E13: SPACsgiving Special! Vaccine news, innovation vs regulation, fixing higher ed, challenge trials

1. 0:00 – 10:59

   Besties congratulate Friedberg & Chamath for taking Metromile public, Chamath explains a PIPE, Sacks & Jason express their discontent for being left out of the first bestie SPAC

   1. JCJason Calacanis0:00

      Hey, everybody, welcome back. Besties are back and it's a bestie SPACs-giving.

   2. DFDavid Friedberg0:06

      (laughs)

   3. JCJason Calacanis0:06

      Congratulations to...

   4. DFDavid Friedberg0:09

      (laughs)

   5. JCJason Calacanis0:09

      ... the queen of quinoa.

   6. DFDavid Friedberg0:10

      (laughs)

   7. JCJason Calacanis0:11

      His second company. David Freiberg announces today, hours before the taping of this special Thanksgiving pod, that he is taking Metro Mile public through a SPAC and that bestie see, and here is the quote, that as only Chamath can tweet, "Buffett had Geico. I pick Metro Mile."

   8. DFDavid Friedberg0:36

      (laughs)

   9. JCJason Calacanis0:36

      (laughs)

   10. DFDavid Friedberg0:36

       (laughs)

   11. JCJason Calacanis0:36

       Unbelievable. I would just like to say-

   12. DFDavid Friedberg0:38

       That's how you move markets. Yeah.

   13. JCJason Calacanis0:40

       LeBron James (laughs) has three rings. (laughs) Uh, Freiberg, tell us what is Metro Mile, uh, and, um...

   14. DFDavid Friedberg0:50

       Well, this isn't a self-promoting podcast, is it? I mean, like-

   15. JCJason Calacanis0:53

       No, no, but I think it's just... You know, it's your second company.

   16. DFDavid Friedberg0:55

       I s- I started the- I started the company in 2011 when I was running Climate, when I was the CEO there, and, um, you know, s- we were just, Climate was offering insurance at the time. We learnt a lot about the insurance markets and figured like, hey, you know, telematics or connecting cars to the internet is going to be a big deal and we're gonna be able to completely change the auto insurance industry. So we set up this company. I was the chairman from the founding, uh, in 2011 and, uh, you know, been, uh, been chairman and I've been an active investor in the business in every round since then. Um, so the business has built some, uh, you know, really compelling, uh, value proposition for customers and, you know, it's got really good unit economics and it's, um, you know, needed its last round of capital to get profitable and turns out, you know, as we were thinking about that this summer, that a SPAC was, uh, a really good path for the business given the inflection point it's at. Um, and so-

   17. JCJason Calacanis1:49

       And the basic premise of the business is instead of paying for insurance by month or time period-

   18. DFDavid Friedberg1:56

       Yeah.

   19. JCJason Calacanis1:56

       ... the innovation here is you pay per mile.

   20. DFDavid Friedberg1:58

       Yeah. Insurance today is like, you know, you fill out a form and you get a price for insurance and you pay that rate for six months of coverage. But, you know, depending on when you're driving and how much you're driving, you should be paying a different price, right? So we s- we kind of changed the model to a rate per mile. And so if you don't drive, you save. You know, so the average customer doesn't drive a lot with Metro Mile. They save 47% over what they were paying with like Geico or Progressive reinsurance. Uh-

   21. JCJason Calacanis2:23

       And you do that with that ODB port? It's like ODB port-

   22. DFDavid Friedberg2:26

       Yeah, the little plug-in device and increasingly-

   23. JCJason Calacanis2:28

       Yeah.

   24. DFDavid Friedberg2:28

       ... we're actually doing it directly by connecting to cars, uh, direct through, uh, Ford and a couple other big automotive OEMs now have this ability to send the data directly out of the car because they're all internet connected now. So, um, so that allows us to just basically f- you know, see how many miles you're driving and the rate per mile is what we bill you each month times the number of miles you drove on your, on your car.

   25. JCJason Calacanis2:47

       And you, you didn't mention how you drive. Uh, I think that was a controversial concept for a while. You know, if you speed, if you-

   26. DFDavid Friedberg2:55

       Right.

   27. JCJason Calacanis2:56

       ... weed in the night.

   28. DFDavid Friedberg2:56

       No, that's- that's increasing-

   29. JCJason Calacanis2:57

       Is that- is that on the roadmap or no?

   30. DFDavid Friedberg2:58

       Yeah. That- that- that is part of it today. But frankly, 70% of the price difference you get, uh, in auto insurance is from the number of miles you drive, and only 30% is really in this variance around behavior. You know, most people are generally pretty good drivers so... Believe it or not. So the- the real variance in terms of, you know, your risk to the insurance company is how many miles you drive. So that really is the predominant factor, so if we can accurately track that. Now what's interesting is like in a world of autonomous cars where you're like turning on the car to be autonomous or fully self-driving at some point, you know, it's on and off, you should be getting a different rate for those miles, right? So if the car is... If your Tesla's on autopilot on the freeway, that should be safer than you are on the freeway, you shouldn't be paying as much for auto insurance.
2. 10:59 – 21:50

   More positive vaccine news, NYT article on Operation Warp Speed: did the Trump administration nail it?

   1. JCJason Calacanis10:59

      Um, I, I think the first thing we should, we should talk about is just this amazing, uh, moment in time when because of science, you know, and this podcast started during the pandemic, we have had, as predicted by Friedberg, who gets to take two victory laps, he said by the end of the year, we'd have vaccines and they would have, because of this mRNA if I remember correctly, 90%, 95% efficacy. And sure enough, the week after Trump, uh, wins, I'm sorry, lo- loses, sorry Sax, he lost actually.

   2. DSDavid Sacks11:32

      (laughs)

   3. JCJason Calacanis11:33

      (laughs)

   4. CPChamath Palihapitiya11:33

      (laughs)

   5. JCJason Calacanis11:33

      The week after Trump lost, I know you didn't vote for him. Um, the week after he lost, Moderna, Pfizer, then the next week Moderna, and then the next week Oxford. And I understand Johnson & Johnson is about to announce something, and all of these have 90% to 95% efficacy, and that there are going to be 40, 50, and 60 million doses in December, January and February, just from the first two in America alone. So Friedberg, if you were to put a number on when herd immunity hits, because probably 20% or 30% of people have had it, 20% to 30% of people have, um, some natural immunity, how long is this going to take and could we be at a, be doing this from, you know, a Warriors game next year? When, when, when are we going to be able to do this in person-

   6. DSDavid Sacks12:21

      I think, I don't know if it was-

   7. JCJason Calacanis12:21

      ... and not have to test?

   8. DSDavid Sacks12:22

      Yeah, I don't know if it was Fauci or someone that's closer to the operation shared that they do think they can get 70% of Americans immunized by May.

   9. DFDavid Friedberg12:30

      ... so-

   10. JCJason Calacanis12:31

       May. Wow.

   11. DFDavid Friedberg12:31

       ... um, May, yeah. So- (clears throat) You know, if you all remember a few podcasts ago, I think I, I tried to explain, a big part of the budget that went into this Operation Warp Speed was to parallelize production of these vaccines while they were being tested. And so, we've been scaling up the production and the manufacturing of these, and if they weren't going to work, we were just going to crash them, right? A couple billion dollars, who cares, it's a good option for the American people. So, we've got a ton of doses that have been produced. It's about packaging and distribution now, and that's, you know, supposed to be kind of underway with the plan to be, that on December 11th or 12th, when they, uh, give the emergency use authorization, these doses start showing up, uh, in care facilities.

   12. JCJason Calacanis13:08

       So we went all in- we basically went all in blind. Like, we just shoved the chips in and said, "We're going to make these vaccines, even if they're not-"

   13. DFDavid Friedberg13:15

       You know, it's, it's more like, it's more like a s- a spray and pray, um, angel investment portfolio. You know, we, we bought a bunch... We bought, like, four different things or five different things. We made our bets in all of them and hope that one of them pays off. And it turns out, they're all going to pay off. So- you know, or, or a chunk of them are going to pay off. And we get to have them ready, you know, in time to kind of make a difference here. Now, all that being said, if you look at the case numbers in the US right now, we could be as high as 30% of the American people have already been infected with coronavirus, based on some estimates. So, as of the June 30th, um, paper that was published from those dialysis patients and they did a pretty good statistical interpretation of looking at antibodies in people's blood, they estimate 10% of the American population was infected by coronavirus as of June 30th. And then, if you look at the number of people that have been infected since then and you apply the similar sort of multiple that you would assume based on tests, you know, there, there's an estimate that we could already be at, up to 30% of the US population has been infected.

   14. JCJason Calacanis14:15

       Wow.

   15. DFDavid Friedberg14:15

       Um...

   16. JCJason Calacanis14:16

       And, and therefore, immune.

   17. DFDavid Friedberg14:17

       And they're, theoretically, mostly immune. Let's just say that, right?

   18. JCJason Calacanis14:20

       Okay.

   19. DFDavid Friedberg14:20

       And so sure, there's anecdotes and so on, but yeah, let's just say, generally, yes, immune. And so you combine that with these vaccines starting to roll out and we get, you know, a, a pretty kind of comfortable position in terms of the pandemic in, in hopefully a couple of months here. And that's why the market's going nuts and that's why everyone... I mean, I don't know about you guys, but I got some conference invites this last week for conferences for next year that have been canceled this year and were being-

   20. JCJason Calacanis14:43

       Really?

   21. DFDavid Friedberg14:43

       ... put on hold. Yeah. So-

   22. JCJason Calacanis14:44

       Oh, wow.

   23. DFDavid Friedberg14:45

       People are starting to, to lean in on this.

   24. JCJason Calacanis14:46

       Wha- For what timeframe? Third quarter or fourth quarter?

   25. DFDavid Friedberg14:49

       Uh, summer? July?

   26. JCJason Calacanis14:50

       Yeah. So-

   27. DFDavid Friedberg14:51

       Yeah.

   28. JCJason Calacanis14:51

       People are now assuming that and they're booking hotel spaces based on it. That is extraordinary. Sax, you shared this New York Times story. Why don't you summarize it for the audience? And I'd love to get your thoughts in addition to this, as to what this recovery might look like if, in fact, we have more vaccine than we need and even, you know, a reasonable number of Americans take it and don't believe that it's a conspiracy theory by Bill Gates to control and the Illuminati and all that stuff.

   29. CPChamath Palihapitiya15:22

       Yeah. I mean, this New York Times story is pretty remarkable. It's called Politics, Science, and the Remarkable Race for a Coronavirus Vaccine. This came out, I think this came out today in the New York Times. Actually, sorry, it's published... It published November 21st, updated November 24th. Um, and it's pretty remarkable. It describes the effort by Operation Warp Speed, by the administration, by Pfizer, by Moderna. It kind of gives you the behind-the-scenes, play-by-play. And reading the article, you have to come away thinking that the Trump administration did a pretty good job with this whole, uh, Warp Speed project. Um, I don't know if the New York Times, uh, realizes that it's making the Trump administration look so good, or maybe-

   30. JCJason Calacanis16:06

       (laughs)
3. 21:50 – 35:25

   How will the COVID experience impact the response to the next pandemic? Morality of challenge trials, hypocrisy of regulatory capture around gambling, drug use, pharma, etc.

   1. JCJason Calacanis21:50

      But we all, are all gonna be scarred for life thinking, you know, "When is the next coronavirus?" Just like for a decade we, we were on pins and needles, "When is the next 9/11?" So this is gonna be scar tissue, uh, for a generation or two of people. Wh- when the next COVID comes, how quickly will Warp Speed 2.0 go?

   2. DFDavid Friedberg22:09

      Yeah. It's, it's a... It's the right question, um, 'cause our approach to doing vaccines may have just changed permanently. Um, so, you know, every cell has your DNA and DNA basically codes proteins. Uh, every three letters of DNA makes an amino acid. Uh, codes for a specific amino acid. There's 20 amino acids. The way that DNA turns into proteins is through RNA. So RNA is kind of like a mirror copy of your DNA. It floats into these things called ribosomes in your cells and out come proteins. Um, and those... It's like a printer, right? And so those, those ribosomes make your proteins using those amino acid sequences coded by the RNA. So the way that the, um, vaccines work historically is you'll get a dead virus, which is basically the protein of a virus. Your immune system then learns to kill that or to re-

   3. CPChamath Palihapitiya22:59

      (barks)

   4. DFDavid Friedberg22:59

      ... that protein.

   5. CPChamath Palihapitiya23:01

      (laughs)

   6. DFDavid Friedberg23:01

      Oh man. Jesus my dog. Your immune system then learns to remove that protein from your body, uh, and that's wh- how you develop this memory, uh, your immune memory, uh, to a specific protein. And so they put this dead r- vaccine, the virus in your body and hopefully your immune system learns a good response to it. mRNA basically puts the RNA in your body that codes for that protein. Your cells then make that protein. And because it's making a lot more of the protein in a more consistent, you know, way, theoretically the idea is your body develops a much more robust immune memory and immune response without it overloading your system where all the immune cells try and wipe that protein out right away and so on. The, the challenge is you're putting RNA in your body. And we've always been worried about, we don't know what the side effects of mixing RNA in your body would be. Is it gonna change your DNA? Is it gonna change your genetic makeup? Is it gonna cause other deleterious side effects? So this technology, this capability, this knowledge has been around forever. I mean, not forever but for, you know, a long time. And the idea has always been we could use RNA in this way. But, y- you know, no one wanted to... And we've used it in animals and we've used it in plants and we've seen the capabilities of, of using RNA to do different things like this. But, um, this is a big leap. And so, uh, you know, we, we kind of leapt forward here getting to the point that we felt comfortable with, you know, RNA as a, as a treatment like this and it's, um, it's working. So in theory in the future, as Sax points out, you could take any virus or any bacteria, you could read its DNA, you could do that in an hour. Then you could take chunks of that DNA and code RNA for it so that your body makes those proteins and theoretically produce an immune response. So that, that's the, the, that's the science of like how do you, how do you create a new vaccine that's based on RNA.

   7. CPChamath Palihapitiya24:33

      I think it's am- I think that's the amazing part is the way it's described, you know, in this article, is that it's almost like laser printing...... or 3D printing a vaccine. It's kind of like the equivalent of that. You just take the genome of the virus and, you know, boom, you've got the vaccine. And then all the other delay is about human trials and testing of it. But imagine if that there, there was the next coronavirus is 10 times as deadly. You know, something that's as... spreads as contagiously as smallpox and as, you know, as deadly as ebola or something like that. We could have a vaccine the next day, you know, like you could... we, we could have it very, very quickly.

   8. JCJason Calacanis25:12

      The challenge, David, would be, is we'd have it the next day like we did here, but we would be going through this three-phase trial. And so I want to take a moment here and talk to Chamath about something which is challenge trials. Um, in the UK they will start doing challenge trials. For those people who don't know what a challenge trial is, essentially they expose you to something dangerous, i.e. a virus like COVID, and then, uh, well they give you the, uh, vaccine, and then they give you, uh, the virus. As opposed to how we do a three-phase trial, which is you give the v- the vaccine to 30,000 people, and a, and a placebo to 30,000, and then you come back three months later and see how many people got infected and it takes time and money. Whereas challenge trials only take risk on the individuals who are part of it. Chamath a- a hundreds of people in the science community signed a letter, and in the UK they're gonna be doing the first challenge trials in January. The United States is not doing these. I'm certain China is. Um, do you think it's a moment in time where we need to think about the ethics and morality of challenge trials specifically, and then, if so, how do you execute them withou- how do you execute a challenge trial without it being unfair, um, or too dangerous for people? Obviously you're not gonna just go into a prison and say, "Hey, anybody want to get 10 years off the sentence, join the challenge trial." That seems morally bankrupt. But we let people climb mountains without ropes, so...

   9. DSDavid Sacks26:35

      Right. Well, I think, I think this speaks to a whole bunch of other issues that we've talked about on the pod before. You know, another example of this was Section 230 before when we talked about it. We had a body of law that was created in a moment of time that essentially was about framing and understanding a specific pathway and a way to use technologies that today look archaic. And we have to rewrite the laws in order to just compensate and understand for where we are. So if I... If you double-click on trials as an example, you know, if you have a solution for a rare disease, you can go in a specific pathway with the FDA and get breakthrough and fast track approval. But if you, for example, have, uh, you know, a novel immunotherapy cancer drug, you pro- you cannot. You know, you have to do a multi-phase trial, a typical three-phase trial. You have to solve for very t- typical things like fatigue, et cetera, et cetera. All these things slow progress down. Now, in a world where we were somewhat flying blind, 40 or 50 years ago, we didn't have, you know, things like CRISPR, we didn't have, you know, a real understanding of the genome, um, we didn't have delivery mechanisms like CAR-T, you would say, "Okay, yeah, we should be really, really, um, careful." Um, but I would say that the more you know, um, the more you can ease up on the rules because you can actually empower people with a lot of information. And it shouldn't take a disaster scenario for us to be iterative and experimental. So, I think the challenge trial is really important. I think the concept of them make a lot of sense. I think a lot of government should employ incentives to figure out who is eligible and why. But if you're a healthy adult, male or female, and you want to participate in a trial for whatever set of reasons, um, you should be allowed to do so. And companies that want to run those trials should be allowed to run them. Similarly, if you want to find a complementary pathway through regulatory agencies to get drugs to the starting line, you should be able to do those too. And I think what we have to do is multipath, um, these compounds going forward because I think that's where you accelerate all these technologies' ability to actually solve these diseases.

   10. JCJason Calacanis28:48

       Freeburg, why is it so controversial that, um, a rocket ship company, uh, or, you know, uh, people who want to climb on mountains without ropes or, or a rocket ship company, like there are experimental pilots, we have astronauts, they, they take unbelievable risk. We send thousands of troops into harm's way for many different reasons, uh, many of which sadly die, and they volunteer for those activities. Those people are volunteering and compensated. But when we look at science, and we look at a challenge trial, scientists say this is morally reprehensible to compensate somebody for taking risk, when it... that's exactly what we do in the army, we do it with police officers, and we do it with astronauts. H- uh, help us understand how scientists think so differently than, say, war.

   11. DFDavid Friedberg29:37

       I, I don't know if it's scientists as much as it is, you know, a regulatory framework like the... Some people would call it a nanny state and, you know, there are things that the nanny state assumes individuals, uh, don't have the capacity to understand the extent of the potential loss or the, uh, or the nature of the risk. This is true for angel investing, right? You have to be a qualified investor to invest in a private company without appropriate disclosures, and, uh, it's true in a lot of other contexts. So, um, you know, to, to give people the authority to make decisions like this, it seems like my... I'm, uh, I have no point of view that I'm kind of making here, but it seems like the, the, the, the, the, the, the government assumes or the, the elected officials assume or the populace assumes that there are things that people aren't really equipped to make decisions on because they can't understand the risk because they're not qualified, and, uh, that, and they get excluded from those activities. But Sachs is the, uh, is the expert-

   12. JCJason Calacanis30:32

       Yeah, Sachs, how should we reframe this?

   13. DFDavid Friedberg30:34

       ... on this stuff. Yeah.

   14. CPChamath Palihapitiya30:34

       Yeah. Well, I think assumption of risk-

   15. JCJason Calacanis30:36

       Or how should we frame it? Yeah.

   16. CPChamath Palihapitiya30:37

       I think assumption of risk is, is a, is, is a really good principle, and it, it is a way for people to engage in potentially...... harmful behaviors. Just because a behavior is, is potentially harmful doesn't mean you don't get to do it. Um, in the United States, you're allowed to do things that are manifestly harmful to yourself, like smoking-

   17. DSDavid Sacks30:58

       Well-

   18. CPChamath Palihapitiya30:58

       ... you know? You assume the rest.

   19. DSDavid Sacks30:59

       E- even, even worse, if you're in Oregon, you can now do all kinds of d- hard drugs. I mean, you can assume that-

   20. CPChamath Palihapitiya31:05

       Right.

   21. DSDavid Sacks31:05

       ... risk for yourself. So, you know, if, if in Portland, Oregon, you can now take heroin openly in the street with no consequence, but you can't participate in a trial that could basically cure a cancer, that's insane to me.

   22. CPChamath Palihapitiya31:18

       Right.

   23. DFDavid Friedberg31:18

       I'll tell you the-

   24. DSDavid Sacks31:18

       He's lost the script. He's lost the script.

   25. CPChamath Palihapitiya31:20

       There it is. There it is.

   26. DFDavid Friedberg31:20

       I'll tell you s- I'll tell you, I'll tell you the flip side of it. Um, you're allowed in Nevada to play roulette. I mean, what the fuck? Like, you know, it's got a negative expected value, statistically, factually for individuals, but the individual doesn't have the capacity, generally speaking, that's playing roulette, to recognize that every dollar they're spending at the roulette table is likely going to be de- de- you know, taken away from them. Like, there's some percentage of that that's gonna be taken away. There's a five percentage for the house on that, uh, on that game. And, um, and so we make the argument in some cases that people don't have the capacity to understand risk, but in other cases, it's okay for them to not have the capacity to, to, to, to take risks. And I think that there is this notion of what some people call regulatory capture that probably encompasses both of these, which is that there is some degree of profiteering that has created some set of laws that kind of manifestly capture that system in a certain way. So, there are profitable casino enterprises that say, "Let's get people to spend their money in a risky way that they don't understand," and that becomes the law, and then people in Nevada are allowed to do that. There are also pharmaceutical companies that will say, "We need to have huge regulatory burdens, so once we make that big investment, and we get patent approval, and we can lock in that drug, we can charge a lot of money for it." So, I would argue to some extent that the regulatory capture associated with the profiteering that happens on the backend in pharmaceuticals has, in large part, driven the structure around risk-taking in, um, in drug trials, uh, particularly in the US. I mean, you can go get whatever drug you want over the counter in Mexico, right? I mean, we have a very different system-

   27. CPChamath Palihapitiya32:48

       Yeah.

   28. DFDavid Friedberg32:48

       Um, it's the most ex-

   29. CPChamath Palihapitiya32:49

       Yeah.

   30. DFDavid Friedberg32:49

       It also happens to be the most expensive in the world, and the, the rationale is, "Well, you're the most protected," right?
4. 35:25 – 47:07

   Why innovation has occurred so rapidly on the Internet: Permissionless innovation & lack of regulators, regulation vs. innovation

   1. JCJason Calacanis35:25

   2. CPChamath Palihapitiya35:25

      So, y- the reason why innovation has happened so fast on the internet is because of, you know, one word, permissionless, right? Permissionless innovation. Nobody who has an idea for a startup needs to go get permission from someone in the government, you know, repeatedly. That's really what makes a difference. You know, Mark Zuckerberg, as a, you know, sophomore in college can just build his project. Larry and Sergey as PhD students can just build their project, ship it, start, you know, getting users, and they don't have to get the permission of a regulator, whose incentive, by the way, is just typically not to get fired by approving something that might rebound on them in some, you know, in some bad way.

   3. JCJason Calacanis36:03

      Yeah. And to keep their job. Yeah.

   4. CPChamath Palihapitiya36:05

      Keep their job. I mean, imagine if, you know, imagine, just taking like a random example, when Elon launched Starman. Remember when he put the, like-

   5. JCJason Calacanis36:13

      Yeah.

   6. CPChamath Palihapitiya36:14

      ... he, he launched the Tesla into space, and there was like a astronaut in there, and it was, like, this kind of really cool moment. I assume he just did it. I assume he didn't get permission from anybody to do it. But could a moment like that have really happened if he did have to get permission? No way. It'd be, like, making its way up th- through the chain. No one would know what to think of it. No one would know whether they could be the one to approve it, and then what if something goes wrong? What if the Tesla comes back down to Earth and, you know, turns into a meteor or whatever? Those are the scenarios that'd be running through their heads. Nobody would have allowed it, right? And so, when you just let entrepreneurs do things...... like, good things happen, right? And- and that's why we've had so much progress on the internet and in so many of these other areas we've had much less progress because, you know, what- what a system like that selects for is your ability to go lobby regulators as opposed to just building your project and shipping it.

   7. DSDavid Sacks37:07

      I think that, um, one of the things that maybe happens is that, you know, we- we were all expecting, or maybe some of us, I have definitely, some version of a New Deal and some grand bargain. And I wonder maybe whether the New Deal and our sort of, like, our version of FDR over the next, I don't know, 10 years is the person that actually says, "Guys, we're gonna have a wholesale rewrite of the regulatory infrastructure to account for technology. Just period. We're gonna start some place reasonable and small, and we're gonna make common sense reforms just observing the times as they exist today, right? And we're gonna go and systematically try to make these industries a little bit more resilient, a little bit more entrepreneurial, you know, a little bit, um, less corrupted by regulatory capture and lobbyists and laws that just-

   8. CPChamath Palihapitiya37:55

      Right.

   9. DSDavid Sacks37:55

      ... don't make sense-

   10. CPChamath Palihapitiya37:57

       Yeah.

   11. DSDavid Sacks37:57

       ... 100 years later."

   12. CPChamath Palihapitiya37:59

       The- the- I mean, it'd be great if we could do that. The reason we can't is because how do you reform the law without the lobbyists getting their fingers in it, right? And- and the problem is-

   13. DSDavid Sacks38:07

       Wow.

   14. CPChamath Palihapitiya38:07

       ... there- there's no, there's no lobbyist for the company that doesn't exist yet, right? For the founder, for the entrepreneur who's got an idea in their head but they haven't built their company yet, there's nobody representing that person in Washington.

   15. DSDavid Sacks38:21

       Innovation.

   16. CPChamath Palihapitiya38:21

       Right?

   17. DSDavid Sacks38:22

       Hm.

   18. CPChamath Palihapitiya38:22

       And what happens is you get new regulations in Washington, some agency gets created. They reach out and touch an industry.

   19. DSDavid Sacks38:28

       But can-

   20. CPChamath Palihapitiya38:29

       Now every player that's affected has to create their own lobbying, you know, organization.

   21. DSDavid Sacks38:34

       No, not- not true. Not true. And, D- David, what do you think about this? What if the- the advocate for the entrepreneur or the uncreated company, an uncreated product, is really the same as just individual civil liberties and rights? How are they really that different? Because really what it's doing is saying the entrenched organizational infrastructure that runs my life gets deconstructed and then power gets pushed down to me, the individual. That's tantamount to the same thing, I think.

   22. JCJason Calacanis39:03

       Well, we- we have seen some-

   23. CPChamath Palihapitiya39:05

       It'd be great if he could do it, but-

   24. JCJason Calacanis39:05

       We have seen some pushback... Well, I mean, I- I- there is some silver lining here. If you look right now, the citizens of California, uh, obviously people have been fleeing and we've been talking about California and- and the one-party system here causing so many problems. But we did have Prop 22, uh, pass and we now have 900,000 people have signed to recall Governor N- Newsom, uh, and these seem to be some pushback against this sort of nanny state, uh, where people can't make decisions. And then additionally, uh, today the SEC announced, um, that they will allow gig working companies to give stock to employees as part of their compensation, up to 15% of their compensation, in fact. Uh, Hester, um, uh, how do I pronounce her last name? It's not Pierce. Um...

   25. DSDavid Sacks40:01

       You can't pronounce the word Pierce?

   26. JCJason Calacanis40:02

       Purse.

   27. CPChamath Palihapitiya40:02

       (laughs)

   28. JCJason Calacanis40:04

       Purse. Purse. No, it's spelled Pierce, but Hester Pierce is, uh, worth following on the Twitter, H-E-S-T-E-R P-E-I-R-C-E. Hester Pierce, I had her on my podcast this week in startups and she, um, they're- they're really getting aggressive in changing the accreditation laws, so anybody's gonna be able to be an accredited investor. You just become sophisticated through a testing mechanism. And now they want to let gig workers get equity compensation.

   29. DSDavid Sacks40:25

       But, by the way, sorry, here's a perfect example of, um, a regulatory body and infrastructure that actually has changed with the times. I think the SEC in- in fact, I've- I've- I think we maybe we talked about this a little bit the last time. I actually think one of the best Trump appointees has been Jay Clayton. Um, and I actually think Jay Clayton has done an incredibly good job. And a lot of what he's done is just deconstruct this kind of nanny state and say people can become educated and make good decisions for themselves. And because it's in some- it's in an area that's relatively benign, i.e. investing, people kind of just let it happen without a lot of pushback and everybody kind of generally supports it. Democrats support it, Republicans support it, and the outcomes are really good. To your point, Jason, which is in a world of zero rates, how do you expect any just, you know, average ordinary middle American who just works a decent job to save for their retirement to actually make enough money? Well, they're gonna have to get educated and they're gonna have to find a way of putting their money to work in- in, uh, in assets that have a better return, which literally was illegal up until very recently. Yeah, so we- you were hav-

   30. JCJason Calacanis41:32

       I mean, you can have this-
5. 47:07 – 59:58

   Thoughts on ISAs & how they could disrupt overpriced higher education, Dave Chappelle's contract with Comedy Central

   1. JCJason Calacanis47:07

      I, I... What do you guys think of ISAs, income sharing agreements? These have become kind of a... Lambda School does them, a bunch of other schools. You, David, you saw a startup we just invested in that's doing them, and I think you liked them at the demo day we did with Kraft.

   2. CPChamath Palihapitiya47:21

      Right.

   3. JCJason Calacanis47:21

      Maybe, you know, this idea is who should take the risk for an education? And when you look at an ISA-

   4. CPChamath Palihapitiya47:27

      Right.

   5. JCJason Calacanis47:27

      ... an income sharing agreement, what they're saying is, uh, the school takes the risk. They let you come to school for free. They give you what would be the equivalent of, let's say, a $15,000 coding camp or growth marketer, uh, risk. Then you pay double that amount over five, six, seven years as a percentage of your income. But if you don't get income, if you don't break 50K a year, you don't have to pay it back. And if you decide to go back to school or your income drops below 50, you don't have to do it. Can you imagine if a college had to make that promise?

   6. DSDavid Sacks47:57

      They should do it. They should start in college sports, but they should do it. Imagine you, you know, Duke basically went and recruited kids and said, "Listen, we're going to pay you to come to Duke. We're going to get you educate- educated. We're going to teach you how to play basketball better than anybody else, and we're going to take 5% of your future earnings. Yes or no? You're not going to have to go to boosters. You're not going to have to take money. You're not going to have to do any of this stuff on the side. But just be your best, learn to play the game. We'll get you a reasonable education, we'll give you a good infrastructure, and we take 5% of the backend." I think-

   7. JCJason Calacanis48:28

      With a cap so you could cap the u- upside, right? So you don't take something reasonable.

   8. DSDavid Sacks48:31

      Or, or maybe there's... Maybe there's no cap and, and... But, but why do we always have to care about all of this? Like, it's like, you know, it's like whatever. Maybe it's 5% for the rest of your life. You're going to pay the government 50%, you get nothing in return. So if you pay 5% and you get Coach K to teach you how to shoot a jumper, it's better than that, right? So why, why isn't it possible? And I remember how people had this unbelievably paternalistic, allergic reaction to income sharing agreements when they were first talked about.

   9. JCJason Calacanis48:55

      They called them i- ... indentured servitude-

   10. DSDavid Sacks48:57

       Modern slavery.

   11. JCJason Calacanis48:57

       ... and they compared them to slavery. And it was like-

   12. DSDavid Sacks48:59

       Oh my God.

   13. JCJason Calacanis48:59

       ... so insulting to the concept of slavery.

   14. DFDavid Friedberg49:02

       But it's no different, it's no different than signing a contract with an agent to represent you when you first start out in any industry, music or, or sports or, uh, film or whatever. One... You could sign a agency agreement where the agent is your rep for 10, 20 years, right? I mean, some of those agreements can have long tails on them, and that's effectively the same, you know?

   15. DSDavid Sacks49:18

       Now, look at, it's, it's even worse-

   16. JCJason Calacanis49:19

       And the, and the United States had a cap.

   17. DFDavid Friedberg49:20

       Yeah.

   18. DSDavid Sacks49:20

       Look at, look at, uh... We, we can talk about this in a second, but like, you know, did you see what happened with Chappelle the last couple of days where Chappelle-

   19. JCJason Calacanis49:26

       Oh, yeah, let's go.Did you watch the video?

   20. DSDavid Sacks49:29

       I loved it. Yeah.

   21. JCJason Calacanis49:30

       The video is incredible.

   22. DSDavid Sacks49:31

       The video was incredible. So the, the, the quick story on this is Chappelle basically did, um, he had a request, he went to Netflix and he said, "Take down Chappelle's Show." Netflix took it down. And he did a little stand-up. It's on his Instagram. It's like 18 minutes. It's f- it's fabulous, as most Chappelle stuff is.

   23. JCJason Calacanis49:46

       Peak Chappelle.

   24. DSDavid Sacks49:47

       Peak Chappelle. And he basically told this story, which essentially the punchline is, like, you know, he signed a contract where he just got completely fucked. And he's like, "This is happening every single day in so many markets." And so the idea that then you have actually a different market which disrupts something by actually creating transparency and something reasonable is all of a sudden completely immoral. It makes no sense to me. So there is abuses happening all the time. That is... But the, the contract that Chappelle signed was indentured servitude. He doesn't even have the rights to his name. He cannot create-

   25. JCJason Calacanis50:23

       Yeah, they took his name and likeness, right. Yeah, he-

   26. DSDavid Sacks50:24

       So, so, so-

   27. JCJason Calacanis50:24

       If he wanted to create the Dave Chappelle Show again-

   28. DSDavid Sacks50:26

       So, so-

   29. JCJason Calacanis50:26

       ... he'd have to be called the DC Show.

   30. DSDavid Sacks50:27

       So this is, but this is perfect- I'm sorry, but somebody owns his name? What the fuck?
6. 59:58 – 1:06:29

   Trump accepts defeat (sort of), Biden's cabinet selections so far

   1. JCJason Calacanis59:58

      (laughs)

   2. DSDavid Sacks59:58

      Hey, David, did you think that Trump, uh, actually resigned two days ago? Was that- was that- was that the equivalent of a res- like or the concession tweet?

   3. CPChamath Palihapitiya1:00:06

      It wa- it was acceptance of, um... You're talking about when they- he authorized the GSA to-

   4. JCJason Calacanis1:00:12

      Yeah.

   5. DSDavid Sacks1:00:12

      Yeah.

   6. CPChamath Palihapitiya1:00:12

      ... release transition funds to Biden? Yeah, I mean that wa- that- that was his concession right there. Um, that- that's- that's basically what you're going to get out of him. That's his acceptance of the- of the election result. Uh-

   7. JCJason Calacanis1:00:24

      So after anger, he's now went into bargaining, uh, and then he was depressed and now he's accepting? (laughs)

   8. CPChamath Palihapitiya1:00:31

      Well, what- what basically happened is y- you know, you had Rudy and Sidney Powell and, you know, th- that legal team going to court to try and challenge-

   9. JCJason Calacanis1:00:39

      The wack pack.

   10. CPChamath Palihapitiya1:00:39

       ... all these rul- the wack pack. Yeah, they're trying to go to court to challenge all these ru- ru- rulings. I think Rudy was like 1 and 35, meaning, I think he won one ruling and lost 35. So it was going very, very poorly but the thing-

   11. JCJason Calacanis1:00:51

       So like you versus Alan Keyedian? Go ahead.

   12. DSDavid Sacks1:00:53

       (laughs)

   13. CPChamath Palihapitiya1:00:53

       Yeah, but the thing- yeah basically. That's a whole separate story we'll get into but, uh, but the thing that really like ended it was when Sidney Powell came out with this elaborate conspiracy theory that actually Trump lost the election because, um, communist, um, code writers had effectively, you know, infected this- the- the software that was running the- the election. And somehow Hugo Chavez was behind this, even though he's been dead for seven years.

   14. JCJason Calacanis1:01:21

       Hugo, not us again.

   15. CPChamath Palihapitiya1:01:23

       And the republic- and the re- and the republican governor of Georgia and Secretary of State were in on it. Anyway, it was so wild and crazy that basically the narrative just cracked. And so then you had like-... Steve Schwarzman come out and then sort of the Republican business community and, and Pat Toomey, you know, Republican Senator from Pennsylvania, came out. And they all just said, "Look, this is, this is ridiculous." And so that, that was the moment, I think, at which the, this narrative that the election was stolen kind of cracked is ... And I think she kind of, she did everyone a favor by being so, like, off the reservation that it just brought the whole thing to, like, a, a meltdown.

   16. DSDavid Sacks1:02:03

       Sidney Powell always, whenever I see her, I always, I, I just think that she's one second away from her dentures flying out of her mouth and hitting the camera.

   17. JCJason Calacanis1:02:11

       I mean, that's your crazy aunt. That's the crazy aunt at Thanksgiving.

   18. DSDavid Sacks1:02:14

       She is, she.

   19. CPChamath Palihapitiya1:02:15

       She said she was going to release the Kraken, and I guess she meant the-

   20. JCJason Calacanis1:02:18

       I think she meant Smoke the Kraken. (laughs)

   21. CPChamath Palihapitiya1:02:19

       ... hair dye that was running down Rudy's... I think it was the hair dye running down Rudy's face, I don't know.

   22. DSDavid Sacks1:02:23

       Yes, exactly. That's the Kraken. (laughs)

   23. CPChamath Palihapitiya1:02:25

       (laughs)

   24. JCJason Calacanis1:02:25

       Rudy's the Kraken. I mean, I'm, I'm glad that-

   25. CPChamath Palihapitiya1:02:28

       It was a total meltdown. It was a total shit show.

   26. JCJason Calacanis1:02:31

       I'm glad the GOP finally, after Trump's defeat, decided with 55 days left to go that they would take a stand against ... (laughs)

   27. CPChamath Palihapitiya1:02:41

       Well, let me, let me tell you what I think-

   28. JCJason Calacanis1:02:42

       Against Trump. (laughs)

   29. CPChamath Palihapitiya1:02:42

       ... is going to happen now. What, let me tell you what I think-

   30. JCJason Calacanis1:02:44

       Yeah.
7. 1:06:29 – 1:14:50

   What the besties are thankful for

   1. JCJason Calacanis1:06:29

      Um, as we wrap here, um, what are you thankful for and what are you most looking forward to next year? Um, vis-a-vis just ... It's been a rough year, um, I mean, listen, it's been nice for people's equity portfolios, of course, um, but it, it's really ... What do you hope for America, for humanity, for yourselves, your family, for friends? You know, what are you thankful for? Um, and, uh, I'll let you, Friedberg. It looks like your processing unit has delivered a result, so let's hear it. (laughs)

   2. DFDavid Friedberg1:06:59

      The emotion at bank has been cleared.

   3. JCJason Calacanis1:07:01

      (laughs)

   4. CPChamath Palihapitiya1:07:03

      (laughs) That was good.

   5. DFDavid Friedberg1:07:05

      (laughs) Uh, it ... I ... Look, I don't think that this year was any, uh, any cup of tea for anyone. Uh, so I think like everyone, you kind of value your friendships and your family. So it's, uh, it's been a, it's been a year ... You know, going into COVID, I was in the office every day, spending more time at home, being closer to my children. I know their names, by the way, Sax. I'll, I'll, uh, teach you how to learn them. They're, uh ... It's been, it's been actually really special being at home a lot and being with the family a lot and realizing, like, how much that stuff matters and how being close to everyone matters. Because when you're in the run of the life before, you kind of get knocked back and just put everything in perspective.... you miss those moments. So that's been really special and important to me this year, in a really kind of personal way. And just having friendships, right. I mean, it's great for us to all be able to, to talk as we do every day and have people you can kind of connect with, even if you're not sitting in, in person. I do think that everyone realizes they need that. So anyway, it's been a, it's been an insightful year.

   6. JCJason Calacanis1:08:03

      Saks?

   7. DFDavid Friedberg1:08:04

      Money aside, it's... Yeah, I was fucking terrorized at the start of this year about money, and the end of the year... (hand slap)

   8. JCJason Calacanis1:08:09

      Here you go, finally fear-

   9. DFDavid Friedberg1:08:10

      There it is. It's all a fucking rollercoaster. Yeah.

   10. JCJason Calacanis1:08:11

       Sold the first company and now you got the second one IPOing. Congratulations, Mazel. Saks, has your processing unit overloaded with this question or are you gonna be able to, uh-

   11. CPChamath Palihapitiya1:08:21

       (laughs)

   12. JCJason Calacanis1:08:21

       ... articulate-

   13. CPChamath Palihapitiya1:08:21

       Yeah, no, I, I-

   14. JCJason Calacanis1:08:21

       ... something you're thankful for and appreciate this world?

   15. CPChamath Palihapitiya1:08:24

       I, I, I agree with, with all the things that Freeburg said. Um, you know, the flip side of working from home all this time is you do get to spend a lot more time with the kids. Um, I personally l- have... I, I like this shift to remote work where I can do a meeting from anywhere. You know, you don't have to go to the office. That's been kinda, kinda nice upside, I think. I think we probably all learned how self-sufficient we can be. Um, I have learned how to give myself a haircut. Apparently you guys don't think I've done a very good job with it, but, um, but anyway.

   16. JCJason Calacanis1:08:54

       Well, it's better that you haven't had long hair. Yeah.

   17. CPChamath Palihapitiya1:08:58

       (laughs) So yeah, but look, I mean, I'm thankful for, um, you know, knock on wood, we all have our health and, um, you know, and, uh, it weirdly, the, the economy of Silicon Valley is doing, still doing great. Technology is doing great, still the future. And I think the country is, even though COVID is kind of at its worst right now, I do think it's gonna get rapidly better as soon as these vaccines come to market. So I do think we'll, we'll, we're... I do think 2021 will be a much, much better year.

   18. JCJason Calacanis1:09:30

       Chemoth?

   19. DSDavid Sacks1:09:33

       Um, in this really crazy way I actually now am pretty thankful, um, for what I've learned during the pandemic. I mean, I wish we didn't have to go through it, but, um, I think that it was the most psychologically stressful period of my life, um, just to be so isolated from everybody. Um, and I learned something about myself recently which is that, uh, i- i- in psychology it's called repetitive com- uh, compulsion, which is sort of like, you know, you repeat the sins of your father. Or in this way, you know, I repeat these tired ways of behavior from my teens and my 20s that were just unproductive and, um, in the day-to-day life of just running around and going to meetings, as David said, like flying around, go to a meeting, go to the office, go here, go there, um, you can make a lot of excuses for shitty behaviors that you carry with you. Um, and so what I'm really thankful for is in this lockdown I've been forced to really find the things that I, that I don't really like about myself and try to fix them. Um, so, you know, uh, I'm, I'm, I'm really thankful for that because I think, uh, hopefully everybody has something positive to look at at the end of this and that's definitely one thing for me.

   20. JCJason Calacanis1:10:53

       Yeah, it's very touching and it actually quite appropriate as we wrap here, because Saks and Freeburg and I had some things we don't like about you, Chamath, that we wanted to bring up. (laughs)

   21. CPChamath Palihapitiya1:11:04

       (laughs)

   22. DSDavid Sacks1:11:04

       (laughs)

   23. JCJason Calacanis1:11:04

       So s- you kind of knocked one off the list already so we've only got four more to go.

   24. CPChamath Palihapitiya1:11:09

       It's, it's good you're doing this work.

   25. JCJason Calacanis1:11:11

       It's good. We were, we were planning an intervention for this end of the pod, but you kind of opened the door so here we go. Uh, I'll wrap up with just saying, you know, family and friends are the obvious, you know, things that you appreciate, uh, at this time. I, I am thankful also for the hope, uh, that we've seen from, uh, you know, what we can do collectively as a society when we put our minds to something, warp speed comes to mind, uh, these frontline workers. I mean, we, we really maybe have seen what a global, uh, recog- challenging problem being solved can do and hopefully that can translate into something like nuclear disarmament, uh, sustainable energy, global warming, et cetera. And, and so I think on a, on a macro level, the most macro levels is species. Us humans as a species have now had an enlightening moment just like World Wars, uh, and you know, Hiroshima and Nagasaki kind of changed people's perspective of the entire world. Jay and I were talking about that the other day, of how we- people looked at the world differently after those horrific bombs went off. I, I think after this bomb goes off we're gonna look at the world and say, "Hey, we can solve problems, right?" And maybe we can be proactive about that. And then finally, I think for the people suffering from mental illness, uh, who maybe I was callous and made fun of, uh, or maybe just didn't relate to, I can relate to now because I have felt depressed, I have felt anxious, I have felt exhausted from this, right? And it, it's the first time in the 49 years I've been on the planet that I ever would say I felt depressed. I didn't understand what that meaning was when Saks would tell me how depressed he was. I just never... He never hit me. I'm joking, he never said that but, uh, it's a good joke, I am joking. But I, I, you know, I think for people suffering from mental illness, get help and, and you know, talk to people and, and I think this really opened my, my eyes to that, and of course this podcast. Uh, you know, and, and our friendship.

Episode duration: 1:21:33