E82: All-In Summit: Claire Cormier Thielke on China + Q&A with Flexport's Ryan Petersen

This talk was recorded LIVE at the All-In Summit in Miami and included slides. To watch on YouTube, check out our All-In Summit playlist: https://bit.ly/aisytplaylist 0:00 Claire Cormier Thielke's AIS talk: "Tomorrowland: China Placemaking and the Future of Innovation" 17:40 Claire takes Q&A with the Besties + Ryan Petersen: Understanding the China/US rivalry 24:08 How the Evergrande debt situation impacts the greater Chinese real estate industry, China's still-nascent middle class, How China is subsidizing its negative birth rate 34:30 Ryan Petersen breaks down Flexport's business, the tumultuous past few years, and how DTC might be in major trouble 46:34 Asset-heavy play as a hedge against the popular trend of asset-light, velocity vs. speed, Flexport.org's humanitarian relief shipping, China's influence Follow the guests: https://twitter.com/clairethielke https://twitter.com/typesfast 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 Intro Video Credit: https://twitter.com/TheZachEffect

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

• 0:00Jason Calacanis?

  We're really excited to have Claire with us. Come on out Claire. Are you here? All right. What are we... Welcome Claire. What will we be talking about today?

• 0:10Speaker 01

  We're gonna be talking about China. You know? Just as everything has been all spicy.

• 0:15Jason Calacanis?

  Yeah, well, just again, we're trying to make today about just easy breezy topics, you know, the most easiest things to manage. So we... Armaments, Ukraine. Let's go to China, sure. Uh, please welcome Claire.

• 0:28Speaker 01

  Thanks.

• 0:49Speaker 01

  We are going to actually keep this pretty apolitical today and maybe talk a bit about the parts about China that are less discussed in the headlines. And, you know, Jason reached out and he said he wanted to really understand what were some problems and I wanted to see solved, that we wanted to see solved. So, I'm a property developer. I run Greater China for Heinz. We're the largest private real estate firm in the world. And we have an incredible Greater China team. I know I see this folks in the front, they're like, "Where is she? I can't possibly spot her in there." Uh, so...

• 1:31Speaker 01

  So, we have a team that is working across Beijing, Shanghai, Shenzhen, Dongguan, and Hong Kong. And we get to work really across the real estate spectrum. So, we built the greenest skyscraper in China. We built some of the first international service departments in the country and are doing some really interesting innovative projects. Like in Hong Kong, we bought a distressed hotel that we're turning into really a new kind of living, collaborative living that's super technology enabled for a young population there, where the average white collar young person, it takes them 20 years of salary to be able to buy an apartment.

• 2:15Speaker 01

  So we get to approach these problems that are not unique to our part of the world, but often the solution is a combination of east meets west. So, back to kinda what's the problem. Well... We're sitting right now in Miami, a place that is super exciting, thanks to a lot of the things that are happening right here that have been hyped by a pretty awesome mayor. Right? What did he do? He got on Twitter and he talked to all of us about what this city had to offer. It had key ingredients. It had universities. It had an upward trajectory. It had young people looking to collaborate. And at the end of the day, that's where we want to be, right? We want to be sitting together in awesome spaces like this,

• 3:00Speaker 01

  exchanging ideas with other interesting people. That's how you do cool stuff. And so as property developers, we think, how do you create spaces where people want to be their best? Right? Collaborate with others and build a better future. So that's a lot of jargon, but what does that actually mean? Back to the problem. Well, first, these ingredients are pretty clear. I teach a class at Stanford on this called "Who Owns Your City", and the students usually pick it up in the first 10 minutes. It's a place that has pretty good infrastructure. Can I get a job? Can I afford to live here? And is there cool cultural stuff that keeps it from being too bland?

• 3:44Speaker 01

  But then, you know, you'd say, okay, well, cities can learn from each other, right? You can just take those ingredients and apply it. And that's what Swara did a great job of here. But we are living in a time where the East and West have never been more divided. Right? And building a city, building buildings, is really hard. It's like the most extreme version of hardware. So as a property developer, we spend our time really thinking about what are the big macro trends? What are startups focused on? Where do they want to be? Because our spaces need to be relevant for 50, 70, 100 years, and we can't pick up our building and move it somewhere else. And so you try to take the arbitrage of what's working in one part of the world

• 4:29Speaker 01

  and try to apply that to another and solve problems. And that's where you find great returns, but it's also where you build places that are going to be relevant for folks. And so, you know, just a couple of examples up here behind me. So, you know, we talked about the living challenges. So for folks to be able to afford a place to buy, but the concept of rental apartments, so like multifamily, if anyone lives in a multifamily building with one landlord, that isn't totally a thing in Greater China.

• 4:59Speaker 01

  Often people are left to rent from an individual landlord, pay a deposit that's enormous, cost prohibitive, and get quality of product that really is not up to what they would expect. And so, taking a very, in some ways, kind of Western concept, and applying it in a place that technologically is probably about 10 to 15 years ahead in terms of what that average user is used to, okay? They're used to unlocking a door with their phone. Their WeChat is their ID. It's the way they meet new people. They can physically shake hands on WeChat to introduce themselves to a friend. It's where they keep their coupons. It's how they pay their rent. It's how they pay their taxes in some regards, right? We don't have that in America.

• 5:44Speaker 01

  But if you're like me and you live in Greater China, you do. And so, how do you combine those things together to create something that doesn't exist? You see up behind me a logistics building, but it's actually six stories high. Something we're developing that is a giant, almost like a refrigerator, but a high-rise, super-tech-enabled. And that's because, you know, they've got a lot of people. That building will be sitting within a 45-minute driving radius to 45 million people. And yet, China only has a quarter of the cold storage capacity per capita that the US does, okay? It doesn't take a genius to see that this trajectory is, you know, lower-left to upper-right.

• 6:26Speaker 01

  And so, again, you're taking this concept of east meets west. Building up here, just behind me, is in Shanghai. It's about a million-foot tower. You have a lot of those here in the United States. Big fancy office buildings, you know, where people used to go to sit at their computers and do work. But this one is very different from one that you may have walked into earlier this week. This entire building is on WeChat.

• 6:55Speaker 01

  You can interact with the building on WeChat. You can interact with the landlord. You can interact with your other tenants. You can have chance encounters or organize a yoga trip in the afternoon with the people, with the space, using this digital interface. So in a way, it's really combining the way we live right now. We live in a physical world, but so much of our idea sharing, our collaboration, is happening in the air, right? In a digital experience that we can't see. And so it's another combination of this east meets west. And so what becomes a problem and an opportunity. A problem, when you sit in the middle of this world, like my team has the honor to do,

• 7:39Speaker 01

  is you see that there are all of these opportunities for us to be able to share this, really the best of what the West has to offer with the innovation that's happening on the ground in China, but it is so hard to talk about in this very divided world. And so we like to take the positive side and say, you know, we're living in this world of like magic and Larry, and how can we make each other better? So I thought I'd use just a few minutes, and then we'll hang out with the besties, to maybe share a story that maybe y'all haven't read so much about, so that you get the benefit of knowing a little bit about what's happening over there. And you can see an example of where sort of east meets west and that collaboration

• 8:24Speaker 01

  can make us all better. So up here is a gentleman y'all will probably recognize. It's Deng Xiaoping, famous for really the opening up of China. And, you know, he was an experimenter. You know, he had this vision of what China could be, and he saw what the importance of the physical world, the physical infrastructure, what a role that could play in to enable the economy to jump further. And so, the picture to the other side is Shenzhen, which in 1980 was barely a fishing village. It had about 58,000 people, very few paved roads. And Deng Xiaoping, he was from Sichuan,

• 9:08Speaker 01

  so he really understood what it was like to not be from the big city. And so, he declared it a special economic zone, special economic zone, so Jingji Tuo Xiu. And that meant that it would be this place to experiment with bits of capitalism, with free trade, etc.

• 9:28Speaker 01

  So, what is it today? Well, first, there's that same road along progression just a few years after it was declared a zone. And then up here behind me is what it looks like now. Shenzhen is over 12 million people. The average age is 29. It's really the tech hub of China. So, companies like DJI, which makes 70% of the world's drones, they call this area home. And just within this area, if you were to go shortly from where this picture is taken, you'll have two of the world's five biggest ports by tonnage. Okay? So, how do you take that head start and turn it into something further?

• 10:14Speaker 01

  Well, they took a lesson out of the Book of the West, and they created something called the Greater Bay Area. It's like the... Yeah, okay, you guys get it. And so, what is the Greater Bay Area? Well, it is a collection of nine cities on the mainland side, some of which may be familiar to you guys. So, Shenzhen, as mentioned, and Guangzhou. Guangzhou is about 18 million people. Places like Zhuhai. Do y'all remember, you know, several years ago, there was this thing about China building the longest bridge in the world? Everyone's like, "Where is that?" Okay, it was in Zhuhai. And then, so nine cities on the China side, and then Hong Kong and Macau.

• 10:57Speaker 01

  And together, this area, it's about the size of, call it, West Virginia, today has a GDP that's sitting right around Canada and South Korea. Okay, about 1.7 trillion.

• 11:12Speaker 01

  In 2017, they declared this Greater Bay Area name. And it was there to really back up a lot of the investment, frankly, that had already started, to join these cities together to create a super region. So within that super region, they spent about $300 billion to build infrastructure to further connect it. So within just four years, they'd built 2,000 miles of speed rail, like high-speed trains. Here we have like a little, you know, one from here that goes to Fort Lauderdale. You know, Texas is going to get one in the year 2090. And so, so what does that mean?

• 11:53Speaker 01

  That means that I can walk out of my office with my teammates in Hong Kong, which is right next to that big Ferris wheel thing that everybody recognizes. I can take one stop onto Metro in 13 minutes. On a speed train, I could be in Shenzhen. Or I could keep on going, and I could access about 23,000 miles of high-speed trains and get to Beijing, get to, you know, further than Guangzhou, get to Western China. It is amazing, and it is happening so quickly. And that number will soon be 40,000 as they continue to build. But it's not just speed trains. These are interconnected nodes with further metro, right?

• 12:36Speaker 01

  With transit-oriented development on top of the meetings of these trains. So, back to the "so what?" So we know that if you take cool people and put them in cool places and you give them an opportunity to interact, well, what can you do? So this area, again, the size of West Virginia, now with 70 million people who are all quite young, and again, back to the ingredients. We talked about what sort of fosters innovation. Well, they've incentivized universities to put additional campuses here. And these are the best universities in China, so Tsinghua, Fudan, et cetera. They funded further life science.

• 13:20Speaker 01

  They funded further tax increment zones to encourage businesses to come and set up nodes of activity focused on areas of excellence. So remember, we talked earlier about in 1980, there were 58,000 people in all of Shenzhen.

• 13:40Speaker 01

  So just between 2010 and 2020, in one small neighborhood on the western side of Shenzhen, they filed 58,000 patents.

• 13:53Speaker 01

  It's pretty amazing. And that shouldn't be scary. That should be exciting, guys. This is where we get innovation. This is how we get better. Back to the magic and Larry, right? Thank you. Yes, you can clap for that. You can clap for that.

• 14:12Speaker 01

  So what does that mean for us? What does that mean for folks who are sort of getting to work in this interstitial space in between, getting to live within it? You know, up here, you know, behind me, I have, I'll clear the visual for you. It's further just connecting, showing these metro lanes, these trams, buses, et cetera, leading to these speed trains. Back down here, that's Hong Kong Island. And then this takes you through a bit of the Bay Area before you get out to the rest of China. Well, why does it matter? It's because these things layer together. Okay, so China's e-commerce percentage

• 14:54Speaker 01

  is about 25% of their overall retail. Here, it's about 14%. Again, y'all are smart. We can see where this is going. So you can take some notes on the preview and see what things and trends may be coming here. In China, about 85-ish percent of their transactions are mobile. Here, that's barely 30%. Where is that going? How does that work? And you can see what's happening. Another is you can look at trends that are just part of the world there that haven't made it here. And you sit there and you're like, wow, what a chance to iterate. So the example there, again, we'll stick with shopping

• 15:37Speaker 01

  and retail, is social shopping. So this idea of streaming while shopping that's layered with a full experience. And imagine what it can do. Again, if you layer that on top of this WeChat platform we were just talking about, a place where I can go and I could make a new friend right now, you, by looking at you, showing my phone to you, putting them together so we can introduce a product, introduce a lecture, a concept together. Imagine what we can do. Elon likes WeChat. He was just talking about it yesterday. So, the point is, that we all have this opportunity to really, you know,

• 16:17Speaker 01

  again, the headlines can be exciting, they can be crispy, but to look beneath them. And to take an opportunity to further connect with the people. Because, again, those folks who are hopping on these trains for, you know, probably the equivalent of about 45 cents, right, to get on the public transit here, going around and exchanging ideas, these people, most of them are not politicians, right? Most of them are not big world global leaders. They're folks who are trying to create something for themselves, to create something for their children, to build a better world, right? So we're really all on the same team.

• 17:01Speaker 01

  So with that, bring the besties out, I guess. Trying not to get too spicy.

• 17:07Jason Calacanis?

  All right. Center stage, free you.

• 17:09Speaker 01

  Right here?

• 17:10Jason Calacanis?

  Right there in the middle seat.

• 17:11Speaker 01

  Oh, baby.

• 17:12Jason Calacanis?

  Well done, well done.

• 17:13Speaker 01

  Be nice, guys, be nice.

• 17:16Jason Calacanis?

  Of course. Well, Sax is in here, so of course we'll be nice. It's kind of by default. And meet our Ryan Peterson from Flexport. Claire, or maybe you guys, Ryan, Claire, Ryan. I'm interested in you two guys, Claire, Ryan, Ryan, Claire. Ryan.

• 17:33David Friedberg?

  You guys met?

• 17:35Speaker 01

  We follow each other.

• 17:38Jason Calacanis?

  So, what do we, as Americans, not understand about our rival? And what does our rival most not understand about us, in your estimation, having operated in both countries for so long?

• 17:57Speaker 01

  You know, the term rival is an interesting one. Obviously, I love sports analogies and came from the track and field world myself.

• 18:06Jason Calacanis?

  Claire was in the Olympics, guys.

• 18:08Speaker 01

  Claire was injured.

• 18:09Jason Calacanis?

  I used to go running sometimes. Kind of fast. At the Olympics.

• 18:16Speaker 01

  But, you know, your job in the sport is to find the person who is better than you in some ways, and maybe they're strong where you're weak, you're weak where they're strong. You find each other and you shore up together. And I think that is what becomes so clear when you, you know, live there, when you live on the other side of the world. But maybe we're born here, or, you know, I'm a minority, so I've maybe always lived in that interstitial space personally. Or even our team. Our team is very representative of modern China.

• 18:58Speaker 01

  We have people from nearly every province, they're really across the education bracket, highly trained engineers, but who might be quite young, to folks in their 60s who have really seen China evolve. And so, I do think the thing that can get missed is almost that concept like we talked about, that as, quote, rivals, you know, they're not monoliths, just as America is not a monolith, right? And we can take the best of each other.

• 19:26Jason Calacanis?

  So we're best of rivals in a way?

• 19:28Speaker 01

  There we go. That's well said.

• 19:30David Friedberg?

  Is there a model for the century for cooperation between the two nations that's enhancing to both?

• 19:36Speaker 01

  I think it's happening in enterprise. I really think it is. So, when I look at, again, younger people, the products that they use, or the things that the young tech entrepreneurs in China are working on versus here, they're approaching a lot of the same problems, right? So on the social side, you know, looking at Douyin and what made it so catchy, right? Explain what it is for us. It's TikTok. It's TikTok. And back to that one about, you know, cheat codes and a preview, you know, Douyin was popular years ago.

• 20:15Speaker 01

  And so, you know, I remember first looking at the app and being like, wow, this is very catchy. And there's effectively no difference between

• 20:25Chamath Palihapitiya?

  So do you read and write Mandarin fluently as well as speak it?

• 20:29Speaker 01

  Well, you will never confuse me for a local Well, you'll have to go to a hotel. But, you know, enough to get by.

• 20:37Chamath Palihapitiya?

  And so when you do business in China, do you conduct it in English or do you conduct it in Mandarin?

• 20:41Speaker 01

  Yeah, so with the team, we work fully across what's appropriate because we also work in Hong Kong where it's Cantonese.

• 20:46Chamath Palihapitiya?

  Right.

• 20:47Speaker 01

  But all of my communications that go out to my full team, everything in full team is in Mandarin. We do have a large part of our team that only functions within Mandarin.

• 20:57Chamath Palihapitiya?

  So when you're, for example, like, you know, you showed some of these buildings and the idea that came to me is this is a massive coordination problem that's almost impossible in the United States, which is if you have this idea of like this living, breathing, monolithic building that is connected via the internet, it'd probably be 50 organizations in the United States that would have to have a say or want to say. The perception that we get is there is an individual that can effectively make that right decision in China, whether it's at the city level or at the state level. Is that how it's really like? Like when you guys have super ambitious ideas, is there one place you go to and then it just kind of all gets decided? Or is it just like here where it's messy?

• 21:40Speaker 01

  So it's kind of neither, actually, and this is where I think it takes the best of both, which is at a local level, so you have, you know, a local, we have a party secretary, you have a block leader and ultimately it goes all the way up to, you know, the big guy. But China does this amazing thing. They have a five-year plan. They call it the five-year plan. Last year was the 14th five-year plan and it sets KPIs and areas of focus for the entire country. And those are things around carbon neutrality, education,

• 22:18Chamath Palihapitiya?

  Agriculture.

• 22:19Speaker 01

  Care for seniors, agriculture, industry. And it's a lot like, you know, for you guys who are running companies, setting goals and how are you going to get there? What's the roadmap? But that filters all the way down. And so at a local level, those KPIs for the local leader are, you know, how did you make your district greener? How did you increase revenue from higher quality services and technologically advanced companies?

• 22:46Chamath Palihapitiya?

  Like what happens if you don't achieve it? You get fired? You get kicked out of the party? Like what is the... Mechanism of reward.

• 22:53Speaker 01

  Yeah.

• 22:54Chamath Palihapitiya?

  Or.

• 22:55Speaker 01

  Well, it's quite high accountability. And so if you perform very well within that system as a leader, then you can move to higher and more advanced posts to a bigger city.

• 23:04Chamath Palihapitiya?

  City mayor becomes a.

• 23:05Speaker 01

  Right, so yeah, so from a block to a bigger city to a higher, you know, up to a.

• 23:11David Friedberg?

  So your political career stalled out if you don't hit them, but it gets accelerated if you exceed them.

• 23:15Speaker 01

  Right, and so that creates a very interesting set of opportunities. And so to put it to maybe a tangible example is so for the things that, you know, are really great for communities like park space or building a building that's green. The last building that I showed up there is right, sits right on top of a metro and is next to a natural history museum. And we needed to work with the local government to ensure that we were relating to the area properly, creating, like leaving it better than we found it. You know, we look at projects where you can't do the project unless you show that it's going to be green and additive or restore historic buildings in the area.

• 24:00Speaker 01

  There's a real handshake there that I firmly believe creates better outcomes. I know our team would say the same thing.

• 24:07Ryan Petersen?

  Claire, what's going to happen with the capital markets for your business with Evergrande and like some of these big kind of property developers that have had major debt problems? And have you seen that already flowing over? And you understand the market very well. You probably are able to navigate this, but the foreign capital and other investors like might group everybody into the same block and get scared off.

• 24:28Speaker 01

  Sure, sure. So certainly we get a lot of questions. But it's another one where the headlines out versus, you know, inside the country, certainly the built environment, the construction and the real estate industries. If you combine that all together, you've got about 27% of the economy. If you include the full integrated stack, one of the things in five-year plan is to diversify away from that in a way. But is, you know. Evergrande and the other developers, the real focus at the local and the higher level is to help the regular people get good on their deposits and ultimately get the homes that they were promised.

• 25:12Speaker 01

  So it's very interesting for developers like us and acquisitions people, as for some of those smaller developers who got into trouble.

• 25:19Chamath Palihapitiya?

  Has there been a bailout? Is that the wrong word, the way that it's been characterized in the US media, that the Chinese government had to step in, shore up the balance sheet, make sure Evergrande wouldn't default on some of their loans?

• 25:29Speaker 01

  I think there was a concern that there would be an entire meltdown of the full Chinese economy, which is not what we feel on the ground. And I think if anything, it's created a set of opportunities to really level set, especially on the living sector. It's really accelerated some policies to make it easier to build and to create rental housing, which creates more access, which therefore maybe takes away some of the pressure on the condominium system. You know, for the debt markets, to create a space that is maybe taking on projects that are appropriate for the system, a little bit, again, more diversification and development in the right places in the right markets.

• 26:14Jason Calacanis?

  When we look at the relationship between the United States and China, we've had 300, 400, 500 million people come out of abject poverty on the planet because of this great engagement. I don't know if that's a term, but I'll call it the great engagement. We started using their factories, we started making iPhones there. This has created, despite all of the hand-wringing about the relationship and all the various issues on both sides, a lot less suffering in the world.

• 26:43Speaker 01

  Absolutely.

• 26:44Jason Calacanis?

  And so there is something that I think we don't recognize sometimes, is that people who are living for under a dollar a day, 300, 400, 500 million of them are now gone. And that leaves some areas in Africa and Southeast Asia that we still need to do that work, which paradoxically, or ironically, it seems like China is doing in Africa.

• 27:03Jason Calacanis?

  What I'm curious about is what you're seeing on the ground with their middle class, which to me seems analogous to what we went through in the 30s, 40s, and 50s. This establishment of a middle class, which then established, you know, education and prosperity for the decades to come, and specifically for the boomers and Gen X. So tell us about that middle class that's emerging. We hear about it.

• 27:26Speaker 01

  Yeah.

• 27:27Jason Calacanis?

  But how many of them are there? Qualitatively, what do they want from life?

• 27:33Speaker 01

  Yeah. Well, Jason, in a word, it's incredible, right? Like, again, I talk about infrastructure so much because you see it up there, right? China's only as urbanized as the US was in about 1950. So we read a lot about these...

• 27:49Jason Calacanis?

  Today.

• 27:50Speaker 01

  Today, today. So we read a lot about these...

• 27:52Jason Calacanis?

  Bullet trains.

• 27:54Speaker 01

  Right, and so that leaves this incredible consolidation of people to cities and younger people to cities. It's a demographic, you know, spark that maybe gets talked about a little bit less. But also, if you look at the change that that person you're talking about has seen in their lifetime. So they went from a rural lifestyle, frankly, most of them, and something of a village setting that had not changed in decades, to this future world that in many ways can only be imagined in movies. And so I think, you know, I sort of struggle to put it into terms because you ask, you know, what do they want? What are they looking towards? And I'd say, you know, to use a personal example, right?

• 28:39Speaker 01

  I'm the luckiest girl in the world. I get to live in this amazing place and work with this incredible team. And, you know, yet, you know, my parents graduated in a fully segregated world. The elder people, when they were growing up, were not just slaves. They were the slaves that we talk about on Juneteenth. The ones in Galveston who walked across the bridge and followed railroad tracks to Houston, Texas, right? That's amazing. [applause]

• 29:09Speaker 01

  That is amazing. And so I think when a generation or a collection of generations sees that amount of change, what they want is, first of all, they're grateful, but what do they want? They want to be able to build and create and be people.

• 29:26Chamath Palihapitiya?

  Themselves.

• 29:27Speaker 01

  Yeah.

• 29:27Chamath Palihapitiya?

  I have a question. Japan in the 80s had a moment where everything came together for that country. Great population growth, great economic growth, great systems like kaizen and all of this other stuff that they would export. And the headlines in the 80s was Japan was taking over the United States or Japan was going to lap the United States. But really, one of the biggest things that had working against it was a demographic wave, right? And you had massive negative birth rate that has really compounded Japan's stagnation. China is on the precipice of this because of this one China policy. I think the stat that I saw, which is stunning, is there's 1.2 billion people in China? 1.4?

• 30:10Chamath Palihapitiya?

  By 2100, it's going to be around 600 million. If that's true, the point is just that there's a real issue.

• 30:18Speaker 01

  Yeah.

• 30:19Chamath Palihapitiya?

  Is there something in these five-year plans around how to become sort of more culturally integrated with the rest of the world? You know, meaning, how do you use immigration as an example to subsidize some of the negative birth rate? Do you teach English more so that you're more integrated into the world economy? All of these things, can you just talk about that?

• 30:38Speaker 01

  Uh huh. So first, I think the urbanization trend of folks consolidating to the cities really can't be overstated, just in the way that it shifts sort of how the country will work and what's happening on the ground. You know, it's still relatively early days, but when we look at things like Belt and Road, you know, as I walk around Beijing and I compare it to, you know, when we first started there or when we were working with capital partners there, I see a lot more brown faces.

• 31:11Jason Calacanis?

  Really?

• 31:12Speaker 01

  Going to the universities around Beijing. Now, these are still-

• 31:14Jason Calacanis?

  Explain what Belt and Road is for folks who maybe haven't heard the term.

• 31:17Speaker 01

  Yeah, yeah, so many places you guys can read about it. And before I forget, talking about, sort of, just, I know everybody loves recommendations here. So, if you haven't read Dalio's latest book on changing world order, or there's actually a great- You read it!

• 31:33Jason Calacanis?

  Friedberg made us all read it.

• 31:34Speaker 01

  She read it, you read it.

• 31:35Jason Calacanis?

  Friedberg, Friedberg made us read it. Friedberg talked about it every podcast for the last 20, as you know.

• 31:39Speaker 01

  So, you've got to read it, listen to your besties. There's also a very good, very good illustration of it, as you guys have talked about.

• 31:49Speaker 01

  But, you do, do read that, because, you know, China's been a major participant in the global south. So, you know, the short version of Belt and Road is working really across a set of countries around Southeast Asia and Africa, bringing in infrastructure and kind of what it sounds like, roads, roads, ports, airports, et cetera, really building out this network for that part of, part of the world. But I think what gets sort of bumped over on that is, again, things like, like this. So, folks coming to China to be educated, the number of folks on the African continent now learning Chinese. And again, I think this is something that is exciting at the end of the day.

• 32:34Speaker 01

  The opportunity to, to further exchange, to lift more people out of poverty, to create further infrastructure and-

• 32:43Jason Calacanis?

  Claire, I was hoping you would stay with us and be a bestie for Ryan, who's the next speaker. Would you be willing to help us interview Ryan?

• 32:50Speaker 01

  I would be honored! You want to switch seats?

• 32:53Jason Calacanis?

  No, no, there we are. Oh, yes, switch seats!

• 32:55Speaker 01

  Okay.

• 32:56Jason Calacanis?

  Perfect idea. Switch seats.

• 32:57Speaker 01

  Get in, I warmed it up for you.

• 32:58Jason Calacanis?

  And you're the guestie.

• 33:01Jason Calacanis?

  I like it, I like it.

• 33:05Jason Calacanis?

  So give it up for Claire. Now, Ryan, congratulations. CNBC does their Top Innovator or Private Company Awards every year, and you made it to the top 50 list today. I didn't check which ranking you got, but being on the list in and of itself is a big win. What do they call it, disruptors list?

• 33:24Ryan Petersen?

  Disruptor 50. And my view of these lists is you should never share any list about your company unless you're number one. And we were number one this morning, so I can share it.

• 33:36Jason Calacanis?

  You truly helped us navigate, I think, the challenge of us as besties and the audience understanding supply chain. We appreciate that. You've been on the show twice, I think?

• 33:47Ryan Petersen?

  Just once so far.

• 33:47Jason Calacanis?

  Just once so far, and then here, so this is your second time on the show.

• 33:50Ryan Petersen?

  Apologies, I was filming the interview for that during Palmer's talk this morning. You didn't miss anything. I don't know what I missed.

• 33:58Jason Calacanis?

  Nothing much happened.

• 33:59Ryan Petersen?

  But when Palmer and I woke up this morning, we're writing our speeches together and deciding what we were going to say.

• 34:04Jason Calacanis?

  Oh, do you have some feelings you'd like to share with the class? Seems to be a theme. I mean, this is turning into therapy.

• 34:12Ryan Petersen?

  No, I don't have any enemies.

• 34:13Jason Calacanis?

  I have some emotions.

• 34:14Ryan Petersen?

  I don't have any enemies. It's sad.

• 34:15David Friedberg?

  He just says nice things about people, J. Cal.

• 34:17Ryan Petersen?

  I got COVID. I couldn't think of a single person. Who do I want to give this to? I was like, I like everybody.

• 34:22Jason Calacanis?

  So, tell us.

• 34:24David Friedberg?

  He was going to do a talk, right? Are you doing a talk for a couple of minutes?

• 34:27Jason Calacanis?

  Well, he's going to talk from there.

• 34:28Ryan Petersen?

  Yeah, I'd love to share a little bit about what we're seeing. So first off, what Flexport is, is we're a global logistics platform. We help businesses of all sizes ship products all over the world, from anywhere in the world to anywhere else in the world. We do a lot of business in China. Probably about half of all of our volumes come out of China.

• 34:43Speaker 01

  I know a landlord, if you're looking for one, Ryan.

• 34:47David Friedberg?

  If you need some range.

• 34:48Ryan Petersen?

  We'll do some business after this. And so we see a lot. We're sort of like a front row backstage pass to the world economy of what's really happening and unfolding. And it's been a crazy few years. We, to give you context, so Flexport started in 2013. Its first revenue was in 2014. We did $2 million in revenue that year. We're on track this year to do $5 billion in revenue. So from, it's very exhausting, yeah. And...

• 35:22Ryan Petersen?

  This time period is, I assume it's always like this in this industry. I have only been in the business for about eight or 10 years here. But just to take you through that timeline, in 2015, there was a port strike on the West Coast and you couldn't import anything into the United States for like three months. Total pandemonium. By the way, that might happen again. July 1st, their contract that they negotiated back then is up for renewal on July 1st. So we might talk about that. 2016, there was so much excess capacity of ocean shipping. Oh, so many extra ships were purchased that the price of ocean freight hit the lowest in all of human history. It was like $600 to ship a container. This past year was $20,000 in 2016. So we go through these boom and bust cycles. It's an asset business that'll happen.

• 36:05Ryan Petersen?

  2017, 18, and 19, our president would launch a new tariff war every couple of months and you couldn't predict anything. 2020, a pandemic hits. You couldn't ship anything for a couple of months out of China where like they were really hard, zero COVID, shut down factories, shut down all the purchase orders. Everyone thought the Great Depression was coming. Cancelled all the purchase orders. Then it turned out the opposite happened. It was this crazy boom and you couldn't import anything because the ports were overcrowded. It went from, 2019, it took about 50 days to ship a container from like when the goods are ready, when the factory raises their hand and says, hey, come and pick up these goods, to right now it's about 120 days. So doubling, more than doubling the transit time.

• 36:49Ryan Petersen?

  And it is just incredibly hard to operate in this environment if you're trying to run a business. And so we've, we've had to learn how to navigate through chaos as Flexport. It's like, we kind of welcome it at this point. We found that it's probably, it might actually be good for our business. We try not to talk about that because it's so bad for our customers and it's been hard to fulfill the customer promises. But if you put yourself in the shoes of those customers, so like a direct to consumer e-commerce business, and we ship for probably 80 or 90% of the hot new D to C brands, a lot of IPOs recently, a lot of, a lot of really cool, hot new brands, they're going through. Almost a perfect storm right now. In like a really, really bad way, like the movie The Perfect Storm. Because ocean freight rates are sky high.

• 37:35Ryan Petersen?

  Mentioned this, ten, twenty thousand dollars to ship a container. Rule of thumb, long term is like two grand. So really, really elevated costs. Walmart announced really high costs this morning. And so it's not just small companies, but Walmart announced their costs were through the roof from supply chain and their stock fell 10% today. Wiping off forty billion dollars of market cap this morning. So it hits companies of all sizes. But these D to C brands got a double whammy because Apple last, I think it was last year when they changed their privacy rules. And their customer acquisition models on Instagram. Facebook. Facebook, all these things stopped working. And so at the same moment, your CAC that stops working, you can't acquire customers, your supply chain costs are through the roof.

• 38:17Ryan Petersen?

  And then add to that, that consumers are now starting to come back to conferences like this. Go back to the restaurants and the clubs and doing the travel. And during the pandemic, everybody just bought stuff. You gotta get your dopamine from somewhere and everybody was just buying goods. So that is like a triple whammy for these companies. I'm incredibly worried about the whole D to C brands, the whole D to C space.

• 38:41Jason Calacanis?

  The D to C space, just anyone in physical goods.

• 38:44Chamath Palihapitiya?

  You saw it in like the, I think it was Thrasio that just announced they're laying off 25% of their.

• 38:49Jason Calacanis?

  Thrasio was buying a collection of those Amazon D to C brands, putting them together and trying to have some economies of scale. But when your supply and your demand both get 10x'd in the wrong direction, it's game over.

• 39:02Ryan Petersen?

  It's, I don't know if it's game over, but it definitely changes the rules of the game. The reality is, look, people are still gonna buy stuff. There are gonna be successful, there are gonna be some winners, there are gonna be brands that survive.

• 39:10Jason Calacanis?

  At what price though, at what price?

• 39:12David Friedberg?

  Well, so you're saying that your thesis that you're making, the statement that you're making today is, hey, we're seeing real significant risk to D to C companies because of this confluence of issues right now. And this could be a big threat to a lot of businesses, particularly in an environment where venture funding is.

• 39:28Ryan Petersen?

  I think, again, venture funding.

• 39:30Jason Calacanis?

  Oh my gosh, triple storm.

• 39:31Ryan Petersen?

  Capital markets are driving.

• 39:32David Friedberg?

  Capital markets, public and private.

• 39:34Ryan Petersen?

  Investors are like, you all will look at this and go, hey, maybe I, you know, put more into SaaS.

• 39:37Chamath Palihapitiya?

  Like Pete said, it's just easier to not do anything.

• 39:39Ryan Petersen?

  It might be easier to not do anything. So what does that mean? How do you manage this? And fundamentally, one of the problems that.

• 39:47Ryan Petersen?

  That comes about in all supply chains, it's been written about the famous PhD paper from like the 60s or something called the Bullwhip Effect. And a bullwhip, if you like, crack a whip, the end of that whip is moving incredibly fast. And it's a bit like that in supply chains because you have imperfect information. And so the people doing demand planning are living in one system, they're selling goods, they're looking at this data set. The people producing stuff, it's on a different system. How long is it taking to produce things? That's getting longer, the transit time's getting longer. This data is living across all these different domains and becoming very, very hard for a brand to make a decision, how many goods should we buy? When should we buy them? How much do we want to have in stock? How do we avoid being way overstock?

• 40:32Ryan Petersen?

  And then, and what we're seeing right now is these warehouses are overflowing and people can't...

• 40:37Speaker 01

  So what changes that? Like what breaks it open? So, you know, like in China, Pinduoduo didn't exist in 2015. Now, 800 million plus, right, users. But it was technology that broke it open. Like what's the breakout moment to solve this exact problem you're talking about?

• 40:51Ryan Petersen?

  Yeah, I mean, actually China's got, one of the companies to watch is Shein, S-H-E-I-N. It's this Chinese, kind of like the new Zara that is taking over the world. I think they're going to do $20 billion in revenue this year. Fast fashion? Fast fashion. They're launching 1,000 SKUs a day. 1,000 new SKUs a day, all like AI-generated and then if people order enough, they produce it. And it's like a really incredible company. Wait, you're saying a robot says, make these SKUs?

• 41:19Speaker 01

  This is where this shirt is from, actually.

• 41:23Ryan Petersen?

  No way!

• 41:24Speaker 01

  I can do not.

• 41:25Ryan Petersen?

  Yeah, see?

• 41:26Speaker 01

  Do you like it?

• 41:27Ryan Petersen?

  I did that shirt. And it, now it's going to be a million of them to be ordered after this. Hold on, sorry, sorry. Tell us, sorry, this shirt you bought?

• 41:34Speaker 01

  So it's literally a shirt from Shein, but, but yes, so if Zara, so if Zara is seeing something on a runway, determining that that trend will hit, and then they can have it in stores, I think within like eight or nine days, something, you know, pretty wild. Shein's about as close to instantaneous as you can get. So very fast-moving SKUs, it's sort of hyperspeed fashion, so they can have things...

• 41:56Ryan Petersen?

  Yeah, but you're kind of like pre-com.

• 41:57Chamath Palihapitiya?

  Like for minority, but they're predicting that this puffy shirt is going to be like, women are gonna wanna go for pirate.

• 42:04Speaker 01

  But it's a fly shirt.

• 42:06Chamath Palihapitiya?

  It's fly as fuck. I agree.

• 42:08Ryan Petersen?

  And I think one of the, one of the key things here is, is that transit time of how long does it take you from when the thing is made to when it gets to the customer? Because if it stretches out the way it has right now in ocean freight market where it's taking forever. If that takes three months, four months, five months.

• 42:22Chamath Palihapitiya?

  Might not be flying no more.

• 42:22Ryan Petersen?

  Six months, all of a sudden you've placed these orders and then the demand went away because people started going to nightclubs instead of buying their gardening equipment. And so the tighter you can make that, and it does speak to spending a little bit more on logistics where, where you know, traditional procurement person in logistics only thinks about like, I'm just gonna buy the cheapest freight I can ever buy. Because they don't understand that your goods in transit are just money that's taken a different form for a period of time. And money has a cost to it. And if you're sitting there on six months, it's already expensive because you know, you gotta pay interest on that. There's opportunity cost. What else could you do with the money? But now that cost has gotten much worse because by the time the goods arrive, maybe nobody wants them.

• 43:02Ryan Petersen?

  You saw that with Christmas where, you know, you import Christmas, that's the classic thing. You import Christmas stuff and in January it's worthless.

• 43:09Chamath Palihapitiya?

  At what price? Do people just find alternate ways, whether it's you establish domestic 3D printing or you buy a fleet of planes or like, there's gotta be a work, because like I saw this image, I think maybe you tweeted it of this entire massive traffic jam. Basically trying to get the ships even into China because the COVID-19 lockdowns are so strict. But that's also exacerbated all of this.

• 43:32David Friedberg?

  And last year Walmart, didn't they announce they're spending $10 billion verticalizing their supply chain and building out their own? Infrastructure for moving goods.

• 43:40Ryan Petersen?

  You're seeing a lot of companies do this, much easier said than done. You've seen at least a few of the big box retailers, Walmart, I wanna say Home Depot, Costco, a number of these guys have said, hey, we're gonna charter our own ships.

• 43:51David Friedberg?

  Target was the other one.

• 43:53Ryan Petersen?

  Target, Amazon, of course. Go charter their own ships, go solve the problem their own way. It's really hard to do, run these things at scale and operate it. It looks good at the PowerPoint slide. You know, when, when you have to get down to it, it's really hard.

• 44:05David Friedberg?

  So is there a big capex play here, Ryan, for the next decade?

• 44:09Ryan Petersen?

  I think.

• 44:10David Friedberg?

  Like a big capital equipment, hard asset play?

• 44:15Ryan Petersen?

  The world's ocean carriers, that's what we call the people that own the ships, have actually ordered 25% more ships, increased the fleet by 25% over the next three years.

• 44:25David Friedberg?

  Wow.

• 44:26Ryan Petersen?

  So it could be ugly the other way, real quick. You have too many ships and nobody, you know, the ship owners can't make any money.

• 44:30David Friedberg?

  Same's happening in mining. I mean, like, it's a similar sort of, but anyway.

• 44:33Chamath Palihapitiya?

  Ryan said it best. The problem is you can't forecast demand accurately for these long lead time categories that are highly capex intensive.

• 44:41David Friedberg?

  Totally.

• 44:41Chamath Palihapitiya?

  Whether it's mining, or whether it's shipping. How do you make a $500 million capex decision for a business demand cycle that's five years into the future?

• 44:49David Friedberg?

  But they're all taking, they're all taking profit hits and saying, "We have to make this investment because we need the security, we need the redundancy." I mean, Walmart did it, right? They were optimized to a T, and then all of a sudden, it's like, "Hey, that optimized system doesn't work."

• 45:00Chamath Palihapitiya?

  Look, the way that mining, for example, deals with this, which is really interesting, is they get these companies to sign up what's called "take or pay" agreements, right? And so they can actually smooth out the demand curve five or six in the future.

• 45:12David Friedberg?

  Can't do that with the consumer.

• 45:12Chamath Palihapitiya?

  Take or pay means, "I'll do a deal that says, 'Okay, I'm gonna rip the lithium out of the ground. You take it, or you pay for it. I don't care what you do, but I'm gonna get the revenue assurance I need to go to Wall Street to get the money.'"

• 45:24Ryan Petersen?

  And we've started to see those signed for the first time. So we've signed three-year contracts. Flexport was the first ever to sign a multi-year contract where we commit, "We will pay for this freight whether or not, uh, whether or not we ship anything."

• 45:33Chamath Palihapitiya?

  Take or pay.

• 45:34Ryan Petersen?

  We're gonna pay upfront. Yeah, okay, take or pay. Um, and, and you asked a little bit, air freight, what's gonna happen there. Well, remember, 50% of all the world's air freight flies in the belly of passenger planes. And there's way less people traveling to and from Asia than there were.

• 45:47Chamath Palihapitiya?

  Is that right?

• 45:47Ryan Petersen?

  Yeah, 50% of the world's air freight. Which is a little scary when you think about, like, what's under the belly of that car.

• 45:52Chamath Palihapitiya?

  Yeah, is that getting scanned?

• 45:53Ryan Petersen?

  Uh, it is, it is. There's, there's good controls on that, but, uh, but you never know. It's always, it's always...

• 45:57Chamath Palihapitiya?

  Yes, Jason, it's getting scanned.

• 45:58Ryan Petersen?

  A little nerve-wracking. Um, so, and in fact...

• 46:01Chamath Palihapitiya?

  He seemed to be not so sure.

• 46:02Ryan Petersen?

  Uh, you know, you work in any industry long enough, you start to question whether everything's perfect. Um, so, we've actually got 10 passenger planes that we've leased, and we'll, we'll keep doing more, that are not flying any passengers. We're just filling them with freight. We started doing this in the pandemic.

• 46:18David Friedberg?

  Are there seats in them?

• 46:19Ryan Petersen?

  Flying masks.

• 46:20David Friedberg?

  Are there seats at the top?

• 46:21Ryan Petersen?

  There's still seats in some of them, some we've ripped out the seats.

• 46:23Speaker 01

  It's like Castaway. You've got the big plane with basically holding staff.

• 46:28Ryan Petersen?

  If you want to go to Asia, God, 787, there's nobody on there, it could be a private flight, just you.

• 46:34Speaker 01

  But exactly, this is why you've seen the rise of logistics real estate as a deeply institutional asset class. Because that math that you talk about, the algorithms determining what is ordered, how long will it sit? And how fast do people want it? That takes an infrastructure on land to be able to get it to people as well.

• 46:51Ryan Petersen?

  And coming back to the question about assets, is there a play here? Probably yes, because most of Wall Street has been trained, they've gone to all the same business schools and everybody's been trained that like, assets are terrible, get them off your books, don't carry them.

• 47:02David Friedberg?

  Well, this is what happened with oil and gas, you know, going into last year.

• 47:06Speaker 01

  Asset light market.

• 47:07Ryan Petersen?

  And everyone missed it.

• 47:08Speaker 01

  You want to be asset light.

• 47:09Ryan Petersen?

  It's still the trend and almost everywhere until somebody like TSMC comes along and says, you know what? You don't want assets, Intel, like, fine, we'll build the fabs. Another $400 billion company because they're willing to have assets on the books. But it's a different investor positioning.

• 47:22David Friedberg?

  And now they have a power in the equation and they can get a better share of value.

• 47:26Speaker 01

  And I've been answering this question.

• 47:28David Friedberg?

  That's the real estate investor.

• 47:29Ryan Petersen?

  The hardest question for me to answer, and I know that there's some entrepreneurs out there who have the same question. Anytime someone asks me, is Flexport a software company or a logistics company? Are you going to own assets or not own assets?

• 47:40Speaker 01

  Yes.

• 47:41Ryan Petersen?

  And, you know, I think the correct answer is to ask the investor which one they'll give you a higher multiple for and then just say that. Try to figure out who you're talking to, but it is on some level, you know, maybe another answer is like kind of Buddhist dualism, like you can't do logistics without the tech, you can't do the tech without the logistics.

• 47:58Chamath Palihapitiya?

  I think you're bringing up something which is that today, the problem with the capital markets is actually that it is very Balkanized, so meaning, you know, let's just say you take a company public like yours. The problem that you'll have in the public markets is that there are folks that you'll go to in that room that understand SaaS software, understand margin structure of a software business, et cetera. And then there's folks over here who run the industrials business and folks over here who run consumer. The problem is those three folks don't talk. They have three completely different conceptions of what a good business is. And the problem for you will be, and I'm not forecasting this for you to be a problem.

• 48:33Ryan Petersen?

  No, you're correct.

• 48:33Chamath Palihapitiya?

  Is that you can get orphaned in any one of these groups and now all of a sudden the capital markets could be totally shut for you. This is a very important point that you're bringing up. The thing that I think we need to change is like the capital people that control the money flows do need to have a little bit more of an open mind. Sure, it's true that you'd love a 90% gross margin business. But it is also true, in the TSMC case, you'd rather have a business doing 20% on $500 billion.

• 48:58Jason Calacanis?

  Well, and if we look, Chamath, we also have some examples of Amazon. The market seems to have worked out this business that's very factory and asset-heavy in delivering goods to us and the cloud business.

• 49:12Chamath Palihapitiya?

  Even Amazon, like, look, Amazon got a scape philosophy on less than $1 billion of invested capital. The problem is, if Ryan, for example, decides, "Hey, I'm gonna go and actually vertically integrate and buy an entire fleet of ships," that's probably a $10 billion to $20 billion capex cycle over 10 years. And you think about replacement costs, it may make a ton of sense, actually.

• 49:33Jason Calacanis?

  Right. I wonder when Amazon's cap expenses for those servers started to hit.

• 49:38Speaker 01

  He's thinking about it.

• 49:41Ryan Petersen?

  But getting the capital markets. A little boy in me definitely wants to do that.

• 49:45Chamath Palihapitiya?

  You want to own a fleet of ships?

• 49:46Ryan Petersen?

  You already own a fleet of ships. But no, we're not gonna do that. I don't think, you know, there's two plays. Fundamentally, your bullwhip effect means the data can't flow. And people can't make decisions optimally because the data is trapped in multiple places. You don't know how to run an efficient supply chain because you don't know how many trucks do I need when the ship arrives. Like, actually, not even like long-term demand forecasting how many ships, but like, literally, that ship is gonna arrive. How many trucks should I dispatch? When should I dispatch them? Like, there's two ways to solve this problem. One is to own the asset. And the other is to create a data network effect such that the asset owner benefits enough from putting it on your platform. Your machine learning, your algorithms are helping them make more money from their asset. They want to tell you.

• 50:28Speaker 01

  Or you can invest further down into the chain.

• 50:31Ryan Petersen?

  One of them's a lot, hopefully, simpler and don't need to manage as many people. And life is easier if you can solve the data machine learning problem.

• 50:37Speaker 01

  Well, you look to Alibaba and Alibaba investing down into China. Like, there is a middle road of being able to go.

• 50:42Ryan Petersen?

  Investing into who?

• 50:43Speaker 01

  China. So logistics warehouse.

• 50:45Jason Calacanis?

  I mean, in a way, Ryan. As stupid as it sounds, you having. Purchased a shipping company and putting it over here, to your point, Claire, and saying, "Here's the little thing we bought. It's a bunch of ships. It's its own balance sheet. And then here's the really great business." But we have this little subsidiary over here is a potential middle ground.

• 51:03Ryan Petersen?

  It's what makes Flexport a fun business. There's like a million strategies and ways to play out. And I'm not a big believer in predicting the future. And you want to have a vision and know where you're going, but I think be sort of flexible.

• 51:14Jason Calacanis?

  Yeah.

• 51:14Ryan Petersen?

  In that.

• 51:15Jason Calacanis?

  It's in the name.

• 51:16Ryan Petersen?

  We talk about our culture a lot. What's the goal of a company's culture? And Elon talks about the goal of a company, the purpose is like, hey, we've got to create valuable products and services for fellow humans, right? But the goal of your culture is how do you maximize your velocity in that direction? And velocity is a really important word because we forget, like, normal people forget that velocity is different from speed.

• 51:38Jason Calacanis?

  Yes.

• 51:39Ryan Petersen?

  If you remember your physics, velocity has a direction. You've got to know where you're going. And sometimes going really, really fast is actually negative velocity because you're going the wrong way. And so how do you stay agile? The world's going to throw all kinds of chaos at you. Be nimble, be able to change. We don't know exactly the strategy. I don't have everything knocked out.

• 51:54Jason Calacanis?

  As we wrap here, question for both you and Claire, which is, China has big asset.

• 52:00Chamath Palihapitiya?

  Before you do your wrap question, can I just, can I ask him to, can you tell us the audience about what you did during the UK crisis?

• 52:07Jason Calacanis?

  Oh, this is beautiful.

• 52:08Chamath Palihapitiya?

  It's just like 30 seconds about.

• 52:11Ryan Petersen?

  I didn't go there like Antonio, crazy man. But what, so we started this group in 2017 called flexport.org to do humanitarian relief shipping, really at that time of the crisis with Syria and trying to help refugees. It was really a simple idea. It's like, look, we got all this stuff here. We know they need stuff at the refugee camps. What if we shipped it there? Seemed like a radical idea. We maintain a database of partners. So we have agents that we can operate on behalf of Flexport in over 120 countries. And at that time, I simply emailed our Syria partner, who was literally based in Aleppo, where a lot of this destruction was happening. And I emailed, I said, hey, we'd like to ship a container to this refugee camp down there. And he was like, sure. What's the address? Where do you want to ship it? And I was like, wait, is that easy? Like, I thought this was like, and I realized you could do that. And we didn't ship into Syria because we didn't know

• 52:56Ryan Petersen?

  who was going to end up in. So we shipped to refugee camps in Turkey and Jordan. So we've been doing this now for five years, shipping to over 50 different countries. Any kind of, anytime there's a hurricane, earthquakes, but we're a warp.

• 53:09Ryan Petersen?

  And so when we saw this happening in Ukraine, we immediately kicked into high gear. The flexport.org team has about 12 full-time people and then we have a model where employees at Flexport can surge onto that. So we've had about 60 people working on this. In this case, you know, usually we offer pro bono shipping because shipping is expensive. We can't just eat the full cost. We are profitable, but not enough to really solve the world's problems all by ourselves. So we created a GoFundMe campaign partnered with Ashton Kutcher and Mila Kunis. Ashton's an early investor in Flexport and we raised 25 million bucks to pay for shipping, to deliver goods. Yeah, thank you.

• 53:46Jason Calacanis?

  Well, and the way you did it was-

• 53:47Ryan Petersen?

  And thanks to Ashton and all of our investors, a lot of great people stepped up.

• 53:51Jason Calacanis?

  You emailed the besties and said, "Hey, it's $4,400 a container." Was that the number, 42 or 44?

• 53:57Ryan Petersen?

  It depends on where it's coming from.

• 53:58Jason Calacanis?

  For Ukraine specifically.

• 53:59Ryan Petersen?

  I mean, for example, we shipped nine ambulances from Gibraltar into Ukraine. I thought we wouldn't be able to ship into Ukraine because it's a war zone. It turns out most, I don't know if most, but a huge percentage of European truck drivers are Ukrainian and they were just like stoked to go and do this.

• 54:14Jason Calacanis?

  So I-

• 54:15Ryan Petersen?

  So we delivered nine ambulances. That cost like around 10 grand.

• 54:18Jason Calacanis?

  Yeah, so a bunch of-

• 54:19Ryan Petersen?

  We delivered nine ambulances.

• 54:20Jason Calacanis?

  I replied back to him and I said, "No problem." And he said, "Hey, mention on the podcast." I said, "No problem." And I donated a $4,400 container. And then Chamath said, "Oh, I donated the plane that 12 containers went on."

• 54:31Ryan Petersen?

  He did.

• 54:32Jason Calacanis?

  So it was a flex on a flex for Flexport. It was like a multi-layered flex.

• 54:37Ryan Petersen?

  So, and then it just snowballed and this hasn't gotten much attention, but Yuri Milner, who's an early Flexport investor, just donated $100 million.

• 54:46Jason Calacanis?

  Wow.

• 54:46Ryan Petersen?

  To, yes.

• 54:47Speaker 01

  You're really putting pressure on their side of this team.

• 54:50Jason Calacanis?

  It was a flex on a flex on a flex.

• 54:52Ryan Petersen?

  I didn't hear the last part. Anyway, keep going.

• 54:54Jason Calacanis?

  Keep going. Let me wrap.

• 54:56Ryan Petersen?

  Everybody does what they can and it is an amazing model where, but by the way, over 60,000 people donated a little bit and I'm almost as, just as proud of that. It's like people are getting involved, stepping up, realizing, "Hey, you can do something."

• 55:08Jason Calacanis?

  Flexport dot org, everybody.

• 55:09David Friedberg?

  People go there and support Congress.

• 55:11Jason Calacanis?

  Final question for you two. We had this great moment where, you know, we engaged China. We built a bunch of iPhones, Amazon Basics, you know, whatever it is, Nike shoes. And it raised, you know, the standard of living for a lot of people. We understand China's doing this now. And they're doing it in Africa and some other places. What are you seeing in terms of that relationship? How China is looking towards other countries to become producers of goods? And they're kind of now becoming incredibly influential. What's their intent? And how is that going? Claire, maybe you can start.

• 55:46Speaker 01

  That's a big question. But I think it's... This is a long-term play. We're all in this for a long-term, right, play? And whether, you know, you take maybe the spicier view around, you know, resources and protectionism versus one that's more just around progress. And as we may have an increasingly balkanizing East and West, the ability for them to control the bigger piece of their own supply chain. But the end result, as you're sort of saying, is you look at places like Niger, right? The average mother there is having six children. We have a very young global South. And the important thing is that they're fed, they're clothed, and that they have an upward

• 56:31Speaker 01

  trajectory. And so, that's the outcome.

• 56:33Jason Calacanis?

  People living in abject poverty will probably end in our lifetime. You know, the only places it won't end is in places with dictators. What are you seeing in terms of the shipping containers? Because you must see shipping containers increasingly leaving certain ports. Where is China sort of exporting production to? And what are the up-and-coming production areas in the world?

• 56:56Ryan Petersen?

  You know, there's some really interesting trends going around, around labor costs. And China, the reason people went there over the last 40 years, to be honest, was like cheap labor. But over time, they became quite sophisticated. They really learned how to manufacture things, especially electronics. If you want to make electronics, you pretty much have to make them in Shenzhen, the Greater Bay Area, as she called it. So, and that's... But stuff that's just for cheap labor, because that's no longer about cheap labor. This is a whole supply chain ecosystem of components and other things. And if it's just cheap labor, two years ago, Mexico became cheaper than China in labor costs.

• 57:27Jason Calacanis?

  Wow.

• 57:27Ryan Petersen?

  Which was a huge shift. And now Mexico doesn't have the manufacturing capacity, they don't have the skill sets, they don't. But they'll build it, you know, and people will respond to that trend. As long as it takes 120 days to ship stuff from China to the US and we can't get this sorted out, brands are going to respond to shipping closer to home. So that is a trend that you're going to see more and more of if the delays stay the way they are. I think China's big challenge is if they become labor costs too expensive, how do they keep moving up the value chain? And this is what they're made in China 2025 thing is like, they've got to make more and more sophisticated products because it can't just be about dirt cheap labor.

• 58:06Jason Calacanis?

  And then eventually migrate to services and...

• 58:08Ryan Petersen?

  Yeah, and that's a huge challenge and very few, if anyone's really done it, no one's done it at that scale because they're the biggest country in the world, but Japan, Korea have kind of done that, but not 10 times bigger.

• 58:19Jason Calacanis?

  India as well, moving to a services-based economy, India with IT comes to mind. And then they'll become entitled and want to retire at 55 like Europe.

• 58:26Ryan Petersen?

  And by the way, my favorite answer, someone at, I think it was Zuck, although Toby from Shopify told me he lifted this line, his employees were asking him about the four-day work week. And he was like, "Well, you know, I do think we should do some experimentation around how many days a week we work. So, but we're going to start with the six-day work week like China does. And then we'll try the four-day work week later."

• 58:47Jason Calacanis?

  Ladies and gentlemen, please join me in thanking...

• 58:51Ryan Petersen?

  Thank you.

• 58:51Jason Calacanis?

  ...Adam and Claire. Well done.

• 59:11Speaker 05

  Besties are gone.

• 59:18Speaker 05

  That is funny how a dog can get a hush in your driveway.

• 59:25Chamath Palihapitiya?

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

• 59:33Speaker 05

  What? You're the bee. What? You're the bee. What? You're a bee. Bee? What? Where did you get merch? Besties are gone.