E33: Apple's hypocrisy, America's math failure, crypto's regulatory correction, Clubhouse's future, UFOs & 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 Intro Music Credit: https://rb.gy/tppkzl https://twitter.com/yung_spielburg Referenced in the show: The Verge - Apple employees circulate petition demanding investigation into 'misogynistic' new hire https://www.theverge.com/2021/5/12/22432909/apple-petition-hiring-antonio-garcia-martinez-chaos-monkeys-facebook The Verge - Apple employees call for company to support Palestinians in internal letter https://www.theverge.com/2021/5/20/22446059/apple-employees-palestinians-support-internal-letter-tim-cook Vox - Full transcript: 'Chaos Monkeys' author Antonio García-Martinez on Recode Decode https://www.vox.com/2016/8/9/12415696/antonio-garcia-martinez-chaos-monkeys-recode-decode-podcast-transcript Business Insider - Tobi Lutke's Email https://www.businessinsider.com/shopify-ceo-email-to-managers-we-are-not-a-family-2021-5 TK News by Matt Taibi - On the Hypocrites at Apple Who Fired Antonio Garcia-Martinez https://taibbi.substack.com/p/on-the-hypocrites-at-apple-who-canceled The Information - Seven Apple Suppliers Accused of Using Forced Labor From Xinjiang https://www.theinformation.com/articles/seven-apple-suppliers-accused-of-using-forced-labor-from-xinjiang Persuasion - America Is Flunking Math https://www.persuasion.community/p/why-america-is-flunking-math-education Bloomberg - Gap With White House on Infrastructure Is Widening, GOP Says https://www.bloomberg.com/news/articles/2021-05-21/biden-offers-to-cut-infrastructure-proposal-to-1-7-trillion St. Louis FED - 10-Year Breakeven Inflation Rate https://fred.stlouisfed.org/series/T10YIE TED - A prosecutor's vision for a better justice system https://www.ted.com/talks/adam_foss_a_prosecutor_s_vision_for_a_better_justice_system?language=en Tweets: https://twitter.com/DavidSacks/status/1394328675768705030 https://twitter.com/DavidSacks/status/1395056042841559041 https://twitter.com/garrytan/status/1393462058407010307 https://twitter.com/moskov/status/1395060902253064195 https://twitter.com/moskov/status/1395062765702713358 https://twitter.com/DavidSacks/status/1395073652840796160 https://twitter.com/cabot_phillips/status/1394654014596337667 https://twitter.com/ALLIN_STATS Show Notes: 0:00 Apple's hypocrisy re: AGM firing 25:48 America is failing math 40:10 Inflation fears slowing down, infrastructure bill restructuring, corporate tax loopholes 50:10 Clubhouse's plummeting download numbers, David Sacks gives the besties a scoop 57:46 Crypto correction: regulation, centralized coins, potential black swans 1:13:30 Friedberg's science corner: UFOs 1:19:18 Sacks presses other billionaires on their support Chesa Boudin #allin #tech #news

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

• 0:00Chamath Palihapitiya?

  Friedberg, Friedberg.

• 0:01David Friedberg?

  What's up?

• 0:02Chamath Palihapitiya?

  It seems like you have a piece of shit on the side of your mouth, or is that a birthmark? Oh, no, it's birthmark, gotcha.

• 0:10David Friedberg?

  Did you record that?

• 0:12Jason Calacanis?

  Yeah, absolutely.

• 0:13Chamath Palihapitiya?

  Jesus.

• 0:14Jason Calacanis?

  Look at this guy, he takes his shirt off for one fucking selfie and now everybody who's fat and pale on the show, the other three of us is gonna be ridiculed.

• 0:23Chamath Palihapitiya?

  I'm having steak tonight, S T E A K tonight.

• 0:26Jason Calacanis?

  I'm lifting twice a week now, oh, come on Sax, come get some, let's fucking go, three, two.

• 0:49Jason Calacanis?

  Hey, everybody, hey, everybody, welcome to another episode of the All In Podcast. With me again, the dictator himself, Chomof Poly Hopatia, Rain Man David Sax, definitely with us, definitely a great driver, his dad lets him drive in the driveway, and of course, everybody's favorite, the queen of Kinwa, the science conductor himself,

• 1:13Jason Calacanis?

  David Friedberg.

• 1:14Chamath Palihapitiya?

  Queen, queen.

• 1:15Jason Calacanis?

  The queen. A lot of activity online, it's been a little bit of chaos since we all got together here. I guess we should talk about this Apple story with Antonio Garcia Martinez. You may have heard that he was hired by Apple to, I guess, run their ad efforts, and I have a little bit of information on kind of what he was gonna do there in terms of ads, which is really interesting, but.

• 1:43Chamath Palihapitiya?

  Tell us, tell us, tell us, tell us.

• 1:45Jason Calacanis?

  Okay, well, anyway, you know how we're basically.

• 1:48Chamath Palihapitiya?

  Start at the beginning and assume people don't know who Antonio Garcia Martinez is.

• 1:51Jason Calacanis?

  So Antonio Garcia Martinez was a Facebook developer. He is some really smart guy who uses a lot of big words and wrote a book called Chaos Monkeys, which is a great book, where he takes a very Jack Kerouac kind of, you know, a lot of prose, and he wrote this book about his time at Facebook. The problem is, he said some things in the book that would be, five years later, problematic. At the time, they were actually considered problematic by some folks, and. In the full quote, maybe less problematic, but he was essentially ousted because of the following problematic quote.

• 2:36Jason Calacanis?

  The quote is, "Most women in the Bay Area are soft and weak, cosseted and naive despite their claims of worldliness and generally full of shit. They have their self regarding entitlement, feminism, and ceaselessly vaunt their independence. But the reality is, come the epidemic plague or foreign invasion, they become precisely the sort of useless baggage you trade for a box of shotgun shells or a jerry can of diesel." And they shorten that quote to be that most women are soft and weak and full of shit. So, in context, in this book, he was contrasting the Bay Area women he had dated with the

• 3:18Jason Calacanis?

  mother of his kids, who he describes as strong and tall and tough and amazing. But still, the quote's a little gnarly, and the quote, you know, when it's out of context, becomes particularly gnarly. And of course, this led to a petition at Apple, which then led to him being fired, which now is going to lead to him probably getting a $10 million settlement. Of course, there's a lot of hypocrisy being brought up here because Apple has allegedly been using, or Apple's supply chain has slave labor in it from the Uighurs and other ethnic minorities.

• 3:57Jason Calacanis?

  And obviously, Apple gave Dr. Dre billions of dollars for Beats by Dre. And he has an even more misogynistic series of lyrics and was also accused of physically assaulting, I believe, his wife and other people he dated. Who, Dr. Dre? Dr. Dre, yeah. So, anyway, what do you think?

• 4:32David Sacks?

  Okay, there you go. Next story. No, I'm happy to jump into this. I think, Jason, I think you're you're you focused a little bit too much. And I saw your your pod with Zach Koleas on this. A lot of good takes, but I think you're a little too focused on what AGM, as I think it's easier to just call him by his initials, what he did as opposed to what the employees at Apple did. And there is at least four things that Apple did, or five things that Apple did wrong. I mean, number one, I think there was a very good reason not to hire this guy, which is that he wrote a bestselling tell-all book about the last big tech company he worked at. So why, if you're a big tech company, why in the world would you hire him? So that was stupid decision number one. But they did decide to hire him. And once they hire him, they got to treat him like any other employee and give him

• 5:17David Sacks?

  a chance to show what he can do. And so that leads to mistake number two, which is these 2,000 employees who signed this petition, really distorted and took out of context that passage. And I know the passage is cringe, okay, and gnarly, and it could, you know, certainly appear sexist, but you have to put it in its context. And the the larger con- this is a work of literature. This is a bestselling book. It's, what, 150,000 words? They're taking 150 words out of context. And the context was, like you said, he's describing the mother of his children, the love of his life, in as this sort of Linda Hamilton-esque in Terminator-type figure, or Charlize Theron in Mad Max. And this passage is not in there to describe all

• 6:00David Sacks?

  women. It's just basically a literary flourish to contrast the this woman that he loves, being such a badass compared to every other woman. And, and, you know, when Kara Swisher interviewed AGM five years ago, she bought this passage, he explained it, and she said, Yeah, okay, I get it. So, you know, it's certainly the case that people can understand the context if they choose to, and they simply are not choosing to understand the context. Which brings me to mistake number three, which is these 2,000 employees lied in their petition by claiming that their safety is threatened by Apple hiring AGM. That is simply untrue. It's physically impossible in the era of Zoom when everyone's working from home.

• 6:45David Sacks?

  But this guy is not a threat to anyone's safety. But they but they use that claim. They make that claim because they know that if you accuse someone of threatening your safety, it will trigger the machinery of HR to remove that person from the workplace. This is the language of safetyism, and it's a specific tactic to basically get somebody canceled or removed from the workplace. Okay. And then that leads to the the the next mistake. I think mistake number four, which is the bosses as Apple caved into this pressure. They were total cowards. They never even gave AGM the chance to explain himself. They never asked him, what did you intend by this passage? What were you trying to do? And by the way, they knew about this book when they hired him.

• 7:26Jason Calacanis?

  It's even worse. They knew about the book. They had vetted and they talked to many people as when a big time. When a big tech company hires somebody for a major position like this, they call all the references. And all of this is uncovered and dealt with.

• 7:39David Sacks?

  Of course, they knew about it. And then when the mob complains, they fire him summarily without subjecting the decision to proper HR processes. This is HR by mob rule. It's totally unacceptable. No company should be run this way. And then finally, that brings us to number five is that in explaining their decision and trying to justify their cowardice and giving it to the mob. They said that they fired him because of his behavior. AGM never had a chance to engage in any behavior. He barely started at the job. This wasn't because of his behavior. This is because of the book that he wrote five years ago. So what they're saying is that if you ever publish a written work at any time in your life years and years ago, that that can somehow constitute present day behavior. And that other people in the workplace can have a problem with that.

• 8:24David Sacks?

  That this is not behavior. And this is why he's going to have a giant defamation suit and settlement because they are making him unemployable in the tech industry by claiming that he was fired for some some sexist behavior. He was not.

• 8:39Jason Calacanis?

  What do you think he'll get paid in a settlement? I put it at 10. 10 million? Well, I was just thinking he's a half million dollar a year employee to a million with his RSUs. So let's just put it at a million unemployed for 10 to 20 years because of this or the damages to his reputation. And present value that back, yeah. So and yeah, so I think 10 million is the number.

• 9:00Chamath Palihapitiya?

  My curiosity in this was just, um, did those 2,000 employees feel the same way about Dr. Dre? Of course not. Or did they, do they feel the same way about some of the movies that they sell, uh, in the iTunes store? Or do they feel the same way about some of the games that they enable, um, in the App Store? Or some of the subscriptions that are sold?

• 9:27Chamath Palihapitiya?

  Right. Do they care, do they care that much about what's happening in their Chinese supply chain?

• 9:33Chamath Palihapitiya?

  I mean, I think it seems at least on the outside, the answer is no, but it would be interesting to get an explanation of that from the same HR people. I don't know whether the guy should have been fired or not, but I do think that you should have a predictable standard and every company is allowed to do what they want. If the standard at Apple is that we are going to hold you accountable for everything you've done in the past, irrespective of whether you've disavowed it or not, so be it. That's their right. And I think that the employees of that company have a right to do that. I think it's that if you start to arbitrarily enforce it, um, you go down this weird place, which is like, basically, I think what they're saying is if it's good for business, we're going to ignore it.

• 10:14Chamath Palihapitiya?

  If it's not obvious that it's good for business, we'll act because it's a low cost way of keeping the masses, um, you know, that the medicated. And I think that's what's even scarier to the 2,000 people. It's not that, you know, maybe they should feel proud that they got their pound of flesh, but they really should figure out how they want to stand on all these other points because to cherry pick puts, puts the whole company in just a weird posture that's, that's not scalable. Friedberg?

• 10:42David Friedberg?

  Uh, I'm less interested in the hypocrisy and the values debate, which is obvious. That's kind of the first order point with all this stuff. It's like, do the employees have the right values? Is there hypocrisy by management? Is there hypocrisy by the employees? What, what strikes me though is, um, a failure of leadership at these organizations. You know, you guys think back to Brian Armstrong's kind of purging of the woke mob and the political discourse that was happening. At Coinbase a few months ago, he took a point of strong leadership to a new level. And I think it highlighted when the leader steps up and says, this is how we're going to operate. These are how we're going to make decisions and puts his foot down. People will leave and you evolve the culture.

• 11:26David Friedberg?

  And I think it indicates to me that certain companies, as they've gotten really big and really successful, like Apple and even Alphabet and various other kind of large tech companies. The leaders no longer lead, the employees lead, the narrative on culture and the narrative on values. And, you know, it speaks to two things. One is that there perhaps aren't founder leaders running those organizations anymore, that there are managers whose job

• 11:54Jason Calacanis?

  That's critically important.

• 11:55David Friedberg?

  Whose job is to keep the wheels on and keep the wheels from falling off. So they have more to lose and they are constantly trying to protect the downside than they are trying to be aggressive about growing to the upside. And then I think it's just, you know, secondly, this kind of, you know, failure to kind of define what your values are from a leadership perspective and the void gets filled by the employees. The void gets filled by the mob. And so while it's this one kind of, you know, debatable point today and this one kind of hypocritical point today, it's really interesting to see that this isn't happening at other companies that are founder led. And if it is, the, you know, the culture gets reset.

• 12:35Jason Calacanis?

  Steve Jobs would have handled this completely differently.

• 12:37David Friedberg?

  Steve Jobs would not have let his employees tell him who or should he be hired.

• 12:41Jason Calacanis?

  He would have stopped and said, let's have a discussion about this.

• 12:42David Friedberg?

  He would have had a really clear point of view about who we hire, why we hire them and how we make decisions and not let the democ, democratic kind of rule or the, you know, employee rule.

• 12:52Jason Calacanis?

  It's not like all employees took a vote. How much of this Chamath has to do with the coddling of Silicon Valley employees for two decades vis a vis, you know, you get driven to school on your school bus, you sit on, you know, you get your lunch prepared for you, we do your dry cleaning. Every Friday you get to come and ask challenging questions to the leaders and this concept of like, you know, everybody has a voice at work as opposed to this is a company controlled by shareholders and/or a founder and you Work for it and there is a trade of services here vis a vis what Toby had to say at Shopify, which is this is not a family. This is a sports team. You are here to perform. We are here to perform for our customers. The end.

• 13:32Chamath Palihapitiya?

  So the, in fact, if you, if you had a chance and maybe Nick, we can post it in the show notes, but the email that Tobi Lutke wrote to Shopify employees was unbelievable. That to me is like, that's a tour de force. That should be basically like, that should be minted and sold as an NFT.

• 13:50Jason Calacanis?

  What's an NFT? We forgot about those.

• 13:52Chamath Palihapitiya?

  And it was, it was, it was just an incredible email, Jason, to your point. And the way that that started, if I, I may be getting these facts wrong, but there was an emoji of a noose inside of a Slack channel. And then, and then folks got quite upset with it. And so I think Toby's response was to basically shut down the whole channel and say, hey, guys, you know, we're losing the script about why we're here. And, you know, I think Brian Armstrong's essay was a version of that. The question is, why are we here? If I had to guess, I think it's because we pumped so much money into Silicon Valley companies. They didn't know where to spend it. And so I actually

• 14:34Chamath Palihapitiya?

  think that what we've really done is over hired far too many people into many of these companies. And so they kind of are very smart people, sitting around twiddling their thumbs. And so obviously they're just going to get distracted. Meaning, I remember like, you know, at Facebook, there was barely enough people to keep the lights on for a while. Then I remember by the time I was leaving, I was like, wow, there's way too many people here. A lot of them and most of them were all really, really smart. But it wasn't obvious to me what many of them did. And, you know, people would look at me and then say, oh, you know, that's a really arrogant thing to say, and that's not true. And everybody's valuable. I don't know. You know, if you look at Google. I've always thought like that company could probably run by 2,000 people.

• 15:18Chamath Palihapitiya?

  But you know, there's 200,000 people, so the 198 other thousand of them need to find something to do. It's probably the same at Apple. It's probably the same at all these big tech companies. And that's the leverage that you get from technology. It's naturally massively deflationary. So, but if you keep pumping billions and billions and billions of dollars into these companies, where the app experience is written by 50 or 100 critical people, or managed by 500 or 1,000 critical people.

• 15:47Chamath Palihapitiya?

  This is the natural byproduct, I think, of all of that.

• 15:49Jason Calacanis?

  By the way, Friedberg said organizations want to grow, right? Like, how many organizations say, you know, we should be smaller. We don't need this many people.

• 15:56Chamath Palihapitiya?

  Sorry, you're saying something really important. Not enough founders and boards understand the difference between growing a business and growing an org. Those are two totally different things. And the reason is because we've lost sight of very simple financial metrics in Silicon Valley. Meaning, if you go to any other industry where there is a cost of capital, people understand what return on invested capital means. They know how to measure it.

• 16:21Jason Calacanis?

  Yeah.

• 16:21Chamath Palihapitiya?

  They know what operating leverage means. They know what margin expansion means.

• 16:24Jason Calacanis?

  We only have valuation.

• 16:26Chamath Palihapitiya?

  And they seek that out. Here, we think about, exactly as you said, valuation. And so this idea that having 100 people do the work and see margins lift is antithetical to the Silicon Valley culture. It's, oh, as margins go up, let's just keep running the same profitable business, but instead have a 500 people, a thousand people.

• 16:43Jason Calacanis?

  Sax, what do you think? You're an operations machine. People would say, on a COO basis, you're one of the top three to five in the history of the valley. What do you say, COO man?

• 16:54David Sacks?

  Yeah, I mean, look, Chamath is right that in a company that's well-run and well-led, where people, people don't have time on their hands to engage in these shenanigans. So, yeah, I mean, I think, I think that's absolutely right. I think companies, startups, are increasingly have to choose whether they want to be Apple, or whether they want to be Coinbase, or Shopify for that matter. And just this, this week at Apple, there's a new petition circling. Now there's a petition called by 1,000 employees. Is calling for Tim Cook to denounce the Israelis and endorse the Palestinian side of the conflict.

• 17:29Jason Calacanis?

  Yeah. How's that gonna work?

• 17:32David Sacks?

  Well, of course.

• 17:32Jason Calacanis?

  Does he have a position on abortion? Is there an abortion position at?

• 17:36David Sacks?

  Well, but now, but, but now that they've given in to the, the woke mob, there's no reason for the mob to stop. They're going to be circulating a petition every week and that's kind of the point is so, and actually AGM himself had a really good quote about this. He, he did a great interview with, um, Matt Taibi and, um, he, he laid out the choice that companies face like this. He said, it's interject, this is, um, Antonio Garcia Martinez saying, is interjecting the whole fucking Twitter cesspool with all the dog piles and all the performance of signaling and all that crap into a corporate setting and replicating those dynamics and calling it work. That's basically what happened is what's happening is you, you're, these employees are performing Twitter at work.

• 18:16Jason Calacanis?

  On Slack.

• 18:17David Sacks?

  On, on Slack and they're pretending like it's really work and it's not. And I think, you know, founders are going to have to make a decision. Do you stand up and take a, a Brian Armstrong like position or a Toby position? Or do you eventually degenerate into some sort of?

• 18:32Jason Calacanis?

  Or a base camp, by the way. Because even base camp, the most woke virtual signaling founders on Twitter decided to take.

• 18:40David Sacks?

  That's right.

• 18:41Jason Calacanis?

  The most libertarian or Spartan approach, you know, stoic approach of Toby to give you Toby's quote.

• 18:49David Sacks?

  Well, base camp, just to finish the base camp thought, so, so base camp tried to accommodate this sort of like woke mentality. And what they found is that they got pushed so far, it became so distracting, they eventually had to move to the Armstrong position. And that's kind of my point is once you.

• 19:05Jason Calacanis?

  Yeah, everybody's going to move to that.

• 19:07David Sacks?

  Yeah, that's my point.

• 19:07Jason Calacanis?

  I mean, and if you don't believe, what I, what I said was like, listen, if you believe that a organization that allows political speech and this kind of stuff as a primary function inside the company, well then go build a competitor to base camp and show that that system works better. Here's Toby's quote, uh, to help you make this more clear to team members. Here are some pointers about what Shopify is not. Shopify, like any for-profit company is not a family. The very idea. Idea is preposterous. You are born into a family, you never choose it, and they can't unfamily you. It should be massively obvious that Shopify is not a family. But I see people, even leaders casually use the term like Shopee fam, which will cause the members of our teams, especially junior ones that have never worked anywhere else,

• 19:52Jason Calacanis?

  to get the wrong impression. The dangers of family thinking in quotes are that it becomes incredibly hard to let poor performers go. Shopify is a team, italicized, not a family. We literally only want the best people in the world. The reason why you join Shopify is because I hope all other people you met during the interview process were really smart, caring, and committed. This is magic and it creates a virtuous magnetism on talented people because very few people in the world have this in themselves. People who don't should not be part of this team.

• 20:24Chamath Palihapitiya?

  I mean, when I was, um, when I was at Facebook, when I was at Facebook, we used to convene the senior team. And, you know, I was like, I want, I really want to fire the bottom five or 10% of the company. And we would force stack rank. And we did it for about three or four years. And then the excuse was it's too big and there are too many people and the roles are too diverse and you can't rank. I actually don't believe that even to this day. I think it's pretty obvious who the real thousand X kind of employee contributors are. And by the way, they exist in every function. There's thousand X salespeople, there's thousand X, you know, product managers, there's, there's the thousand X people that work in facilities. They exist in every job function. And companies, I don't think, do a good enough job of figuring out who they are.

• 21:07Chamath Palihapitiya?

  And so instead, what happens is people that are not even 100X or not even a 10X are really more like a one or 1.1X can basically hide in all of that noise. And I think that if you could separate HR into two things, but there's really three things. One is like benefits, which is critical. The second is actually like safety and the, the ability to whistleblow if there's something really nefarious or bad that's happened. And then the third that's really valuable, I think, is organizational design, right? How do you put people in good jobs? And how do you allow them to have a huge amount of autonomy to run and build a career? But all of this other policing stuff, to me, just seems like it coddles to the lowest 25%.

• 21:49Chamath Palihapitiya?

  I don't know if that, and this is my intuition, to the lowest 25% performers of every company.

• 21:53Jason Calacanis?

  Of course, of course it does. And just to close this story up and wrap to our next, Antonio AGM announced that he is going to take a year, wait for it, to write for Substack. So he is going to get paid $10 million, I would guesstimate, in a settlement by Apple. He's going to get a half million dollar advance.

• 22:13Chamath Palihapitiya?

  I'll take the over.

• 22:13Jason Calacanis?

  You take the over? If only we could bet on this. I set such a good line.

• 22:18Chamath Palihapitiya?

  We can bet on it. Yeah, we can bet on it. I'll take the over. Okay, I set the line at 10. Anybody want the under?

• 22:24David Friedberg?

  I'll take, you'll take the, uh...

• 22:27Chamath Palihapitiya?

  Well, go, go, give it, give a different bet and I'll tell you. Yeah, if you got a different line, you can set a different line. Set a different line.

• 22:31Jason Calacanis?

  I think 10 is a good line. Cause you gotta think, like, if they offer him 78 million...

• 22:38David Sacks?

  I mean, it's gonna be something like that. I don't know what the big, what the number is, but...

• 22:42Jason Calacanis?

  We'll never know.

• 22:42Chamath Palihapitiya?

  I'll, I'll make a line, 15.6 million. I'll take the under.

• 22:46David Friedberg?

  I'll take the under.

• 22:47Chamath Palihapitiya?

  Wow, really?

• 22:48Jason Calacanis?

  I'll take the under, yeah. 15 is way too much, way too much.

• 22:50Chamath Palihapitiya?

  David's quite sexy.

• 22:51David Sacks?

  I'd say under 15.

• 22:52Jason Calacanis?

  Yeah, that's not a good line. I think 11 would have been a better line. 11.5 is a good line. Okay, let me do it. 11.5, what do you take?

• 23:00David Friedberg?

  Chamath can afford the book against all three of us.

• 23:02Jason Calacanis?

  Okay, 11.5. Chamath takes the over, 11.5? Free Burke Sachs?

• 23:06David Friedberg?

  Yeah, I don't know, under?

• 23:08Chamath Palihapitiya?

  Can I just tell you why? If you look at the last four-year compounding of Apple stock, right? And so if you think about reasonable number of grants as his level of seniority, plus the imputed compounding, plus whatever he would have gotten...

• 23:19Jason Calacanis?

  Oh, you should be part of his team. Somebody send this clip, because that's the argument is...

• 23:24Chamath Palihapitiya?

  I, I do think you end up getting to probably 20 million.

• 23:26Jason Calacanis?

  Sure, yeah, you just, you gotta include the appreciation.

• 23:29Chamath Palihapitiya?

  Yeah, you get a buy it now price at 15 and call it in.

• 23:31David Sacks?

  And they've also, also you could make the argument, they've rendered him unemployable in the industry, so...

• 23:36Jason Calacanis?

  And then there's foregone...

• 23:37David Sacks?

  Inconvenience in the future.

• 23:39Jason Calacanis?

  Then it could be 25. And also mental suffering. What about suffering? He is going to suffer. He's gonna need to be on meds. My client is suffering. He's in therapy twice a week. He can't get out of bed. He's not gonna be able to be in functional relationships. And he's too scared to leave the house.

• 23:54David Sacks?

  He should wait on the Substack, cause he's gonna make so much money on Substack, it's gonna mitigate his damages.

• 23:59Jason Calacanis?

  Yeah, don't take the subject.

• 24:00David Sacks?

  Don't take the wait, just wait on the subject.

• 24:02David Friedberg?

  I'll give you guys another stat. Do you guys know what Apple's market cap divided by employees is? Apple is, Apple's market-

• 24:09Jason Calacanis?

  It's probably seven million an employee.

• 24:12David Friedberg?

  Anyone else?

• 24:13Jason Calacanis?

  Wait a second, there's a hundred thousand employees and it's worth two trillion?

• 24:18David Friedberg?

  Okay, there's a hundred fifty thousand employees, two point one trillion, so it's fourteen million in employee. So the other way to think about it is if Apple's like gonna lose one or two good employees over this, um, you know, they'd, uh, they'd happily pay up to get, uh, to get the guy to be quiet. So it's worth one employee to pay fourteen million dollars.

• 24:37David Sacks?

  Well, no, I mean, well, you're, you're not dividing by all the slave labor in China.

• 24:42Jason Calacanis?

  And, I'll, I'll recalc, I'll recalc. Well, they cost, they actually cost zero.

• 24:50Jason Calacanis?

  That was bad, sorry. I mean, it's dark, but it's true. I mean, this is the hypocrisy of Apple. They've literally got slave labor in their supply chain. Not that they want it in their supply chain, but those employees-

• 25:03David Friedberg?

  How do you know that? Let's, let's just go through this, cause like, this is a common narrative, but has anyone actually like gotten to the bottom of-

• 25:10Jason Calacanis?

  Well, that's why I said reported. I mean, it is, it is known-

• 25:14David Friedberg?

  Again, like, I don't like, I don't like pushing, I don't like pushing narratives.

• 25:18David Sacks?

  I actually, I tweeted something that, well, I retweeted something that came from, I think, a pretty valid source. Um, that author from The Atlantic, who I think is pretty legit.

• 25:29Jason Calacanis?

  Also, I just think, just in terms of his quote, if he had taken the word woman out of the quote, uh, most people in the Bay Area are soft and weak. Mmm, in a zombie apocalypse, I don't think you're recruiting from the Bay Area. Uh, but related to this story, uh, in terms of Chamath's point about, you know, uh, one thousand X performers, uh, America is, uh, really doing a bad job at math and Gary Tan, uh, the venture capitalist, retweeted and participated in a tweet thread about immigrants, um, who know that standardized test is probably your best shot at getting somewhere. Uh, your money socialist can't take you, the rules are well standardized, and he tells this story about this, but there is a-

• 26:09Jason Calacanis?

  persuasion article about us failing math and that they're going to be in California getting rid of the gifted programs for math because it's unfair to the kids who are not gifted. As a kid who is was not gifted and to the three kids on the program who were in gifted programs, or at least two of you were, I have no problem with there being a gifted program. But any thoughts on this?

• 26:33Chamath Palihapitiya?

  I think it's shameful.

• 26:35David Sacks?

  Yeah, it really is.

• 26:37Chamath Palihapitiya?

  I mean, like, we are, we are really doing our level best to just completely fuck our population. Why? I mean, why is this even? How could this even be possible? It's like, like, just like, it's, it's kind of like the equivalent. It's the moral equivalent of actually saying, you know what, we're going to eliminate welfare for the bottom five percent. Like, our job as a society is to kind of like, find the broadest set of solutions for the most number of people and solve for both extremes. So when you're dealing with education, you both need to understand that there are folks that need some kind of structural support. Look, when I came to Canada, I had ESL, right?

• 27:19Chamath Palihapitiya?

  English as a second language. You take that so that you can learn the native language of a country. It didn't mean that I was stupid. It just meant that I was behind. You know, if I had dyslexia or something else, I would need some kind of support. One of my children had a speech impediment. We had a speech therapist. This is what you do. But on the other side, if you have a kid who's an incredibly high performer, who has the potential to just completely crush, hey, like, you should be able to give that kid a pathway to achieve and give back. So the idea that you would eliminate anything at the extremes is kind of completely uncompassionate and stupid, just totally fucking stupid.

• 27:54Jason Calacanis?

  Well, it's in the name of having a more equitable math class.

• 27:58Chamath Palihapitiya?

  Again, I hate that word. Please don't use that word. Please don't use that word. That is, that is the least.

• 28:04David Friedberg?

  By the way, this, this, I mean, this goes back to the point I made a few episodes ago that, you know, you can have progress or you can have equality, but it's very difficult to have both. And, you know, if you want to try and make everyone equal and give no one the opportunity to have more or get more than anyone else because of whatever the circumstance may be, whether it's earned.

• 28:21Chamath Palihapitiya?

  No.

• 28:21David Friedberg?

  Or whether it's in red. No, but this is my point, like, you know, you limit the ability for everyone to to progress as a group because we're now limiting the ability for folks to take calculus.

• 28:31Chamath Palihapitiya?

  No, equality, look, I'll use a video game example. Equality means we all get to play Grand Theft Auto. Not that we have a somebody who actually plays for us and gets to the same answer and just gives you a ticket.

• 28:42Jason Calacanis?

  We don't all get the same score on Donkey Kong.

• 28:44Chamath Palihapitiya?

  You don't get the same score.

• 28:45Jason Calacanis?

  Yeah.

• 28:45Chamath Palihapitiya?

  So, so, so that's, that is what equality means, is that we all get to play and we all get a chance.

• 28:50David Friedberg?

  Versus equity, which is leveling everyone.

• 28:53Chamath Palihapitiya?

  Equity is leveling everybody and saying, here's your result.

• 28:56David Friedberg?

  Right.

• 28:56Chamath Palihapitiya?

  And by the way, it's the same as this other person's result.

• 28:57David Friedberg?

  Whatever the misnomer is, but the notion of leveling everyone, where no one can be ahead of anyone else by too far, uh, obviously limits as a group, our ability for the top decile to to increment or the top quartile to increment.

• 29:10Chamath Palihapitiya?

  I gotta think, look, let's, let's again use, let's again use our friends because instead of ours, but, you know, we know a lot of really smart people, um, who have really, really smart kids. We also know people in general that are in tough circumstances who also probably have really smart kids. Just purely selfishly for me, I want those kids doing the best they can to figure out what the hell they can invent for us in the future. Why would you slow those kids down? You know, it's kind of like saying, you know what, like, how about a black athlete? Would you, would it be preposterous to say, you know what, you don't have a right to go to the NBA and make money for your family? I'm going to slow you down because there's another white kid that's going to go through four years of college.

• 29:54Chamath Palihapitiya?

  So you know what, you're going to have to go through four years of college and you're going to have to pay for it.

• 29:57Jason Calacanis?

  Well, actually, what I would propose, uh, Tamak is when I go up to dunk, that we just, the rim automatically lowers two feet.

• 30:05Chamath Palihapitiya?

  Yeah, yeah, yeah.

• 30:05Jason Calacanis?

  So I dunk and then when you go for a layup, I'll just raise it six inches. It'd be more equitable for me.

• 30:11Chamath Palihapitiya?

  That's more equitable. Yeah, it's more equitable.

• 30:13David Sacks?

  Let me, let me, let me add another layer to this. So I, I agree with you, with you guys that what we should be thinking about is opportunity. We should always be asking what increases opportunity for the most people. And that's how we should measure political programs. And we're not doing that here. We are sort of leveling down, but I would say it's even more unfair. Serious than that, which is, I think what's happening is that the education establishment is completely failing our kids in our schools. And what they're trying to do is destroy the evidence of that failure.

• 30:41Jason Calacanis?

  Wow.

• 30:42David Sacks?

  And so they're hiding, they're hiding the results. Now, this persuasion piece, yes, this persuasion piece lays out the statistics, which are pretty grim. Okay. So according to these like global measurements by OECD, okay. Math proficiency in the U.S., we rank thirty seven in the world. Okay. And there's only thirty seven developed nations in the world, according to the developed. So we're last among developed countries. China, which is our main global competitor, is number one. Okay. And we achieved these horrible results despite ranking fifth in the world in per people's spending. So it's not a spending problem. Okay. And as we know, to the extent we do have high performing math students in the U.S., a huge majority of them are actually foreign born.

• 31:25David Sacks?

  And so we're actually kind of cheating our, our numbers a little bit. It's even worse than it appears. Now, what is the education establishment doing about this? How are they hiding the failure? Well, uh, when school comes back in the fall, they're planning to eliminate accelerated math. Okay. That means that there's no more algebra for eighth graders who are ready to take it on. There's no more calculus for high schoolers who want to, you know, do like the AP classes and get a jump on STEM. You know, for college. The entire idea of gifted students is now under attack, like we talked about in the name of equity. It's become a catch all for every bad idea. And the University of California system has now abandoned the SAT and ACT. So they temporarily got rid of those requirements during the pandemic, but now

• 32:09Jason Calacanis?

  They've never wasted crisis.

• 32:11David Sacks?

  Let's, they've never wasted crisis. And now they say they're not bringing back the requirements until at least twenty twenty five. And you can bet it's never going to return at all. And so here's the thing, they're trying to get rid of measuring how bad we are at math. So we won't have to think about it. They just want to give everyone a gold star and a pat on the back and just say how

• 32:30Jason Calacanis?

  You know, this reminds me of Saks is when you threw away the, um, the digital scale I got you.

• 32:37Jason Calacanis?

  Right. I'm not, I'm not fat because I'm not measuring it. Great, I'm soft. Perfect.

• 32:45Jason Calacanis?

  Oh my God, it's like, we really, it's, it's the movie Idiocracy. It literally, we are doing the movie Idiocracy. Have you guys seen Idiocracy?

• 32:53Chamath Palihapitiya?

  Why don't we, why don't we just, uh, why don't we just eliminate all admissions programs at every university? And just have one global admissions board where every campus is the same. What is the difference between MIT and Stanford and Caltech and the University of Arkansas? In my opinion, there shouldn't be. It's more equitable to just have somebody go close to home because you can save money. You know, carbon emissions are lower, right? You can just take the bus to the local school.

• 33:18Jason Calacanis?

  Competition is unfair.

• 33:19Chamath Palihapitiya?

  One centralized place, teach you.

• 33:21Jason Calacanis?

  Why have anybody compete?

• 33:22Chamath Palihapitiya?

  Basic course. I mean, if I said this, you, you'd think that I was a crazy person. Except that's basically what we're now telling all of our high school and middle school kids.

• 33:30Jason Calacanis?

  I'm also getting rid of Michelin stars and I'd like Yelp to take off their review system because it's not equitable. Like, we should not have Michelin stars anymore. Every chef should just get.

• 33:38Chamath Palihapitiya?

  Every restaurant's the same.

• 33:39Jason Calacanis?

  Every restaurant should get three quarters of a star.

• 33:41Chamath Palihapitiya?

  We should not, the health department should not give ranks of letters and they should not be forced to post it because that's inequitable.

• 33:48Jason Calacanis?

  Absolutely.

• 33:49Chamath Palihapitiya?

  You know?

• 33:49Jason Calacanis?

  Yeah. Also, you can game, you can game the health test. You could literally just follow the rules.

• 33:54David Friedberg?

  Let me just ask the, um, the counterpoint question, which is, uh, standardized testing, for example, benefits people that can afford tutors and special, you know, classes to get ahead.

• 34:07Jason Calacanis?

  Provide more tutors.

• 34:09David Friedberg?

  Yeah, therefore, well, therefore it's higher income people that can always, well, the point is they can always layer on additional tutoring. They can always layer on additional classes and therefore they can always.

• 34:17Jason Calacanis?

  There's a finite number of math, there's a finite score, Friedberg. You can only get 800 on the math SATs.

• 34:22Chamath Palihapitiya?

  I'll, I'll, I'll be somewhat, um, flip floppy here. I don't believe in standardized tests that much. I never did well particularly in standardized tests. I do think that they can be gamed, but that's different from what we're talking about. What we're saying is if kids show aptitude, we are explicitly choosing to not give them a chance to develop at their potential.

• 34:44Chamath Palihapitiya?

  And the problem is, we do this in other areas. We do it in athletics. We do it in music. We do it in the arts, but we're not going to do it in STEM. That's what we're choosing to do. That is what's crazy. So choose to get rid of the SAT or ACT, whatever you want. I don't care. But if you are the LeBron James of physics, Jesus Christ, like let that kid become the LeBron James of physics.

• 35:07David Friedberg?

  I'll tell you, like, I, I, um, I got into UC Berkeley because I had great standardized test scores because I had an aptitude for.

• 35:14Chamath Palihapitiya?

  What was your SAT, Friedberg? Let's do this.

• 35:17David Friedberg?

  Um, I got a, uh, an 800 math and I think it was a 720 verbal.

• 35:23Chamath Palihapitiya?

  Okay. So you got a 1520 out of 1600 at the time. I got an 1160.

• 35:28David Friedberg?

  And I got an 800 on the math.

• 35:32Chamath Palihapitiya?

  I was last, obviously, Sacks. Go ahead.

• 35:34David Sacks?

  I was, uh, 750 math, um, 720 verbal.

• 35:39Chamath Palihapitiya?

  14.

• 35:41David Friedberg?

  Are you writing this down?

• 35:42David Sacks?

  This is pre, this is pre the inflation. There was a big, uh, SAT inflation.

• 35:46Chamath Palihapitiya?

  I was, I was 1510 on the SAT. Oh, we were. Okay. So I woke up 400 points, 500 points behind each of you. In, in Canada, I was just kind of like, we didn't even write it, but I went and I wrote it just for shits and giggles.

• 35:58David Friedberg?

  I didn't do well. I didn't do well, like.

• 36:00David Sacks?

  You just said you weren't good at standardized tests. So what are you talking about?

• 36:03Chamath Palihapitiya?

  Yeah, you're in this top 3%. Yeah. Yeah, I know. But generally, like, I wasn't a good test taker. I was in probation in college, academic probation. I'm not a good test taker.

• 36:11David Sacks?

  But look, the, the reason why these tests got invented was actually to prevent discrimination. Um, I think it was back in like the 50s. Um, you know, I think it was like, and at that time it was Jews being kept out of the Ivy League. And one of the ways that they corrected for that was they made everyone take the same test. And so you could see the scores and it would shine some light on, you know, making sure that people didn't just get in because they were legacies, that they got in because, um, you know, they, they had, they had good, good scores. And there's been decades of work since then to try and eliminate bias in the test. And so the, the, the, the claims of bias now in the test really aren't supported. Now, to, to Friedberg's point. Obviously, that if you take some rich kid who lives in the suburbs, who gets a 1400

• 36:56David Sacks?

  and you compare that to a kid in the inner city who doesn't have, who grew up poor, doesn't have the advantages, and that kid gets a 1300, well, which score is better? Probably the 1300. And so you can take that into account, in my view, in the admissions process. But eliminating the scores altogether, why would you want to have less information to make a decision?

• 37:17Jason Calacanis?

  Yeah, there's no reason not to get rid of these. I would just think more holistically about how you accept students. And I mean, isn't more competition and having better teachers what we should be focusing on here as opposed to even standardized testing or god forbid cancelling programs? Let's just invest in more competition for schools.

• 37:35Chamath Palihapitiya?

  Well, so in Canada, we had this thing where, when I was graduating, we had specific different kinds of math contests and computer science contests and other things that you could write, the Putnam, etc. And those things were actually really instructive because they were purely verticalized things that could test your aptitude. And the school that I went to, University of Waterloo, would look at a lot of those things and adjust for it. Because my grades were decent, but my, some of those, one, this one specific math test I took was pretty good, I remember. And then they would adjust it exactly as David said to, what is this kid's background and his circumstances? And they called it a crunch factor. They would just adjust my marks. And that's how I got into Waterloo.

• 38:16Chamath Palihapitiya?

  And I didn't think I was going to. So there's all kinds of ways where you can be smart about it. But again, we're talking about, guys, don't lose sight of what you're saying. We are actually going to cut all these kids off at the knees starting in grade eight. So forget about all of this stuff. By the time that these kids graduate, they're going to be, I honestly, they're going to be like, really dumb.

• 38:35David Sacks?

  Right. The problem, the problem ultimately isn't just measurement, it's the denial of opportunity to learn. It's about, it's about getting rid of the learning and the classes. That's the biggest problem.

• 38:45Chamath Palihapitiya?

  You have to move to a state with a gifted program now, if your kid is really smart.

• 38:49Jason Calacanis?

  Or opt out of public education, which doesn't help anybody. I mean, literally, schools don't have to teach, we put it, we've now designed a system, to summarize, schools don't have to compete for students. Teachers don't have to compete for jobs or for their employment. And now we're saying students don't have to compete. So if you remove competition from the human condition, you're just not going to have any performance. There's going to be no progress. And as a species, we need progress. We need to solve global warming. We need to solve a lot of issues. And don't we want to live longer and better lives? Like, where is the optimistic nature of the human species? Competition is at the core of excellence. And to just

• 39:33Jason Calacanis?

  take it out of everything, the whole stack?

• 39:36David Sacks?

  Jake, that's the smartest thing you've ever said. Way smarter than 1120 SAT score.

• 39:40Jason Calacanis?

  Thank you. Thank you.

• 39:42David Sacks?

  Are you sure it was only 1120? How lame is it that we're still talking about our SAT scores like 30 years later?

• 39:48Jason Calacanis?

  800 was the average. So in Brooklyn, when you're 320 points above average, David, it's a BFD.

• 39:53Chamath Palihapitiya?

  What's lame is the four of us all remember, down to the number what our score is. That's what's lame.

• 39:58Jason Calacanis?

  I think I was 1120, 1150. I gotta, I gotta look it up. All right. Do we want to go to the crypto meltdown? Or talk about inflation? Or do we, should we dovetail those together? Or do you just want to go straight to UFOs?

• 40:09Chamath Palihapitiya?

  Well, Biden just, they just, a press release just hit the wire and they just cut the infrastructure bill from 2.3 trillion to 1.7 trillion.

• 40:19Jason Calacanis?

  Oh, so we're doing our job here at the All In Podcast.

• 40:22Chamath Palihapitiya?

  And I had heard from somebody that there just is not the broad base support for the capital gains tax. So that's not going to happen. And it looks like the corporate tax will probably go to 25%, not even up to 28%. And interestingly, I didn't realize this, but one of the biggest features of the bill that has the most popularity is that they're closing this loophole around IP that sits outside the United States. And that more than the corporate taxes will raise almost a trillion dollars of revenue.

• 40:55Jason Calacanis?

  I agree with that one. Why should you put your, why is Apple, I mean, you want to talk about hypocrisy, putting their IP in Ireland so they don't pay taxes?

• 41:01David Sacks?

  Google does the same.

• 41:02Jason Calacanis?

  Everybody's doing that. Why does that exist? It's so un-American.

• 41:06David Friedberg?

  Well, it's a subsidiary that has different taxation on it and, you know, to kind of that capital and that, uh, and that earnings sits outside the US.

• 41:16Jason Calacanis?

  That IP was made in California. It was not made in Dublin. No offense to, you know, my home country.

• 41:23Chamath Palihapitiya?

  I remember Facebook, we did that, we did this exact thing. We signed over all the IP and then the IRS sued Facebook. And I remember like I was called either to, I was subpoenaed and we went through like a whole multi-year trial. It may still be going on and it was around this issue, which was the IRS said, hey, Facebook, how come you, you know, you ported this over there? And I think Facebook's answer was, yeah, we paid the tax. And I think they did. They don't think they did anything wrong because the laws allowed it. But it effectively helped shield then tens of billions of dollars of future taxes.

• 41:54Jason Calacanis?

  I, I mean, I remember reading about this and I'm like, how does this pass the sniff test?

• 41:59David Friedberg?

  Well, it's where the revenue is recognized, J Cal. So you basically can produce the IP here and then transfer it to your subsidiary. When you transfer it to your subsidiary, you can recognize the earnings in that subsidiary and that subsidiary pays taxes in its local jurisdiction. Um, the, I think the issue Facebook had was that they transferred the IP and they undervalued what the future value would be from that IP transfer. And that's why the IRS sued them. Is this accounting snafu in terms of like, what did you value it at, at the moment you transferred it?

• 42:29Jason Calacanis?

  Here's another idea. Why doesn't, why don't they look at as part of this IP licensing? Where does the consumption of that IP occur? And where do the employees who maintain that IP live?

• 42:40Chamath Palihapitiya?

  J Cal, it's a very smart idea. The problem is that's the slippery slope that then gets to local taxation. You know, the thing is, we have all these global tax treaties where these large corporate entities can basically play this game and they're not subject to local tax. But that's the thing that's going to really start the undoing of the big monopolies. Because if you start to abandon these global tax treaties, and you're starting to see it, France is trying to do some stuff, the UK is trying to do some stuff, states individually in the United States are trying to sue these companies or tax them more. That's the, that's the first way to chip away at these monopolies is to basically say, fuck your global tax treaty, you need to pay X amount of dollars to be here.

• 43:20Chamath Palihapitiya?

  And it already exists because of these, you know, realist, uh, sorry, the retail tax nexuses and how e-commerce companies have to pay local tax in the areas. But once it sort of touches a whole bunch of other industries and countries, uh, I think that you're going to have that. That's why I think Yellen, Janet Yellen yesterday said that, you know, she's in support of trying to have a global minimum tax of 12%. Basically trying to get to the end state and tell every country, let's all circle the wagons and agree that we'll all just charge everybody 12% and then we won't go all our separate ways. The, the problem is that if you have a lot of usage in a country, you know, that country doesn't care what the taxation is in Zimbabwe, right?

• 44:03Chamath Palihapitiya?

  Or Canada, they're like, if I'm the UK or France, I'm like, I look at the top 20 apps in my country and I'm like, wait a minute, these guys would be paying me $50 billion a year in tax. It's hard to get away from the incentive to, to not want to tax these companies right now. Sacks. Any thoughts?

• 44:17David Sacks?

  Yeah, I don't have a huge thought on the, the IP issue. Um, it, it seems like, I know there, the Republican proposal on the infrastructure was six to 800 billion. Biden's proposal initially was 2.3, Chamath is right now they're down to 1.7. I think the, the markets have been choking on the size of all of this tax and spend. And the, there's been all these reports of inflation spiking. And so the growth stocks have just been hammered because we're all expecting big interest rate increases to control this future inflation. So, um, Biden's been horrible for growth stocks so far. And it really, I guess that what it shows is that, you know, what are growth stocks? Growth stocks are future investment.

• 45:01David Sacks?

  And it shows the way that the government can crowd out. When you have excess government spending, I guess you can call it investment if you want, but when you have excess government spending, it starts to crowd out private investment because it raises interest rates and that, you know, decreases the, the value of growth stocks and there's less money that flows into that.

• 45:23Jason Calacanis?

  Yeah, it does seem like the market reaction to the infrastructure bill and to inflation has made Biden reconsider his approach. And maybe he just came out too hot.

• 45:35David Sacks?

  I don't think Biden's reconsidering. I think it's people like Joe Manchin. Remember, it's Mark Warner, Chris Sinema, the moderate, there's three or four moderate Democrats in the Senate who I think are receiving the message. Jamal put it really well the last pod that the markets are sending a message to Washington. I think some of those centrist Democrats read the message. I don't think Biden's aware of it. I don't know what he's aware of. He doesn't seem too aware of anything to me. But I think the moderate Democrats are getting the message. And they're telling, they're telling the White House, the package is too big. And they're, and I think that's why it's coming down.

• 46:09Chamath Palihapitiya?

  The other thing that I think people may be getting their heads around, here's what's changed since last week. There's a growing body. If I had to say like, you know, the beautiful thing about the, the markets is that it is an extremely elegant voting mechanism in the short term. Right? I mean, Buffett says it's, it's a voting machine in the short term and a weighing machine in the long term. But if you look at sentiment and how things are voted on in the public markets in real time, it's incredibly illustrative. So there's a body of people now that are voting a very different scenario than inflation. What they're voting for now is this idea that by the fall, a lot of this short term pent up demand will have worked its way through the system. And instead, we'll be back to this realization

• 46:54Chamath Palihapitiya?

  that we've had for the last 20 years, which is, hey, wait a minute. People don't actually want to buy more of these physical goods. They're going to go back to consuming the way they did before. It's going to reflexively push towards technology companies again, and we're going to have this rebirth of growth. And you would say, well, how would you know that that vote is likely? And this one incredible thing happened this last week, which I just want to throw out here. One thing that I look at is this thing called 10 year break evens, which is basically a thing that the Federal Reserve of St. Louis publishes. And what it basically shows is like what people think collectively, trillions of dollars, what the 10-year breakeven interest rate is going to be. And it peaked last week at 2.54%.

• 47:36Chamath Palihapitiya?

  And it's fallen 13 basis points, just in the last week, down to 241. And I don't know whether it's sustained or whatever, but there is a growing idea that the worst may be behind us. And if you layer on top of this now, Biden pulling back, right, on stimulus because he can't get it done, pulling back on cap gains, pulling back on corporate taxation, and a more measured policy of investment, we could all be back by the fall.

• 48:07Jason Calacanis?

  So we're basically taking the medicine and getting back to where we were. But we still have massive asset inflation we're seeing in houses, cars, and other things.

• 48:16Chamath Palihapitiya?

  Well, we may have just pulled forward demand, meaning, you know, people are like, okay, I'm flush with money. The savings rate in the United States has been, you know, going at an incredible clip. People may pull forward all that spending and say, I was going to buy a car 18 months from now, or I was going to buy a house two years from now. Fuck it, I'm going to do it now because prices are going up too fast. I don't want to miss out. But then they're out of the market now for the next many number of years. And this is what I'm saying, where you see this short-term spike of demand, and then things get back to normal. If that's what we see, good times are back in growth stocks.

• 48:49Jason Calacanis?

  Yeah.

• 48:52Jason Calacanis?

  All in podcast sentiment levels. Go buy again. I literally, I did like two or three early-stage deals recently, and I had members of my syndicate say like, how does this valuation make sense? And I said to them, you know, it actually doesn't make sense if you're looking at it with the traditional metrics, but all valuations are higher at all stages. So I'm going to selectively, you know, overpay compared to what we were paying a year or two ago. You know, if I really love a company, but I will sit out a lot of, I'm sitting out a lot of rounds right now that I just can't get my head around the valuation. So hopefully some

• 49:28David Sacks?

  Well, there's always a trickle down. There's always a trickle down from growth stocks in the public markets to venture, right? Because the, the last private investors, like the big funds who do the super late stage stuff, they're just doing an arbitrage on what they pay versus what the company's going to list for publicly. So when they see those valuations go down, they adjust and then it works its way all the way down the stack. So, you know, growth stocks have just been hammered and especially all the recent listings, the IPOs and Sacks and everything and, and that's going to trickle its way down, I think, to venture. It's just a matter of time.

• 50:02Jason Calacanis?

  I think we have the, yeah, and I think we have the lead indicator on that as Clubhouse, right? Which will be the canary in the coal mine. I don't know how you guys reconcile.

• 50:09Chamath Palihapitiya?

  Explain, explain what's going on with Clubhouse, just for those of us.

• 50:12David Friedberg?

  Explain, explain what it is.

• 50:13Jason Calacanis?

  Okay. So Clubhouse is a casual audio space. You go into a room and you're immediately taken to a live conversation with people speaking on stage and an audience, audience members can be promoted to the stage and start talking. So you're

• 50:26David Friedberg?

  Wait, wait, hold on. It's in an app and it's all audio. So there's an app, there's an app you go in and it's all audio.

• 50:31Jason Calacanis?

  Yes.

• 50:32Chamath Palihapitiya?

  So it's like amateur night at a strip club, but for words?

• 50:34Jason Calacanis?

  Uh, or more comedy club, whatever. You just bring people on stage. Yeah, it's kind of like the champagne room, but a little different. Um, so anyway, and there we go. Our first consolation from the pod. Apple, 2000 signatures from Apple to remove All In from the podcasting app. We just lost three ranks in the Apple podcasting app. So what's very interesting about this app is that it had a massive number of downloads during the pandemic because people were home and people were not doing anything at night because they were sheltering in place. And, um, they had in, you know, 2 million downloads in January, 9.5 million in February of this year, and then came crashing down 2.7 million

• 51:16Jason Calacanis?

  in, in March and 922 in April. But at the same time, their valuation over 18 months went from a hundred million in their seed, when they had like three or 4,000 users to A billion to four billion in the last round of financing for a company with zero revenue. And let's call it a couple of million people using the app. And what's really interesting is the same venture firm led all three rounds, ala Sequoia's investment in WhatsApp, where they did all the private funding. So you have no outside capital marking this valuation, a $4 billion valuation, $4 billion.

• 51:52David Sacks?

  Well, they got a, they got an acquisition offer from Twitter for $4 billion and they, they turned.

• 51:57Jason Calacanis?

  Was that ever confirmed?

• 51:58David Sacks?

  I've heard it was real. So, so, but so basically the reason why the $4 billion private round happened was so that we keep going as an independent company. They could basically take some chips off the table through secondary and kind of go for the bigger outcome. But yeah, they could have just sold to Twitter for $4 billion.

• 52:14Jason Calacanis?

  So.

• 52:15David Sacks?

  They may end up regretting that.

• 52:17David Friedberg?

  But like, is this really a function of a broader inflation? Valuation inflation? Or is this just a function of there was a company that was a social network with hypergrowth? And then it turns out that the product had no stickiness and the hypergrowth went away.

• 52:32David Sacks?

  The souffle collapsed.

• 52:33David Friedberg?

  The souffle collapsed. Can I, can I, can I just point out like, and, and forgive me if any, any of you guys are investors in this company or anyone that's listening cares. But like, if this thing came out before YouTube, people would say, you know, this is interesting, but it needs an asynchronous killer. It needs a thing where you can like record a conversation, post it online and people can come and watch it and listen to it when they want. It was always so crazy to me that you had to be logged into the app to listen to what was going on. And if you didn't, you missed the conversation and there was no way to like, go watch the recording of the conversation. Like, am I crazy to think that this was just like?

• 53:09David Sacks?

  I think you, I think you nailed it that they don't have async in there. And actually I've got a little disclosure to make here.

• 53:15Jason Calacanis?

  Oh, what? What? The beat got wet, but it didn't get too wet.

• 53:23David Sacks?

  Breaking news story. Okay. So I think I understand what Clubhouse did wrong. Asynch is a huge part of it. But rather than tell you exactly, I'm going to show you because I've been incubating a new app.

• 53:35Jason Calacanis?

  What?

• 53:35David Sacks?

  Yes.

• 53:36Jason Calacanis?

  What?

• 53:37David Sacks?

  That we're. We're on test flight right now and you guys, after this pod, I can, I can demo it for you. And if you guys, if you guys want to invest, I'm going to close around this week for it.

• 53:49Jason Calacanis?

  Beak's getting wet?

• 53:50David Sacks?

  And so if you guys want to wait.

• 53:51Chamath Palihapitiya?

  What's our valuation?

• 53:51Jason Calacanis?

  What's the valuation? What's our insider all in? What's the besty vow?

• 53:54Chamath Palihapitiya?

  Yeah, what's the besty vow?

• 53:55David Sacks?

  I'll talk to you guys about it offline.

• 53:57Chamath Palihapitiya?

  How much, how much money do you want to raise?

• 53:59David Sacks?

  We're raising 10 million bucks and we already have commitments and, but I'm creating room for you guys.

• 54:04Jason Calacanis?

  Yeah. So 500K each? Sounds like 500K each. Or is it a million each?

• 54:10David Sacks?

  Let's talk about it offline, but, but the app's on test flight. I think we'll be ready to launch in a few weeks.

• 54:14Chamath Palihapitiya?

  Can I, can I say one thing?

• 54:15David Friedberg?

  Wait, what's it called?

• 54:17Chamath Palihapitiya?

  Can you tell what it's?

• 54:18David Sacks?

  Yeah, no, I'll say it. It's called Call-In.

• 54:21Jason Calacanis?

  Call-In?

• 54:22Chamath Palihapitiya?

  Call-In. I thought it was, I thought it was going to be called Glove Mouse.

• 54:28David Friedberg?

  Does this have a podcast?

• 54:30Jason Calacanis?

  Yeah.

• 54:31David Friedberg?

  After all, like, are we going to do the podcast on it?

• 54:33David Sacks?

  We absolutely could do the podcast on it and it would be awesome. Nick would be out of a job, so I don't think he would like that too much.

• 54:39Jason Calacanis?

  I wouldn't have the quality level, but I think it's good for call-ins. If we wanted to do a call-in show, it would be good for that.

• 54:43David Sacks?

  Yes, it'd be great, it'd be great to do, exactly. That's why it's called Call-In is because the ability for you to take callers is obviously a huge feature. But also like we could host after-parties for our fans to like, you know, chop up the latest episode and talk about it.

• 54:58Jason Calacanis?

  Yeah, these fans are getting crazy. Did you guys see the All-In Stats Twitter handle? I don't know the Twitter handle off the top of my head, but somebody's, these kids are doing, um, uh, they're using machine learning or something to know what percentage of time we each speak on the pod and how many monologues. And they're doing all these statistics. It's crazy.

• 55:18Chamath Palihapitiya?

  That's really cool. Um, I was going to say, uh, in defense of Clubhouse for a second, I don't, I don't know the app per se, but I think like why Andreessen did all of that, in my opinion, is because they're pressing a hot hand, which makes a ton of sense from their perspective. It's like, you know, I think that they're going for the kill shot because I think they're basically set up, they're basically set up to become Sequoia if, if they really, I mean, I think if you think about like which two firms are really crushing on all cylinders right? Now, obviously, Sequoia has always been the perennial number one. But if you think about the heater that Andreessen is on, it's incredible. And so from their perspective, the $4 billion valuation is less important than what is their real capital at risk?

• 56:01Chamath Palihapitiya?

  And that's probably 100 or 150 million, which in the grand scheme of having 40 or 50 billion dollars of AUM, if you consider the value of all their public positions as well, that's a really reasonable risk to take. So I think if you view it in that way, it's kind of like they're taking a shot to try to just, you know, go for it.

• 56:17Jason Calacanis?

  If it does become worth 10 billion or 50 billion, also, if it only gets sold for 500 million, they get their money out first. So what does it matter?

• 56:26Chamath Palihapitiya?

  What does it matter?

• 56:26David Sacks?

  They're going for the $100 billion outcome. I mean, they've seen that Instagram sold too soon. They saw that Snap turned down a $3 billion offer from Facebook and now it's worth 80 billion. So they're going for the $100 billion outcome.

• 56:37Jason Calacanis?

  YouTube, 1.6 billion.

• 56:38David Sacks?

  Yeah, now it's worth hundreds of billions. So they're hoping it's going to be like that. But Chamath is right. Look, if they had taken, what, say 20% of a $4 billion outcome, 800 million, that doesn't even pay back their fund, right? But if it ends up being $100 billion outcome, they make 20 billion. Now it's like a Coinbase for them.

• 56:56Jason Calacanis?

  And what do you think they gave to the founders?

• 57:00David Sacks?

  Well, who knows?

• 57:00Jason Calacanis?

  To keep them in the game because 4 billion, if they owned 80%.

• 57:05David Sacks?

  Yeah, they took chips off the table. But here's the thing, all those decisions were made before the recent collapse of engagement at Clubhouse. I'm not sure anybody would be paying 4 billion for it now, given everything that's gone wrong. But, you know, who knows? It's still pretty early.

• 57:20Jason Calacanis?

  And just for people who are curious, there is a Twitter handle, AllIn underscore stats. And yeah, it's AllInStats.com. I don't know, we're not affiliated with these maniacs. But we love the Stans and we're going to do something in person in September. Congratulations to the Stans for losing their minds. I think it's a pretty good way for them to capture a bunch of attention on the Twitter. All right, crypto is getting absolutely hammered. And it's, the Chinese have once again said,

• 57:54Jason Calacanis?

  That they're basically saber rattling about cryptocurrency. They're obviously going to do their own.

• 57:59Chamath Palihapitiya?

  Jason, I think you have to talk about China in a slightly broader lens than just what's happening in crypto. Because like this is the same week where they basically they've they forced, you know, Zhang Yiming to resign from ByteDance. I mean, you know, last week it was or last month it was the CEO of Pinduoduo.

• 58:17Jason Calacanis?

  And Jack Ma's MIA.

• 58:19Chamath Palihapitiya?

  They're going for the jugular. I mean, it's like.

• 58:21Jason Calacanis?

  Where what? Why are they taking out all their top CEOs? This would be like putting Elon and Jeff Bezos on the bench. Is it they just don't want any heroes?

• 58:31Chamath Palihapitiya?

  I don't know. I mean, I guess maybe the speculative part of me would say they're showing them who's really in charge of these companies.

• 58:39Chamath Palihapitiya?

  I mean, it would be crazy to your point if the government of the United States forced Sundar Pichai and Tim Cook and Mark Zuckerberg and Elon Musk to resign. It's like, hey, sorry, I'm sorry. You need to leave right now and put somebody else in.

• 58:52Jason Calacanis?

  And deactivate their badges.

• 58:55David Sacks?

  Yeah, we just we just relentlessly criticize them, right? But but yeah.

• 58:59Jason Calacanis?

  Yeah, we just demonize them. We just try to cancel them.

• 59:02David Sacks?

  But look, but they deserve that level of scrutiny because of the amount of power they have. But but yeah, that we don't. We don't put them in jail or house arrest or drive them out of their companies. And that is a big advantage for the US economy.

• 59:14Jason Calacanis?

  The Treasury Department here in the United States is doing a little saber rattling. They want to know anytime there is a $10,000 transaction in any kind of digital token. And they're talking about a CBDC to do their own cryptocurrency. So they're putting out a white paper for feedback this summer. And we are now seeing a pullback on Bitcoin from, you know, mid 60s to, you know, now into the 36, 37,000 per Bitcoin. Do you think this is the end of the beginning, beginning of the end?

• 59:48Chamath Palihapitiya?

  It's the beginning of the beginning. David Rubenstein was on CNBC today and David Rubenstein, for those of you guys don't know, is was a co-founder of Carlyle Group, you know, more blue chip and blue-blooded you cannot get and very connected in Washington. And, you know, he said it best where he said, you know, effectively, the people want this and the government will have no choice except to support it because you can't take something like this with this much institutional and retail demand away. So we have to go to the place where now crypto needs to be like everything else. And maybe the crypto stands get upset with that because they don't like it that, you know, a bunch of their parents are all of a sudden going to be buying tokens and stuff, but they got to get over it. Then

• 1:00:33Chamath Palihapitiya?

  this stuff should be, you know, transacted in the same way you transact anything else. You buy it, you sell it, you get a tax return, you pay your taxes and you move on.

• 1:00:41Jason Calacanis?

  This reminds me of the transition that we all went through with, I don't know if you remember Kazaa and Napster and BitTorrent, like everybody, all the, we, a lot of our contemporaries in their 30s, you know, whatever, 10, 20 years ago, were like, you can't stop it, you can't stop it. And it got stopped. You know, like you made it illegal and you prosecuted people. And then you came up with solutions that were regulated like Spotify or, you know, Netflix and you gave the consumers what they wanted. So David, do you think this is a similar path right now that we're going through, which is the crypto zealots and the, and the, and the stands are gonna basically have to get used to, as Chamath's saying, their parents buying it and

• 1:01:24Jason Calacanis?

  crypto not being this underground thing, but being regulated in a, in a major way in the United States? And is that a good or bad thing?

• 1:01:29David Sacks?

  I, I think the thing that that's happening quietly behind the scenes is that major Wall Street players, institutions, endowments and so forth, over the past year have decided that Bitcoin and crypto is a legitimate asset class and they've been allocating to it. Huge, huge pools of capital, balance sheet capital have been allocating into it. I don't think that's gonna change. This is probably a pretty good buying opportunity. We've seen these crashes and Bitcoin many, many times over the years. It plummets down and then it goes back up and it eventually goes back up, reaches a new peak. So this is probably a pretty good entry point for the next rally. We don't know when that's gonna be. But the whole point of Bitcoin is that...

• 1:02:10David Sacks?

  It's censorship resistant and China can do its best to try and stamp it out, but I don't think they'll be successful at that.

• 1:02:17Jason Calacanis?

  You don't? Oh, you're so wrong about that. That is the most naive take, worst take you've ever had.

• 1:02:23David Sacks?

  How's China gonna stop Bitcoin?

• 1:02:25Jason Calacanis?

  Uh, how do they stop VPNs? They put people in jail. How do they stop religion? They put people in jail.

• 1:02:29David Sacks?

  They may make it incredibly hard for Chinese citizens to get a hold of Bitcoin. I agree with that, but they're not gonna be able to stop Bitcoin.

• 1:02:36Jason Calacanis?

  They're not gonna stop Bitcoin in the West, but they will stop it in China. 100% full stop. And you know how many servers are in China? I mean, go talk to the people who were in Tiananmen Square about what happened.

• 1:02:48David Sacks?

  The miners will have to move out. The miners will have to move out.

• 1:02:50Jason Calacanis?

  Miners are done. And then if it'll be an underground thing, it'll be like having a VPN, which is five years in jail for selling VPNs.

• 1:02:57David Friedberg?

  What do you think about the IRS requirement that you have to report any Bitcoin transaction over $10,000? Do you think that that, and Americans can be prosecuted for not reporting? Right? So I don't know how much.

• 1:03:08Jason Calacanis?

  That's, that's alright.

• 1:03:10David Sacks?

  Fine.

• 1:03:10Jason Calacanis?

  Good.

• 1:03:11David Sacks?

  So what?

• 1:03:11Jason Calacanis?

  Do it.

• 1:03:11David Sacks?

  So what?

• 1:03:12Jason Calacanis?

  Get over it. But I do think that will get rid of 20% of the transactions that might have been nefarious.

• 1:03:17David Sacks?

  This is the Silk Road fallacy that, you know, that the only legitimate use for crypto or.

• 1:03:23Jason Calacanis?

  Why I said 20%? I didn't say only.

• 1:03:24David Sacks?

  Okay, fine. But so maybe that makes that, that small fraction of illegitimate or illicit use cases.

• 1:03:32David Friedberg?

  No, Sax, I think the point is that they're trying to chase down, it's not about illegal use cases, it's about not reporting a taxable gain on your Bitcoin before you use that money to buy something.

• 1:03:42David Sacks?

  So sure, of course, it's about tax evasion. But look, but that, but that's not, that's not gonna stop Bitcoin usage. You know, smart people who've been trading Bitcoin, been paying taxes on it for years. That's not, I don't think that's really an issue. If you were in China and you had created your wealth in China or many, many other countries all over the world, and there were currency restrictions and controls, and the government was asserting more and more power, and we're putting business leaders under house arrest and, and seeking to put them under their thumb, you'd be trying to convert as much of your net worth into Bitcoin as possible, so that all you have to do is if you ever had to flee the country, you wouldn't have to have dollars in your suitcase. Or gold bricks or diamonds, you'd simply have to have a password in your brain that you could

• 1:04:26David Sacks?

  access at any computer terminal when you got out of the country. And so that I think that sort of digital gold is a phenomenal use case of Bitcoin. And the more oppressive all these countries become, the more they increase the value of that use case.

• 1:04:41David Friedberg?

  What do you think is the black swan event in crypto and Bitcoin in particular?

• 1:04:47Jason Calacanis?

  Taxation in the United States, a 10% additional taxation like you do on cigarettes. That would be for me. The United States putting a tax on it that makes it less competitive with our our national coming cryptocurrency, the CBDC that the United States will launch in the next two or three years. They're going to say, if you want to use any of these other currencies, there's a 10% tax on them. We want you using ours, the legitimate one.

• 1:05:12David Sacks?

  There's a very negative black swan that obviously has never occurred. But if anyone ever manages to counterfeit a Bitcoin, or this is the double spend problem, right? If you could ever, if you could ever double spend or figure out a way to create Bitcoins or counterfeit them, whatever, that weren't in the blockchain, if the number of Bitcoins ever grew beyond the 21 million, that's just built into the way that the whole thing works. If that ever happened, Bitcoin is instantly worthless. That would be the black swan on the negative side. I think the black swan on

• 1:05:43Jason Calacanis?

  If it didn't happen in the first 11 years, what do you think the likelihood on a percentage basis that it happens in the 20th?

• 1:05:49David Sacks?

  Exactly.

• 1:05:50Chamath Palihapitiya?

  It's too expensive now, and it's too, it's too visible. Like, the way that it would have happened, it would have happened in the first two or three years.

• 1:05:56David Friedberg?

  Or the argument could be maybe opposite, that now it's so valuable that it's worth investing to figure out how to get, yeah. And rather than have it be about a diminishing probability, it could be an increasing probability over time, which is that the pathways to get there start to get resolved, whereas in the past, you didn't have enough time to resolve those pathways. And I'm speaking highly theoretical here, but like, certainly, there's a lot of technical

• 1:06:19Jason Calacanis?

  Take into account that it's open source and that everybody can see it. So you would think that everybody would discover the vulnerability at the same time, right? In an open source project?

• 1:06:27Chamath Palihapitiya?

  Well, no, I think the issue practically speaking in this would be that you would see those resources getting organized, meaning you'd see silicon being bought in volume by some centralized player, and then you'd have to see water and power come together as well. And this is where I think it's just not realistic, where today, I think the horse has left the barn, because if you try to basically capture enough hash rate to kind of like overpower this network, it's like the scene in Austin Powers where he's screaming in front of a steamroller, but the steamroller is moving at like one foot a minute.

• 1:07:03Jason Calacanis?

  Right.

• 1:07:04Chamath Palihapitiya?

  It's just like, you just see it coming.

• 1:07:06Jason Calacanis?

  Well, would you have a black swan, Friedberg? You asked a load of questions, so do you have one?

• 1:07:10David Friedberg?

  I think about it a lot. I don't really, I mean, it's a black swan, it's because it's a black swan, so you don't really see it coming, but like, you know, the thing about Bitcoin, which has always given me pause, is the fact that the only way it works is if everyone believes that more people are going to believe in it tomorrow than believe in it today.

• 1:07:33Jason Calacanis?

  Well, that's the only way it appreciates.

• 1:07:35David Friedberg?

  Yeah, but for a variety of reasons, it's also the only way that it works, because if it starts to depreciate, it becomes almost like this unwinding circumstance. And there are moments where it unwinds, but then people kind of say, well, you know what, more people are going to get on this. There's the Chinese argument, there's the Argentinian argument, there's all the reasons why people will try and store wealth in this system, and that becomes a rationale for continuing to bet on it. And my observation is so many people that are active in Bitcoin compare Bitcoin to the price of the dollar, which to me seems like it doesn't make sense relative to the intention of Bitcoin, which is to not be

• 1:08:15David Friedberg?

  part of the monetary system that uses the dollar as kind of a de facto, you know, system of value. And so why have the comparison to the dollar as the objective for Bitcoin? Why is the objective not transactions, use cases, number of people that are active on the network, et cetera, et cetera?

• 1:08:34Jason Calacanis?

  And nobody buying it is buying it as a substitute for dollars. They're buying it as a lottery ticket.

• 1:08:38David Friedberg?

  So, yeah, that's right. And so then it becomes this rationale that it's like it's an investment that you put money in. In the form of dollars or your local currency with the intention that you will be able to get more of your local currency out at some point in the future. And the only way that works is if you expect someone else will buy it from you at a higher price in the future. Therefore, it's all about propagating the, you know, the marketing around the Bitcoin. Whereas if your objective was really about making this become a replacement currency system or replacement monetary system, you would ultimately care less about, you know, what's the dollar value per coin and you would care more about how many people are using it, you know, how active.

• 1:09:14Jason Calacanis?

  Let me build on that question then. So Sax or Chamath, if this CBDC and Americans' currency, you know, starts to move towards a Bitcoin blockchain-like experience, what would America start to look like if 10 or 20% of your dollars, instead of being held in a bank, were on a blockchain with an American?

• 1:09:35David Sacks?

  A government-backed blockchain doesn't accomplish anything.

• 1:09:40David Friedberg?

  It's still centralized.

• 1:09:41David Sacks?

  It's centralized. Not only is it centralized, but also it's still prone to debasement, right?

• 1:09:48Jason Calacanis?

  Yeah.

• 1:09:48David Sacks?

  And so, look, human beings have used everything from gold coins to seashells as money. We can make anything money that's easy to transact if we all agree on it. That's the sense in which Bitcoin is the bubble that becomes true if everyone believes in it.

• 1:10:02Jason Calacanis?

  That's right.

• 1:10:03David Sacks?

  Provided, provided the number of Bitcoins stay at 21 million and that the technology enforces the scarcity. The problem we have with the US dollar is the government can just print as many of them as they want.

• 1:10:13Jason Calacanis?

  Yeah, you change the denominator problem.

• 1:10:15David Sacks?

  Yeah. And so I think there's a positive black swan as well, positive for Bitcoin, which is Stanley Druckenmiller thinks that the next 15 years, the US dollar will no longer be the world's reserve currency. Well, what's going to replace it? The positive black swan would be that Bitcoin becomes, if not the, a world reserve currency, an unofficial world reserve currency. Why? Because people trust it. They trust the decentralization more than they trust any government. And that would, that would be a big flip.

• 1:10:46Jason Calacanis?

  Chamath, is that in, is the United States and China, are they going to let Bitcoin become the world's reserve currency?

• 1:10:53Chamath Palihapitiya?

  Well, it's not a choice that they have.

• 1:10:56Jason Calacanis?

  You sure?

• 1:10:56Chamath Palihapitiya?

  So, yeah. There's nothing they can do.

• 1:11:00Jason Calacanis?

  What about the law and guns and jail and tax?

• 1:11:03Chamath Palihapitiya?

  I don't, I don't know what that means. There's, there's nothing that they could, there was nothing that they could do to stop it before. There's nothing that they can do to stop it now.

• 1:11:11Jason Calacanis?

  Well, you can't get the New York Times in China and you can't practice religion there. So they have a pretty easy system. They put you in jail. They want to stop Bitcoin. They could just put you in jail.

• 1:11:18Chamath Palihapitiya?

  How?

• 1:11:20Jason Calacanis?

  By finding out that you have Bitcoin and just, well, because they have a hundred percent view into the internet there.

• 1:11:28Chamath Palihapitiya?

  How?

• 1:11:28Jason Calacanis?

  On, because they have routers. That's how they capture all the Uighurs is they know their location because they have mobile phones. And when they use Signal or any other encrypted technology, they catch them.

• 1:11:38Chamath Palihapitiya?

  No, I don't, I don't think that's how it works, but.

• 1:11:40Jason Calacanis?

  That's how they catch all the dissidents there is they, they have them and they also have Apple's entire data center is controlled by the Chinese government.

• 1:11:48Chamath Palihapitiya?

  There's no ledger somewhere that says this specific wallet address equals David Sacks and there's not going to be one anytime soon. And so you'll have these centralized wallet authorities that actually, you know, have a lot of account information, but the reality is the sophisticated actors, you know, use tumblers, they, they, they washed sort of like their, their paths in a way where it's very difficult to figure out who these people are. Now, if you, if you don't, if you use a site that doesn't have KYC, that's always going to be the case. And, you know, people with huge amounts of Bitcoin are sophisticated enough to know how to stay anonymous if they want to. For everybody else who doesn't care, because for them it's sort of an investment asset class and an, you know, a hedge,

• 1:12:31Chamath Palihapitiya?

  then they're not going to care either. And the point is when enough people own it, governments aren't in a position to track record of them just waking up one day and pulling the plug on anything is zero. That's not how people do things. You have to have like centralized policy and support. And I don't see it one way or the other. Of all the things that China and the United States will face over the next 30 or 40 years, this is like 50th on the list.

• 1:12:57Jason Calacanis?

  Sacks, what do you think? Any closing thoughts?

• 1:13:00David Sacks?

  I mean, I think we've said it. So, yeah, I mean, look, I think, I think if you're going to stay in a place like the United States, you need to comply with tax law. You're absolutely going to report your Bitcoin holdings if it's required. But if the reason you're buying Bitcoin is because you're fleeing a country, or you're worried about fleeing a country, you're obviously not going to report it. And that's the, that's the advantage of it is that it's a portable money supply that, again, you can just, you don't have to carry anything with you. You just put a password in your brain wallet.

• 1:13:30Chamath Palihapitiya?

  Tell me about UFOs before we leave. I mean, can you believe this thing? This is the craziest thing. I, I-

• 1:13:35Jason Calacanis?

  So, there was a, yeah, there's a 60 Minutes episode that just happened. Deputy Assistant Secretary of Defense for Intelligence literally said, "The crafts we're seeing are," and then in quotes, "far beyond anything that we're capable of. There's nothing we could build that would be strong enough to endure the amount of force and acceleration. Imagine a technology that can do 700 G-forces, fly 13 miles per hour, evade radar, and has every, no obvious signs of propulsion, and yet can clearly defy the effects of Earth's gravity. That's precisely what we're seeing from the Director of Advanced Aerospace Threat Identification Program."

• 1:14:08Chamath Palihapitiya?

  I mean, is this real? Like, how is, what? What do we do? What?

• 1:14:12Jason Calacanis?

  Our government says there are crafts that outstrip our arsenal by at least 100 years to 1,000 years at the moment. And we're like, meh. What do you think, Friedberg? You're the scientist here.

• 1:14:22David Friedberg?

  There's a, if you read the original treatment written by Arthur Clark for the movie 2001: A Space Odyssey, which was written before the movie, and then the book was written after the movie,

• 1:14:36David Friedberg?

  he makes a really compelling point. And the point he makes is that when civilizations achieve a sophisticated enough level of technology, there's no longer a need to physically transport yourself from star to star and transport yourself around the universe. Think about this for a second. Take what we have from virtual reality today and fast forward 200 years. And then take what we have in terms of, you know, the ability to print and create anything we want on demand and fast forward two or 300 years. Those two conditions alone might give us the ability to strap on something to our brain. And literally, and remember, our brain is simply sensing what our body is given.

• 1:15:19David Friedberg?

  And if you can control what your brain is sensing through some strap on device or whatever, you don't actually need to physically be in the place where that happens. So if we can remotely sense what's going on somewhere else in the universe or some other part of our planet, and we can remotely pick up those signals and view them or experience them, you don't need to physically be there. But all this, I'm sorry, all this via strap on? Okay, and then secondly, I shouldn't have used the term. And then secondly, if you could print anything you want. But think about if you guys ever watched the TV show Star Trek: Next Generation, which I would guess maybe one of you did. Or The Replicator or The Holodeck, and you could walk in there.

• 1:15:56Jason Calacanis?

  I rank it number three on my list of Star Trek series.

• 1:15:59David Friedberg?

  If you walk in and you could literally recreate the physical space that you want to be in to accomplish anything, The Holodeck, and then you could print anything, why would you use all the energy and all of this work to transport physical matter from one part of the universe to the other when all matter is transmutable? And the only thing that differentiates things is the photons coming off that matter, which is just to sense it. So if you can sense things remotely while you're physically here.

• 1:16:23Jason Calacanis?

  Why go through the trouble?

• 1:16:23David Friedberg?

  Why go through the trouble?

• 1:16:24Jason Calacanis?

  For the same reason that we go to Hawaii and not just watch a movie.

• 1:16:29David Friedberg?

  No, because we don't have enough of the sensing capabilities today to truly recreate being in Hawaii. But imagine if we did, and we are very much on the path to doing that. And in two, 300 years, we have the ability to physically recreate what it's like for our body to be in Hawaii in every form, smell, taste, color, everything about being there physically, and our body experiences it. Why the hell would you fly to Hawaii? You could meet people, you could socialize. So in a world, in a world where that technology exists, which could, by the way, be Neuralink, right? Where you can, you know, put these signals directly into the brain, etc. Moving physical matter from one part of the universe to the other makes zero sense. All matter is trans... It's mutable. You can convert one atom to another using a technology locally. So you wouldn't do that. And so that's the premise of 2001 is that you've got these local communication pods

• 1:17:14David Friedberg?

  that just transmit information from different parts of the universe. You don't need to physically transport yourself. So that's the, that's the, the macro kind of argument against this notion that UFOs or aliens are in a physical spacecraft visiting. It's so old school technology that it makes no sense. It's like saying, you know, oh my gosh, all these people are coming over to the United States on horses from Europe, you know, like it just like, why would they do that? Why would they use a horse? Uh, so, so I think that's the argument against UFOs being aliens in spacecraft. Now, is there really cool technology that has this advanced capability and there are these crafts that are in our sky and someone has that technology? Maybe. Um, but I, I'm not sure about this general thesis.

• 1:17:54Jason Calacanis?

  I mean, you blew my mind with that. So.

• 1:17:56David Friedberg?

  Yeah.

• 1:17:57Jason Calacanis?

  Sax, uh, I, you obviously don't care. So we

• 1:18:02Jason Calacanis?

  I have no way for this to increase the IRR of my fund or to get me another home. Beep boop bop boop. On planet earth, why would I want to go?

• 1:18:12David Sacks?

  I just somehow feel like if they're really UFOs, it'd be like an even bigger story. Like we'd all know it. You know, it's not going to be some like weird fringe conspiracy thing.

• 1:18:22Jason Calacanis?

  Here's the, here's the thing.

• 1:18:23Chamath Palihapitiya?

  I do not care about emotions of humans.

• 1:18:25Jason Calacanis?

  I can tell you why this is bullshit.

• 1:18:27Chamath Palihapitiya?

  The emotions of others.

• 1:18:28Jason Calacanis?

  Every single photograph that's been taken in the last year is absolutely recognizably better than the one taken 10 years ago. And every single photo or video of these aliens looks like it was shot in a, on a camera from 1950 on film that was left in somebody's basement.

• 1:18:48David Friedberg?

  And meanwhile, Pixar movies can recreate literally the ocean glimmering.

• 1:18:52Jason Calacanis?

  We're recording this on Zoom. Why can't it get me a clear shot? There's not one clear shot of this.

• 1:18:57David Sacks?

  Show me the alien in 4K, high def, and then I'll believe it.

• 1:19:02Jason Calacanis?

  Have you ever seen SpaceX launch where it has a camera by the engine and we can see the engine? Like, why can't we get a shot of the?

• 1:19:08Chamath Palihapitiya?

  Until then, I will be traveling between my homes, living my best life.

• 1:19:12Jason Calacanis?

  I am living my best life, not in San Francisco. We will get Chesa Boudin recalled.

• 1:19:17David Friedberg?

  I will tell you, Sax, I don't think you need to harp on the Chesa point anymore because I don't hear anyone making the case on the other side anymore.

• 1:19:24David Sacks?

  Dustin Moskovitz.

• 1:19:26David Friedberg?

  He did publicly?

• 1:19:27David Sacks?

  Yes.

• 1:19:28Jason Calacanis?

  What, from Asana?

• 1:19:29David Sacks?

  Yes. Nick, pull up the tweet. So, you know, I've been basically because look, there

• 1:19:34David Friedberg?

  Oh, we fired him up. Here we go.

• 1:19:35David Sacks?

  No, let me get this in, then we can take off, so.

• 1:19:38Jason Calacanis?

  Insert quarter here.

• 1:19:42Jason Calacanis?

  My rage upgrade.

• 1:19:43David Friedberg?

  Yes.

• 1:19:46Jason Calacanis?

  Run rage function now.

• 1:19:49David Sacks?

  No, look, we're taking all this heat from these stupid reporters who are talking about our donations. You know, like asking what are we up to? Look, we're very public about what we're up to, but

• 1:20:00Jason Calacanis?

  This is a terrible tweet from Dustin.

• 1:20:02David Sacks?

  There, there've been these tech billionaires, Dustin Moskovitz, Reed Hastings, and Mike Krieger. And they've been donating money to, to Chesa Boudin and Gascon in LA.

• 1:20:14Jason Calacanis?

  That's disappointing.

• 1:20:15David Sacks?

  Yeah, horrible. So I asked, I just said, why are you donating money to this insanity? And Dustin's still defending it. And then he said, and then he said, I'm going to mute you now because, you know, he didn't want to, he didn't want to take me on.

• 1:20:26Jason Calacanis?

  Wait, just in fairness, let me pull this up. Dustin's quote is, I live in the city and I'm not going anywhere. Crime happens to me too. Trust me. We write extensively about why of our grants here. You know, here's the thing. I think Dustin Reed Hastings and their spouses are very involved in criminal justice reform. And what we have to do is give somebody like Dustin or Reed Hastings the benefit of the doubt here and say, we understand your donations were meaningful to you and you wanted to maybe lower the incarceration of black people in jail for crimes that were not violent. And we agree. Let's

• 1:21:04David Sacks?

  No, no, no. I'm not giving them the benefit of the doubt. Let me explain why. Okay. So Reed, so this is a good example. This Reed Hastings thing is a good example. By the way, just today it was announced that he donated 3 million to Gavin Newsom. In any event, so, you know, he keep, he, he, look, he's on that side of the spectrum. By the way, there's a little backstory there. I don't know if you guys remember when there was pressure on The Facebook board to kick Peter Thiel off back in 2016. It was Reed Hastings. That was from Reed Hastings. Okay. So the guy is very close minded.

• 1:21:33Jason Calacanis?

  I think it's his wife is actually handling this specific stuff.

• 1:21:36David Sacks?

  He was the board member who pushed to get Peter off because he couldn't handle the fact that there might be another board member who disagree with him politically. So it's a very closed minded point of view, but let's take, let's take this example of crime in LA. Okay. So we had this election where George Gascon, who was a failure as DA in San Francisco, he goes down to LA and runs against the, the veteran DA down there, Jackie Lacy, who it happens to be a black woman, a veteran, seasoned DA, competent. Nobody had a problem with her. I think she's a Democrat. Okay. It's not like this is a right wing person. And so George Gascon basically fails his way out of San Francisco, goes down

• 1:22:17David Sacks?

  to LA and he basically dislodges her from that seat with $15 million, an unprecedented amount spent in a DA election. Where did that money come from? 5 million came from Soros, 5 million came for Reed Hastings, 5 million came from BLM. Now, you know, in any other context, the idea that you're going to fire a talented, competent, seasoned veteran, black woman and replace her with an incompetent white male, that would be seen as institutional racism. But nobody complained about it at all, but it's outrageous.

• 1:22:53Jason Calacanis?

  What is there, what is the most charitable?

• 1:22:55David Sacks?

  What's behind that?

• 1:22:57Jason Calacanis?

  What is the most charitable view of why they're supporting Gascon and Chesa Boudin?

• 1:23:03David Sacks?

  Well, there, there's this decarcerationist agenda. And so yes, you're, you're right that they see mass incarceration as a problem, but the problem, it is, but the solution is not mass decarceration. That we need something in between. And the problem with Gascon and Chesa Boudin, they just want to let everybody out. They don't want to put people in prison.

• 1:23:23Jason Calacanis?

  They also don't want to add anybody. So I think if their agenda is to lower the number, adding people is against that. There are people who need to go to jail. Murderers need to go to jail.

• 1:23:31David Sacks?

  There are now people dying every day in San Francisco by, at the hands of repeat offenders who Chesa Boudin has made the decision to let them out of jail, even though they should be in jail. These are dangerous, violent felons.

• 1:23:46Jason Calacanis?

  The problem with this is, I think, Chamath, I would like to get your feedback on it, is, you know, you, when a person gives these kind of donations and they make it their public persona, and it doesn't go well, how does one,

• 1:24:03Jason Calacanis?

  you know, I don't know, disentangle or reconcile, they made a bet that had a bad outcome? Because this is obviously a bad outcome. You don't want the city to devolve into chaos.

• 1:24:16Chamath Palihapitiya?

  I don't particularly care about San Francisco. And I think, I think the two, the two of you guys can talk about it on No, I'm done. I'm gonna get rid of my place in the city. On Colin, but I, I couldn't care less about how that city's run. I think I'm done too.

• 1:24:28Jason Calacanis?

  Well, any closing thoughts, Friedberg?

• 1:24:30David Friedberg?

  I, I, I got, I got nothing to say.

• 1:24:32David Sacks?

  Okay, I want to add just one thing. Look, I, so I care because I live there, but, but this trend, this is not just San Francisco, this whole idea of these radical decarcerationists, they are running for DA in every major city. This is going to be a national trend, and they're going to cause a lot of carnage, a lot of death and destruction, until the people realize, and there will inevitably be a backlash to this, and hopefully, just not too many people die.

• 1:24:58Chamath Palihapitiya?

  Fair enough. I, I don't want to be too flippant. My point is, it's a really important debate. It's going to happen in, in every city, but folks need to get engaged in those cities and do something about it.

• 1:25:08David Friedberg?

  If, if you want to hear the argument of why this is happening, you can go watch the TED Talk on YouTube of Adam Foss, F-O-S-S. He was the original, like, proponent of the DA's coming in to drive the decarceration, uh, decarceration movements. Um, and, uh, you know, I just think it's important to be informed of the other perspective, uh, in evaluating where folks are coming from that are, that are proponents for this movement.

• 1:25:34Jason Calacanis?

  Yeah, I'm trying to be charitable towards their position, Dustin and Reed, if you want to come on the pod and be a bestie guestie, I guess, maybe?

• 1:25:41David Sacks?

  Dustin, Dustin responded to me and said, listen, we don't know what the counterfactual is if we had a more aggressive DA. That was his argument, is we don't know the counterfactual.

• 1:25:48Jason Calacanis?

  That's ridiculous.

• 1:25:48David Sacks?

  So I, of course, so I posted a list of people, of innocent victims who've died, okay? Because, directly because of a decision that Chesa Boudin made. That's your counterfactual.

• 1:26:00Jason Calacanis?

  Yeah.

• 1:26:01David Sacks?

  That's your counterfactual.

• 1:26:02Jason Calacanis?

  All right. Listen, it's been an amazing episode and no plugs, no ads, no nothing. If you like the show, great. And if you don't like it, how the hell did you make it to the minute 75 for the queen of quinoa, the dictator himself, Chamath Pabatia? I'm having steak tonight. He's having steak tonight. Steak and cake tonight. If you're vegan, David Friedberg, you're not invited to steak dinner. I'm having beers tonight. I'm having beers tonight. You're having beers and roasted eggplant tonight. You've never eaten fish in your life, never had sushi. And Sax is eating everything. By the way, that's true. I don't know if our listeners are gonna know. Sax, are we gonna talk about Sax's health? What's your first, second, and third dinner tonight?

• 1:26:46David Sacks?

  I'm on a seafood diet. I eat, I see the food and I eat it.

• 1:26:51Jason Calacanis?

  Sax, if we take out your Postmates slash Uber Eats account right now, how long is it gonna be? Eat it out, eat it out. What's happening? What's happening? What's coming up?

• 1:27:02David Sacks?

  I guess you'll be the fat guy on this pod. I don't get it. This is not, this can't be happening. This can't be happening.

• 1:27:08Jason Calacanis?

  It's happening. This is your Twilight Zone episode. I just bought, I'm going, I decided I'm going twice a week with the trainer and I just bought the hydro. So now I have tonal Peloton tread and I got the hydro. I'm going from smart machine to smart machine. Hey, are you SPAC? Oh, I gotta [bleep] Chamath. Oh, good question. No, no, no. No comment? No comment. Okay, sorry. I just saw some tweet.

• 1:27:32David Sacks?

  People have other things to do.

• 1:27:33Jason Calacanis?

  Guys, I gotta go. I gotta go. I gotta go. All right, everybody. Love you besties. Love you Sax. Yeah, get a salad. Okay, we love you. Bye, besties. You need a salad? And of course, the dictator here, Chamath. Absolute dictator. The dictator himself, Chamath Pabatia. The dictator.

• 1:28:23Chamath Palihapitiya?

  And at some point, you have to figure out whether you actually want your kids to have asthma or not, or you care more about the land grass.

• 1:28:33Chamath Palihapitiya?

  People think money is free, and it's not.

• 1:28:37Speaker 04

  People think money is free, but it's not.

• 1:28:42Chamath Palihapitiya?

  I get thousands and millions confused.

• 1:28:44Speaker 04

  I get thousands and millions confused.

• 1:28:46Chamath Palihapitiya?

  I get thousands and millions. Firing on also with this.

• 1:28:51Chamath Palihapitiya?

  Ultra laundry billionaire has bought the French laundry.

• 1:28:55Chamath Palihapitiya?

  Just wanna be called king.

• 1:28:59Chamath Palihapitiya?

  The little guy getting run over. I just can't stand that.

• 1:29:04Chamath Palihapitiya?

  The flash.

• 1:29:11Chamath Palihapitiya?

  It's hard to make it, it's hard to make good investments, it's hard to build a company, because if it was easy, everybody would be doing it all the time.

• 1:29:19Chamath Palihapitiya?

  This one man for yourself, it's all about you, you can figure it out. The rugged individualism, that's just not realistic, like. Anybody who wants, who's listening to this, who wants to go to the French Laundry, stay at home, pour a bunch of salt on whatever you're gonna eat. Melt a stick of butter in the microwave. Melt a stick of butter in the microwave, drink it, and then basically take fifteen hundred dollars, light it on fire, you've been to the French Laundry.

• 1:29:50Chamath Palihapitiya?

  It's hard to make it, it's hard to make good investments, it's hard to build a company, because if it was easy, everybody would be doing it all the time.

• 1:29:59Chamath Palihapitiya?

  This one man for yourself, it's all about you, you can figure it out. The rugged individualism, that's just not realistic, like.