, it seems like all positive to be able to work from home because there's trust, there's decorum, there's social norms, there's all these things that were established together. But what happens when all of a sudden you introduce one, two, three, four, five, 500 new people into the mix? How do you onboard these folks? How do you get? And I think that's not a solved problem. And until you do that, I'm not sure that work from home will be as effective as it can be, because I think you'll just get a lot of people that that languish a little bit as they switch jobs. Now, maybe what that means is they'll switch jobs less

• 47:44Chamath Palihapitiya?

  because they'll just say, actually, this is net better. My crappy job got a little bit better, so there's no reason to move.

• 47:51Chamath Palihapitiya?

  On your point of commercial real estate, Jake, I actually think it just brings the utilization down, but I'm not sure it destroys it because I think people need the physical plant. Now, maybe over time, they'll get much smarter about getting smaller spaces and having flex spaces, so like things like WeWork do better. Because then you use that for overflow space, or that's how you how you actually have a primary outfit. But yeah, those are my thoughts.

• 48:17David Friedberg?

  Friedberg, any thoughts? I think it's going to be hard to, what I'm hearing, I don't know if you guys have talked to a lot of CEOs, but I just hear it's kind of a little bit tough right now to find the balance of the rules around when to be in work, because people have meetings in the off, they'll have a meeting, 80% of the people will show up to the meeting, 20% will be remote, and then it's a huge headache for everyone to be like, okay, we're all in the room, we're all having a conversation, now we got to zoom the people in that aren't here, and this person decided not to show up today, and it's kind of become a little bit of a a weird faux pas, or what's the the right word? Faux pas. Faux pas. To come in to like- A fucks po. Right, to not come into work while everyone else is meeting in person, and it's just becoming a little bit of a conflict across the organization right now.

• 49:01David Friedberg?

  There's gonna, it's gonna be sticky for a while. I'm not sure there's gonna be a great solution, and it's gonna vary by company. Also, it's very different, as you guys know, when, you know, when I was single in my early twenties, working at Google.

• 49:14Chamath Palihapitiya?

  Uh oh, here it comes.

• 49:15David Friedberg?

  Uh oh. Well, no, it was like, it was, it was going to work was like, it's cool, here's the like- Boop.

• 49:20Jason Calacanis?

  Boop.

• 49:21David Friedberg?

  Boop. No, it was like, it was cool. Like it was, it was great to go to campus every day. Now that I'm married with kids, you know, like being, being around your kids more often, you got obligations at home. It's very different, right? Your priorities change. And so when you have a diversity in the workforce of people with different home lives and so on.

• 49:38Chamath Palihapitiya?

  What if you're married, but you don't know and you have kids, but you can't remember their names? David overdues, sucks.

• 49:47Jason Calacanis?

  I mean, but at that moment in time, correct me if I'm wrong, Friedberg, you know, Google was taking people out of Stanford, Harvard, MIT, whatever. And they were basically giving them another four years in college with this like college campus experience.

• 50:00David Friedberg?

  It's a great experience.

• 50:01Jason Calacanis?

  It was fun.

• 50:02David Friedberg?

  A frigging barista made your coffees. Anytime you want a coffee, you walk over to a counter. And there's a barista and he makes you whatever you want. You get all these amazing snacks and you go, you go down the slide to your meeting.

• 50:12David Sacks?

  When you say it was great experience, do you mean that it was like fun for the employees? Like it was like a fun life experience or do you mean they actually got good work experience?

• 50:22David Friedberg?

  Fun life experience. Yeah, yeah.

• 50:25David Sacks?

  But it was like useless. It was useless from like a skills or like resume, like from a, from building your career. It was useless, right?

• 50:34David Friedberg?

  Well, the, the work itself was useful, at least for me, at least at that era at Google, when it was a private company. I love that work. It was an incredible experience for me. I made a lot of friends and, and built incredible career experience working at Google when it was a private company.

• 50:47David Sacks?

  But what about now? I mean, Google has this reputation that there's thousands of employees not doing anything. It was satirized by, by the employees on, sitting on the roof of the show Silicon Valley. Hulu. Yeah, exactly.

• 51:00David Sacks?

  Yeah. So look, I mean, instead of sitting on the roof, they're going to be sitting on their couch at home, you know? I guess, I guess it's, I guess it's an improvement. But I think that's really what it comes down to. What, what Facebook said in its statement was kind of interesting. There was a, a part in there where they kind of implied that work from home would be like a perk, you know? And that high performers would get it and then low performers would have to come into the office more. And that probably is the right approach because in order to let people work from home, you have to trust them to be much more self motivated to get their work done and quite. Frankly, the employees who want to hide, you got to make those people come into the office.

• 51:37Jason Calacanis?

  It's like, it's like in jail where the good inmates get their own cell. Totally. Yeah. Absolutely. If you get time in the yard, you get visits, conjugal visits.

• 51:47David Friedberg?

  If you were running a 500 to 1,000 employee SaaS company based in Silicon Valley with offices around the country or whatever, what would you do right now? What would your, your work from home policy be today?

• 51:58David Sacks?

  Well, most of my companies that are in that position are going fully remote, fully distributed. And it is, and there are going to be some challenges to be sure, but I just think it's inevitable. Now, some of them, I, I, I do think there is a strong cultural advantage. We've talked about this before. Chamath has made this point. Around having everyone in the same office or at least having hubs. So I am a fan of developing hubs. You might have like an engineering hub somewhere that, you know, and then you've got some remote engineers. You might have like a customer service hub. I, I, I do think that like call centers, for example, you're much better off having everybody work from the same call center. Because that, that is like a total productivity job where it's about like, how many units of work can you do within a certain amount of time?

• 52:43David Sacks?

  It's way easier to measure and manage that work when it's all happening in one place. And, and those call centers tend to be in locations that aren't as expensive as, as the Bay area.

• 52:52David Friedberg?

  At Metro Mile, we have a big customer service and claim center in Tempe, Arizona. And we have gone fully remote since the pandemic and productivity per unit, per, per employee has gone up since going distributed because it turns out that, you know, I'm not, I'm not going to pine too deeply on this, but you know, the, the throughput increases when people are kind of maybe not being distracted in the office or something. So and you can actually track it and, and that's a very measurable job, right? So the throughput and everything can be measured. So I would kind of make a counterpoint there that maybe we're seeing something different happen.

• 53:26David Sacks?

  Yeah. I mean, look, you, you may be, you may be right about that. I mean, it all comes down to, do you have the ability? Do you have systems that can manage the, the sort of sprawl? And if you do, I mean, and you can really measure the output and you can ensure the employees are delivering results, that's, that's a win-win.

• 53:42Jason Calacanis?

  I, I created a, a super lightweight version of this. Where since Slack is so dominant, I just tell people, you, you need to have a start and end to the day so you can like get on with your personal life. Just at the start of the day, do an SOD in Slack in the general channel. You just say two or three bullet points of what you're working on today. And then at the end of the day, reply to that. Same one with your EOD. Just what you got done today and then inform your employees and then you don't need to be managed. So if you can do that for five minutes at the start of the day and just five minutes into the day. And then on Friday, before you leave for the, and close up the week, give me an EOW of what you got done this week. And then on Saturdays, like today, when we're taping this, I go through, have a cup of coffee, read all the EOWs and I give feedback.

• 54:27Jason Calacanis?

  And it has made it so clear who's a contributor in the company and who's not. And when I instituted this pre pandemic and I had two people quit because they were like, I don't want to do it. And it turned out that those people were the lowest performers.

• 54:41David Sacks?

  I think you should call it a TPS report.

• 54:44Jason Calacanis?

  You know, you could frame it as such, like micromanaging. And I said, you can either frame this as micromanaging or you're setting an intention of what you're going to do in your workout. And then you record what you did in your workout. Since I started using the tonal system and since I started using Hydro, I'm not advertising them here, but they both have measurements. And I did 6,500 pounds on the tonal. And I'm like, I want to break that record this weekend. I want to do 7,000 pounds. I want to do five exercises. And I went from doing three exercises, three reps to five exercises, four reps. And that just makes me want to measure it.

• 55:19Chamath Palihapitiya?

  If I do slash apple slices into Slack, do I get apple slices?

• 55:24Jason Calacanis?

  Absolutely. We will bring you, you could also pick milk or chocolate milk or strawberry milk.

• 55:29Chamath Palihapitiya?

  What did you guys think of that press release that Salesforce sent out, which said something to the effect of like, they are becoming an entirely Slack centric company. They're going to rebuild, I guess, the entire architecture of SFDC around or Salesforce around.

• 55:43Jason Calacanis?

  Of course, we predicted that on the show. Slack is going to be the, they're going to rename Salesforce Slack.

• 55:47Chamath Palihapitiya?

  No, but I don't really understand what that meant, other than the actual headline of the statement. I'm wondering if you guys understand what it means.

• 55:53David Sacks?

  Well, I think I understand what Benioff is getting at, which I saw an interview that he did recently, where he talked about their quarterly results, which I guess were their best ever. It was like a fabulous quarter for them. What he talked about, Benioff is very good at connecting his products to larger societal trends. And the big trend that he's kind of hooking on to is this distributed work trend. And the way he described it is, you know, basically, this is the future. Companies are trying to figure it out, but they need a saddle. Because I guess this is a trend that could sort of buck them off the horse. And he's trying to say that Slack is going to be the thing that anchors your company now for this new era of remote distributed work. I think it's kind of brilliant marketing.

• 56:33Chamath Palihapitiya?

  Brilliant.

• 56:34Jason Calacanis?

  Absolutely. I mean, there has to be a there there.

• 56:36Chamath Palihapitiya?

  He's absolutely brilliant. He has built such an incredible organization. I mean, the scale of Salesforce. Over these last 20 years, my gosh, he is, he is a star. Star of stars.

• 56:49Jason Calacanis?

  I mean, and I sent you guys in the Slack, or I sent you guys in the chat. This socket site.com, which is a cool real estate site for San Francisco that's been around for two decades, I think. It's hilarious. They calculate how much open office space by how many Salesforce towers are empty in. And it's 16 million of square feet of vacant office space now spread across San Francisco. This seems to me, at the same time, we're having a crazy housing crisis. I don't know if you're monitoring this, but it turns out that banks and hedge funds and now Redfin and, you know, Open Door and all these companies are buying homes. Homes are getting bid up. At the same time, mortgage mortgages are at an all time low.

• 57:29Jason Calacanis?

  And people are moving around and we're not constructing. So I think we had a 60 or 70% decline in new housing being released into the market. And now we've got a full blown housing crisis in the country.

• 57:41Chamath Palihapitiya?

  I'm going to go back out on a limb and put up my 10 year breakeven. I think this whole inflation thing is a head fake. And I think that the, right now, we're in this weird position where the home builders are not necessarily sure whether they're going to rip in the capital necessary to build a bunch of homes. The reason they would slow down is if they think that inflation is coming, rates go up, mortgage rates go up, and then demand falls off. But if it turns out to be a head fake, the builders will then actually build what's necessary and they have the capital capacity to do it, but I don't think that they've had the economic justification and the courage to do it. And in fairness to them, it's because

• 58:24Chamath Palihapitiya?

  the 10-year breakeven has gone straight up since the depths of the pandemic, which is essentially, again, just to, you know, get everybody up to speed. It's how the market thinks about the future forward inflation rate. Anyways, over the last three or four months or three or four weeks, sorry, since we talked about it, it's kind of steadily started to fall off. And I think there's a prevailing sentiment that, you know, we're going to see some short-term spikes. We saw it this past week in CPI. Energy went bananas, right? The cost of energy, the cost of certain things. But then we're going to get back to normal. And when we get back to normal, inflation will be okay. And I think, Jason, that's probably a solution because if it gets, you know, if that, if that boogeyman

• 59:03Chamath Palihapitiya?

  is actually not real and we put it away, then the builders will be back in size and they'll green light a lot of projects. And I think you'll see housing supply kick back up really aggressively. That'll be good for us.

• 59:18David Sacks?

  Yeah, two, two points there, I think. One, so I, I hope Jamath is right about the long-term inflation prognosis. It's been, you know, it's, it's very important for investment in growth companies, growth stocks and high-tech companies that the inflation, the long-term interest rate remains low. So I hope you're right. I think that ultimately what's happening is there's a battle going on between sort of fiscal and monetary policy coming out of Washington, which is highly inflationary, and then technological deflation. So for the last 25 years, because we've had this explosion of productivity around technology, it's driven down the prices of pretty much everything that's not, where the prices aren't set by

• 1:00:01David Sacks?

  the government. So healthcare, universities, things like that, the prices have gone up because the government's paying for it. Everything else, the prices come down massively. So we've, we were kind of in this battle between sort of government inflation and technological deflation. I don't know which one's going to win. I do think that the sort of The the policies we're seeing creating a lot of government debt and the Fed continuing on this never ending QE are pretty scary. But in any event, I hope you're right about where this ends up. I think on the the other point was was sorry, we're on.

• 1:00:36Jason Calacanis?

  We're talking about the housing.

• 1:00:37David Sacks?

  Yeah, the housing. So this is a really interesting sort of populist narrative that's evolving where you've got, I mean, it's, I think both the left and the right can agree that it's a pretty scary thing that you now have major hedge funds buying up huge stocks of housing in the US, driving up prices. So first time home buyers can't buy a home. I mean, that is a very scary. It's a nightmare. It's a nightmare trend. And I think you're seeing a reaction to it on the left that California now proposed some new policy where they want the state of California to pay for 50% of first time home buyers houses, which just seems insane to me.

• 1:01:16David Sacks?

  But, you know, and then on the on the right, Tucker just did a segment coming down attacking BlackRock and these big hedge funds for for basically for for driving up the prices. So I think you're going to see a unanimity on the populist left and right in reaction to these hedge funds. But the thing that no one's really talking about that they need to be talking about is the NIMBYism. I mean, Jason, you mentioned it. The reason why we don't have enough housing is because it's too hard to build. And Chamath is right that the builders could get the capital for it, but it is too hard to get these projects approved. That is the thing we've got to, that is the change we got to make.

• 1:01:53Jason Calacanis?

  To build on that, I think what's happening now becomes the catalyst to break the NIMBYism. If you all these BlackRocks are buying up all the homes, if young people and young families can't buy a home despite mortgage rates being ridiculously low and despite them having the money to do it and the desire to do it, then that's going to create a massive societal upheaval, I believe. And then that's going to either drive people to other states like Texas is benefiting because they're pro-development. It's going to catalyze the massive movement of people out of New York, out of California, whatever states are are giving too much red tape. It's going to drive people to those states because that's where the housing people is going to be built, or those states are going to crack under the pressure and say, you know what?

• 1:02:37Jason Calacanis?

  We're gonna let you build in Sacramento and you know, you guys know I have a housing company in my portfolio and they are, they are getting absolutely deluged with people begging them to do affordable housing in different locations. And the biggest problem they're having is sorting through all the projects and what are we gonna do? But the great news is technology exists now to build modular homes in factories like Tesla does cars and ship them to site and take six months to a year out of the construction process. So then it just becomes a matter of regulations and which state decides that they're gonna let people buy a home for the first time. And if California doesn't let people buy a home for a first time, who's gonna pay taxes here? Where's the growth gonna come from? This is gonna be, this is a stall moment, I think.

• 1:03:22Chamath Palihapitiya?

  Just, just so you know, then the other, the other really terrible thing about homeownership is that it is where the preponderance of wealth creation for average Americans comes from. And so when you lock people out of homeownership, you're essentially ripping away 60 to 70% of how they're ever gonna make real wealth. And so yet again, you exacerbate, Jason, to your point, the inequality that we have where a few folks make all the money and then everybody else, they're kind of shut up from the equity market, they're shut up from private investing, and then they're shut up from owning a home. And no wonder people are pissed because it's like you throw your hands in the air and it's like-

• 1:03:58Jason Calacanis?

  You're literally creating a revolution. You pulled up three ladders at once. You can't invest, you can't invest in private companies.

• 1:04:03Chamath Palihapitiya?

  Tell me how I can, tell me how I can just earn some money so that I can pay for my kids to go to college, take a vacation and have a nice life on our, tell me how to do it then.

• 1:04:10Jason Calacanis?

  Yeah, cuz look, just to summarize-

• 1:04:12Chamath Palihapitiya?

  And nobody has a good answer. Government doesn't have a good answer.

• 1:04:14Jason Calacanis?

  You, we're pulling up the ladder of homeownership. We've pulled up the ladder with accreditation. You can't invest in private companies. We've made higher education far too expensive. We pulled up that ladder. I mean, what's left for the average citizen to, to, to grow their wealth?

• 1:04:28David Sacks?

  This is a crazy thing. We pull up the ladder and then in response, government creates a program to subsidize people and bail them out at the end. I mean, it doesn't make any sense. I mean, Mike Solana had, Mike Solana had a really funny tweet about the, the California program, which was, it's amazing the lengths to which people will go to avoid building new housing, you know, new supply. It's like we subsidize home buyers for this artificial price increase we've caused by limiting the supply.

• 1:04:54Jason Calacanis?

  This is like eliminating people's student loans.

• 1:04:56David Sacks?

  Just allow supply and demand.

• 1:04:58Jason Calacanis?

  Yeah, just make more colleges and make them cheaper.

• 1:05:01Chamath Palihapitiya?

  What do you guys think about this whole ProPublica, speaking of wealth and equality, this ProPublica leak of tax records? Somebody inside the IRS, or it was hacked, we don't know.

• 1:05:09Jason Calacanis?

  Yeah, this is clearly a person-

• 1:05:10Chamath Palihapitiya?

  Got a hold of basically 3,000, uh, the, the tax records, many going back many years of 3,000 of the wealthiest Americans. And ProPublica has slowly started to digest and, and issue, um, news reports about them. And it shows that, you know, in some years, guys like Bezos, um, paid no tax, um, whatsoever, were able to take huge deductions. You know, at one point, actually Bezos, in a year where he made, you know, kind of like billion dollars, was able to essentially didn't, uh, claim he made nothing and then made so little or made negative dollars that he got a $4,000 tax credit. That's typically reserved for people, you know, people, people who-

• 1:05:51Jason Calacanis?

  It was a tax credit for your kids. Yeah. It's, it's not meant for billionaires essentially, but you know, they, this was a lot. The, I think the big story here is the leak more than, uh, capital gains, how capital gains works. We all know how capital gains work. ProPublica has got an agenda, obviously. This is a left-leaning investigative journalism, uh, funded by the left, uh, and donations. And, uh, they do a great job with investigations, but in this case, they're just telling everybody what we already know, which is if you have giant holdings, you can get a loan against them, whether it's you own a home and you can get a mortgage against it or equity line, or if you own a bunch of stock, you can get a margin loan. I mean, it's not really news. I think this is like stirring the pot and the big news is who, who released this data?

• 1:06:36Jason Calacanis?

  And then, you know, there are some countries, I believe Sweden is one of them, where tax records are public.

• 1:06:41Chamath Palihapitiya?

  They have to be published.

• 1:06:42Jason Calacanis?

  Top level. Yeah. They have to be published. And so I think the way the United States is going is we're going to force people to publish their tax records and we're going to force some sort of minimum, uh, for people with holdings, AKA a wealth tax. I, I'm not saying I agree with either of those, but I think that this is the way it's going and I, somebody posted to our group chat-

• 1:06:59Chamath Palihapitiya?

  I'd be in favor of publishing-

• 1:06:59Jason Calacanis?

  87,000 more IRS agents are coming online.

• 1:07:02Chamath Palihapitiya?

  I'd, I'd be in favor of publishing tax returns. I, I have no, I, I, I think that that's a really good idea.

• 1:07:07Jason Calacanis?

  As a flex mostly?

• 1:07:08Chamath Palihapitiya?

  No, no, no. I like, I think it's a, I think it's a really smart thing to do. I think like you would see a lot less shady behavior if you had to publish this stuff.

• 1:07:15David Friedberg?

  When you publish your tax return, uh, Chamath, would you do a shirtless, holding up your tax return in a mirror and take a selfie? And then that's how you would publish it or?

• 1:07:22Jason Calacanis?

  Listening in sweat?

• 1:07:22Chamath Palihapitiya?

  More like, more like a one tear, one tear rolling down my cheek.

• 1:07:29Jason Calacanis?

  It should just be a picture of you with a wheelbarrow of cash, just you dumping it into a furnace.

• 1:07:34David Friedberg?

  By the way, I think, I think, I think, one thing I'll say is I think these stories have highlighted just an incredible ability to shift the narrative and create a different kind of dialogue around taxation. Because as we all know, the principle of taxation in the United States is that you are taxed on income. And income is a recognized gain, meaning when you sell an asset for cash or for some other asset.

• 1:08:00Jason Calacanis?

  Or you do a job.

• 1:08:01David Friedberg?

  Or you do a job and then you get paid, you get that cash that you can now go use to go buy something or to, to do whatever you want to do with. That is the transaction moment that you get taxed on. And everyone's saying, well, this guy's a billionaire, he has these billions of dollars, he paid no taxes. He didn't necessarily make billions of dollars of income that year. His stock value may have gone up billions of dollars, but if we all taxed each other when our stock values went up each year and we didn't get a rebate when our stocks went down, people would feel pretty upset. The average American, the average person would probably feel pretty upset if they got taxed every time their, their stock portfolio went up. And then they didn't get to have a rebate when their stock portfolio went down. So the principle of taxation is such that when you sell those shares and you ultimately generate income, that's when you get taxed.

• 1:08:46David Friedberg?

  But the narrative is very quickly shifting where people are like, oh, this guy's a billionaire, stated, you know, he didn't pay any taxes. They don't say anything about how much income he actually made. And a lot of these guys don't need income.

• 1:08:57Jason Calacanis?

  They have a dollar salary. They pick like, you know.

• 1:09:00David Friedberg?

  Well, they effectively have a credit card. One way to think about it is wealthy people have a credit card, as Chima pointed out, because they can buy everything on loan, they can buy everything they want on credit. Because down the road, everyone knows you guys have billions of dollars when you eventually.

• 1:09:12Jason Calacanis?

  Aren't they paying consumption taxes on those? So if they do take the billion dollar loan and you buy houses, you're paying consumption.

• 1:09:17Chamath Palihapitiya?

  To be honest with you, it's even more, it's actually even more perverted. So if you take a loan and then you use that loan to actually invest, the United States tax law says that all that interest you pay is deductible as well. And so the arbitrage that you find yourself in is if you have. Yeah, it's like you have these assets, you go to a bank, they'll lend it against because they want, you know, what is the bank's job? A bank's job is to generate interest, right? So, you know,

• 1:09:46Jason Calacanis?

  They want these big fish as customers.

• 1:09:48Chamath Palihapitiya?

  Right. And so, and then, and then, uh, part of the tax code is that it's tax deductible. And so it's one of these things that I think structurally gets people very confused about what's right or wrong, but it happens and it happens.

• 1:10:00Jason Calacanis?

  Is there any common sense solution, Sax?

• 1:10:02David Sacks?

  Well, I was gonna say, just keep in mind that when somebody lives on a credit card, like one day that credit card comes to you, and it's not a problem for Bezos because Amazon's stocks just keeps going up and up and up, but you will occasionally hear about some rich person going broke. And the reason is always that they took on too much debt and then their stock price went down and all of a sudden they owe more than the value of the collateral and then they're just done.

• 1:10:27Jason Calacanis?

  And they got liquidated.

• 1:10:28David Sacks?

  Yeah, exactly. So you do take a big risk.

• 1:10:30Jason Calacanis?

  Forced liquidation.

• 1:10:31David Sacks?

  When you live on margin, you are taking a big risk. Most people don't do that. Most people who have gains will eventually cash out. They'll do that by selling their company or they'll sell a piece of their stock. They'll have a stock selling plan and then they pay tax.

• 1:10:44David Friedberg?

  Exactly. And I feel, I, so I feel like it's really unfair how, I look, I don't want to say it's unfair because people get really riled up when rich people aren't paying taxes, but it's interesting to me how the narrative has been kind of very quickly reframed without the specificity of the income that was generated by these individuals. And they're just saying, look, this person has all this wealth. They didn't pay any taxes without actually recognizing that this person may have had an income generating event earlier in their life, which they did pay taxes on, or they will have an income generating event later in their life, which they will pay taxes on. Um, and so the, the, the truth is a little bit more nuanced than I think, you know, the very quick kind of soundbitty press stories kind of indicate. And it's, um, it's just really, it's been, it's been

• 1:11:26David Friedberg?

  really interesting to watch how many people get so riled up and frothy about this moment. And I, I get that we all, you know, everyone kind of dislikes wealthy people. Um, you know, I certainly did when, when, you know, I was, I had no money and I felt like I was getting screwed by the system.

• 1:11:39Jason Calacanis?

  You certainly did when we started this podcast and had to be on with Sax.

• 1:11:43David Sacks?

  But I think Friedberg raises a great point, which is that With Bezos, take for example, and look, by the way, maybe he should be paying more tax in other ways. But with respect to his Amazon stock, he built this machine called Amazon. It's this machine that makes all of our lives better. Um, for, for the most part, in terms of the delivery of goods and services. You know, you press a button, somebody shows up the next day. So he builds this incredible machine. He owns a piece of it. He's merely holding on to his ownership in that machine. But the way that the public market is valuing that machine keeps going up and up and up. But to Friedberg's point, he hasn't recognized more income. He doesn't have more cash in his bank account.

• 1:12:26David Sacks?

  Um, and so should he be paying taxes?

• 1:12:29Jason Calacanis?

  And here's the thing, if you change the, hold on, if you change the rule, Chamath, correct me if I'm wrong here. And you said you, you have to pay on the gain, then somebody who bought a house in 1980 and it appreciated 100X in California. By the time they were 70 and they bought it in their 30s, they would get caught up in this wealth tax or paying for it as they go. The appreciation.

• 1:12:48Chamath Palihapitiya?

  This mechanism exists, now Jason, you said a key thing. This mechanism exists at all parts of the tax code. So yes, a billionaire can basically go to JP Morgan or Goldman Sachs or Morgan Stanley. You know, get a margin loan on their stock and live their life. But individual folks who are not billionaires can do that via a HELOC on their home. And a lot of people do that as well. They take home equity lines of credit and they use that to forward finance things as well. The difference is that because the quantums are so much bigger. You have this ability for rich people to accelerate their wealth creation in a way that normal folks don't. So I'll give you another example. So one example that I just spoke about is you basically take a loan instead of selling things. Right? You use that to make investments.

• 1:13:31Chamath Palihapitiya?

  All of that interest is tax deductible, number one. Number two is even if you don't need to do that, you can just take a loan on a small percentage of your capital. Reinvest that. Again, pay the interest and now you're running implicitly a little bit of leverage. And just to give you a sense of it, there's a really great study by um, AQR, I think is the name of the hedge fund. And um, they reverse engineered Buffett's returns. And what they saw was that Buffett ran about 20 to 30% levered his entire career. And the way he did that was synthetically by the float of GEICO. The point I'm trying to make is even the best investors in the world prove

• 1:14:15Chamath Palihapitiya?

  that a small amount of margin and leverage is the key between being average and being the best in the world. And if that, if he needed that, let's be honest, we all need that. And again, we all can't have that. It's only available to a few. And so I'm not saying that the rules are wrong, but the rules do stifle the ability to basically move up and move down that curve. It's clear how often people move down. People get stopped out, they get margined out, happens all the time. It's very hard to see examples of people moving up. It's because it's harder and harder to get that first little bit of capital that then you can go and run with.

• 1:14:52Jason Calacanis?

  Yeah, and see, I think the great, the great reconciliation is what we need to work on as a society. And if you look at what the great reconciliation would be, it's can I get a great education, can I get great healthcare and can I have a nice home? And if you just said, we're going to have healthcare for everybody in the United States, very easy to pay. And if you just said, we're going to allow the building of single family homes, two or three bedroom homes, and you cannot stop them and any state that tries to stop them is not going to get whatever amount of federal funding. And then finally, we said all trade schools are free. Those are three very simple things.

• 1:15:25Chamath Palihapitiya?

  That's a great idea, by the way. What a fabulous idea, Jason. I love it.

• 1:15:29Jason Calacanis?

  Reconciliation.

• 1:15:30David Sacks?

  And charter schools and charter schools and school choice for everybody.

• 1:15:34Chamath Palihapitiya?

  Yeah.

• 1:15:34David Sacks?

  Because that is the number one thing to create equality of opportunity in this country.

• 1:15:39Chamath Palihapitiya?

  Those are incredible ideas, guys.

• 1:15:41David Sacks?

  And safe communities. Because the number one thing kids need is a great education and a safe household. And you cannot have that when

• 1:15:49Jason Calacanis?

  And healthcare.

• 1:15:50David Sacks?

  And healthcare, you can't have that when gun violence is exploding across the country. Our communities are no longer safe. We have to fix that problem.

• 1:15:58Jason Calacanis?

  All right, listen, we're at 75 minutes. Do we want to talk about toxic Bitcoin insanity in Miami?

• 1:16:02Chamath Palihapitiya?

  Yeah, what the hell is going on over there? What are these guys doing?

• 1:16:05Jason Calacanis?

  All right, so very simple. There was a Bitcoin conference in Miami. If you go to that conference, you have to agree to not mention other cryptocurrencies. There is a, we all have heard of Bitcoin maximalization or being a Bitcoin maximalist. This means you believe that Bitcoin is the one true cryptocurrency. All other cryptocurrencies do not exist. This conference has codified that to the point at which people are jumping on stage like maniacs, ripping off their clothes to reveal Dogecoin shirts. And then people are saying Bitcoin maximalism now has evolved into Bitcoin toxicity, which is a subset of the Bitcoin movement. What Bitcoin toxicity says is in order for Bitcoin to become the one true currency and the reserve currency, we must attack anybody who attacks it.

• 1:16:50Jason Calacanis?

  In other words, cult-like behavior, either accept Mohammed, Jesus, Moses, whoever, Hindi Hindu god, Zeus for the Greeks, you have to accept our god, or else we're going to attack you. So you can actually see this in practice. I tweeted, if Bitcoin was replaced by a technology, what would that look like? And you get massively ratioed on Twitter, which means more comments than likes.

• 1:17:14David Sacks?

  I'll take the other side of this if you want.

• 1:17:16Jason Calacanis?

  Yeah, go ahead. Well, so Bitcoin toxicity is now a thing, and it's actually, I believe, making the movement toxic to people and people are not going to want to participate. So it's actually collapsing the project. People do not want to be involved in toxicity, and people think that there's many ways to win in crypto.

• 1:17:34Chamath Palihapitiya?

  There are.

• 1:17:34Jason Calacanis?

  So the crypto community, because of the recent loss of 50%, I think now is in a debt spiral of toxicity, go Saks.

• 1:17:42David Sacks?

  Well, I think this is a fake moral panic on your part. Look, if toxicity means that you think that all these cryptocurrencies are a scam, then Jason, you are guilty of toxicity too, because you think.

• 1:17:56Jason Calacanis?

  No, no, I believe in Bitcoin. I believe in Bitcoin. I own seven figures worth.

• 1:17:59David Sacks?

  Nobody has been on Twitter more saying that all these cryptocurrencies are a scam. The only disagreement that you and the Bitcoin maximalists have is with respect to Bitcoin. But you both agree, both sides agree that you and the Maximals believe that all these other cryptocurrencies are scam.

• 1:18:13Jason Calacanis?

  No, I believe it's a real technology. I do believe that there are scammers in it, to be clear.

• 1:18:17David Sacks?

  You've contributed, you've contributed to the toxicity by basically

• 1:18:20Jason Calacanis?

  Absolutely not. I did not.

• 1:18:22David Sacks?

  By constantly denouncing every crypto as a scam.

• 1:18:25Jason Calacanis?

  I denounce ICOs and scams. I believe technology. It's a real technology. But anyway, it's, it's, it's just gross and I think it's

• 1:18:32Chamath Palihapitiya?

  I think that in general, if I had to summarize what I see, I, I see like there's a vein of young men, basically, who are super, super frustrated and

• 1:18:44Jason Calacanis?

  Incels.

• 1:18:46Chamath Palihapitiya?

  And, well, I don't know if they're incels or not, but like, you know, I think that they, they basically, I think, like, ran the race the way they were told. They checked all the boxes. They went to the schools. They got the jobs. They did the thing. They did the that. And it's kind of not working. And so whenever they find a thing that's new, I think they find acceptance in a community. And then, man, did they get really rigid about it. And they, in some ways, just stopped thinking for themselves. And that's a shame.

• 1:19:14Jason Calacanis?

  Called a cult, yeah.

• 1:19:15David Sacks?

  Can I quote something? We've all been raised on television to believe that one day we'd all be millionaires and movie gods and rock stars, but we won't. And we're slowly learning that fact and we're very, very pissed off. So I'm from Fight Club.

• 1:19:27Jason Calacanis?

  Yeah, of course it's Fight Club.

• 1:19:29Chamath Palihapitiya?

  That's a great quote. It's so true. It's so true. That basically summarizes Twitter. That summarizes Twitter.

• 1:19:36David Friedberg?

  It's Instagram. Instagram made it a hundred times worse. You could see everyday people suddenly becoming rich and famous, or at least the perception that they're rich and famous.

• 1:19:42Jason Calacanis?

  And using filters to look better.

• 1:19:44David Friedberg?

  And then everyone feels like they're being left out, or everyone feels like they want something that they don't have. And then you're left in this constant state of want and desire and this constant state of unhappiness. So, uh, this isn't new, by the way, you know, these are Buddhist principles, that Daka's source of unhappiness is really, um, about desire. And if you can let go of, and we create more desire.

• 1:20:04Jason Calacanis?

  And comparing yourself to others.

• 1:20:05David Friedberg?

  Yeah.

• 1:20:06David Sacks?

  I think there's a, a different answer to, to the Fight Club nihilism, um, than just sort of, uh, giving up all desire. I understand the sort of Buddhist approach. I actually wrote in 1999, when I Join PayPal. I wrote an article called Silicon Valley's Fight Clubs in which I basically said that startups were the answer to this sort of, you got, remember Fight Club came out in 1999. And so you had this sort of nihilism associated with this empty materialism. People wanted all these materialistic things, but it didn't really make them happy. But I think that creating something great and being part of creating something great is the answer to this. And it's about, it's about creation. It's about purpose, having meaning.

• 1:20:49Chamath Palihapitiya?

  Mastery.

• 1:20:50David Sacks?

  Mastery. And we are robbing people of having that experience. When we do stuff like universal basic income or tell them they don't need to work, you know? We should be encouraging them to have these great experiences. And this is why I kind of react to these like Apple snowflakes who don't want to come into their billion dollar spaceship campus. It's like, you know, they're just punching a time clock, you know? They're not really getting any meaning out of their work. And that's the thing I sort of react to. That's so, um, it's

• 1:21:19Chamath Palihapitiya?

  You'd rather than find another place where they can actually find purpose and mastery rather than be at Apple, be mad.

• 1:21:25David Sacks?

  Yeah, contribute, contribute.

• 1:21:28Jason Calacanis?

  The iPhone had been created by a remote team.

• 1:21:31Chamath Palihapitiya?

  It could, uh, let's be clear. The iPhone would never have happened had it not been for Steve Jobs.

• 1:21:35Jason Calacanis?

  Okay.

• 1:21:36Chamath Palihapitiya?

  Period. End of story.

• 1:21:37Jason Calacanis?

  You need to have the founder. Yeah, you need to have

• 1:21:39Chamath Palihapitiya?

  You just needed to have him. I mean, he could have been anybody, but he himself.

• 1:21:42Jason Calacanis?

  If him with a remote team, could they have made the iPhone?

• 1:21:46Chamath Palihapitiya?

  No, I don't think so. I mean, I think, I think Apple will probably be a different company if Steve were still here. Who knows?

• 1:21:51Jason Calacanis?

  Which is why I think they want people to come back. And I think what's happening here, I mean, I hate to be super cynical, is I think a lot of people left the Bay Area, didn't tell Apple because you're supposed to tell them if you relocate. And they're just trying to extend their tenure at Apple because there is no way to come in three days a week. If you're living, you know, in Tahoe or further out. I mean, what are you supposed to do? Get a hotel for two nights a week and then drive back to Tahoe or Phoenix? I mean, these people have left.

• 1:22:18David Sacks?

  If Steve were still around, those Apple employees would be racing back to the office because they'd be so excited about what they're working on. They'd be working on new products. And if they didn't, if they didn't have that passion, Steve would have weeded them out in two seconds.

• 1:22:32Chamath Palihapitiya?

  At the end of the day, all you have is a Snowflake, by the way. You mentioned Snowflake, although you said Apple Snowflakes.

• 1:22:37Jason Calacanis?

  The founder of Snowflake said in a CNBC episode, essentially, "We care about diversity, but we care first and foremost about being a high-performing organization," I'm paraphrasing, "that services our customers and our shareholders." And so while diversity is important, we're going to fill a role with the best person we can find. And so now, the grand debate that has started is, and I think it's related to what happened at Coinbase and Shopify with, you know, no more political speech at work, is meritocracy and can meritocracy live alongside equity and equality and diversification? Or diversity? So diversity and meritocracy in the same organization, which wins?

• 1:23:22Chamath Palihapitiya?

  You know, Mike Moritz wrote this pretty fabulous essay, I think it was in the Financial Times a couple of years ago. He got in a little bit of heat for doing it. But essentially, what he said was, you know, "While we're all talking about the things that we think are important, there's an entire cadre of engineer in China that are coding 24/7."

• 1:23:39Jason Calacanis?

  996.

• 1:23:40Chamath Palihapitiya?

  I think he actually said like 996, exactly.

• 1:23:42Jason Calacanis?

  Yeah, 9 a.m. to 9 p.m. 6 days a week, and they use the same tea bag 3 times. And he used that to illustrate, no, he used it to illustrate their commitment to excellence and what he used to see in Silicon Valley where people, on the weekends, the parking lots were full. Keep going, Shama.

• 1:23:56Chamath Palihapitiya?

  But I just bring this up because it's like, we've lost the ability to have both things be true. Meaning, it's maybe, like, at the end of the day, Frank Slootman is a representative and a spokesperson for the values of a company that's a $100 billion company that came out of nowhere and built something fabulous for people in a matter of a few years. I doubt that he speaks for himself only.

• 1:24:24Jason Calacanis?

  No, he specifically said in this comment, Shama, that he was speaking for other people who were too scared to talk about it.

• 1:24:31Chamath Palihapitiya?

  Okay, but I'm saying, but I'm saying he also, but I don't care about other companies. He speaks for Snowflake. So to the extent he says that as the CEO of Snowflake, why can't we respect that an entire company has decided to do something? For example, you know, the other opposite end of this, do you remember this bakery, I think it was in Colorado that like, you know, refused to make a cake?

• 1:24:52Jason Calacanis?

  Yeah.

• 1:24:53Chamath Palihapitiya?

  Yeah, refused to make a cake for a lesbian couple. It went all the way to the Supreme Court, and they said that this guy had the right to deny them making the cake. To me, it makes my blood boil. But at least I live in a country where he has the right to have that opinion and it's in within a legal boundary of reasonableness, I guess. Now, I learned from that and I say, okay, that's a legal bound of reasonableness. And until that law is overturned, that's what it is. This is so much less than that and we can't, you know, let this guy actually just go about his day without issuing an apology.

• 1:25:27Jason Calacanis?

  Yeah, that's not the America we're living in.

• 1:25:29Chamath Palihapitiya?

  Meanwhile, there are engineers that are working 996 in China, eating our lunch every day.

• 1:25:35Jason Calacanis?

  Yeah, I mean, in America today, you have to, you have to agree to that.

• 1:25:39Chamath Palihapitiya?

  I'll give you another example.

• 1:25:40Jason Calacanis?

  You have to capitulate and agree to the diversity.

• 1:25:45Chamath Palihapitiya?

  Jason, let me give you, let me give you another example. There is a massive play right now going on in the uranium market. It was brought to my attention, I was like, let me just go look at this, I don't know anything about this, but I just was curious about what's going on. And effectively what it is, there was a fund that was trying to basically corner uranium and drive the price up. And the entire thing about uranium, which was interesting, is, okay, what is it used for? It's used for nuclear reactors. Well, then you spend a little time understanding nuclear reactors and I was shocked to learn how clean, how safe.

• 1:26:19Jason Calacanis?

  Yep.

• 1:26:20Chamath Palihapitiya?

  How reliable, how repeatable. I had all these stupid cobwebs in my head, based on a random couple of press releases, Three Mile Island, Fukushima, et cetera. So when I cleared all of that bias away and I learned about it, then I'm like, why aren't nuclear reactors everywhere? Because it is the fastest way for us to get to carbon neutral. And then I find out, the same people who want carbon neutral, i.e. Greenpeace, is the, one of the largest advocates against nuclear. And I thought, how do we not, again, be in a position to actually hold two thoughts that are slightly divergent at the same time? We want nuclear energy because it actually supports something that's even more important

• 1:27:05Chamath Palihapitiya?

  to the sustainable ecosystem that Greenpeace is there to protect in the first place. And you can't have it. And to me, I find, so I find all of this stuff, again, ad nauseam in this list of, while we're all navel gazing on this bullshit, China's 996.

• 1:27:22Jason Calacanis?

  Right. We have to have forward progress. And by the way, Slotman, he put out a release, "Comments I made during a media review of last week may have led some to infer that I believe that diversity and merit are mutually exclusive when it comes to recruitment, hiring and promotion. I do not believe this, and I want to personally apologize to anyone who may have been hurt or offended by my comments." So, I've been added, said in a statement posted Monday, "I accept full personal responsibility for the lack of clarity in my comments."

• 1:27:47David Sacks?

  I think Slutman's apology actually only buttresses the original point he was making, which is that CEOs are afraid to say what they really think.

• 1:27:55Jason Calacanis?

  Yes.

• 1:27:56David Sacks?

  He came out, he had the bravery and courage to say what he really thought. He then got piled on on Twitter, and now he's apologizing for it and walking it back. It's really kind of a shame to Chamath' point. How can we have honest conversations when people are just afraid to say what they think?

• 1:28:10Chamath Palihapitiya?

  Whether I agree with Frank Slutman or not is not the point. The point is that if his entire company and his employees and his executive team have made a specific decision that they view merit as, you know, incredibly important, and then they they layered diversity in as a result, who am I to cherry pick those words? And all of a sudden, I have a wording issue with that, because I don't even understand the hiring criteria. It's not as if he published those stuff. So it's not not like anybody on the outside had any shred of ability to know the details.

• 1:28:39David Sacks?

  Right. And I agree. And here's my problem with all the people who attacked Frank on Twitter, is, you know, have any of those people said one word about school choice or charter schools, the need to release the stranglehold that the education unions have on our kids? They're running these schools for the benefit of the unions, not for the benefit of the kids. They're abolishing advanced math. And how many of the people attacking Frank have said one word about that? Because if we want to achieve, if we want to achieve a quality of opportunity in our society, we have to fix the schools. And so it's so easy to attack Frank, but they're unwilling to say one word about school choice because the unions are a political ally and it's inconvenient for

• 1:29:24David Sacks?

  them to do so.

• 1:29:26Chamath Palihapitiya?

  What about, again, going and actually understanding the cleanliness and safety of nuclear and, you know, being able to tell folks on the environmental left that actually this is a path to sustainable energy and a better ecology and biodiversity in the shortest path possible?

• 1:29:43David Sacks?

  They just want to shut down the conversation. They don't want there to be any real conversation or debate.

• 1:29:47Chamath Palihapitiya?

  But we're shutting down, to be really honest with you, words and we're shutting down rather superficial conversations and nobody ends up addressing the root cause issues of anything. That's the shame. I just think that we are screaming at each other about things that none of us really understand without taking the time to understand each other. Meanwhile, China is 996. I just can't say meanwhile-

• 1:30:10Jason Calacanis?

  Which is why we need to- Now you agree, Chamath. We have to win space.

• 1:30:14Chamath Palihapitiya?

  Meanwhile, China is 996.

• 1:30:17Jason Calacanis?

  The 996 and they're gonna win space and put broads up there.

• 1:30:19Chamath Palihapitiya?

  You put 1.2 billion people that are born in a collectivist system against holistically defined goals over a multi-decade period of time. They're the only, by the way, going back to where we started just to end maybe the podcast, biotech is the last bastion where America is completely dominant, right?

• 1:30:40Jason Calacanis?

  Yeah, software too.

• 1:30:41Chamath Palihapitiya?

  Not really. There are incredible advances that it's been American biotechnological ingenuity through and through. And the question there is going to be, how do we make sure we wrap our arms around this category and continue to do great things? Because in the absence of it, and if we get, again, if we lose the script, some other country is gonna 996 that market from us as well.

• 1:31:04David Sacks?

  Yeah, I think, you know, what you're pointing out is we're in this generational competition, sort of Cold War-type conflict with China. I think our foreign policy is starting to realign around that. You're seeing both Democrats, Republicans really get on the same page now about the threat that China represents, but our domestic policy is not realigned around that. If we really want to win this Cold War against China, we have to be competitive. And we keep doing things to our schools, our kids, and other parts of our system and our economy that are anti-competitive.

• 1:31:37Jason Calacanis?

  We need more Friedbergs. You know, and if you get rid of like the advanced programs, we have no Friedbergs. We need to clone Friedberg. Friedberg, what's the chances we could just clone you and have like 2,000 more Friedbergs to solve this biotech problem? Would you be open to that? Can we, can we start the clone wars with you?

• 1:31:53David Friedberg?

  Do you guys think you would get along with your clone, or would you want to destroy your clone?

• 1:31:56Chamath Palihapitiya?

  Destroy. That's, that's mimetic. So we know that.

• 1:31:59Jason Calacanis?

  I want 10 clones of myself. Are you kidding me? Can you imagine the round table?

• 1:32:02Chamath Palihapitiya?

  You know, Rene Girard wrote about this very eloquently many, many decades ago. This goes in one place, which is, you know, it goes, it goes into, it goes into capital merger. I want a clone army of myself.

• 1:32:14David Friedberg?

  Zach, would you like to just sit down and play chess with your clone all day?

• 1:32:18Chamath Palihapitiya?

  Not chess, but he'd like to do something else.

• 1:32:20Jason Calacanis?

  Oh, no. Wow. No. That's not an image I wanted. Oh, no. You're gonna have a threesome with yourself, Zach?

• 1:32:28Chamath Palihapitiya?

  No, nothing sexual. No, no, no, stop.

• 1:32:31Jason Calacanis?

  That's sort of what you were saying.

• 1:32:32David Sacks?

  I'd be cool with clones. I'd create a bunch of clones myself.

• 1:32:35Jason Calacanis?

  You'd wrestle with your own clone? Like a wrestling match?

• 1:32:36David Sacks?

  I feel like there's all these different things I want to do in my life that, you know, different careers or whatever, and I could send one Sacks out to be an architect. One Sacks could be an architect, and one could be a director, and one could be whatever. I want Chamath to be a lawyer.

• 1:32:48David Friedberg?

  Do you guys want to have your mind blown for a second?

• 1:32:50Jason Calacanis?

  Yes, please.

• 1:32:51David Friedberg?

  Okay, so there's a concept, a capability called induced pluripotent stem cells, where you could basically take any cell in your body and apply a bunch of chemicals to it and effectively get that cell to convert into a stem cell. Once it converts into a, and so the, the, the copy of the cell becomes a stem cell. And this was, uh, these guys, Yamanaka Factor, they, they won the Nobel Prize for this. Now, you could take that stem cell and turn it into an ova cell, turn it into a, um, effectively, um, uh, an egg cell.

• 1:33:22Jason Calacanis?

  A fetus.

• 1:33:23David Friedberg?

  And then you could induce that fetus to start dividing based on a discovery that was made recently, which hasn't been done in mammals yet, but effectively get it to start dividing without being fertilized and grow up, and it would effectively grow a clone. So this has been done in plants. It has not been done in animals. So in theory, in the next decade or two, we could take any, any hair cell from our own body, convert it into a stem cell. This is totally sci-fi. By the way, it's not proven. There's no, there's a bunch of, there's a bunch of discoveries that have been made, research that's been done that points to this trajectory, that you could then take that stem cell from, take a cell from your body, turn it into a stem cell, turn it into an egg cell, induce it to start growing, and turn it into effectively a clone of yourself.

• 1:34:00Chamath Palihapitiya?

  I just want to say, as you've been saying this, I've been shaking my head. Jason has no reaction. Sacks is grinning from interior to outer.

• 1:34:08David Sacks?

  I mean, get out with it.

• 1:34:10Jason Calacanis?

  Exactly.

• 1:34:10David Sacks?

  Sign me up. I'm gonna be like Saddam Hussein with my clone of myself.

• 1:34:16Jason Calacanis?

  You're gonna have all these matches with clones of yourself in them?

• 1:34:19David Sacks?

  Oh my god.

• 1:34:20Jason Calacanis?

  Just think of the possibilities.

• 1:34:22David Sacks?

  I love you guys.

• 1:34:23Jason Calacanis?

  I love you besties for the queen of quinoa, Rain Man himself, and the dictator. I'm Jake Al and this has been a double episode of the All In Podcast. We'll see you all next time. Bye bye.

• 1:34:38David Sacks?

  We'll let your winners ride.

• 1:34:41Jason Calacanis?

  Rain Man David Sacks.

• 1:34:45David Sacks?

  And instead, we open source it to the fans and they've just gone crazy with it.

• 1:34:49Jason Calacanis?

  Love you besties. Queen of quinoa.

• 1:34:58Jason Calacanis?

  Besties are back.

• 1:35:01David Friedberg?

  That is my dog taking a piss in your driveway.

• 1:35:04Jason Calacanis?

  Oh man.

• 1:35:09Chamath Palihapitiya?

  We should all just get a room and just have one big, huge orgy because they're all just pissed. It's like this like sexual tension that they just need to release somehow.

• 1:35:17Jason Calacanis?

  What? You're a bee. What? You're a bee. Bee?

• 1:35:21David Sacks?

  What?

• 1:35:22Jason Calacanis?

  We need to get merch. Besties are back.