E161: US strikes Houthis, market instability, Q1 rate cuts in doubt, Carta's major mishap, DEI

1. 0:00 – 1:21

   Bestie intros! Friedberg's jumper

   1. JCJason Calacanis0:00

      Nick, can you cue the tape?

   2. DFDavid Friedberg0:01

      This is now the worst form of a sho- oh my God.

   3. CPChamath Palihapitiya0:06

      (laughs)

   4. DFDavid Friedberg0:06

      I, uh-

   5. JCJason Calacanis0:07

      I mean the fact that he hit the rim is a miracle. (laughs)

   6. DFDavid Friedberg0:10

      ...the, the most unaethle- what is? Oh my God. I have to-

   7. JCJason Calacanis0:13

      Oh! Oh! Look at- oh!

   8. DFDavid Friedberg0:13

      I wish we could get slow motion on that. Oh. Do the slow mo.

   9. CPChamath Palihapitiya0:17

      It's like the ball, the ball is just moving forward.

   10. JCJason Calacanis0:20

       Start the slow mo.

   11. DFDavid Friedberg0:20

       Now look at his hand. Look at the right hand. Look, oh! Look at- oh! (laughs)

   12. JCJason Calacanis0:22

       Look at that. He let it- wh- what is that about?

   13. DSDavid Sacks0:25

       One-handed.

   14. DFDavid Friedberg0:27

       It's-

   15. JCJason Calacanis0:27

       I mean that has nothing to do with basketball.

   16. DFDavid Friedberg0:30

       It's the most unnatural- Oh. ... basketball/athletic movement I've seen. Come on. It wasn't that bad.

   17. JCJason Calacanis0:38

       Mm, I mean the lean forward too is just-

   18. DFDavid Friedberg0:40

       You know the, the lean forward, the kind of like sassy jump.

   19. JCJason Calacanis0:44

       (laughs)

   20. DFDavid Friedberg0:44

       You know, the sassy jump.

   21. JCJason Calacanis0:46

       What are you saying when you say sassy? (laughs)

   22. DFDavid Friedberg0:47

       The little sashay. He little sashayed on the side there. It's nice.

   23. CPChamath Palihapitiya0:52

       I'm going all in. Let your winners ride.

   24. JCJason Calacanis0:55

       Rain Man David Sachs.

   25. CPChamath Palihapitiya0:58

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

   26. DFDavid Friedberg1:04

       Love you bet, Heidi.

   27. JCJason Calacanis1:05

       Queen of Quinoa.

   28. CPChamath Palihapitiya1:06

       I'm going all in.

   29. JCJason Calacanis1:08

       All right, everybody. Welcome to the All In Podcast with me again, the Chairman Dictator, Chamath Palihapitiya, David Freiberg, the Sultan of Science, and The Rain Man himself, David Sachs.

2. 1:21 – 16:24

   US and its allies strike Houthi targets in Yemen

   1. JCJason Calacanis1:21

      Our first topic will go to our war correspondent. The U.S. and its allies have struck Houthi targets in Yemen. Sachs?

   2. DSDavid Sacks1:29

      Well, we talked about this two weeks ago on the show and we talked about it as a escalatory risk in the Middle East back then, and I think that that is playing out now. We fired, I don't know, maybe 100 rockets and missiles at Yemen last night. The purpose of the strike is to restore deterrence and, I guess, try and prevent the Houthis from attacking commercial shipping in the Red Sea. But that deterrence is not working. I mean, there's already a new attack by the Houthis this morning of a commercial ship in the Red Sea. So, I don't think this is gonna have any impact other than to escalate the conflict in the Middle East and put us on a path to war with Iran, which is really where the Neocons want to take us. You've heard, obviously, the warmongers like Lindsey Graham are calling for that, but even Speaker Mike Johnson is talking about that. I think that's where this is all headed is a larger war in the Middle East that features the U.S. and Israel going to war with Iran. I think we should all be very concerned about that actually.

   3. DFDavid Friedberg2:34

      But yeah, I mean, you have to be fair. It's not just, it's not just the U.S., right? It's now the U.S., the UK, Israel, Qatar, UAE, and Saudi against the Houthi rebels. That's a big alliance and you've got to think that Iran will think very carefully about how close they want to get to the Houthis in the middle of all of this because that's a, that's a huge armada, if you will, of countries that I don't think you really want to cross as a group.

   4. DSDavid Sacks3:04

      Well, I think S- Saudi Arabia and UAE are, are playing this very carefully, I think. They did not participate in the strikes. They did allow the U.S. to fly overhead or to use its territory, but they released a statement calling for restraint and de-escalation. So I think they're very nervous about this blowing up into a wider regional war. I don't think they want that. The allies who participated in the, the campaign of airstrikes were UK, Australia, Canada, Netherlands, and Bahrain. But I don't think they actually did anything. I don't think they contributed any assets. They just provided their names to this operation and provided some diplomatic cover.

   5. JCJason Calacanis3:45

      Freiberg, any thoughts?

   6. DFDavid Friedberg3:46

      Well, Sachs, you posted a comment on Twitter, which I wanted to respond to where you said China has the largest shipping volume through the Red Sea and they're staying out of this conflict, letting the U.S. do, do the dirty work. But the Houthis didn't attack Chinese ships. They specifically attacked Western ships. Isn't that correct? I mean, this is a very targeted disruptive event that the Houthis have been undertaking for some time now and they're using these very interesting tactics with drones that can be very destructive and very hard to block, and doing it not at Chinese ships, but at a very targeted enemy.

   7. DSDavid Sacks4:22

      Right. Well, what the Houthis have said is that they're only attacking ships that are either Israeli or going to Israel, but-

   8. DFDavid Friedberg4:28

      Right. But they're all Western ships.

   9. DSDavid Sacks4:29

      ... in reality, they've, they've attacked, they've attacked a much wider range than that.

   10. DFDavid Friedberg4:33

       But not Chinese.

   11. DSDavid Sacks4:34

       Um, it, it may be true that they haven't attacked ships that are declaring themselves to be Chinese ships or Russian ships. However, there are more Chinese shipping containers on all the ships that are going through the Red Sea and the Suez Canal than any other country. So, there's no question that if we're talking about the disruption of global trade, this is gonna have a big impact on Chinese trade, whether it's on Chinese ships or not.

   12. DFDavid Friedberg5:01

       Or it could benefit them because they can get through that shipping lane and the rest cannot.

   13. DSDavid Sacks5:05

       Their own ships can get through, but foreign ships, European ships that have Chinese shipping containers on them are not getting through.

   14. DFDavid Friedberg5:12

       Yeah.

   15. DSDavid Sacks5:12

       So their trade is still getting disrupted.

   16. DFDavid Friedberg5:15

       And they need that.

   17. DSDavid Sacks5:15

       Nevertheless, they don't feel the need to engage in this militaristic response or participate in that.

   18. DFDavid Friedberg5:21

       So in terms of understanding implications of the escalation in this conflict, let's just quickly talk about number one, I'm assuming shipping prices are gonna go up, freight prices are gonna go up. But hold on a second. We talked about this with Ryan. Remember the question that I asked him? This is really an issue for Europe. It's not an issue for the United States because there are alternative routes. You can go through the Pacific and you can go down through the bottom of, of Africa, right? And all that does is add like a 5 or 10% increase. So, what we're really debating is what is the risk of inflation and a backup of goods and shipping rates into Europe? Yeah. And this is why I don't understand why America needs to even get involved. I understand why the Netherlands and the UK and France and all these folks need to send resources to unclog this. That makes a lot of sense.... but I don't see why the U.S. needs to be involved. Other than providing moral support or logistical support, what is, what is the point?

   19. DSDavid Sacks6:18

       Well, Chamath, this is exactly my point, is the number one type of trade that's going through the Red Sea are shipping containers from China going to European ports.

   20. DFDavid Friedberg6:28

       Right.

   21. DSDavid Sacks6:29

       And as a result of what the Houthis are doing is having to go around the Horn of Africa, it's adding two or three weeks to the trip, and it's raising the cost of a shipping container from China from say $1,500 to-

   22. DFDavid Friedberg6:41

       Okay. So then-

   23. DSDavid Sacks6:41

       ... $3,000. It's Europe and China who are impacted the most, but for some reason, it's the U.S. that decides it has to take the lead in doing this. And the problem is that, first of all, the action is futile. I mean, the Houthis have been at war on and off with the Saudis for a decade and the Saudis have been backed by Western weapons and we have not been able to defeat the Houthis. So this missile strike last night is not gonna deter them, it's not gonna stop them. They're very determined, very tough fighters. Second, they are gonna be looking for retaliation. They're gonna be looking for blowback. And Cham- to, Chamath, to your point, they're not gonna be looking for retaliation against China or Europe, they're gonna be looking at it against the United States. So we're incurring this cost and risk onto ourselves.

   24. DFDavid Friedberg7:28

       Okay. So, so let, let me put this question to you then. We have no obvious economic incentive to get involved because we can sustain our economy through different shipping ports that at best raise rates 5 or 10%. Right? We can absorb that in the economy. 100% which could drive inflation is a European problem. So there's no economic incentive necessarily to get involved. So what is the incentive? It feels like, not to play conspiracy theorist, but like a wag the dog moment, a- another distraction to add to the plate. What do you think about that line of thinking?

   25. DSDavid Sacks8:05

       I tweeted something just like that. This does feel... It's a wag the dog in the sense that the Biden administration was looking-

   26. DFDavid Friedberg8:13

       Do you want to explain the reference for folks that may not get it?

   27. DSDavid Sacks8:14

       Yeah. There's a movie called Wag the Dog that came out in the early '90s where the president is up for re-election and there's a horrible scandal that's about to come out, like a Monica Lewinsky type scandal. This is before Monica Lewinsky, by the way, but, um, it really was sort of one of those movies that kind of predicted the future. But in any event, the president's trying to avoid this Monica Lewinsky type scandal, and so the political aides and advisors decide the way to do that is to start a war. But they don't start a real war, they basically manufacture a fake war on a sound stage in a, in a movie studio. And it's pretty hilarious how they keep the whole thing going. David Mamet, who's a brilliant, brilliant writer, wrote that script. But this movie came out right around the time of the Lewinsky scandal with Clinton, and so therefore, it took on this larger political and cultural significance.

   28. DFDavid Friedberg9:07

       Yeah, it's been used as kind of a-

   29. DSDavid Sacks9:07

       So, yeah. So wag the dog is, you know, you basically start a war because of the political benefits as opposed to the real necessity of going to war. And I think you can make that accusation here, Chamath, because I think that the Biden administration was looking impotent. I mean, they were basically telling the Houthis to stop, they were pleading with them to stop interfering with international shipping. The Houthis weren't listening. By the way, the reason why the Houthis are doing this is they're doing it in solidarity with the Palestinians in Gaza. They've demanded that the Israeli invasion of Gaza stop and humanitarian aid be let in and they're not gonna stop interfering with global trade until that happens. So that's the Houthis' position. The Biden administration's been telling them to stop and b- I think that they w- were looking increasingly feckless and impotent, and that's why they did this strike.

   30. DFDavid Friedberg9:56

       Well, is it, is it that?
3. 16:24 – 29:46

   Markets: Q1 rate cut looks unlikely, December CPI print slightly hot, soft landing in jeopardy?

   1. JCJason Calacanis16:24

      So, uh, segueing into markets, the likelihood of a Q1 rate cut is not looking good. We had a slightly hotter than expected December CPI interest rates, hit a 22-year high in July, as everybody knows, when the fed raised the range from 5.25 to 5.5, but they've left rates unchanged, if you haven't been following it, uh, as inflation has cooled. But in December, the CPI rose 3.4% from a year earlier. That was just a slight tick above, and of course, markets are wondering, is this gonna be a, a glide path into a soft landing or could it be choppy going forward? Freeburg, higher for longer interest rates. You think that's still gonna be the case? And what are your thoughts going into the new year?

   2. DSDavid Sacks17:14

      Well, Larry Summers put out a note saying that he thinks that the rates are gonna stay higher than the market is predicting based on the yield curve right now. So I think the market's currently saying no cuts in March and high probability of cuts in June, but some folks like Larry are saying might be longer because inflation is very sticky. And if you look at the breakdown on the drivers of inflation, you start to think about what's the underlying business activity that's going on. Like, car insurance went up by 20%, which was one of the key drivers. And car insurance has always been this lagging indicator, but it does ultimately drive costs up later. The reason car insurance rates go up is because the cost to repair a car goes up and the cost for medical care goes up. When that happens, the insurance companies actually have to file with state regulators to get approval to raise their rates. And it can take over a year for the regulators to then approve those raising of rates. So by the time the rates get raised-... the other factors have maybe leveled out, but you're still gonna have some elements of, uh, costs that are gonna continue to climb for some period of time after you get the core engine tuned down. So these are the sorts of things that I think we're seeing in the, the current, uh, CPI data is that there are some of these lagging effects of an overheated economy or overstimulated economy that are now starting to play through. And so there's a number of these. It's not just car insurance, but there's a lot of things that are gonna linger for a while and they're going to be very hard to work their way through the system very quickly. And as a result, it may be the case that rates are going to need to stay higher for longer.

   3. DFDavid Friedberg18:58

      I think the thing with inflation that is worth noting is that a couple of things are true at the same time, which I think is interesting. I think we were the ones in May of '21 that started getting very antsy around inflation, and we started to look at the five and ten-year breakevens. Do you guys remember that?

   4. DSDavid Sacks19:17

      Mm-hmm.

   5. DFDavid Friedberg19:17

      We would, like, look at that chart a lot, and I think it was very predictive. We also used to look at the future oil curve. You know, not that we're macro economists, but I think it's it's useful if average everyday people can have a few things to look at. If you look at those things today, it tells you the same picture, which is inflation has cooled. We're going through the last kind of, like, throes of some of the random variables still being a little sticky. The broad trend is down. I think it's indisputable. At the same time, even with the conflagrations in the Middle East, if you look at what people think about the future price of oil, it's also down. Oil futures are, I think, about 5% to 10%. Future prices are about 5% to 10% lower than spot right now, for whatever that's worth. But the third thing, which I think is important, is we've now started to see folks come back from the new year and start to imp- effect some pretty big layoffs, and they're across industries, right? Citibank today just announced 20,000 layoffs. That's a huge amount of people that are going to lose their jobs. So what does all of this mean? It's that I think that people expect that as inflation contracts, the money supply will expand, but demand has yet to reset properly. So that's the last thing, and I think Friedberg's mentioned this a bunch. Consumer spending has always been crazy, people living on credit, all of this stuff. That is now finally, I think, the last thing that has to get sorted out. So in the absence of demand, back to the way you started, Jason, companies will cut expenses in order to maintain profitability because they don't really want to cut prices unless their product really sucks.

   6. JCJason Calacanis21:06

      Yeah, and just to note that Citigroup, as you mentioned, 20,000 cuts by 2026. Google also laid off hundreds of people, Amazon, hundreds of people. Discord laid off 17%, and there's a viral video going around of a woman laid off by Cloudflare, you know, who was only on the team for, like, six months or something, or five months. And it does seem like, yeah, firing people before the holidays, laying them off is considered, you know, do it in the fourth quarter. So maybe there was some, some, uh, backed-up layoffs that people decided to do into this year. But it certainly feels like sacked people are... And you said this, I think, in the predictions episode or the recap episode, hey, you know, maybe it's still gonna be a little bit of turbulence and the soft landing isn't guaranteed. Maybe you could expand on that.

   7. DSDavid Sacks21:53

      Yeah, my prediction for the year was bumpy landing.

   8. JCJason Calacanis21:57

      Hmm.

   9. DSDavid Sacks21:57

      I thought soft landing was a little too optimistic and I also thought that this big stock market rally that we had in November, December was too much, too soon. The market, starting in November, started pricing in about 1.5% of rate cuts this year, believing that the inflation problem had been licked. And now what we're seeing is, first of all, you had a slightly hotter than expected inflation report, and now we have this escalating situation in Yemen, where this war in the Middle East might expand. And just so you understand, I mean, the Houthis have already said that if the United States attacks them and uses Saudi or UAE airspace to do it, that they will consider themselves at war with Saudi Arabia and UAE, and that they will try to do things like light the Saudi oil fields on fire. I don't think they have the capability to do that necessarily, but it's an indication that things are very volatile. Another thing I think we're likely to see in the Middle East is continued attacks on US military bases in Iraq and Syria. So that whole region is a powder keg, and if it develops into a wider regional war, then I think you could see an oil shock. And if there's an oil shock, I think you can kiss rate cuts goodbye because that's going to percolate through the whole economy and have a big impact on inflation. So I just think that there's a lot of downside to these very optimistic projections that we're going to get these huge rate cuts. It might happen, but I just see a lot of risk.

   10. JCJason Calacanis23:27

       Yeah. Friedberg, do you think these oil shocks are here for the long term or a possibility? You've been talking a lot about alternative energy, nuclear, obviously. Uh, so is, is... And the US has become a net exporter of oil. So do you think this risk of oil disruption from the Middle East is with us for the long term or do you think that's waning now?

   11. DSDavid Sacks23:52

       There's definitely structural risk because you have a supply chain that can get disrupted in a number of ways and limited alternative options. If you look at the chart I just shared, it's the US Strategic Petroleum Reserve. So we have about 350 million barrels in the, uh, Strategic Petroleum Reserve today. That's down from, call it early '21 when we were at 650 million barrels.And, you know, it was pretty much at that level for decades, after the buildup leading up to 1990. We haven't been at a level this low in the Strategic Petroleum Reserve since 1983. And so, there's not a lot of levers for the government to intervene, uh, to support the supply as there may have been in the last couple of years in the case of some supply shock because of a conflict that arises in a major oil-producing region.

   12. JCJason Calacanis24:55

       It's a really interesting chart, isn't it? Because that was after the oil crisis of the '70s, and you look at how long it took to build it up-

   13. DSDavid Sacks25:01

       Yeah.

   14. JCJason Calacanis25:01

       ... and how large we built it. It's a really fasc- I've never seen that chart before, but if you look at the, you know... I don't know if you guys remember the oil lines. Did you have them in Canada, Chamath? Where y- I remember in Brooklyn, you had an even number/odd number license plate thing if you wanted to get gas. You know, some days was the even number, some days was the odd number. I remember my parents getting online for gas and waiting for two hours or three hours to get gas.

   15. DSDavid Sacks25:24

       Yeah. By the way, I'll say this is not a real cost today that we're experiencing, but as Sax is pointing out, there's a number of ways that this can become a real cost. I was in Austin this week, and the thing that shocked me the most was how cheap gas was (laughs) at the gas station. You can get gas for, like, two bucks and 25 cents a gallon. It's pretty awesome.

   16. JCJason Calacanis25:43

       It's like $6 when you're in Lake To- Lake Tahoe (laughs) .

   17. DSDavid Sacks25:46

       Yeah.

   18. Just so everyone understands how the SPR got depleted, last year when inflation was the top story, you know, on the front page of every newspaper and gas prices were hitting, what, seven or eight dollars, the administration started releasing crude from the SPR to try and bring the price down. And they did that for about a year, and they were basically subsidizing the price of oil. Now, that's why our stockpile is low, and that was a really great political strategy. But if we end up in a real crisis, we're gonna have less dry powder to deal with it. So, you know, we could have a perfect storm of things coming together here, where at precisely the time we end up getting involved in a big war in the Middle East, our tools to mitigate the oil shock that would create have been reduced by what the administration's done over the past year. Now, I don't know that that's gonna happen. I mean, I still think we're several steps away from a regional war. But you look at how many fronts now we have conflict in the Middle East. There's about five different fronts where there's conflict. You've obviously got Israel's war in Gaza. You've got Hezbollah in the north basically firing rockets. You've got US bases in Syria and Iraq coming under attack, and now we have the US striking Yemen. So, there's just so many ways that this could spiral out of control.

   19. JCJason Calacanis27:12

       Isn't the SPR designed so that when we have an economic crisis like this to use it? Like, I mean, it's...

   20. DFDavid Friedberg27:16

       Yeah, you're, uh, the, the Biden administration does a lot to dip it. By the way, you have to give credit to the Biden administration in one, in one form. It's not necessarily skill per se, but when you look at the SPR depletion, they were selling at incredible moments in the market. And the Energy Department, I actua- I think they, they just announced that they're buying another, you know, four or eight billion dollars, uh, to replenish the SPR. So, they'll be doing that now. But they were selling, if you look at these price points here, they were selling when prices were $80 and $90 a barrel, and now they're buying it back at $70. So, uh, at least the United States can take some solace in the fact that we ARBed out (laughs) a few billion dollars for Treasury.

   21. JCJason Calacanis27:59

       I wonder, uh, how the SPR relates to consumption. You know, we see this chart, but it's in the number of barrels, right, 350 million barrels or something like that. Is that what the chart says? And then it peaked at 6 or 700,000. I wonder what it needs to be, Chamath or Friedberg, on a, as a percentage of our consumption as more EVs hit the market, right, and as the number of miles per gallon goes up. So, I, I couldn't find a chart for that. I tried to find it. If anybody in the audience knows the SPR in relation to consumption, that would be a very important chart, no?

   22. DFDavid Friedberg28:32

       I think they're pretty independent, Jason.

   23. JCJason Calacanis28:34

       How so? Like, we just build it up independent of what we need?

   24. DFDavid Friedberg28:38

       No, the, the Strategic Petroleum Reserve is, is essentially that. It's, it's not meant to be something that's, that's meant to book end usage. You know, if in a highly functioning market, there's theoretically an infinite amount of oil that's available. And so if there's more consumption, you'll be able to find more oil. You'll just have to pay a different price for it. This SPR is meant to be used in very different kinds of situations. This-

   25. JCJason Calacanis29:03

       Like a war.

   26. DFDavid Friedberg29:03

       ... is interesting.

   27. JCJason Calacanis29:03

       Yeah, right, like when there's a disruption.

   28. DFDavid Friedberg29:05

       Right.

   29. JCJason Calacanis29:05

       When, when there's an acute disruption.

   30. DSDavid Sacks29:07

       It's supposed to be break glass in case of emergency.
4. 29:46 – 51:02

   Carta's mistake, why verticalized SaaS tools could be in trouble, Chamath's 8090 incubator

   1. DFDavid Friedberg29:46

      Oh my gosh, do you guys see all of this, uh, mishigas with Carta this week?

   2. JCJason Calacanis29:50

      (laughs)

   3. DFDavid Friedberg29:50

      Crazy, huh?

   4. JCJason Calacanis29:51

      Absolutely. Uh, actually it's on the docket. So, those of you who don't know, Carta is cap table software. If you don't know what the cap in cap table is, uh, which many of you might not, it stands for capitalization. What is it? It's a Google or an Excel sheet that says who owns the number of shares in a company. This gets very complex in private companies, and they've made quite a business out of it.

   5. DFDavid Friedberg30:11

      Wait, wait, wait, can I pause you there?

   6. JCJason Calacanis30:12

      Yeah.

   7. DFDavid Friedberg30:13

      There, there was a lot of comments that said exactly that, "It gets very complicated." I apologize. Uh, I've, I've owned equity in companies for 20 years. What the hell is "exactly complicated"?

   8. JCJason Calacanis30:23

      Well-

   9. DFDavid Friedberg30:23

      I don't understand that statement. I'm not, I'm not directing it at you, Jason.

   10. JCJason Calacanis30:26

       Yeah, yeah.

   11. DFDavid Friedberg30:27

       But I want...

   12. JCJason Calacanis30:27

       I can tell you, yeah.

   13. DFDavid Friedberg30:28

       'Cause I, I feel like that is, like, some...... BS statement.

   14. JCJason Calacanis30:33

       Yeah, it's not. The thing is, you as acting as a price round individual in a lot of these cases, it was very simple to do a price round. But when you inserted SAFEs into this, you know, a simple agreement for future equity that Y Combinator created and you put capital, uh, um, convertible notes into this, founders started doing, like, dozens of these, Chamath. And at the early stages, the cleanup work and understanding how many shares people owned, especially with-

   15. DFDavid Friedberg31:01

       No, but J-Cal, what I'm saying is, what, like... Okay, tell, may, let me stop. Ho- ho- let me ask it a different way.

   16. DSDavid Sacks31:06

       Yeah, sure.

   17. DFDavid Friedberg31:07

       We did this with spreadsheets.

   18. DSDavid Sacks31:09

       Let me answer your question.

   19. DFDavid Friedberg31:10

       Okay.

   20. DSDavid Sacks31:11

       So, in a private company, let's say a company issues options to an employee and they don't have a good record of that. The employee executes the options, they now believe that they own shares. Unlike in a public company, where there's a broker of record, every share is registered in a public company. You know who owns the shares, you know what broker is holding those shares, and every share is traded through a public exchange. So there's a record of every transaction that takes place with every share in a public company. In a private company, there's no independent legal regulator that tracks all the shares. So you could issue options to an employee and forget that you did that, put the document in a, in a drawer, and the employee shows up five years later and they're like, "Wait-"

   21. DFDavid Friedberg31:52

       I get it. There's not-

   22. DSDavid Sacks31:53

       Or I, I, I've experienced this. I've had advisors show up, be like, "Look, here's my advisory agreement. I was given options."

   23. DFDavid Friedberg31:58

       I get it.

   24. DSDavid Sacks31:58

       "I was given options."

   25. DFDavid Friedberg31:58

       But, but, but sir, I'm asking a different question. You're, you're saying something. Great, I get that.

   26. DSDavid Sacks32:02

       I'll tell you what I think the killer feature was.

   27. DFDavid Friedberg32:04

       Why is that complicated to implement in software? I don't understand.

   28. DSDavid Sacks32:07

       I, I'll tell you. I, I, I think the killer feature for Carta, it was called eShares back then, was getting the shareholder to sign for their stock certificates. So to Freidberg's point, in the old world, where it was all done by email and a spreadsheet, they would literally have to send you a paper stock certificate-

   29. Yeah.

   30. ... that you put in a file cabinet somewhere.
5. 51:02 – 1:05:17

   Why and how Sacks is taking on Slack, where Carta went wrong with founders

   1. JCJason Calacanis51:02

   2. DFDavid Friedberg51:02

      Saks, how are you... How are you thinking about what the critical go-to-market MVP capability is for Slack? So, this here's what I'm curious about. There's chat, right? The problem with chat, in my opinion, is that Slack has become totally overrun, where you could be a five-person company and all of a sudden you'll have 500 channels.

   3. JCJason Calacanis51:24

      Yes.

   4. DFDavid Friedberg51:24

      So, there's no scarcity. And that scarcity is, in my opinion, what makes, what makes all corporate chats in this modern version, Teams included, totally unusable. So much noise and distraction. So, how are you thinking about that problem?

   5. DSDavid Sacks51:40

      I totally agree with that.

   6. JCJason Calacanis51:40

      Yeah.

   7. DSDavid Sacks51:40

      I totally agree with that. What you hear from every single company that has more than, I don't know, 50 employees is that Slack doesn't scale. Because what happens is you have a channel get created, and there's a whole bunch of conversations in there that are kinda munched together. And if anybody in the company wants to participate in any one of those conversations, they have to join that entire channel. And as a result, every single employee ends up in every single channel. And it's just a giant mess and there's way too much noise. So, I think that the channel model was beautiful in terms of letting people get started really easily. You just jump into a channel and start posting. That's why it took off. But it's not particular enough in terms of, of addressing conversations to the right people. So, that's basically one of the problems that we're fixing. The other thing I've heard from people is that, "We love chat, but we also really like the feed that Yammer had as a way to quickly scroll through new stuff."

   8. JCJason Calacanis52:37

      Yeah.

   9. DFDavid Friedberg52:37

      You had a top-level corporate feed. People forget that. There was like this, "Hey, if you wanna get-"

   10. JCJason Calacanis52:41

       Yeah, I love, I love that.

   11. DFDavid Friedberg52:41

       "... the pulse of the entire organization, go to this one corporate feed."

   12. DSDavid Sacks52:44

       We were the first ones to figure out that, like, a feed should be used inside of an enterprise, not just in a consumer social network.

   13. JCJason Calacanis52:50

       Right.

   14. DSDavid Sacks52:51

       So, in any event, I, I'd say those are, like, two of the main concepts, is combining feed and chat in a way that actually makes sense and solving the noise, the signal noise problem.

   15. DFDavid Friedberg53:01

       Do you have a name for it yet?

   16. DSDavid Sacks53:03

       Yeah. It's gonna be called Glue.

   17. DFDavid Friedberg53:05

       Ooh, I love that.

   18. JCJason Calacanis53:06

       Ooh.

   19. DFDavid Friedberg53:06

       Can I remind you...

   20. DSDavid Sacks53:07

       (laughs)

   21. DFDavid Friedberg53:07

       Can I, can I remind you that as a, as a humble investor, sir, I, I, I think I was part of Yammer and Slack, so I, I'm, I can add super allocation.

   22. JCJason Calacanis53:16

       You can add value. You can add value.

   23. DSDavid Sacks53:17

       You're in, you're in. There's just one requirement for the-

   24. DFDavid Friedberg53:20

       You gotta use it.

   25. DSDavid Sacks53:21

       ... early investors is you guys actually have to use it. You gotta do a rip and replace on your Slack and-

   26. JCJason Calacanis53:25

       What?

   27. DSDavid Sacks53:25

       ... hop to Glue.

   28. DFDavid Friedberg53:26

       Sure, sure. Why not?

   29. DSDavid Sacks53:27

       If you're willing to do that, you're in.

   30. DFDavid Friedberg53:28

       Perfect.
6. 1:05:17 – 1:15:24

   DEI debate: cultural significance, real solutions, Motte-and-bailey

   1. JCJason Calacanis1:05:17

      All right, Zach, you were, uh, in the group chat talking about this viral clip about Star Wars. You wanted to chime in on it? Maybe you could, uh, cue it up, Nick?

   2. DSDavid Sacks1:05:25

      I mean, as you may recall, my pick for business loser of 2023 was Disney. And it seems like they haven't learned anything from the horrible year they've just had. What is the balance of activating a force for change, but also trying to permeate that patriarchy, that power structure? (laughs) And is that a part of the calculation of your art as well, and- and what's been the reaction to that?

   3. GUGuest1:05:54

      Oh, absolutely. Um, I like to make men uncomfortable. I enjoy making men uncomfortable. (laughs)

   4. (applause)

   5. DSDavid Sacks1:06:04

      This is the new director of Star Wars.

   6. JCJason Calacanis1:06:06

      All right. Your thoughts, Zach?

   7. DSDavid Sacks1:06:07

      Well, I saw the-

   8. JCJason Calacanis1:06:08

      (laughs) Jeez.

   9. DSDavid Sacks1:06:08

      ... comment on that tweet was, "This is gonna be the biggest Disney flop yet." Isn't that what it said? I mean, look, I- I don't know what Bob Iger is doing. He seems to want to burn Star Wars to the ground like the rest of the Disney brands by playing politics. This director doesn't seem to have had a lifelong fandom for the franchise. Uh, she didn't really talk about how she had grown up marinating in this universe, loving its characters. Her background is in documentary filmmaking, and there's nothing wrong with that, but there's no indication from her that she truly loves Star Wars. And in fact, the comments that she's making right now are indicating that she's gonna politicize it. The patriarchy is not why anybody is a fan of Star Wars that goes to see its movies. So, nobody wants to see that movie.

   10. DFDavid Friedberg1:06:56

       It's the opposite. (laughs)

   11. DSDavid Sacks1:06:57

       It's the opposite. They wanna avoid it. They don't go to Star Wars movies for the politics. And she's also trying to solve a problem that doesn't really exist. I mean, science fiction may skew male in its fan base-But it's not because sci-fi franchises don't like strong female characters. I mean, just stepping out to the larger world for a second, you've got Ripley in Aliens, you've got Sarah Connor in the Terminator movies. You've got-

   12. Princess Leia.

   13. ... Trinity in The Matrix, you've got Princess Leia, Padme, Ahsoka in Star Wars, so-

   14. JCJason Calacanis1:07:30

       You seem to know a lot of these female charac- y- you're deep into Star Wars, right?

   15. DSDavid Sacks1:07:33

       Yeah, dude, I'm really, I'm a Star Wars geek.

   16. JCJason Calacanis1:07:35

       Ahsoka.

   17. DSDavid Sacks1:07:35

       I'm a Star Wars geek.

   18. JCJason Calacanis1:07:35

       You've got, you've got some good pulls here, yeah. Padme.

   19. DSDavid Sacks1:07:37

       So, so it's not this idea that there aren't ph- strong female characters in Star Wars is, that's just kind of a myth, right? And-

   20. JCJason Calacanis1:07:43

       It's, yeah.

   21. DSDavid Sacks1:07:44

       So it's not, it's not like the universe needs to be reset in this way. And you could just see the whole fan community kinda groaned at this comment, because they're just like, "Oh, here we go again. St- Star Wars is gonna ruin another franchise by playing politics." And the amazing thing is that, is that, you know, Iger doesn't seem to learn from this at all.

   22. But there's nothing wrong with having a female director either. Right, Sacks? I mean, you're not saying that. You're saying that a particular person who has a political agenda in how they wanna shape the story of Star Wars is the issue.

   23. Of course.

   24. Right. Now-

   25. Of course.

   26. I will also say, I think one of the core driving narratives, emotional narratives of Star Wars is the oppressor-oppressed storyline.

   27. JCJason Calacanis1:08:26

       It's a highly political- it's a highly political storyline, yeah.

   28. DSDavid Sacks1:08:28

       Well, I have, I've always said I think Star Wars has been, like, the most anti-technology effector in society since the '70s, because Star Wars is all about the, I, I've said this before, but the Ewoks destroying the Death Star and, like, the no tech overcoming the oppressor big tech, and so we have to destroy big tech. And anyone who has the better technology is very likely the oppressor and, uh, they have all the wealth and they have all the power and they have all the control. And so those who do not have the power, do not have the wealth, do not have the control, do not have the technology have to go and destroy that, whether it's the Empire or that, you know, kind of evil force. And that's the core narrative of Star Wars. So I do think that at its heart, Star Wars in and of itself is an oppressor-oppressed, uh, storyline that relates very deeply to technology and wealth and has helped shape the Western psyche for a couple of decades in a very meaningful way, or has really reflected maybe perhaps the Western psyche, uh, in a very meaningful way.

   29. JCJason Calacanis1:09:25

       What did you think of Andor?

   30. DSDavid Sacks1:09:27

       I think you're superimposing current day terminology on a movie that was created in, the first one in the 1970s when intersectionality did not exist. Yes, there are political overtones to Star Wars. You've got the Rebel Alliance against the Empire. That is not diversity politics. Sorry. It's about-

Episode duration: 1:38:38