Big Fed rate cuts, AI killing call centers, $50B govt boondoggle, VC's rough years, Trump/Kamala

1. 0:00 – 6:50

   Bestie intros + All-In Summit recap

   1. JCJason Calacanis0:00

      All right, everybody. Welcome back to the All In podcast. The channel's been active.

   2. CPChamath Palihapitiya0:06

      We're in the afterglow. We're in the All In summit afterglow.

   3. DSDavid Sacks0:10

      (laughs)

   4. JCJason Calacanis0:10

      It's so glowing that Friedberg couldn't make it. He has been riding a high. I've never seen him happier.

   5. CPChamath Palihapitiya0:18

      Nick told me that in the last week we just, we, uh, we've only put out a half the clips and they've already gotten 20 million views.

   6. DSDavid Sacks0:23

      Oh my Lord. I, you know, I, I, I, uh-

   7. CPChamath Palihapitiya0:26

      So we'll be, we'll be around 50 million I think when all the clips are released and you let it bake for couple of months.

   8. JCJason Calacanis0:32

      That is an astoundingly large amount of reach.

   9. DSDavid Sacks0:35

      Crazy. Yeah, and that's just YouTube. We're not doing it on the podcast feed right now.

   10. CPChamath Palihapitiya0:39

       YouTube and X.

   11. JCJason Calacanis0:40

       Well, hopefully we get it on the podcast feed, we get another 50 million (laughs) . Uh, but, uh, Friedberg's in his afterglow, couldn't make it, but he's very busy right now. Look how happy he is. The summit went well.

   12. CPChamath Palihapitiya0:51

       Is that marijuana?

   13. JCJason Calacanis0:53

       Think he's making potatoes. I think that's his farm. But I mean, the smile is incredible.

   14. CPChamath Palihapitiya1:00

       That's mari- It's marijuana. It's Friedberg's version of founder mode.

   15. JCJason Calacanis1:03

       He's in fantastic-

   16. CPChamath Palihapitiya1:04

       It's Friedberg's founder mode, he's hitting the bong.

   17. JCJason Calacanis1:07

       His founder mode gives him the munchies.

   18. DSDavid Sacks1:10

       (upbeat music) Let your winners ride.

   19. JCJason Calacanis1:14

       Rain Man David Sachs.

   20. DSDavid Sacks1:17

       I'm going all in. And I said- We open sourced it to the fans and they've just gone crazy with it.

   21. JCJason Calacanis1:22

       Love you, West Side.

   22. DSDavid Sacks1:23

       Queen of quinoa. I'm going all in.

   23. JCJason Calacanis1:26

       He is, uh, he's in the afterglow, um, and he won't be with us this week. Um, but we, uh-

   24. DFDavid Friedberg1:33

       He, uh, he organized such a great conference, don't you think, J-Cal?

   25. JCJason Calacanis1:36

       He did. He did great. Uh-

   26. DFDavid Friedberg1:37

       I mean, he really took charge of that and-

   27. JCJason Calacanis1:40

       He crushed it.

   28. DFDavid Friedberg1:41

       ... just did an amazing job.

   29. JCJason Calacanis1:41

       He crushed it. Yeah. I would like to give him his flowers. Absolutely.

   30. DFDavid Friedberg1:44

       The level-
2. 6:50 – 17:35

   Fed cuts 50 bps: Economic tailwind, scary signal, or both?

   1. JCJason Calacanis6:50

      would be great. But Sacks, I know you're super excited and want to give Biden his flowers. The Fed just cut rates 50 bps and the stock market is, uh, tearing, uh, it up right now. On Wednesday, Fed cut interest rates by a half a percentage point, taking them down off of a 23-year high. We've been talking about this, God, for two years here on this podcast. First rate cut since March of 2020, which is about when we started this podcast. J Powell basically said the Fed thinks inflation is coming down to around 2% nicely, and they don't want the job market to soften any further than it already has. He also mentioned, uh, immigration has helped soften the market, uh, the labor market as well, obviously with all those new people looking for jobs. So in the last two months, July and August, CPI has been at a two handle. We talked about that. 2.9% in July, 2.5% in August. Here's the CPI over the last decade. Obviously, massive boom, uh, in interest that you see there from 2021 to 2023. Many obviously think we're going to have more rate cuts, probably 25 every meeting for a little bit. And, um, Dow's already at an all-time high, surged 300 points on the news. Here's a, here's, uh, some interesting data about the 50 basis point kickoff cuts. So, uh, this is where it gets interesting, Chamath. Fed only started publicizing their interest rate changes in 1994. Since '94, Fed has initiated a cutting cycle six times. Here's the chart. Take a good look at that. '95, '98, 2019, they started with 25 bps, '01 and '07, after the great financial crisis, they started with a 50 bp cut. So obviously there was an emergency 50 bp cut in March of 2020 when COVID hit. '01, '07, 2020, very severe situations. And the... What happened in the markets is what I want to discuss, uh, with both of you today. In twenty- 2001 market fell 31% in the two years after that rate cut. In 2007 market fell 26% after two years. So... And 2020, despite all the fears, market ripped 44% over two years. What's the more likely scenario, Chamath? Is this similar to the dotcom and Great Financial Crisis or similar to 2020?

   2. DSDavid Sacks9:19

      Well, I think 2020 you have to put in a big asterisk because the question is what would have happened had there not been COVID and had there not been an entire global shutdown? So if you go back to that chart, you could probably just extrapolate and cut out that part that's flat because the part that's flat from 2020 to 2022 was largely artificially created because on top of that we injected so much money into the economy. The reality is we probably would have raised at some rate of change that you could have predicted from 2016. So what do you, what do you take away from that? I think that you have to, like, realize we are at a point in the economy where you cut rates because there's tension, and there's tension between employment and unemployment. There's tension between earnings growth and contraction. And so it's a stimulatory move. So if you look through that stimulatory move, why is the Fed doing this and why will they cut probably all the way down to 2 or 3% by the end of '26? It's because we now need to stimulate the economy again. So the reason why markets tend to fall once the rate cut cycle starts is because the next couple of quarters sort of demonstrate what I think the Fed is expecting, which is that there's pressure in the economy. We have not seen that flow through (air whooshing) in earnings or in how companies describe markets on the field, by and large, except for a few. So I think this part of the cycle now will be about all of these companies telling us whether there's nothing to see here or whether there is actual real pressure. And if there is real pressure, it'll probably look like the several times before where you're just gonna have to contract the value of financial assets because they're just not worth as much when they're earning less.

   3. JCJason Calacanis11:19

      Okay. Sacks, any thoughts here or just balls and stripes?

   4. DFDavid Friedberg11:23

      Well, I think a lot of people are commenting on the fact that the only other two times where we've had a 50 basis point rate cut in modern history, it has been just before a recession. So I think this happened in 2001, 2007, right before, uh, the recession and the Fed had to do a dramatic rate cut because they could see in the data that things were weakening. So a lot of people are asking the question, "Well, is that what's going on here?" Now Powell's comments, though, are indicating that the economy is in good shape. He said the economy is in very good shape that, um, basically indicating that they had tamed inflation and that they would look to cut another 50 basis points this year. So Powell's rhetoric is, uh, in a way at odds with the magnitude of this cut. The qu- you know, so why didn't they just cut 25 basis points? I think people are trying to figure that out.

   5. JCJason Calacanis12:17

      Read the tea leaves-

   6. DFDavid Friedberg12:19

      Yeah.

   7. JCJason Calacanis12:19

      ... into-

   8. DFDavid Friedberg12:19

      Reading the tea leaves.

   9. JCJason Calacanis12:19

      ... why 50, because they could just do 25 a month-

   10. DFDavid Friedberg12:23

       Sure.

   11. JCJason Calacanis12:23

       ... for five months as opposed to 50 and-

   12. DFDavid Friedberg12:25

       And if the eco- And if the economy is hot... Yeah, if the economy is hot, why wouldn't you tiptoe into rate cuts, uh, and just do 25 now?

   13. DSDavid Sacks12:31

       That's the key thing. If you look at the, the dot plot, and if you look at where the smart financial actors are betting where rates end, so it's hard to sort of like look at any point in time, 50 now, 25 later, what does it all mean? It's very hard to know. But what is much clearer is where do we think terminal rates will be in, even in the next 18 months, and it is dramatically lower from where they are now. And I think that supports, Sax, your, that argument that you just made, which is if you're going to basically cut this aggressively over the next year to year and a half, by the estimates of very smart financial actors whose job it is to spend every day observing the Fed, then they must see something. Because otherwise, as you said, you could take a much more gradual approach. And so I think that the smart financial actors are guessing recession or guessing contraction. I think what they're also guessing is similar to non-farm payrolls, we're going to go through a couple of difficult GDP revisions, probably downward, and I think that will have an impact to people's sense of how the economy is doing even more than what their sense is today, which is already teetering on it's, m- at best okay. And I think all of that has to play itself out. So it's gonna be a very complicated and dynamic fall in that respect.

   14. JCJason Calacanis13:53

       Yeah. And, and I think so much of this has to do with unemployment. Uh, we had that period where so many jobs were available. Remember we talked about it here, 11, 12 million (laughs) jobs available at the peak? We can debate the numbers, of course, but we all saw it where you just couldn't hire talent in America. There was so few people available to, to take positions. And man, has that changed. And y- you get to see it on the ground in early stage startups where this whole narrative, I don't know if you saw it in your board meetings, but, "Hey, we can't find a person. Hey, we're looking. Hey, that search is still going. We're still looking for a director of sales. We're still looking for salespeople. We're still looking for developers. We're still looking (laughs) for operations people." Now it's the opposite. It's like, I, I just... I'm hiring producers here in Austin because I'm building it, my in-person studio. We had like, I don't know, a dozen viable candidates for this position, and I had a hard time picking between, you know, the top three. Now, that's distinctly different than my experience for the last five to 10 years where (laughs) you were like, "H- how do we, how do we fill this role?" So I think that employment has been broken, and that's the thing that has me concerned because with all these people who came in through the southern border, and then you have people outsourcing to other countries, I wonder if Americans are gonna lose so many of these mid-paying jobs. And this will dovetail into our next story about A- Amazon making cuts. I'm very worried about the, the hollowing out of the upper middle class, that elite group of $150,000 jobs that, that employ nannies and spend money in the economy. I wonder, I don't know if you're seeing that in your company, Sax.

   15. DFDavid Friedberg15:30

       I'm not worried about the hollowing out of that, that class.

   16. JCJason Calacanis15:32

       (laughs) You, you (laughs) , you have disdain for them.

   17. DFDavid Friedberg15:35

       (laughs)

   18. JCJason Calacanis15:35

       But, but I mean, just in terms of the labor market, what do you see, you know, in companies right now, you know, hiring, the talent pool, et cetera?

   19. DFDavid Friedberg15:45

       Well, I mean, in tech, things are, are pretty good. I mean, they, they're not as absurdly frothy as they were during the bubble of 2020 and 2021, but things are good. You have this huge AI tailwind now, and there's just a ton of investment going into AI. There's a little bit of A Tale of Two Cities going on. If you're in AI, things are really bubbly. And if you're outside AI, they're, they've returned to much more normal levels in terms of valuation and company operations, all of that kind of stuff. Just to go back to the state of the economy for a second, the, the reason why a lot of people were predicting a recession, including me for a while, is that the yield curve inverting has been an almost perfect gauge of whether a recession is coming. It's when basically the Fed raises short-term interest rates above long-term interest rates. Normally, long rates are the ones that should be higher because investors demand a higher rate of return to tie up their money for longer. So if something's really off and kind of broken, when short rates go above long rates, the yield curve inverts. And it's always been the prelude to a recession, but the recession doesn't come when the yield curve inverts. It usually comes when the yield curve de-inverts.

   20. JCJason Calacanis16:59

       Right.

   21. DFDavid Friedberg16:59

       And the reason for that is because the Fed now sees weakness and dramatically cuts the short rates. So in other words, it jacks up the short rates to control inflation. That works. It trickles through the economy, the economy cools down, and then the Fed says, "Oh (beep) , maybe we've over-corrected." They slam on the brakes, and then they cut rates to basically make up for the effect on the economy. So the yield curve has finally de-inverted, and the question is just do we now get that recession, or did the Fed manage this to a soft landing? I don't think we know. I'm not, I'm not like calling a recession, but this is the, the thing that people are concerned about.

   22. JCJason Calacanis17:34

       Yeah. Well,

3. 17:35 – 33:41

   AI is coming for call centers; how agent training works

   1. JCJason Calacanis17:35

      Sax, we were talking about AI in the group chat, right?

   2. DFDavid Friedberg17:37

      Yeah. I think it's now becoming really clear that call centers are gonna be the first really big disruption caused by AI.

   3. JCJason Calacanis17:45

      Yeah.

   4. DFDavid Friedberg17:45

      I mean, all the level one customer support is gonna get replaced by AI.

   5. DSDavid Sacks17:50

      Mm-hmm.

   6. DFDavid Friedberg17:50

      I mean, LLMs plus voice because, uh, you know, OpenAI just released their audio API. You saw that at the ALAN Summit, we released a Mearsheimer AI-

   7. JCJason Calacanis18:03

      Yeah.

   8. DFDavid Friedberg18:03

      ... where we trained it on all of his work. And you can go to Mearsheimer.AI and ask it questions, and it will tell you the answers in his voice because we cloned his voice using Resemble AI. Anyway, so AI can do voice now, and it can be trained extremely well on large data sets to give you answers to questions, which is pretty much what customer support is.So I think it's now becoming clear that I, I think within the next two to three years, you're going to see a massive disruption in that industry.

   9. JCJason Calacanis18:31

      I agree with that massively, and I think there's another under-reported story which is people don't like to call and talk to a customer service agent, like an actual human, if they can avoid it. They would much rather go on YouTube and say, "How do I fix this?" Or, you know, ask ChatGPT, "How do I fix this?" It's like, I don't want to waste another person's time. Just give me the answer as quick as possible, and AI will give you the answer quicker. YouTube will give you the answer quicker. I've had so many times where I have people who work for me who are like, "I don't know how to do that," and I literally would walk up to their computer and load YouTube and type in, "How do I blank?" And there's a video there. Watch it on two-speed, you can do it. That's what's, you know, gonna also kill this. Like, I, I don't want to talk to a human. Just change my flight. Just, you know-

   10. DFDavid Friedberg19:19

       But you talk about disrup-

   11. JCJason Calacanis19:19

       Answer my question.

   12. DFDavid Friedberg19:20

       Yeah, I mean, you talk about disruption, call centers are a very big part of the economy in certain geographies.

   13. JCJason Calacanis19:26

       Oh.

   14. DFDavid Friedberg19:26

       Denver, Salt Lake, I mean, parts of Florida. I mean, there's-

   15. JCJason Calacanis19:29

       Arizona, yeah.

   16. DFDavid Friedberg19:30

       Yeah, exactly. It's a really big deal. If, like, half the cost gets ripped out of those call centers?

   17. JCJason Calacanis19:35

       Where would you move those people if you, if you had your choice? Could they move to sales?

   18. DFDavid Friedberg19:40

       Well, I think sales will be the one that's disrupted after customer support.

   19. JCJason Calacanis19:43

       Okay. (laughs)

   20. DFDavid Friedberg19:43

       But, um, but I don't know. I think it's going to be very disruptive. One of the reasons I think this is, you know, in the early days of LLMs, people were saying that legal services would be disrupted, and you saw some very highly valued startups rocketing up based on that. I think the problem with that is the error rate. So, when you think about AI applications, you have to think about what is the tolerable error rate that the industry will allow?

   21. JCJason Calacanis20:13

       Mm.

   22. DFDavid Friedberg20:13

       Because we know that AIs get things wrong, they can hallucinate, and you're never gonna be able to make it perfect. I mean, you can improve the quality, but it's still gonna have some errors. And when you're dealing with, like, legal services, for example, you just can't have mistakes.

   23. JCJason Calacanis20:26

       Yes.

   24. DFDavid Friedberg20:26

       It's just not tolerated. However, customer support is different. Customer support is already organized into levels, level one, level two, level three, based on difficulty, and there's already, in a sense, a mechanism for failover. If, like, the level one customer support person can't answer the question, they kick it up to level two. So, there's a place for LLMs to start in customer support, which is replacing all the level one and then working their way up the chain to level two as they get better and better. And so what I'm saying is that the level of accuracy now, especially with the new PhD-level reasoning models, is good enough.

   25. JCJason Calacanis21:05

       Yeah.

   26. DFDavid Friedberg21:05

       And we don't need to wait for, like, some perfect LLM model. And I think this is why this is gonna be a big, big disruption.

   27. JCJason Calacanis21:12

       Let me pull you into this.

   28. DFDavid Friedberg21:12

       Millions of people, potentially, are gonna have their, their jobs disrupted or at least transformed.

   29. JCJason Calacanis21:17

       Well, it could be the end of the entire career as well. Chamath, if you were to look at this four-by-four sort of quadrant chart that Sax is describing, which is the cost of an error, you know, and, um, the actual complexity of the job perhaps, uh, or the cost of the job, how do, how do you look at this? I know you're working on software that kind of does this with your startup as well.

   30. DSDavid Sacks21:44

       I mean, I'll preview one use case from 80/90, which is pretty stunning. You know, we work with a, a very large regulated, highly regulated company, public company. And they have a very complicated set of people and processes because of the, the field in which they're in. And David, your point is exactly right. It took us a fairly long time, but we're at a point now where we've been running AI-powered software versus the old legacy deterministic solution, and we've been running it at 100% accuracy now for about 10 days. So this is still very new, and since... it's an incredible thing because, to your point, our first version was like at, in the mid-80s. Then we were in the mid-90s, then we were, you know, 97, 98%, but there were still errors, and it just took a lot of engineering to figure out how to get to 100. But now it's at 100, and it's been consistently at 100. And so we're all kind of like scratching our head because now the next step is, well, what do we do? To your point, what, what do we do? Do we... so we're, we're figuring that out right now. But the art of the possible is that I think well-crafted AI software is as good as deterministic software in the sense that the error rates will be equivalent-
4. 33:41 – 47:10

   US government wasting $50B for rural internet and EV charging stations

   1. JCJason Calacanis33:41

      previously. Yeah, something in...

   2. DFDavid Friedberg33:42

      It's waste, fraud, and abuse. It's the same thing that's happening with, um, rural internet. Do you see that story?

   3. JCJason Calacanis33:47

      Yeah, which is our new- Horrible. Horrible. ... paradoxically, it's our next story. Horrible. So (laughs) - Horrible. ... let's go for it. In related news of our government burning our money, rural broadband, rural broadband (laughs) and EV charging, 42 billion and 7.5 billion, almost $50 billion combined. Let's just go over these two programs real quickly here. Both were part of the $1.2 trillion infrastructure bill in 2021, 42 billion carved out to provide high-speed internet to people living (laughs) on farms and rural locations, 7.5 billion carved out to build 500,000 EV chargers over 10 years. It's been a thousand days since the bill was passed, so let's check on the progress. Zero people have been connected, according to FCC Commissioner Brendan Carr, and eight, one, two, three, four, five, six, seven, eight EV (laughs) chargers have been built as of May, according to AutoWeek magazine. What's even crazier, private industry already solved these problems (laughs) . United Airlines just announced they're putting Starlink on a thousand of their planes, and they're gonna offer it for free. And Starlink now has 2,500 planes under contract with a bunch of other airlines. And, uh, in the second half of 2023 alone, the private sector built over a thousand charging stations in the US. These are two problems that's- have already been solved, Sax. Why are we burning $50 billion in the future with- So close. Uh, on things that have already been solved? We've solved for this. You, I own electric cars. I have Starlink. You know the answer. You know the answer. Say the answer, Jason. Corruption. No. Come on, Jason. Incompetence. R- R- Really? Graft. Keep going. (laughs) I mean, you tell me. W- w- corruption, graft, buying votes from your constituents? They haven't, they haven't delivered any of it. Incompetence, yes (laughs) .

   4. DFDavid Friedberg35:51

      Well, there's, there's a couple things going on here. So one is typical government waste, fraud, and abuse-

   5. JCJason Calacanis35:57

      Mm-hmm.

   6. DFDavid Friedberg35:57

      ... where they've allocated 42 billion for rural internet, haven't hooked anyone up, and we could spend a fraction of that giving people Starlink and allowing the private sector to do its job. So-

   7. JCJason Calacanis36:09

      And why even pay for it, Sax? Why are we paying for it if it's available-

   8. DFDavid Friedberg36:12

      Sure, of course.

   9. JCJason Calacanis36:13

      ... for 100 bucks?

   10. DFDavid Friedberg36:14

       So that, that's, that- that's the baseline, but it's-

   11. JCJason Calacanis36:15

       Yeah.

   12. DFDavid Friedberg36:15

       ... worse than that because on top of the waste, fraud, and abuse, and the fact that the government is grossly incompetent and inefficient, you also have naked political retaliation going on here.

   13. JCJason Calacanis36:26

       Ah, that's-

   14. DFDavid Friedberg36:26

       And-

   15. JCJason Calacanis36:26

       ... the answer.

   16. DFDavid Friedberg36:27

       Yeah, exactly. And Brendan Carr, who's an FCC commissioner, pointed this out. He said that in 2023, the FCC canceled or revoked an $885 million contract with the company by claiming Starlink is not capable of providing high-speed internet.Then, the- a year later-

   17. JCJason Calacanis36:45

       I'm using it. (laughs)

   18. DFDavid Friedberg36:46

       ...the... Yeah, of course, that was a lie.

   19. JCJason Calacanis36:48

       (laughs) It's a lie.

   20. DFDavid Friedberg36:48

       And then a year later, the FCC is now claiming that Starlink provides so much high-speed internet that the word "monopoly" should be, uh, tossed out.

   21. JCJason Calacanis36:56

       Yeah.

   22. DFDavid Friedberg36:56

       So look, this is just pure-

   23. JCJason Calacanis36:58

       Which is it? (laughs)

   24. DFDavid Friedberg36:59

       ...it's pure, naked retaliation.

   25. JCJason Calacanis37:01

       Yeah.

   26. DFDavid Friedberg37:01

       The, the Biden-Harris administration doesn't want to admit that Elon has the best solution for rural internet.

   27. JCJason Calacanis37:08

       Yes.

   28. DFDavid Friedberg37:08

       Just like they couldn't admit he made the best electric cars. Remember when they did that EV summit and they didn't invite him?

   29. JCJason Calacanis37:13

       Yes. 100%.

   30. DFDavid Friedberg37:13

       That was just nakedly political, um, because he's on their team.
5. 47:10 – 1:07:18

   Reflecting on some rough years in VC: is the model broken?

   1. JCJason Calacanis47:10

      All right, listen, early stage investing has always been hard. There was a tweet storm this week that Y Combinator might be having a hard time replicating their early success. We'll discuss it now. A thread this week from X user Molson Heart caught a couple people's eyes. He made the case that it's been a rough decade for YC based on the accelerator's top companies page. YC lists top companies by 2023 revenue there. And, uh, you'll notice there's not a lot of companies from the recent cohorts. Out of the 50 companies featured only three are from the classes after 2020, most of them being from the early 2010, '10s. Obviously, that's because they've been around longer, but it sparked a big discussion that there were so many winners from the 2009 to 2016 era. And that, uh, maybe the class size at YC has expanded a whole bunch and maybe that's part of the problem, but there's a bigger problem in VC that we've talked about here. Here's a chart from Carta that just shows the percentage of VC funds that have made a distribution since 2017. Over 40% of 2018 vintage funds have not made a single distribution yet. Uh, and it's getting to the point year five, six, or seven, where you probably should have had some distributions occur. Obviously, a lot of this has to do with maybe M&A and those early wins being taken off the table. We've talked about that a whole bunch. But here's the chart that kind of gets really interesting. An explosion in fund managers occurred, as we all know, and this chart shows from PitchBook, the first-time, first-time VC managers that raised a second VC fund as a share of all first-time VC managers, and it's now down from above 50% to below...Gosh, 15%. So, what are your thoughts here, Chamath?

   2. DSDavid Sacks48:57

      My gosh. Venture is a really, (laughs) really tough business. Every year for the last seven, six years, seven years, I have published my returns, which most VCs don't wanna do. I do it because I go back and I look at it, and I think having public accountability actually drives some good decisions. They s- they may seem suboptimal in the moment, but they, in the long run, turn out to be good decisions, and the biggest one has been generating liquidity. So Nick, you can throw up this thing, but I'm sure there are funds in each of these vintages that have done way better than me, so I'm not, I'm not saying, you know, it is what it is, but what I wanna point out is, if I go and look inside of these funds and tell you how hard it has been to generate this DPI-

   3. JCJason Calacanis49:50

      (laughs)

   4. DSDavid Sacks49:50

      ... it is like, it's like dragging an entire just-

   5. JCJason Calacanis49:58

      Sack of potatoes-

   6. DSDavid Sacks49:59

      Oh, my gosh.

   7. JCJason Calacanis49:59

      ... over the finish line. It's, it's-

   8. DSDavid Sacks50:01

      It's like, like a truck of dead bodies over a finish line.

   9. JCJason Calacanis50:04

      (laughs)

   10. DSDavid Sacks50:04

       It is super, super hard. And the things that we have fought are two. One is that the gestation of companies has totally blown out. We used to be in a world where, by year five, six or seven, you could return money. You just can't do that anymore, unless you get extraordinarily lucky, which by the way, I got when Sacks was running Yammer. It was an enormous win for all of us, but that is just exceptionally rare because there just-

   11. JCJason Calacanis50:33

       And that was M&A in year what? Five or six, Sacks?

   12. DSDavid Sacks50:36

       Yeah, but there's just-

   13. JCJason Calacanis50:36

       When did it get sold?

   14. DSDavid Sacks50:36

       ... there's so few, there's so few entrepreneurs capable of that. He's one of maybe five or 10. So, other than that, I've never really had a company that has generated liquidity in year five, six or seven. They've always generated, if they've de-generated it at all, in years 11, 12, and 13. And so the problem with that is that at some point you have these paper marks that say you're winning and things are working, but there's no path to liquidity.

   15. JCJason Calacanis51:06

       Mm-hmm.

   16. DSDavid Sacks51:06

       So then I, what I did was I stepped in to the secondary markets and I would sell.

   17. JCJason Calacanis51:12

       Hmm.

   18. DSDavid Sacks51:12

       And it would really upset certain founders, but I was very clear that when I was running outside capital, and I was running outside capital on behalf of really i- organizations that I believed in, the Broad Foundation, the Mayo Clinics, Memorial Sloan Kettering, my job was to get them money back. You know, these were their pension funds. These were the things that they used to build facilities, so-

   19. JCJason Calacanis51:36

       Cancer research.

   20. DSDavid Sacks51:38

       Cancer research. I didn't have the, you know, ability to just sit on my hands and say, "Oh, you know what? You're 15, don't worry." So, it, it's just meant to say that the, the tactics of generating liquidity in venture are very misunderstood and very underappreciated, and even then, you sell some things that are just absolute winners that had you waited another five or six years would've turned another, you know, one or two turns, but that's not the job. The job is not to maximize absolute every single win. The job is to return capital in a reasonable time period so that your investors don't run outta money to give you.

   21. JCJason Calacanis52:19

       Yeah. It's, uh-

   22. DSDavid Sacks52:20

       So it's a tough game, man. It is really, really, really tough.

   23. JCJason Calacanis52:23

       Yeah. And the, and the insight-

   24. DSDavid Sacks52:25

       And, and sorry, by the way, and I feel this now because, you know, the last five or six years has been entirely my own capital, and my gosh, it's hard.

   25. JCJason Calacanis52:32

       Yeah.

   26. DSDavid Sacks52:33

       Managing liquidity is imp- it's impossible, especially when you can't rely on anybody else. So, it's a tough game.

   27. JCJason Calacanis52:39

       Well, and thank God for the secondary markets even emerging, because at the same-

   28. DSDavid Sacks52:42

       Oh, thank God.

   29. JCJason Calacanis52:42

       ... time that the secondary markets emerged and people were willing to buy venture assets, you know, going into their second decade or-

   30. DSDavid Sacks52:50

       I would've been in real trouble without the, without reasonably liquid secondary market-
6. 1:07:18 – 1:17:47

   Reacting to the first Trump/Kamala debate, what factors will make each candidate can win or lose the race

   1. JCJason Calacanis1:07:18

      Love you. All right, Chamath had to go do work, apparently, starting this new concept at Sax where Chamath is actually going to work, and, uh, at a company. Uh, we never got to talk about the, uh, debate because we were busy doing this summit and we took the week off from a new episode. Uh, people wanted to hear your take. What did you think of Kamala and Trump? The one and only debate we're gonna hear, a- apparently. Any, any thoughts?

   2. DFDavid Friedberg1:07:43

      I think that Kamala Harris performed better than expected. She did that, I think, mostly through having canned answers to topics, and she was able to kind of memorize those answers and, and say them, and she was never knocked out of her preparation.

   3. JCJason Calacanis1:08:03

      She was well-prepared, yeah.

   4. DFDavid Friedberg1:08:04

      I think she was well-prepared. However, we now know that these were canned answers because, in subsequent press interviews, she gives the exact same thing. It's like a jukebox where you just push the button-

   5. JCJason Calacanis1:08:13

      Greatest hits.

   6. DFDavid Friedberg1:08:14

      ... and you get the same answer. Exactly. So, she's, she's memorized a certain number of talking points, and that's all she's gonna give you, no matter what the question is. And if you saw that, it's become a meme now, where if you saw that question when she was asked about inflation, there's a pause when she's figuring out which Greatest Hits she's gonna play, and then, you know, she, I guess, pushes B26 in her head, and then it begins, "So I was born in the middle class."

   7. JCJason Calacanis1:08:40

      And it's working, apparently, right? It seems like it's, it's helping her, yeah?

   8. DFDavid Friedberg1:08:45

      I think what you saw is that she got a bounce out of the debate, but now it's sort of, like, a lot of these, um, bounces, there's been kind of a effervescence to it, and then it kind of settles down back to the recurring pattern. And so, I think the election is extremely close, but I don't think-

   9. JCJason Calacanis1:09:01

      Oh, yeah.

   10. DFDavid Friedberg1:09:02

       ... the-

   11. JCJason Calacanis1:09:02

       I mean, every day it's like a poll going one way or the other. I mean, this is the closest of our lifetime, maybe, or that I can remember.

   12. DFDavid Friedberg1:09:09

       Yeah.

   13. JCJason Calacanis1:09:09

       I mean, it's nuts how this thing has flipped over and over again. What did you think of Trump's performance? Were you disappointed? Uh, there were some rumors, uh, people were a little upset that he doesn't prep as much as he should. What, what's your, what's your advice there, you know?

   14. DFDavid Friedberg1:09:23

       Well, look, I mean, I, I think that, uh, he was in a very difficult situation. You basically had a three-on-one situation where he was up against not just Kamala Harris, but the two debate moderators. It turns out that Lindsay Davis is, uh, Kamala's sorority sister. David Muir was fact-checking him constantly.

   15. JCJason Calacanis1:09:42

       Yeah.

   16. DFDavid Friedberg1:09:42

       And some of those fact checks weren't even correct. Um, for example, we now know that the Springfield city manager has acknowledged complaints about pets being eaten as far back as-

   17. JCJason Calacanis1:09:52

       Oh, here we go. (laughs)

   18. DFDavid Friedberg1:09:54

       ... a whole second-

   19. JCJason Calacanis1:09:54

       I was wondering if we were gonna get through the episode. (laughs)

   20. DFDavid Friedberg1:09:55

       Well, no, it's, it's as far as, as far back as March-

   21. JCJason Calacanis1:09:58

       Yeah.

   22. DFDavid Friedberg1:09:58

       ... there are videos of him talking about the complaints at a city council meeting.

   23. JCJason Calacanis1:10:02

       Yes, I, I did see that today, yeah.

   24. DFDavid Friedberg1:10:03

       Now, you can, you can say that you don't believe those stories or whatever, but those reports were real, but David Muir fact-checked in real time saying that Trump was wrong, and there was, like, this effort to kind of gaslight and make him sound crazy during the debate when there are, in fact, sources for what he was saying.

   25. JCJason Calacanis1:10:23

       And it might have thrown him off a little bit, I noticed. Like, it was like he... I, I agree, they... Going into it, I think they need to negotiate in the future, you know how they're negotiating the microphones on or off, audience on or off. I think they should negotiate, are we fact-checking in real time or are we not fact-checking, and who's doing that fact-checking?

   26. DFDavid Friedberg1:10:43

       Well, totally, and they only fact-check one candidate. For example, when Kamala Harris repeated numerous hoaxes like the Very Fine People hoax, the bloodbath hoax, the suckers and losers hoax. I mean, these are things that f- were already addressed in the last debate, and, you know, even left-wing sites like Snopes have said the whole Very Fine People thing is, is totally made up.

   27. JCJason Calacanis1:11:02

       Yeah, for people who don't know that, they, there's been selective edits, and I mean, there's been selective edits forever, but that one is particularly egregious, and-

   28. DFDavid Friedberg1:11:09

       It's really egregious. The bloodbath-

   29. JCJason Calacanis1:11:10

       Yeah.

   30. DFDavid Friedberg1:11:10

       ... one was really egregious too because when Trump was-

Episode duration: 1:24:49