E53: Wealth tax, inflation as a capital allocator, big tech earnings, paternity leave & more

Jason Calacanis 0:00 Oh, baby. No skin-on-skin? You just gotta keep the shirt on? (laughs)

Chamath Palihapitiya 0:03 Listen to me, only the best for my daughter. This is 100% Loro Piana vicuna.

Jason Calacanis 0:10 (laughs) She's gonna puke on any minute. (laughs)

Chamath Palihapitiya 0:12 There, there is, there is not a-

Jason Calacanis 0:12 You're using Loro Piana to wipe her when she vomits. (laughs)

Chamath Palihapitiya 0:16 No, this is the sweater that she's, she's got her face on, but this is the softest material human, you know, uh, I mean, natural material on earth.

Jason Calacanis 0:23 Really?

Chamath Palihapitiya 0:23 This is not subject to any supply chain constraints, this material.

Jason Calacanis 0:27 Aw. Aw.

Chamath Palihapitiya 0:28 In fact, when you buy one from Loro Piana, they'll fly one right to you.

Jason Calacanis 0:31 (laughs)

David Sacks 0:33 (music) 50s are back. Going all in. Let your winners ride. Rain man, David Satterfield. I'm going all in. And I said we open source it to the fans, and they've just gone crazy with it. Love you, besties. Queen of quinoa. I'm going all in.

Chamath Palihapitiya 0:50 Guys, isn't it amazing how people in power can not take any time off and still remain in power and engaged when you have a baby?

Jason Calacanis 0:59 (laughs)

Chamath Palihapitiya 1:00 (laughs)

David Sacks 1:00 (music)

Jason Calacanis 1:00 J-Cal, t- what's the reference?

Chamath Palihapitiya 1:02 Okay, our friend, Joe Lonsdale, venture capitalist living in Austin, had a tweet that, uh, went viral, but maybe not for the best reasons. He said, uh, in response to a Dan Primack tweet, uh, Dan works at Axios, he was talking about Joe Rogan criticizing, uh, the amount of time Buttigieg was taking on paternity leave. And Joe Lonsdale responded, "Wow, great for fathers to spend time with their kids and support moms, but any man in an important position who takes six months of leave for a newborn is a loser. In the old days, men had babies and worked harder to provide for their future. That's the correct masculine response." Uh...

Jason Calacanis 1:42 Well, it was an opinion from 1957. That's either a his or his.

Chamath Palihapitiya 1:45 (laughs)

David Sacks 1:46 (laughs)

Jason Calacanis 1:46 (laughs) I'm getting the way back machine. But Joe's old school. Joe is a unique individual and he just happened to... I think, in this whole, like, not get canceled debate or don't let yourself get canceled debate, the right is now saying like, "I'm just gonna tell you how I actually feel." And so Joe told us actually how he felt.

Chamath Palihapitiya 2:07 I don't think he said anything offensive. I think you can have a different opinion than what he said. But I don't think he said, "It shouldn't exist." He said, "If you're in a position of power and you check out for six months, it puts everything that you're doing under a lot of pressure." That's, I think, what he said, and he called those very specific people losers. The context is, Joe Rogan called out Pete Buttigieg because Pete Buttigieg w- uh, had two kids via surrogate, and I guess is taking six months or I don't know. I don't even know how much time he's taking off.

Jason Calacanis 2:40 He's at three months, but nobody knows if he's like working half-time or full time.

Chamath Palihapitiya 2:44 But Rogan, but Rogan had an issue with it, and then Dan Primack basically said, "What Rogan doesn't know is at his own company, i.e. Spotify, there's a six-month policy."

Jason Calacanis 2:54 Which by the way-

Chamath Palihapitiya 2:55 And, and-

Jason Calacanis 2:55 ... Joe Rogan does not work for Spotify, they license his show. So, there is no way for Joe Rogan (laughs) to know the internal policies. He is not an employee.

Chamath Palihapitiya 3:03 I mean, Jason, if you want, if you wanna hang your hat on that little fig leaf, okay.

Jason Calacanis 3:08 No, I'm just saying-

Chamath Palihapitiya 3:09 Um-

Jason Calacanis 3:09 ... it's, I'm not defending Joe, but I'm also saying like, uh, how would he know? It's not like he went to HR and was like, "Hey, uh, what's our paternity?"

Chamath Palihapitiya 3:16 Sure.

Jason Calacanis 3:16 He doesn't work there.

Chamath Palihapitiya 3:17 Yeah, fine.

David Sacks 3:17 Well, s- s- six months is a, is a long time, especially, I mean, that is a long time to take off.

Jason Calacanis 3:23 The word loser is a very strong word. Do you think men who take paternity are losers?

David Sacks 3:28 No. No. I mean, it's their choice.

Jason Calacanis 3:30 Do you think men who take six months of paternity are-

David Sacks 3:33 No.

Jason Calacanis 3:33 ... losers?

David Sacks 3:34 No, I, no, I don't, I wouldn't, I wouldn't necessarily call them a loser. I do think that is a long time for somebody who, you know, prioritizes work. I mean-

David Friedberg 3:42 If an entrepreneur took six months of paternity, would you, would that influence whether or not you invest in his business?

David Sacks 3:49 Well, look, if you are the principal of a business and you just disappear for six months, that's not gonna work. I mean, let's be realistic here.

Chamath Palihapitiya 3:56 Un- unless, unless it does, in which case, then you have other problems.

David Sacks 3:59 Well, or look, if you're at, like, the stage that Google is at or whatever, the founders can disappear and move to, you know, islands and private islands and it doesn't matter.

Chamath Palihapitiya 4:07 Basically what they did. (laughs)

David Sacks 4:09 But, but look, we all know, I mean, that when you're a startup, you face existential decisions daily, weekly or monthly. You can't just disappear for six months. It's not gonna work.

Jason Calacanis 4:18 You might only have six months of runway. So, if you did take six months of paternity, there would be no company when you came back, in all likelihood.

Chamath Palihapitiya 4:23 Let me speak for myself. Uh, I couldn't ever take six months. I'll, I'll probably take three weeks to a month. And honestly, I agree with David. I really didn't do much of anything. Nat had to do, frankly, all of this by herself. And so I'm there to just be moral support and help where I can. You know, baby needs a diaper change, I do that. I'll hand feed in a bottle because she's tired of pumping and, you know, breastfeeding, like, but I am so peripherally at the edges trying to help and be relevant and try to give her a break here or there, that's my role. And at some point when the kid gets on a schedule, um, there's even less stuff necessarily for me to do, other than again, just be moral and emotional support. Then, of course, there's bonding and stuff, but, you know, to be honest with you, like, I have found as a parent, the, the connection that I have with my children has gotten meaningfully better as they've gotten older. And maybe that's just the limitation that I have and my need to communicate and how I want to connect with my kids and how I feel, I get feedback back that gives me energy to be a parent. It is much easier for me to find that equation with my 12-year-old than it is with my, you know, two-day-old. So, that's just me. You know, I'm gonna be out for three weeks to a month and...

Jason Calacanis 5:44 Well, I mean, the other thing we're leaving out here is the question of resources. So, Joe Lonsdale, uh, according to his podcast, Is A Billionaire, uh, his podcast title, and so if you're a billionaire and you have unlimited resources at home, and 24-hour night nurses, which-... you know, we all know what those cost. Uh, you're talking about $1,000 or $2,000 a day, uh, to have 24-hour coverage but that's nothing to a billionaire. So if you ... I don't want to make it about class but if you were two working parents and you didn't have the money to hire somebody, this is actually practically the only thing you can do. Somebody has to be with the kid and i- can one spouse be at home for-

Chamath Palihapitiya 6:22 You know, I'm on, by the way-

Jason Calacanis 6:23 ... 24 hours alone with the kid all the time?

Chamath Palihapitiya 6:25 As you guys know, I'm from Canada. In Canada, we have a one-year maternity and paternity leave policy. It can kind of go both ways. The, the ... basically the family gets it and you can allocate it as and how you need it. And in all-

Jason Calacanis 6:38 Who pays for their salary?

Chamath Palihapitiya 6:40 Governments. The, the, the government guar- basically guarantees your job. You go on, effectively, unemployment insurance after some period of time where you go from 100% of your salary to about, I think it's 50%. Somebody will correct me if I get these details wrong. Um, and then you go through the rest of the year. Now, in both cases, my, my sister, you know, when she had both kids, you know, on the way in, she was like, "I think I want to take the full year." And by the six-month mark, she was losing her mind, and, you know, she's a lawyer at a-

Jason Calacanis 7:09 Yeah.

Chamath Palihapitiya 7:09 ... really good research hospital and, you know, she does work that's really valuable to her and that she finds really stimulating, and she just needed more adult connection after six months. It was very hard for her to kind of be there.

Jason Calacanis 7:21 Yeah. I just think six months for the second parent is ... that seems like a long time.

7:26 I g- I don't think I could take six months off but, uh, I also think if you have resources, there's pockets of time, even when I did stay home for, I don't know, the first couple of weeks after the kids were born. You know, they're asleep for three hours and then you clean the diapers, feed them, they play for an hour or two and then they go back on a nap. You know? It's like they're ... it's constantly this stop and start. I mean, that's the thing that's hardest about it, is the lack of sleep, I think.

Chamath Palihapitiya 7:50 Oh my God. It feels like ... I mean, it's funny but, like, I- I forgot what it's like but, you know, you- you're reminded quickly. It feels like you're drunk.

Jason Calacanis 7:59 Yes.

Chamath Palihapitiya 7:59 Two hours, you wake up. You get a 10-minute catnap, you wake up. And this is where, again, I go to ... and I'm such a bit player in this play right now, you know, at the edges where (laughs) I'm, like, not sleeping, I can take care of Tali but I- I don't know how women do it. It's, it's incredible.

Jason Calacanis 8:16 And for those of you listening (laughs) , Chamath has got his newborn on his chest, uh, and uh, swaddled quite nicely there.

Chamath Palihapitiya 8:24 This is why you should subscribe on YouTube and you can see.

Jason Calacanis 8:27 (laughs)

Chamath Palihapitiya 8:27 You can see the baby.

Jason Calacanis 8:27 Yes, he's using his new daughter to get the YouTube subscriptions up. (laughs) This has got ... this should blow us past the 100,000 status but ... How do you feel?

Chamath Palihapitiya 8:34 It's so special. I feel so lucky. Um, I feel so, so lucky.

Jason Calacanis 8:41 Th- this is gonna be the most popular cameo on the pod since Freiberg's dog.

Chamath Palihapitiya 8:45 Yeah, I mean, she ...

Jason Calacanis 8:47 (laughs)

Chamath Palihapitiya 8:47 This chick is so deliciously cute. She's so-

Jason Calacanis 8:49 (laughs)

Chamath Palihapitiya 8:50 She's so delicious. And I forgot how beautiful the sounds that girls makes versus boys, having three boys and two girls now. I remember the boys. They make kind of interesting noises but not really, but my gosh, like, little baby girl noises, uh, and you guys-

Jason Calacanis 9:05 True. Yeah.

Chamath Palihapitiya 9:05 Sacks has two girls, you have three.

Jason Calacanis 9:07 I have three. Yeah.

Chamath Palihapitiya 9:07 Freiberg all girls. It's ... Girls are incredible. My gosh. Oh-

Jason Calacanis 9:10 Uh, we're ... uh, we're all basically girl dads like Kobi and-

Chamath Palihapitiya 9:12 Oh, so what a blessing. What a blessing. I feel really lucky.

Jason Calacanis 9:16 And Freiberg, any news on your front?

Chamath Palihapitiya 9:18 Well, we had a baby the day after Chamath had a baby. There were-

Jason Calacanis 9:21 Oh, right. I did see the pictures.

Chamath Palihapitiya 9:22 Yes.

Jason Calacanis 9:22 Congratulations.

Chamath Palihapitiya 9:23 Thank you.

Jason Calacanis 9:24 Freiberg, where's your s- swaddled infant?

Chamath Palihapitiya 9:26 (laughs)

9:26 You're letting, you're letting Chamath, uh, win sweep sweeps here. What's going on?

9:30 Yeah. His vicuna is on the way.

Jason Calacanis 9:32 (laughs)

Chamath Palihapitiya 9:32 I haven't, I haven't been-

Jason Calacanis 9:33 Are you into Joe Lonsdale? You- you did one day off and then went right back to work?

9:37 (laughs)

Chamath Palihapitiya 9:37 She's in the, the, the place where you drop the kids off to get raised and then you pick 'em up in a year.

Jason Calacanis 9:42 Oh, okay. You're like ... oh, you mean like Vulcans? You're like Vulcans where you-

Chamath Palihapitiya 9:44 Yeah, Vulcans.

Jason Calacanis 9:45 ... drop them into a learning pod and come back a year later? (laughs)

Chamath Palihapitiya 9:48 I mean, they, they sleep most of the day, so she's asleep right now. Actually i- Alison just sent me a picture. She's sitting on the rocking chair where they're outside right now. Pretty amazing.

9:56 I give Lonsdale a lot of courage for saying what he thought. I really don't think that, uh, what he said was altogether that, like, vilifiable, if that's the word you want to use. I think that there's a lot of reasonable points of view. He could have maybe used better language but I think where he was coming from, I think a lot of us probably wouldn't do it ourselves. We may never judge anybody else. I would never judge anybody who wants to take six months. I know that I could not. I would just ... I'm ... I think m- either I'm too selfish or whatever but, um, I'm not sure there's just that much to do as the secondary. And to David's point, if I was asked to be the primary, I think I could probably step in and do 10% of what Nat would do or ... but, um-

Jason Calacanis 10:35 Here, here's Joe Lonsdale's super blind spot. He made this very gender-specific with men and women in certain roles, and he basically is saying, you know, (scoffs) a man who takes six months off is a loser. So he is not just giving his opinion, he's attacking people who do take the time off. And then he says, "Listen, in the old days, men had babies and worked harder to provide for the future. That's the correct masculine response." So I think what triggered people about his response, and, and perhaps rightfully so, is that this is just a view of-

Chamath Palihapitiya 11:07 I know but, Jason, here's ... can I say something? This is a, this-

Jason Calacanis 11:08 ... like degrading men who take time to take care of their kids-

Chamath Palihapitiya 11:11 But look, we've talked about this a lot. Th- there is an opportunity for folks like us to take a step back and slow down in how we interpret a tweet that's written at 8:00 AM in the morning super quickly.

Jason Calacanis 11:23 Sure. Yeah, I don't ... I'm not advocating he be canceled.

Chamath Palihapitiya 11:26 And not ... and, and not just him but everybody else but, like, there is an opportunity to teach empathy here where I'm not saying you have to agree with him, but you can also choose to see what he's trying to say through the exact words that he used, decide that you agree or disagree, and then just move on.

Jason Calacanis 11:43 Yeah, of course.

Chamath Palihapitiya 11:44 You know what I mean? And, and I think that the reason why folks may want to do that in this case but in most other cases is eventually it will be you that makes a mistake.

Jason Calacanis 11:55 Sure.

Chamath Palihapitiya 11:55 And you want to be let off the hook by other people that are empathetic enough to say, "I really disagree with what you're saying, but you don't deserve to be punished beyond disagreement."

Jason Calacanis 12:06 I love what Chamath just said.

David Sacks 12:08 You know, the mistake that we make might even be on this pod today. (laughs)

David Friedberg 12:13 (laughs)

Chamath Palihapitiya 12:13 (laughs)

David Sacks 12:13 I might have already made it.

David Friedberg 12:14 We may have already made it.

David Sacks 12:16 I agree that we should all just be a little bit less judgmental and, um, there, there, there, the, there is an element, there is a judgmental element in, in Joe's tweet that, that's probably the part I don't agree with is, look, if someone wants to do that, fine, take the time, doesn't necessarily make them a loser, but it's not a choice that I would realistically make.

David Friedberg 12:36 Yeah, it's totally unrealistic.

Chamath Palihapitiya 12:37 It's not even startups. Like, you know, uh, uh, I'm getting these, I'm getting put to these multi hundred million dollar decisions a day. I can't... you know, I could pause the business, but that'll have so many downstream implications. Unfortunately, I picked a job or am in a position where I can't check out even if I wanted to. So I try to do my best.

David Friedberg 12:54 That's the point he was trying to make that wasn't that well articulated.

David Sacks 12:58 Right.

David Friedberg 12:58 I don't think, I don't think any of us are in a situation where we can straight up walk away from work for any meaningful time. I mean, on a daily basis.

Chamath Palihapitiya 13:03 It would destroy, it would destroy my business.

David Friedberg 13:05 You know, we get texts, we get emails, we get phone calls that we have to answer. And so it's not... it, it, it, it, you know, almost definitionally isn't an option to just walk away. But for those who it is, and if that's their choice, that's what it is. The, the great thing (laughs) about freedom isn't that you can say whatever you want. It's that you don't have to listen to what anyone else is saying. And you know, for people-

Chamath Palihapitiya 13:27 Really well said.

David Friedberg 13:28 ... that, that disagree with Joe, I feel like you always have the option to not listen and you always have the option to walk away. Unfollow. And... yeah, and unfollow. And the whole idea of cancel culture and, you know, punishing people for the things they say regardless of what they say and, and the censorship and all the shutdown of, of voices and channels for people to have a voice, I think it, um, it takes the freedom away that's inherent in the idea of (laughs) you know, your choice to not listen.

David Sacks 13:56 Yeah. And it, and it, and it's almost always totally hypocritical. So just as a postscript on the whole Chappelle debate, it turns out that the leader of the sh- the anti-Chappelle protests, who've been trying to get him canceled at Netflix, it turns out this, this person has like a treasure trove of the most angry, hateful, vile tweets that I-

Chamath Palihapitiya 14:17 It was disgusting.

David Sacks 14:18 ... or anybody has ever seen. (laughs)

Chamath Palihapitiya 14:18 When you, when you put it in the group chat, I thought that that was a joke. The, the things-

David Friedberg 14:23 That's what I thought too actually.

Chamath Palihapitiya 14:24 ... that she wrote were so beyond the pale.

David Sacks 14:28 Beyond. Beyond.

Chamath Palihapitiya 14:29 Oh my god.

David Sacks 14:30 They're like, they're like the worst tweets.

David Friedberg 14:31 We can't play them on the show.

Chamath Palihapitiya 14:33 No, we can't... I don't even want anybody to speak these things.

David Friedberg 14:36 I don't want to include it in the show notes.

David Sacks 14:37 They're literally the worst tweets-

Chamath Palihapitiya 14:39 They're the worst tweets.

David Sacks 14:40 ... I've ever seen.

Chamath Palihapitiya 14:40 Seriously, I completely agree.

David Sacks 14:42 The most racist.

David Friedberg 14:43 (laughs)

David Sacks 14:43 Like I've never seen-

Chamath Palihapitiya 14:45 Racist.

David Sacks 14:45 ... such explicit racism in the-

Chamath Palihapitiya 14:47 Yeah.

David Sacks 14:47 ... 21st century basically.

Chamath Palihapitiya 14:48 Yeah.

David Sacks 14:48 Aside from these tweets and, um, and this is the person who's trying to cancel Chappelle, was out there with a megaphone and who the press was fawning over.

Chamath Palihapitiya 14:56 By the way, and she said in her thing, "Yeah, those are from a long time ago. I've already owned up to those, so let's move on."

David Sacks 15:03 (laughs)

David Friedberg 15:04 Wait. Hold... I, but...

David Sacks 15:06 Owned up how? Owned up how?

Chamath Palihapitiya 15:08 And it's kind of like, you know, let me play the empathy card on me, but then, you know, I... so meaning I expect you to see through what I'm going through and that, those expressions were in a moment in time so see past them and see my true character. That's what she's asking.

David Friedberg 15:23 So one way empathy.

Chamath Palihapitiya 15:23 That's what she's asking the world to do, you know, about her. But then you're not willing to do it to any... for anybody else. And that's where I think that double standard just doesn't work anymore and I think this is what people are getting really fed up with.

David Sacks 15:37 And yeah, and I would also say that her tweets weren't funny. They weren't attempting to be funny.

Chamath Palihapitiya 15:42 Oh my God, they are so gross. Gary, they really are gross.

David Friedberg 15:43 They were, I have a customer service problem with this beeping, beep.

Chamath Palihapitiya 15:47 No, they're so bad.

David Sacks 15:48 Yeah, I want to bash, I want to bash this, you know, beeping Asian or whatever over the head blah, blah, blah, blah. Like a lot of racism towards Asia, you know, um, Asian people.

Chamath Palihapitiya 15:57 No, there was homophobic tweets.

David Sacks 15:58 Yeah.

Chamath Palihapitiya 15:58 There was A- Asia, Asian hate tweets. I mean it... Latina, Hispanic. I mean it was crazy.

David Sacks 16:03 Right. She wasn't even trying to be funny, that's the thing.

Chamath Palihapitiya 16:05 No.

David Sacks 16:05 It wasn't even, it wasn't even a failed attempt at humor. So here you have Chappelle who I think is dishing it out in an equal opportunity way, making, you know, funny, uh, observations about... really he's criticizing our culture, not specific groups. And he's being deliberately misinterpreted by the people who want to cancel him. They're... really to think that Chappelle's standup routine is hateful really requires I think deliberate, uh, obtuseness. You have to deliberately misinterpret what he's saying. And so you have these people out there trying to do that and meanwhile they are guilty... it's a total active projection because they are guilty of everything they accuse Chappelle of.

David Friedberg 16:49 Well, not all of them. This person in particular is.

David Sacks 16:50 The leader.

David Friedberg 16:51 And-

David Sacks 16:51 The leader. And of course the press doesn't dig any of this up. It all happens through the, through kind of internet sleuths.

David Friedberg 16:59 That would be a narrative violation, David. If, if somebody is virtue signaling and they are leading a cancellation movement, it's, it's kind of a narrative violation to say, well, maybe they should be canceled by the same standard or-

David Sacks 17:11 Right.

David Friedberg 17:11 ... you know, quite easily. I think the thing that-

Chamath Palihapitiya 17:13 I don't think she should get canceled. Let's just, let's... there you go.

David Friedberg 17:15 Of course not.

David Sacks 17:15 Yeah, yeah, yeah. I don't, I don't think she should be canceled, but I-

Chamath Palihapitiya 17:18 And, and this lady-

David Friedberg 17:18 What if she said it when she was drunk?

Chamath Palihapitiya 17:20 And, and in fact-

David Friedberg 17:20 What if she had a nervous breakdown?

David Sacks 17:21 Well...

Chamath Palihapitiya 17:21 I can only imagine the difficult path that this lady has gone through and on the off chance that she's listening, I'm totally cool with your journey. I understand you made some mistakes. We've all... I'm going to let you off the hook. Can you please try to let the next person off the hook?

David Friedberg 17:37 I think that would be a nice place for everybody to aim to go and then... and, and just to circle back with, with Joe, when he started explaining hims- uh, self in the thread when it became a conversation with a wider group of people, the journalists went on the pure dung cancellation route but then there was actually a productive discussion about... between CEOs, et cetera. And I thought what was very interesting about it was he get... he started talking to Garry Tan who, you know, was like, "Listen, we have a four-month leave practice at our venture firm." And, and Joe said, "Do you really take 100% off cold turkey or did you work part-time and stay in touch like a responsible leader of your firm?" And of course, Garry did just that, right? And then Joe says, "You know what? I shouldn't have written 'loser' and appreciate the pushback. In more intensive operational contexts, losing key leaders cold turkey for six months seems unnecessary, but I respect the different takes here." And I think that really is...

Jason Calacanis 18:26 ... uh, an actual good discussion about this is, hey, well maybe if you're an intense leader and you don't have the ability to take a couple of months off, well maybe you should take a couple of Fridays off and m- and then there was a really interesting discussion.

Chamath Palihapitiya 18:38 And bank it, yeah.

Jason Calacanis 18:39 What's better for a leader to do, spend a little more time every year or to spend three or four or six months in the beginning when you're, as you just said Chamath, on the periphery here and trying to be helpful on the margins? Maybe for the secondary person, if it isn't 50/50 Sachs, it is actually better for you to pick up some Fridays or whatever and, and take over the whole -

David Sacks 19:00 Right. Well I, I, I'm glad, I'm glad you read that clarification by Joe because I think what he basically is saying is that yeah, he... The initial language he used, he, he would... He basically clarified that. And it sounds like what he's saying is, "Listen, if you're on a high performance team and you're the star player and you disappear for six months, that's gonna cause your team to lose." So I think that's maybe what he was saying, not, not-

Jason Calacanis 19:20 That's a perfect analogy, Sachs-

Chamath Palihapitiya 19:22 Yeah.

Jason Calacanis 19:22 ... because if we were looking at LeBron James or Kevin Durant and they had a baby midseason, or Draymond had a baby midseason, which I'm sure has happened to, you know, folks, it's not like they say, "I'm not playing the next six months of games."

David Sacks 19:33 Yeah.

Jason Calacanis 19:34 They miss one game, maybe two, they go back on the road and I think everybody understands like, (laughs) yeah, you can't give up one of your 10 primary years or three years left that LeBron and KD have left.

Chamath Palihapitiya 19:45 I'll give you one final anecdote to end this chapter of our discussion today. Uh, in 2007 at Facebook, at one point in like one of the umpteen reorgs we were doing as we were trying to get out of the primordial ooze, I was in charge of HR. And everybody at that company was young except for a handful of people. And then there was finally a person, and I think it was our... this HR person that, that at some... through some weird convolution of events re- reported to me, uh, who got pregnant, who was pregnant. And we didn't have a policy because nobody had ever gotten pregnant before. And, you know, I remember saying, "Oh, we have to come up with a policy." And what I did was I was like, "Well, what would I want?" (laughs) Which is the easiest way for me to answer most questions.

Jason Calacanis 20:31 Yeah.

Chamath Palihapitiya 20:31 And, (laughs) and I came up with four months for either the father or the mother, i- i- irrespective of the context. And that's how we started the original policy. Four years later though when I had my first kid, um, I took like three weeks and I came back 'cause the grind was too hard.

Jason Calacanis 20:43 Yeah.

Jason Calacanis 20:44 All right. I think, I think where we have to go is it's been a crazy week of, uh, the reconciliation bill, the infrastructure bill, and how to pay for this, uh, incredible spending.

Chamath Palihapitiya 20:54 It's been a meta week.

Jason Calacanis 20:55 It's been a... it's been a meta week. (laughs) I mean, and this builds on top of our discussions about inflation, uh, as well as the supply chain issues that builds on the conversation we had about COVID and the new president. So we're trying to get the wealth... uh, we're trying to get the reconciliation bill done and part of that is, hey, how is this gonna get paid for? And in the course of one week, we've seen, uh, the tax proposals flip, I think multiple times, to ones that have never been tested and they... and may not even be legal in the United States. Of course I'm referring to a billionaire tax which was proposed, uh, which would be a penalty, uh, or a tax on assets that are liquid but that have not yet been sold and it would look back three years, essentially going after Bezos or Elon, Larry, Sergey, basically going after the top 10 billionaires in the world. And then maybe it was gonna be the top 700, then it became a millionaire tax, uh, all of this to try to pay for these bills while so much money has been poured into the system that, you know, NFTs and stocks are going through the roof. Where do we want to begin, gentlemen? Should we... does anybody have thoughts on this brief billionaire tax that was floated and what that says, uh, about where we are as a country in terms of how we think about the success of our greatest entrepreneurs? Do we want to talk about what's fair or the process?

Chamath Palihapitiya 22:20 Well, I thought the, the process was insane. And what was crazy was that, you know, Ron Wyden had been working on this proposal theoretically for the past two years, and at no point did he bother to float the trial balloon with his colleagues in the Senate to even see whether these people actually supported it beyond some, um, folks on the progressive left who are ideologically fixated on, you know, this confiscatory way of running the country. The funniest thing about that bill to me, and I let the powers that be know this, is... Hey guys, I've always been on the record, I'm happy to pay whatever tax you want. I feel super blessed to be in America, whatever. You want me to pay 30%, 80%, I don't care. But I had a real issue with the way that bill was written 'cause I'm like, um, the Democrats are writing a bill that will disproportionately tax Democratic, uh, successful billionaires and it'll leave intact the Kochs, who is literally the bogeyman to the progressive left who wants to write this bill. And I thought, "How could you even write this bill this way? It is so stupid." You're saying be-

Jason Calacanis 23:29 Because those people own private assets and this goes after public.

Chamath Palihapitiya 23:32 Guys, guys like me would have been paying billions of dollars and the Kochs would not have paid zero.

Jason Calacanis 23:38 Because their entities are private-

Chamath Palihapitiya 23:40 Yes.

Jason Calacanis 23:40 ... and yours are public.

Chamath Palihapitiya 23:41 Yes.

Jason Calacanis 23:41 Just so the audience understands.

Chamath Palihapitiya 23:42 Yes. How insane is that? And yet we're the ones supporting these people.

Jason Calacanis 23:46 That is a s- a great second order observation, that these people-

Chamath Palihapitiya 23:50 So that, that was-

Jason Calacanis 23:50 ... clearly didn't think through.

Chamath Palihapitiya 23:51 That was my only issue with the thing. It's like, if you want to try to ram and jam this thing through, go ahead and try. I'm not gonna be the one that, that, you know, files a lawsuit the day after it's passed and takes it to the Supreme Court, which will get heard and, you know, this conservative Supreme Court would not have allowed this, this tax to stand. You can't target 700 people. Uh, but by the way, the reason you can't target 700, because there is a slippery slope from 700 to 7 million to 70 million. And what it does is it allows tax and spend politicians a blank ledger to go absolutely crazy and just fund every single harebrained pork barrel scheme that they can come up with.And that's really what we stopped, was an important slippery slope. And then in its place, I think is a tax that is fair. A simple surtax on adjusted gross income. If you're above X, you pay five million and if you're above Y, you pay another three, so eight percent.

Jason Calacanis 24:48 Five percent 20%.

Chamath Palihapitiya 24:50 On every, on every kind of income. And I think like, that's a really reasonable way to get folks to pay more. That seems like a good start. But the first version of the bill was so stupid, and the thing that really angered me though, was it targeted Democratic successful people, and left alone Republican successful people, written by the Democrats.

Jason Calacanis 25:07 Freeburg, what are your thoughts on the confiscatory nature of this? I've never heard the word used that way, confiscatory. Where we're going back and saying, "Listen, you won so much, we're just gonna take 20 or 30% of it."

David Friedberg 25:20 We all pay property taxes, and so we, there is a experience we've all had with paying a percentage of some of assets that we own, people of all income brackets every year, to your local government to fund local services that everyone, uh, participates in. So, you know, I don't think it's unfounded. Now, if you look at history as a guide, you know, France introduced a wealth tax to people making over, uh, I think it was 1.3 million euro per year, um, and it was shut down and came back basically 1999, 2000. And between the year 2000 and the year 2016, 25% of millionaire households emigrated out of France, uh, during this period. And the amount of tax revenue that was lost during that period of time was greater than the new revenue generated from the wealth tax that was introduced. And so France ultimately scrapped the wealth tax, um, and there have been a number of other, you know, reasonably good examples of European countries putting in place these wealth taxes and then kind of removing them, uh, later. So, um, you know, on the one hand, I, I, I think that we've all seen this experience and Switzerland does this. I think you get taxed on your total assets in Switzerland when you have to go negotiate every year, uh, with respect to how much you pay. It's a very weird process. So on the one hand, there is this kind of experience and, and precedent for paying some percentage of assets, sometimes it's a targeted asset and sometimes it's not, but the longer range consequences that we've seen is like, you know, e- emigration and people realize there's always a better choice. The cha- the question we have in the United States is if we introduce a wealth tax like this, where will successful Americans emigrate to? Um, you can see how people could leave France and go to Belgium or go to the UK or go to Switzerland or go somewhere else where they might be better off. Uh, where's, where are Americans gonna move to?

Chamath Palihapitiya 27:13 Canada.

David Friedberg 27:14 If you're successful... Canada? I mean, are you gonna move to Vancouver? I mean, you're from Canada, but Zacks would you move? You know, where would you move to? You know, it's almost like there ends up being this kind of, you know, I, I think really interesting experiment that'll be run here. Now, remember, this wealth tax was introduced by Warren and others last year. So this wasn't some new concept that, that was fly by night. This has been one of those things that's been on the shelf for a while. What happened is they pulled it down from the shelf and said, "Let's try this now."

David Sacks 27:40 Yeah, they've never-

David Friedberg 27:41 Yeah.

David Sacks 27:41 They've never had committee hearings on it. Uh, they've never had committee markups on it. It's been tried and repealed in European countries. And like you said, they pull it down at the 11th hour. Why? Because there are carefully laid plans, which they've been concocting for three months were thrown overboard when Sinema said she wouldn't support the rate increases. Now, well I don't know why they wouldn't go to her at the beginning of the process instead of waiting till the end of the process, but so because of that, they're scrambling around trying to find any source of revenue. So it's, "Oh, will a billionaire tax work?" No. "Well, what about a corporate AMT? How about that?" No. "What about a millionaire surcharge?" These guys are like burglars rummaging through the house.

David Friedberg 28:20 (laughs)

Jason Calacanis 28:20 (laughs)

David Sacks 28:20 They hear, they hear the sirens, they hear the sirens coming-

Jason Calacanis 28:24 Here we go. (laughs)

David Sacks 28:25 ... and they're like, "What can we take? Oh, the TVs are bolted down, can't get that."

Jason Calacanis 28:28 (laughs)

David Friedberg 28:29 (laughs)

David Sacks 28:29 "Where's the jewelry? What can we take?" And it's just for, you can't set, you can't set tax policy this way. And this whole idea that we can set tax policy based on our intuitions of fairness without having hearings to ask the question, "What will this do to the economy? How much damage will it cause?" This is absurd.

David Friedberg 28:49 I'll say it's r- it's really important to note, um, the market is telling Congress something here, and the market is members of Congress informed by their, uh, their constituents. The market is saying, "Maybe we shouldn't be spending this much" (laughs) because there isn't a place to fund it and no one's raising their hand and saying-

David Sacks 29:06 Totally.

David Friedberg 29:06 ... "This is something we can all align on." And so I think the m- the, the more important fundamental question is, are we really equipped and do we really have a general economic interest, economic interest meaning people measure things and vote with dollars, to support these sorts of social programs? And it seems to me the indication is no, and this seems to me to be primarily a response of the pendulum swinging the other way post the Trump era where, you know, the Trump era was all about blowing up these ineffective, over-regulated, bloated government infrastructure and, and programs and people and, and bureaucracies. And now we've kind of found ourselves through our, our voted representatives swinging this other way, but it turns out maybe we've swung too far and the market is now voting and saying, "This just isn't a, a, a, a, a playing field we should be on." And so, you know, where they end up here, I think regardless it's gonna end up needing to be some sort of reconciliation on spending to make this all work.

Jason Calacanis 30:01 Let's be honest, Bernie Sanders and Elizabeth Warren were, did not win the nomination. The country specifically wanted a moderate, uh, Biden was sold as a moderate, go back to the way it was, moderate Dems like Clinton, like Obama. This is the classic Coca-Cola, this isn't new Pepsi nonsense. And we got hoodwinked basically, and I think what a lot of Democrats are seeing now, especially the moderate ones, is, "Hey, wait a second, Biden is Warren and Bernie in sheep's clothing perhaps," uh, "and, and we didn't want this, this, we didn't want Trump, he was too hot."And we don't want this to left crazy, let's just take everybody's money, randomly change the tax code. I don't think American citizens wanna live in a world where we change tax code at the eleventh hour. That is scary to people, all people, people who have savings.

David Sacks 30:52 If you care about the economy-

Jason Calacanis 30:54 Well, yes, and, and it is the economy.

David Sacks 30:55 ... but, but, but these progressives, I think these progressives... So, so it used to be that taxation was a necessary evil. You, you, you tax people because you gotta pay for government and government programs. Everybody hates it, but, but you do it, and you try to figure out the way of achieving the revenue government needs in the least destructive way possible. But I think progressives now, they're so focused and monomaniacal about this issue of income inequality, the fact there are some people who've gotten richer than everybody else, that I think they're willing to tax those people. I mean, they would like to siphon off money from those people. I think they would siphon it off just to light it on fire, just to level people. And so they don't really care what the impact is gonna be on the economy.

Jason Calacanis 31:33 Well, I mean, and their position was-

Chamath Palihapitiya 31:34 Ardon Cox.

Jason Calacanis 31:34 ... in fact, ban the billionaires. That was their roo-... But, uh, you know, before we get to that, I just wanna say, these rules, I think Americans want the rules to be simple, and I don't think people want you changing the rules at the last minute and then making them retroactive. I think all Americans want taxes to be predictable and simple, not just change them willy-nilly because you change the budget. This seems so unthoughtful and crazy. Chamath, your point.

Chamath Palihapitiya 31:59 I have two points to make. The first is that I don't think anybody really knows what's in these bills. And as a result of nobody really knowing what's in these bills, they're used as negotiating chips. So case in point, when Biden came out and said, "You know, we have a $1.85 trillion bill now, and we're ready to get this done," so that he could, you know, fly to Europe and, you know, fly to COP26 and kind of, you know, declare victory, unfortunately, the progressive wing of the Democratic Party in the House said, "No, I'm not ready to dance yet." And, you know, they have consistently refused to sign an infrastructure bill until they got what they needed from this other bill. And so when Pelosi called the vote, she had to pull it because they weren't gonna get the votes necessary to get this bill passed. So what this says to me is that even with spending, it doesn't matter whether you're spending fi-... 'Cause that's a, I think it's a trillion-dollar bill, right? That's a $1 trillion bill. This is a $1.875 trillion bill. Nobody cares about the quantity, and nobody cares about the details. They care about some perceived moral victory. This is the only reason why we're seeing this, you know, Mexican standoff that we're seeing today. If these things were so substantively important, we would have passed the first bill. We would have negotiated a s- reasonable second version and passed that too. Instead, we're here going through the end of the year with nothing done. And I just want, you know, the Democratic leadership who listens to this, 'cause we know a lot of people in Washington listen to this podcast, you guys gotta get something done, because if you go into the midterms with nothing done, with a Democratic President, Democratic Senate, and Democratic House, this is going to be a bloodbath.

David Sacks 33:47 Well, thi- this is why something will, will get done, but, uh, you know, uh, I think the political realities are that at the end of the day, the Democrats will come together and pass something. But it's concerning that we're just talking about doing something because it will help you in the midterms. You know, in the immortal words of Nancy Pelosi, you have to vote for the bill in order to find out what's in it. I mean, at the end of the day, we're not even gonna know what's in this thing. And, um, you know, we're spending another... It'll probably end up being a $1.75 trillion bill. It'll be stacked on top of the spending that's already happened. One point- remember, Biden already passed 1.9 trillion of COVID relief, another 1.2 trillion of infrastructure.

Chamath Palihapitiya 34:26 No, that hasn't passed yet.

David Sacks 34:27 Well, it's going to along with this now 1.75 million, sorry, 1.75 trillion of this new social spending bill, assuming-

Chamath Palihapitiya 34:36 Right, so it's about-

David Sacks 34:36 ... it, it passes-

Chamath Palihapitiya 34:37 ... 5 bil-... $5 trillion-

David Sacks 34:39 5 trillion.

Chamath Palihapitiya 34:39 ... 5 trillion of wealth redistribution.

David Sacks 34:40 Right, and, and progressives will have, will have set the stage for this to be perceived as some sort of failure. It's bizarre.

Chamath Palihapitiya 34:44 By the way, David, if you go back then, if you take that five trillion and add it to the, all the COVID before and all of the, uh, the Fed buying, we've probably had one entire turn of GDP, so call it $20 to $22 trillion of money created in the last three or four years.

David Sacks 35:05 Right.

Chamath Palihapitiya 35:05 Now you go back J... So, so now, so now you go back to, Jason, what you started. The thing that I have struggled with the most in these last few weeks

Chamath Palihapitiya 35:13 is trying to come to a conclusion on inflation. My worry is that it's here, and it will be persistent. And inflation comes in two ways. Way number one is if you massively increase the supply of money. Why? Let's just say the economy at $100, and now all of a sudden, you just print another 100, so now there's $200. What will happen is all of the goods and services that make up that 100 will get repriced to absorb the 200. So prices go up, inflation goes up. The second way that inflation can happen is if middle and lower income people buy and spend. Because when rich people have extra money, they just buy financial assets. That's why you get financial bubbles. But practical goods and services are bought by average, everyday, normal working folks, and their wages are going up. And so I think what we've created is a really distortive inflationary cycle that's gonna really hurt the United States, because as Sachs talked about, we cannot print enough money to pay for the debt when interest rates go up.

David Sacks 36:21 This is, this is the number one-

Chamath Palihapitiya 36:22 It's cataclysmic for them.

David Sacks 36:22 This is the number one thing causing me concern as well, is that you look around, it's all-time highs for everything. It's all-time best everything. NASDAQ and S&P, all-time highs. Crypto markets, all-time highs. Shibu Inu worth 30, $40 billion bubble.Uh, I'm seeing SaaS multiples-

Chamath Palihapitiya 36:42 Real estate.

David Sacks 36:42 Real esta- I'm seeing SaaS multiples at all-time highs.

Chamath Palihapitiya 36:45 Crazy.

David Sacks 36:45 So you have to wonder, is this a new normal? Is this sustainable? Or is it some sort of inflated bubble? Then you look at the inflation rate's 5.1%. To Tuma's point, it might be persistent. You look at Treasury, the Treasury, uh, interest rates, the yield is 1.6% on the 10-year T-bill. Okay, so effectively, your real interest rate for savers is 1.6% minus the 5.1% inflation rate. You're at negative 3.5% if you just save your money in T-bills, in sort of, uh, risk-free, you take the risk-free return. Negative 3.5%. So now, you have everybody going out there trying to chase the yield because how do you earn a return on your money? You don't want it to be, uh, you know, eroded-

Chamath Palihapitiya 37:31 You buy s- you buy stocks or NFTs or houses.

David Sacks 37:33 So, so people start going into riskier and riskier assets to basically try and make up for the loss of inflation. And so you have to wonder-

Chamath Palihapitiya 37:40 They're trying to hit the one outer.

David Sacks 37:42 Yeah, so then-

Chamath Palihapitiya 37:43 Oof.

David Sacks 37:43 Okay, so, so you have to ask yourself, okay, so back to this point about all-time highs, is this because everything is really this great or how much of this is driven by these sort of distortions?

Chamath Palihapitiya 37:54 50/50. I mean, I'm just putting a number on it. Like obviously, the industry and eco- and economy is doing fantastic, but seems 50/50. Here's the other thing that I wanted to make and just the last portion, which is, I think what we've realized as well at the end of this is, I- I actually again now, to use this empathy card, I'm going to give the progressives my empathy card and say, "I understand what you're trying to do. And I believe in a lot of what you're trying to do is to even the starting line for everybody." Right now, a lot of what you end up proposing distorts that goal by trying to, you know, even out the outcomes and even the finish line. But I really do think they want to even the starting line. But here's the thing that we all have to realize now. All the things that the progressives want to tax and fund are actually being done by private corporations. And I think we just have to acknowledge that and make a decision about whether as a society that's okay or not. I'll give you two examples. Number one is the federal minimum wage. We have tried for years and we have debated raising this minimum wage. It still sits today at $7.25. Just this week, McDonald's moved their minimum wage up, Starbucks moved their minimum wage up. We're talking about, you know, entry-level quick service jobs that now pay $17 to $25 per hour. Right? So two and a half to three plus times the proposed federal minimum wage. The free market And so, and so, and so what government didn't and wasn't able to do, the free markets have done. Second example, we tried to get free community college inside of one of these bills. It was dropped. Now, depending on where you go, the em- the nation's largest employer, Amazon, actually will just pay you to go to college. Right? So they are replacing that intention and a version of the GI Bill, but as a private organization. So I think what we also have to realize is that maybe some of these policy decisions is actually a little bit of, you know, getting tilted by the fact that private organizations are acting more nimbly to actually implement this progressive agenda because it actually exists in America if you're willing to take the time to look. Let me ask a question about inflation. If... Who is inflation going to, um, hurt the most and who's going to gain the most from it? Because it does seem like consumables, gas station, you know, supermarket trips, et cetera, are going through the roof. In that case, you know, that's going to have no impact on the top third of people because gallon of milk at $3, $6, $9 doesn't matter. But then you look at inflation on stocks, it's going to make it go up. So a rich person isn't impacted by their gas or their groceries, but somebody in the middle class or, uh, who's poor, that's going to dramatically impact them. So if we spend more, does that actually create a larger wealth gap, Sacks?

David Sacks 40:50 Look, inflation is devastating for the middle class. Um, if you have savings, it ar- i- i- if you can afford to put all of your savings in financial assets the way that the super wealthy can, then your financial assets will go up. But if you have a good, you sort of middle class income and you don't have your, in your savings are in something more conservative, you're going to get absolutely, uh, eroded by inflation over time. It's going to kill you. And, you know, housing prices will go up. The, the, um, the, the middle class young couple that wants to buy, uh, a house for the first time, that's going to be much harder to achieve because housing prices will inflate away. So I think, you know, the- there is, there are some effects that are a wash. So for example, prices go up and then, uh, wages go up at the same time. But savings can really get hammered if you're not in financial assets.

Chamath Palihapitiya 41:41 Mm. It hurts the middle class first, but it also hurts, it hurts everybody because again, unless you're perfectly hedged going into a rising rate environment, you will own assets that are just speculative and go

David Friedberg 41:51 Let me, uh, ask-

Chamath Palihapitiya 41:51 Let me ask Friedburg a scientific question here. Are we starting to go into a self-fulfilling prophecy around inflation a la what happened in the '70s, which is, we've been talking about it so much that anybody who is thinking about raising prices says, "Well, everybody else is raising prices. So even if my grilled cheese sandwich hasn't been impacted by all of this and I didn't have to, uh, give raises to my employees, they're happy at their current salaries, I'm just gonna put $2 on my grilled cheese." And we just get this cycle of everybody saying, "How much can I add to the cost of something?"

David Friedberg 42:21 I am trying to remember, there was an earnings, uh, interview I saw yesterday. Uh, God, which was the company? Anyway, their, um, their company in the industrial supply chain, and he said that they're raising rates to get ahead of the supply costs going up for them-

Chamath Palihapitiya 42:37 Ah.

David Friedberg 42:38 ... um, so that their margins won't get squeezed. And I think that's, uh, it's almost like that, what you're referencing is a little bit of a run on the bank.... mentality where, um, those with, uh, pricing power raise ra- raise prices, and as a result, you end up kind of seeing the- the- the trickling effects because competition can't catch up. So, if everyone's kind of raising rates and there's not enough competitive advantage, the one thing that's making this even harder right now is the gluts in the supply chain, which are reducing the competitive, um, uh, market dynamics that we might normally see where one customer raises... One company raises rates and another company says, "Wait, our rates are going to stay the same." But because so many people are challenged by getting product, there's enough demand for their product, everyone can raise rates together. We're seeing this in the energy markets now. So, um, yeah, I mean, this is kind of part of the scary, uh, scenario that everyone's trying to manage against. Um, I- I don't know what the science is, and I'm not an economist, but, uh, it certainly seems to me like the psychology of managers and business owners and- and boards is such that they're saying, "Let's get ahead of the curve. Let's raise rates." And as a result, you're seeing the trickling effect of inflation, uh, throughout the whole economy. So, um-

Chamath Palihapitiya 43:47 A little scary.

Jason Calacanis 43:48 Sax, what do you think psychologically is going on with raising prices? Yeah.

David Sacks 43:52 So- so expectations are definitely part of the inflation game. People raise prices if they expect inflation in the near future, and then that feeds on itself, and that's how... If you look at countries that have had hyperinflation, that's how you get a spiral. Now, I don't think we're going to have hyperinflation here, but we're at 5.1% now, and if people think it's going to be worse next year and the Fed's not going to raise rates, it could even be higher next year. And I think people are gonna start getting upset about this, you know, when they buy their Thanksgiving turkey and their Christmas ham and those prices are way higher than they think and they're already paying gas prices that are a lot higher than they're used to. Um, I think you could see a lot of unhappiness out there.

Jason Calacanis 44:32 One other thing I'm thinking about is, is the logical thing for a person to do in this hyperinflationary, you know, market is to say, "You know what?" The- _ these... I went to look at a car that I wanted to get to drive in the snow and I was like, "You know what? I'm just going to hold off buying this because I'm not paying 15K over sticker." So... And I can pay 15 over sticker. So I was like, "Ah, do I want to do that? Ah, the other car is okay. I'll just put snow tires on it." So are a lot of people chamoffing as part of this psychological, you know, spiraling out of control situation, then some group of people might say, "You know what? I'm going to opt out of consumerism and I'm just going to lower my burn rate and stop consuming," which is also bad for the system.

David Sacks 45:08 How are you going to stop consuming food? I mean, food prices-

Jason Calacanis 45:11 No, this is a thing, inflation.

David Sacks 45:11 ... are going through the roof.

Jason Calacanis 45:12 Well, you might- Yeah, inflation- No.

David Sacks 45:13 You... Instead of getting, you know, filet mignon, you might get chicken.

Jason Calacanis 45:17 (laughs)

David Sacks 45:17 Okay, well, there's going to be a lot of unhappy people who are eating chicken for Christmas instead of filet.

Jason Calacanis 45:21 (laughs)

David Sacks 45:21 I'm being serious.

Jason Calacanis 45:22 Well, I'm coming to your house-

David Sacks 45:23 (laughs)

Jason Calacanis 45:23 ... so I'm getting filet, so I'm good. I'm gonna go to your house for lunch and I'm going chamatz for the surf and turf after.

David Sacks 45:29 (laughs)

Chamath Palihapitiya 45:31 Guys, rich people don't create inflation. The middle class and lower middle class create inflation. There's just not enough rich people to matter. They're irrelevant. So when you look at the last two or three spikes and waves of risk that we've seen globally, they've come from large, multi-hundred million person cohorts of people, right? Those could be in Asia, those could be specifically in China, those could be in the United States plus all around the world because of certain loose monetary conditions. That's what we have now. We have a multi-hundred million, probably approaching more than a billion person strong liquid buying pool of people that are, again, as I said, if the, if the lowest on the pecking order is now making 17 bucks an hour, we all know this, guys, it's not as if the inflation stops at 50,000 bucks a year. Everybody's wages rise. So consistent and persistent wage inflation will allow you to spend more because that's just what people do. We also have high savings rates, so people will feel more flush with money. The point is that everybody will spend, they will spend more. You know, you can't get cars, you can't get this, you can't get that. All this pent-up demand will get fed. And the downstream implication is I think that prices will rise, but it- it will disproportionally hurt the middle class and the lower middle class. And then these asset bubbles will probably deflate or they'll have to get re-rated. And if the Fed stops tapering and, you know, hikes rates two or three times over the next 12 to 18 months, man, this is an ugly, ugly, uh, stock market.

Jason Calacanis 47:08 One of the things people have been asking me to ask all of us on the pod is, what are our strategies right now given the turmoil we're in? So maybe we can go around the horn in what we're thinking about in terms of our strategies to deal with inflation while maybe not getting ahead of our skis and being the bag holders. Anybody have-

Chamath Palihapitiya 47:29 I'm not, I'm not gonna-

Jason Calacanis 47:29 ... people thinking strategically?

Chamath Palihapitiya 47:30 ... I'm not going to answer this question. And you, you know why? Because I can't-

Jason Calacanis 47:33 Got it, okay.

Chamath Palihapitiya 47:34 ... because of the public mar-... I don't, I don't want to even answer this question yet.

David Sacks 47:38 Okay, well, let me... Can I... I'll... Let me further describe the, the, the problem. Um, so this happened in the late 1970s. We had stagflation, we had sort of, um... Every year we had, um, increasing inflation because of the expectation game. And the thing that broke it was you had Paul Volcker come in at the Fed and he jacked up interest rates and, uh, he actually caused a pretty severe recession in like '80... I think it was like '82. Uh, '81, '82. I think by '83 we were coming out of it, and then the economy absolutely boomed. Interest rates came way down because he broke the ba- uh, back of inflation. And actually interest rates came down for, you know, as a result of Volcker and the Fed controlling inflation, they came down for 40, 40 years basically. And th- those, that decrease in interest rates fueled everything. It made debt a lot cheaper. It, uh, inc-... It made the stock market boom because the net present value, the discount rate went down, so the net present value of all those future earnings went up. Um, so you had... It- it set the stage for the boom in the Reagan era and beyond, and- and the Clinton era as well. Now, what's the difference between then and now? Um, well, for one thing, the government debt as a percentage of GDP-... when Reagan took office was around 31%, okay? So when Volcker jacked up interest rates, it didn't really create that much more of a debt service cost for the United States, for the federal government. Now today, the, uh, the government debt, uh, is 125% of GDP. So if, and this goes back to the, to the Druckenmiller point from a previous pod, if the, the Fed were to jack up interest rates to, say, the historical norm of 4.9%, debt service would go from 2% of the federal budget to 30%. You would have a massive crowding out of government programs, so how we fund all that debt service, very unclear. So we're caught between a rock and a hard place. The rock is we have inflation that could be persistent, the hard place is the debt service. So, you know, the tools for controlling this aren't exactly clear. So this, I think, is fundamentally the, the problem is it's, it's not clear whether we're gonna have, you know, interest rates going up or persistent high inflation. Uh, those are the threats to the, the sort of economic boom we're seeing. Now, the flip side of it is that the reason why the stock market's, uh, one of the reasons it's at an all-time high is because earnings right now are fantastic. So the economy is doing very, companies are doing very well, but we just had for Q3, the GDP growth was at 2% annualized, which was sort of an anemic number. It's the lowest it's been since this COVID recovery started. So it's, um, you know, it's, it's interesting. We're at all-time highs, but there's also these, like, major storm clouds on the horizon, and I'm not gonna, like, pretend like I know what's gonna happen. I just, you know, when, when things are this good, I start getting nervous. When it's this easy to make money across everything, the stock market, the crypto market-

Jason Calacanis 50:44 Yes.

David Sacks 50:44 ... to SaaS investing we're doing, I start getting nervous.

Jason Calacanis 50:46 We know we're on a heater, we're on a heater.

Chamath Palihapitiya 50:47 Can I, can I say-

David Sacks 50:48 Yes.

Chamath Palihapitiya 50:48 ... that's the, that's the part that really scares me? So for example, when everybody gets tilted because there's some Shiba wallet where 8,000 turns into 5.7 billion, right? So for those that don't know, there was a, you know, Shiba Inu coin, which is a shitcoin, which was basically there to ape, uh, uh-

Jason Calacanis 51:06 The other shitcoin, Dogecoin.

Chamath Palihapitiya 51:07 The Dogecoin, right? A meme coin. Um, all of a sudden some guy, uh, 13 months ago put 8K into it, 'cause the whole market cap was 80K, and then all of a sudden over the course of these 400 days, that wallet holds $5.7 billion of value or 10% the entire market cap of Shiba. Um, people get tilted by that. Then, then there was an article today in Bloomberg where there's a gentleman, a 66-year-old man in Singapore who's a billionaire, right? So he was successful in his own right. However, he had made in his entire career about one or two billion, and he has made seven billion in the last two years speculating on Tesla call options.

Jason Calacanis 51:48 (laughs)

David Sacks 51:49 Wow.

Chamath Palihapitiya 51:49 I'm not kidding. So buying short-dated calls, right? Riding the, riding the wave, making money, allocating the gains, buying the underlying Tesla security over and over and over again, and so, you know, I was talking to Nat about this, and I was telling her these, uh, these examples, and she's like, "That's what sounds like a bubble." Because it really is very difficult to be in business and to make these decisions and to be reasonably right.

Jason Calacanis 52:14 But also if you're a capital allocator or you're building companies, like, how do you know if you're doing a good job if everybody just is all of a sudden-

Chamath Palihapitiya 52:23 I'm gonna be right back, guys. I have to, I have to deliver the goods.

Jason Calacanis 52:25 Yeah, yeah. Okay. We got a quick baby change.

David Sacks 52:28 I think what's hard about this-

Jason Calacanis 52:29 Hey.

David Sacks 52:29 ... is... Okay,

David Sacks 52:30 so, so one of the areas where it's sort of like best times ever are, is the SaaS market, which is where I invest in, and I'm obviously investing in very, very early-stage companies, but we're seeing valuations now, uh, go to multiples of ARR that we've never seen before, you know?

Jason Calacanis 52:45 50, 75.

David Sacks 52:46 Oh, I would say 100 times-

Jason Calacanis 52:47 100?

David Sacks 52:47 I'd say 100 times ARR is sort of the rule of thumb right now-

Jason Calacanis 52:50 (laughs)

David Sacks 52:50 ... uh, and you're seeing-

Jason Calacanis 52:51 At what scale? A $5 million company is worth 500 million?

David Sacks 52:54 Uh, anywhere from one million to 10 million. I mean, absolutely, but-

Jason Calacanis 52:58 Is worth between 100 and a billion dollars, which makes no sense.

David Sacks 53:02 Yeah, but... Well, no, it does if... Well, he, I'll, he... Let me give you the argument for why it could make sense. Okay, let's say the company is expected to go 3.3X this year and-

Jason Calacanis 53:11 Mm-hmm.

David Sacks 53:11 ... 3X next year. That's basically a 10X over the next two, two years. So that 100X in two years will only be a 10 times ARR multiple, and by the way, if you look at the comps for the companies that have gone public, the SaaS companies that have gone public-

Jason Calacanis 53:27 Yes.

David Sacks 53:27 ... like, look at Toast being worth, what, 30, 40 billion. So they're trading at 30, 40, 50, 60 times ARR in the public markets-

Jason Calacanis 53:36 On big numbers.

David Sacks 53:36 ... on big, big numbers. So my point is-

Jason Calacanis 53:38 But David, how hard is it to go 3X, 3X? That is... I mean, going 3X is hard. Going 3X, 3X back to back, that's like winning two N- uh, you know, NBA championships or being in the Finals.

David Sacks 53:48 No, I, I don't-

Jason Calacanis 53:49 It's hard.

David Sacks 53:49 No, I don't think it's that hard. I mean, it, it's-

Jason Calacanis 53:50 Not for you, but you're the king of SaaS.

David Sacks 53:52 (laughs) You-

Jason Calacanis 53:54 Uh, you know, I'm, I'm being dead serious. For the, for a, a SaaS founder with a million to go from one to three and then three to nine, how many out of 100 actually go from one to nine?

David Sacks 54:02 Yeah, I'll tell you, Yammer's trajectory, and this is back, this is over a decade old, we went from one million in our first full year selling the product to, uh, well, back in those days, we looked at total contract value as seven million of TCV, that was about five million of ARR, and then it, it tripled the year after that. So, you know, and then we tripled the year after that, and-

Jason Calacanis 54:23 Well, what, a, a category defining SaaS company, so you're taking-

David Sacks 54:26 And then we got acquired by Microsoft, but, but, but I'm just saying that it's entirely possible. There's a lot more Yammers today or companies-

Jason Calacanis 54:32 Okay.

David Sacks 54:32 ... with that growth trajectory. So, I mean... But look, this is what's led to, you know, our fund two, which we started investing in 2019, which has a SaaS focus, already has five unicorns in it from companies that we invested in the cedar stage A.

Jason Calacanis 54:46 That's crazy.

David Sacks 54:47 So, but look, I mean, wh- when you're seeing, like, results that good, where my head goes is, "Okay, this is too good."... you know, what am I missing here? Or, like, what's the downside and how long will this sustain?

Chamath Palihapitiya 54:58 Well, there, just to build your, just to build on your point, there are these businesses that have, I- I- I would say, interesting products that are growing well, but they may not actually be very important companies, yet they trade at enormous valuations. And then you have these companies that are just so superb, and I'm talking about Microsoft, Google, Apple, and Facebook, that now trade, in many cases, at some pretty deep discounts, um, to their intrinsic value. But this is the sign of this histrionic behavior that I think, um, embellishes the end of a bubble, right? It's this thing where you look at a growth rate and you don't even ask the structural questions about business quality, viability, sustainability, competitive moats-

Jason Calacanis 55:49 Management team.

Chamath Palihapitiya 55:49 ... you're like, "Oh, well, it's growing from 300% to-"

Jason Calacanis 55:52 Totally addressable market.

Chamath Palihapitiya 55:52 ... you know, it's only decaying to 200%. I buy." Well, it's like, but yeah, but what are you buying? And is there any longevity and staying power? This is why, you know, I've, I think there are some great businesses in SaaS, but I also think there's a lot of head fakes. And in the public markets particularly, people just wanna buy that growth, as David said, because they're chasing yield. They're not, you know, do they really understand, am I buying this company because I really believe in this database technology versus that streaming technology versus this container technology? They don't know any of those things.

David Sacks 56:25 Well, I, uh, eh, t- to, to, so, so this is the conundrum, is I actually do believe, like so I believe in my own portfolio and I'm doubling down on all these companies and I do believe in SaaS. And I think the reason why these SaaS companies get such great multiples is because they're pure software businesses, very high gross margins, 80% plus gross margins. You know, once the flywheel gets going, they're very hard to displace. I mean, they have, uh, it's not just a recurring revenue subscription-type business, but you get expansion out of your current customer base. So, you know, on January 1st of a new year, you're starting with 120%, 150% of last year's revenue just from your existing customers, and then you're stacking the new revenue cohorts on top of that. So, I am a believer in SaaS, but when I see everything going so well, it's SaaS and NASDAQ and S&P and crypto, an- and then I see, you know, 125% debt to GDP and the, the sort of radical, uh, spending that's coming out of Washington, I just start getting nervous. And I don't know if I have, like, a prescription for people out there. I would just be a little bit cautious right now and temper your enthusiasm. But, but, look, the flip side of it is, we could keep having a boom for five more years, you know? And so the market would be going over five more years-

Jason Calacanis 57:38 And so what do you do, sit it out while inflation is going through the roof?

David Sacks 57:41 No, you can't sit it out. You can't sit it out.

Jason Calacanis 57:42 You can't sit it out.

David Sacks 57:42 But, but, but, you know, but, on, on, um, on, I was listening to Vinny Lingham's, um, show on, uh, beep, on call in.

Jason Calacanis 57:50 (laughs)

David Sacks 57:51 It's ca- it's called, it's called Crypto Musings.

Jason Calacanis 57:53 There we go. (laughs)

David Sacks 57:53 It's a... No, he and Sunny Madharia do a great show that you guys-

Jason Calacanis 57:55 I think we all just got 25 bips. (laughs)

David Sacks 57:58 So... (laughs)

Jason Calacanis 57:58 We just...

David Sacks 57:58 You guys should all listen to his show. It's called Crypto Musings. They were, they were talking about all the, the dog coins the other night. It was Shiba Inu and Dogecoin, and there's a couple others. Vinny made a great point, he said, "Listen, if you're out there listening and you're sitting on life-changing money-"

Jason Calacanis 58:14 Sell.

David Sacks 58:14 "... in Shiba Inu, sell. Take it off the table if you can."

Jason Calacanis 58:18 Of course.

David Sacks 58:18 Keywords being if you can. So, look, I, you know, this boom could last for another five years, it could last for another 10 years, and the valuate- valuations could keep going up, the earnings could keep going. You don't want to miss out on that bull run, but if you've got life-changing money in a, in a highly risky position that's not diversified-

Jason Calacanis 58:35 And you're not diversified.

David Sacks 58:36 ... I'm amending my advice of let your winners ride to take some, take some chips off the table prudently. Doesn't mean you sell everything, but just take some chips off the table.

Jason Calacanis 58:45 To diversify specifically.

David Sacks 58:47 Diversify, yes.

Jason Calacanis 58:47 Yeah, I mean, I think it's

Jason Calacanis 58:49 absolutely, uh-

Chamath Palihapitiya 58:49 I mean, I gotta say, when, when you saw these quarterly earnings, there is no better business in the world than Google. Single-handedly, par excellence, the most incredible money-making machine that's ever been created, and a close second, as it turns out, is Microsoft.

Jason Calacanis 59:06 Unbelievable. I mean, just to-

Chamath Palihapitiya 59:08 Which is now the most valuable company in the world, greater than Apple.

Jason Calacanis 59:10 Well, and, and Friedberg's been saying this on the podcast forever, but just to give people an idea, Q3 revenue at Google was up 41% year over year to $65 billion in a quarter.

David Friedberg 59:26 And by the way, that is high margin-

Chamath Palihapitiya 59:28 High margin.

David Friedberg 59:28 The incremental revenue on the core Google products, uh, generated an increment, operated at an incremental 50% EBITDA margin.

Chamath Palihapitiya 59:38 Sick.

David Friedberg 59:39 And they just adjusted-

Chamath Palihapitiya 59:40 So sick.

David Friedberg 59:40 ... their, their, their CapEx depreciation amortization schedule because they realized that their computers that they use in their data centers last four years-

Chamath Palihapitiya 59:50 Last longer.

David Friedberg 59:50 ... instead of three, and the networking equipment lasts five years instead of three. So they're like, and, and I've been saying this since the beginning, 'cause I worked at Google and Urs is still there and he runs all the data centers and the networking infrastructure. When I worked at Google, there was this amazing project where we built a 10,000, I mean, we didn't build it, they built it, a 10,000 port switch called Firehose, which helped increase the throughput of the data centers and had these massively parallelized indexing and, um, uh, a- and, uh, and production servers. Um, and there was so much investment made from the beginning in building the infrastructure stack, the flywheel continues to move, spin faster and faster and faster. And here they are building their own servers, building their own racks, their own data centers, literally the most ver- they have their own fiber across the oceans. Um, literally the most vertically integrated business in history, with a moat that no one will ever be able to catch up on. And I read all these nonsense comments on the internet about people being like, "Why doesn't someone else go after Search?" It's so crazy to me. People fail to recognize that what we see is the tip of the iceberg at Google, and this flywheel is built by layers and layers of monopolistic, in a good way, monopolistic technical advantages that they've built into this business over the period of the past two decades.... and it is extraordinary beyond anything we've ever seen in human history how well this commercial enterprise has run. And the reinvestment of capital has been extraordinary. They've... If you look at YouTube in the quarter, uh, YouTube (laughs) generated... This is insanity. YouTube is now operating at a nearly $30 billion revenue run rate, and that's just like pure margin incremental revenue for Google layered on, um, you know, built off of the same ad- ad network, uh, that they were originally running on Google. Obviously, they have a- a different ad team now at YouTube. But YouTube now has more revenue than Netflix and is growing at likely 40 to 60% year-over-year revenue growth rate, whereas Netflix is, you know, considered one of the FAANG stocks, you know, one of the top stocks, and Netflix is only r- uh, growing at 22% a year.

Chamath Palihapitiya 1:01:49 Sure, remove Netflix and just put Google twice. It should be-

David Friedberg 1:01:52 And then you look at Google Cloud-

Chamath Palihapitiya 1:01:54 ... uh, we should put You- YouTube in there on its own.

David Friedberg 1:01:55 Yeah. And Google Cloud is now operating at a $20 billion (laughs) run rate. And, you know, they- they can just throw these services on top of, um, all these flywheels that they've built, and they become massive enterprises unto themselves. I mean, it is a behemoth that is effectively, uh, not a tax in a bad way, but a tax on the internet, because they are core infrastructure to service almost everything that we all consume and use over the internet in- in some way or another.

Chamath Palihapitiya 1:02:17 Yeah, but they give it to everybody for free and they built the internet for everybody.

David Friedberg 1:02:21 They- they- they, they have been extre- they have been extremely smart about competitive pricing. As we saw recently, they dropped-

Chamath Palihapitiya 1:02:25 Yeah.

David Friedberg 1:02:25 ... the commission in the Play Store to 15%. If I'm making an app and I'm g- giving Apple 30%, now I give Google 15%, I'm more inclined to promote my Android app and that's gonna affect users and, you know, they're putting out this Pixel 6 phone that looks like an incredible piece of equipment that's cheaper than the iPhone.

Chamath Palihapitiya 1:02:41 No, they're, they're an incredible company. The- the- the-

David Friedberg 1:02:43 Everything.

Chamath Palihapitiya 1:02:43 They are so incredibly well run at the top. Sundar is an incredible CEO. Um, and they are... They're running a money printing press, uh, at Amphitheatre Parkway in- in Mountain View. I was gonna say, Jason, to your point, I was talking to somebody, and one really interesting thing that this organization did was, um, a couple of years ago, they basically went long Google and Microsoft and they shorted Apple, Amazon, and Facebook against it. And I asked them, "Why?" And they said, "It's the best inflation hedge we could come up with at massive scale that could work in a way where, you know, we're long growth, but we're hedged where, you know, the types of supply constraints that could come in and, you know, kick us in the ass would never affect Microsoft and Google the same way that it would affect Apple and Amazon." Which, by the way, in their earnings results, they said, right? Amazon has huge issues on the supply chain side. Apple has huge issues on the supply chain side. Amazon was up 15%. They missed their numbers. Uh, although Amazon Web Services is up 40% year-over-year, also on a big number, $16 billion in AWS revenue for Q3. So that, as a standalone company, is now on a- 60 billion. Oh my God. I mean, that was... Did you watch the video? I watched the whole thing. I watched two minutes of it and then I stopped watching it. PTS. (laughs)

David Sacks 1:04:20 (laughs)

Chamath Palihapitiya 1:04:20 I mean, it's basically y- you have Facebook in the face of all of the things, all of the times they got their hand caught in the cookie jar, saying, "This is gonna be the new world, but instead of us doing everything wrong and screwing the users and their privacy and democracy and creating strife in the world, this time we're gonna make it open source. This time we're gonna build a coalition and partnership. And this time it's gonna be awesome." And it's- it's like a dystopian SNL skit where Zuckerberg is describing the future and he literally describes how proud he is that you're gonna be able to play Grand Theft Auto. And Nick Clegg is like, "Yeah, this is gonna be amazing. This time we are gonna bring all the regulators and the scientists in to tell us how to build it, and we'll have consensus of how to build the future." And you're like, "Did- did you just say that everybody in 3D is gonna be in a virtual space beating each other up with bats and guns and killing police officers in Grand Theft Auto?" Luckily they didn't show a clip of it. Uh, but it was s- basically Zuckerberg taking credit for every single, uh, virtual reality or augmented reality thing you've seen over the last 20 years. He literally took everything from education to HoloLens to, you know, poker games, and he took basically credit that this is gonna be the future and that instead of this time it being a closed ecosystem, it would be an open one that supports NFTs and don't worry this time. I think any developer who puts any amount of their effort into supporting in any way Zuckerberg's view of the metaverse is crazy when they could do it on a distributed, decentralized, crypto-based, open source platform. You do not want to give Zuckerberg any more power. And if there is even a 10 or 20% chance that this is the next big compute platform, Zuckerberg needs to be stopped from doing it by the market.

David Friedberg 1:06:11 Wow. J-Cal.

Chamath Palihapitiya 1:06:12 I think you're cr- I think you're crazy. I think you've lost your mind.

David Sacks 1:06:14 Oh my God. j-cal.

Chamath Palihapitiya 1:06:14 I haven't.

David Friedberg 1:06:15 Yeah, I- I- I think you've lost your mind.

Chamath Palihapitiya 1:06:17 Please counterpoint.

David Friedberg 1:06:17 Oh my God. I have a counterargument too. Okay-

Chamath Palihapitiya 1:06:19 Go ahead.

David Friedberg 1:06:19 ... David, you start. You- (laughs)

David Sacks 1:06:20 Well, I don't even know if- if I could categorize what I'm about to say-

David Friedberg 1:06:23 Wow.

David Sacks 1:06:23 ... as a counterargument. I don't even know how to counter that. All I would say... (laughs)

Chamath Palihapitiya 1:06:27 It's insanity.

David Sacks 1:06:28 All I would say is, look, I think it's really great that Facebook is spending all this R&D money on metavor- verse virtual reality. Oculus is a really cool product. I think, Jason, you made the observation that people use it once, say it's the coolest thing ever, then never use it again.

David Friedberg 1:06:43 Yeah.

David Sacks 1:06:43 There is that element to it. They have to solve that. Um, using Oculus for the first time was o- one of the most unique experiences I've ever had with computing. But I admit, I don't use it anymore. It's just not something I s-

Chamath Palihapitiya 1:06:55 Better or worse than Pornhub the first time?

David Sacks 1:06:58 (laughs)

Chamath Palihapitiya 1:07:00 (laughs)

David Friedberg 1:07:00 (laughs)

David Sacks 1:07:01 But any event, look, I think, I think the fa- the fact that-

Chamath Palihapitiya 1:07:03 Worse. The fa- that's his way (laughs) of saying worse. (laughs)

David Friedberg 1:07:06 (laughs)

David Sacks 1:07:06 I think that the fact that Facebook wants to do all this RND and virtual reality, great. Um, changing the name of the company, however, at this point and time, it felt, to me, like, a little bit like Philip Morris changing its name to Altria Group. And by the way, I don't b- buy the idea that Facebook is like cigarettes. I don't believe that at all. I don't think it's, it's bad for people in the way that it's been hyped up to be, but-

Jason Calacanis 1:07:28 But you're saying this is a PR marketing strategy.

David Sacks 1:07:29 ... but, but I, but it feels like they're running from their name and, uh, and, and basically it's almost like saying, "You know, this whole business of social networking has been so sullied that we need to appear to be a diversified portfolio of companies, of which social networking is just one small piece."

Jason Calacanis 1:07:46 A deprecating piece.

David Sacks 1:07:47 Yeah, exactly. And I don't, I don't really buy into that. And I, I, I think if that was any part of their motivation, it's a mistake. 'Cause I think the only thing Facebook should do about all these accusations is get up on their hind legs and fight, because I think, like, all those, these leaks from the so-called whistleblower, I think this is a completely orchestrated political hit, and they should just fight back and push back on it. I think the dangers of social networking have been vastly exaggerated. So it seems to me like they're buying into that nonsense by running from their name. I ... So, I at least would not have done this right now. I would've won that battle, and then if it was still important to change their name, then I would've changed the name.

Jason Calacanis 1:08:28 Uh, well, they're losing young people at, uh, an extraordinary rate on Facebook. US teenagers were projected to decrease by 45% over the next two years. Young adults between the ages of 20 and 30-

David Sacks 1:08:37 Yeah, 'cause they're all going to Insta.

Jason Calacanis 1:08:38 ... were expected to decline by 4%, or TikTok I think is probably more accurate.

David Sacks 1:08:42 Yeah, TikTok is big. Yeah.

Jason Calacanis 1:08:43 Yeah, during that same timeframe via a leaked memo obtained by The Verge.

David Sacks 1:08:45 By the way, I mean, how in the world is Facebook or Instagram more dangerous than TikTok? I, I don't get it.

Jason Calacanis 1:08:51 No, TikTok is deranged. Which ... But by the way, our stan making our Henry Belcaster of, uh, TikTok is reporting that we have, like, millions of views over there, so there's some rogue All In TikTok guy.

David Sacks 1:09:04 Did I say how much I love TikTok?

Jason Calacanis 1:09:06 I love TikTok. (laughs)

David Friedberg 1:09:07 (laughs)

Jason Calacanis 1:09:07 He's building our audience. (laughs) We're connecting with Gen Z finally.

David Sacks 1:09:10 Yeah, you're right.

Jason Calacanis 1:09:10 Friedberg is TikTok. Go TikTok.

David Friedberg 1:09:12 Go CCP.

David Sacks 1:09:12 Yeah. No, you're, you're right. You're right. The TikTok account, the all ... There's an All In TikTok account done by a fan, and we got like 2 million views in the last week. It is absolutely bonkers.

David Friedberg 1:09:21 Holy shit. Yeah. We, we just passed Rachel Maddow and a bunch of, uh, folks. Uh-

David Sacks 1:09:25 Yeah, we're more popular than all of MSNBC.

David Friedberg 1:09:27 Yeah.

Jason Calacanis 1:09:27 Well, I mean, come on. Way to set the benchmark. (laughs) Friedberg, uh, some thoughts on that.

David Friedberg 1:09:32 I actually ... Do you, do you guys, do you guys remember a year ago, Larry Ellison (laughs) negotiated this deal with Trump to buy TikTok for like nothing?

Jason Calacanis 1:09:38 That's brilliant.

David Friedberg 1:09:38 Isn't that incredible?

Jason Calacanis 1:09:38 Yeah, he's gonna throw in Lanai. Friedberg is, uh ...

David Friedberg 1:09:42 Yeah.

Jason Calacanis 1:09:42 (laughs)

David Friedberg 1:09:42 And Masa, Masa Son was supposed to be on TikTok's board.

Jason Calacanis 1:09:44 Yeah, that's ... By the way, uh, (laughs) Xi Jinping is on Lanai right now, and, uh, Larry Ellison got TikTok.

David Friedberg 1:09:50 Yeah.

Jason Calacanis 1:09:50 Fair trade.

David Friedberg 1:09:51 Nobody talks about the billi that, uh, Ellison kicked into Tesla right before it went-

David Sacks 1:09:56 Oh, my God.

David Friedberg 1:09:58 Zip, zip, zip.

Jason Calacanis 1:09:58 Yeah, like give him, she's gonna zip, zip.

David Friedberg 1:09:58 He's, he's such a boss.

David Sacks 1:09:59 He made like-

David Friedberg 1:10:00 He made like $12 billion.

Jason Calacanis 1:10:01 15.

David Friedberg 1:10:02 15. 15.

David Sacks 1:10:02 12 billion ... 15?

Jason Calacanis 1:10:02 15.

David Sacks 1:10:02 15 billion?

David Friedberg 1:10:04 Yeah.

Jason Calacanis 1:10:04 He's such a boss.

David Friedberg 1:10:05 On a, he p- he put a billion dollar investment, joined the board-

Jason Calacanis 1:10:06 Such a boss.

David Friedberg 1:10:07 Told everyone-

Jason Calacanis 1:10:08 Zip, zip, zip.

David Sacks 1:10:08 Wow.

David Friedberg 1:10:08 Talk all, talk all the, the, the smack you want about this guy, but he's landing spaceships on a drone ship in the middle of the ocean. What are you doing?

Jason Calacanis 1:10:16 He'll figure it out.

David Friedberg 1:10:17 He'll figure it out and 15Xed. It's insane.

Jason Calacanis 1:10:20 But wait, I have one question for Friedberg. Is Zuckerberg pulling a Larry Page, i.e. somebody else becomes CEO of the Facebook collection of companies and then he becomes-

David Friedberg 1:10:30 No.

Jason Calacanis 1:10:30 ... the chief product officer-

David Friedberg 1:10:31 No.

Jason Calacanis 1:10:31 ... and then doesn't have to go to Senate hearings?

David Friedberg 1:10:33 No, I think he's way more active and driven in terms of product direction than Larry ever was. So, I don't think they're the same person, and I wouldn't liken these two at all.

Jason Calacanis 1:10:42 But what about the Meta strategy of changing the company name?

David Friedberg 1:10:44 Uh, look, uh, I ... Um, by the way, my prediction was that they would ... I should've done this on the pod. A month ago, I said they were gonna change their name to Meta. I, I think that, uh, at some point, as you diversify these businesses, um, away from your core and you have this core engine driving the business, um, you know, you have to make it look like these businesses can and will operate independently. While they might get some leverage off of one another and one might feed into the other, um, they need to be able to operate independently from a kind of public perception, operating, and management perspective. That's what Alphabet did. It's a natural progression of states as you start to do things that are too far distinguished from one another. Um, and so it feels reasonable. I think it ... You know, is this a whole, like, PR rebranding? Maybe to some extent that's helpful, but I do think that this idea that we need to do more than we're doing today and we need to make a big, hard, cold bet on it, um, is what this represents. Now, the, the, the, the, the i- important psychological question, is he doing it out of a matter of defense, meaning, like, does this signal fear about the core business, um, or is it about ambition and aggression and, and re-bets on, uh, new opportunities and emerging opportunities that he thinks? And that's the big debate that I think is kind of going on right now, is how much ... Often, when you see people make big moves like this, it's either out of greed or out of fear. And I think, um, some people are asking the question, how much should we be afraid of the core business being eroded based on his making this sort of a big bet. And I'm saying I'm gonna-

Jason Calacanis 1:12:09 Oh, you think this could perpetuate that or it's a bit of a tell-

David Friedberg 1:12:12 No.

Jason Calacanis 1:12:12 ... that this is happening?

David Friedberg 1:12:13 A tell.

Jason Calacanis 1:12:14 Oh, got it. Okay.

David Friedberg 1:12:14 Right. And that, that ... And I'm, I'm not saying that's the case. I'm saying that's the question, right?

Jason Calacanis 1:12:18 Right.

David Friedberg 1:12:18 And, and that's the question a lot of people are asking. Is this a tell that the core business is at, at serious risk?

Jason Calacanis 1:12:24 Well, and he- he's putting 10 billion into it this year.

David Friedberg 1:12:27 For example, this Apple, you know, ad revenue business I think is climbing by billions of dollars while Facebook's core business is being affected by the c- the, uh, tr- uh, cookie tracking policy change on Apple iOS. Uh, so at the same time that, you know, Apple's reaping these benefits from the changes that they've made, uh, in iOS, you know, people don't really have great visibility into how much it's really affecting Facebook's ad revenue at this point. And this could be, as you point out, the tell, um, that maybe things aren't that good and he needs to diversify and he needs to make a big, aggressive bet elsewhere. So, um, you know, we'll see. I mean, you- he's-

Jason Calacanis 1:13:00 Um, important question, Chamath. Are we gonna celebrate the, uh, birth of both your and Friedberg's daughters with a poker game?

David Friedberg 1:13:07 (laughs)

Jason Calacanis 1:13:08 (laughs) With my gambling? (laughs)

Chamath Palihapitiya 1:13:10 Yes. Yes.

Jason Calacanis 1:13:11 And playing poker? (laughs)

Chamath Palihapitiya 1:13:11 Do you want me to, do you want me to give you my thoughts on that, or no, you don't care?

Jason Calacanis 1:13:13 No, it's a joke. (laughs) Can you