E57: Understanding Omicron, tech stocks plummet, VC's great resignation, Jack Dorsey's departure

1. 0:00 – 12:30

   Bestie Intro: Miami talk, gambling stories, Nancy Pelosi's retirement plans

   1. DSDavid Sacks0:00

      Yeah, Chamath goes to those sorts of events and they all pick some endangered animal and then they skin it and they make a sweater out of it for him.

   2. JCJason Calacanis0:05

      That's that Illuminati (censored) . The Illuminati.

   3. CPChamath Palihapitiya0:08

      So this is cashmere, it's Loro Piana. The lining is chinchilla.

   4. DFDavid Friedberg0:12

      (laughs)

   5. DSDavid Sacks0:12

      Oh, chinchilla. I knew it.

   6. JCJason Calacanis0:14

      Oh no, geez.

   7. DSDavid Sacks0:14

      I knew it was some poor animal.

   8. CPChamath Palihapitiya0:15

      I- I mean, it is so-

   9. DSDavid Sacks0:16

      Some poor animal.

   10. CPChamath Palihapitiya0:17

       ... phenomenal.

   11. DSDavid Sacks0:18

       Probably nicer than a, than a dog.

   12. CPChamath Palihapitiya0:20

       It's so warm.

   13. DSDavid Sacks0:20

       Probably sweet, sweeter than any dog you've ever met if you actually played with a chinchilla.

   14. CPChamath Palihapitiya0:24

       Look, it's so, it's so warm.

   15. DFDavid Friedberg0:26

       (laughs)

   16. CPChamath Palihapitiya0:26

       It's so, oh, I'm just rubbing it. Mm.

   17. JCJason Calacanis0:27

       PETA is, uh, PETA is-

   18. CPChamath Palihapitiya0:29

       Who?

   19. JCJason Calacanis0:29

       ... boycotting the show right now.

   20. CPChamath Palihapitiya0:30

       Who?

   21. DFDavid Friedberg0:32

       (laughs)

   22. CPChamath Palihapitiya0:32

       (laughs) Nobody cares.

   23. DFDavid Friedberg0:34

       (laughs)

   24. JCJason Calacanis0:36

       Nobody cares.

   25. NANarrator0:38

       Let your winners ride.

   26. JCJason Calacanis0:41

       Rain Man, David Sa-

   27. NANarrator0:45

       I'm going all in.

   28. DFDavid Friedberg0:46

       And it's sad.

   29. NANarrator0:46

       We open sourced it to the fans and they've just gone crazy with it.

   30. JCJason Calacanis0:50

       Love you, besties.
2. 12:30 – 24:49

   Understanding the Omicron variant

   1. JCJason Calacanis12:30

      I guess, Friedberg, let's go to you to talk about the new variant. Maybe you could tell us how to pronounce (laughs) it, 'cause there seems to be some debate about the pronunciation of this. And, uh, what's your take on it?

   2. DSDavid Sacks12:40

      Were you in a frat in college? Did- you have to memorize-

   3. JCJason Calacanis12:43

      Uh, no-

   4. DSDavid Sacks12:43

      ... the Greek alphabet?

   5. JCJason Calacanis12:43

      ... no, I went to- I went to school at night, um, so I didn't-

   6. DSDavid Sacks12:46

      Right.

   7. JCJason Calacanis12:46

      ... have the college experience. Yeah, went to night school.

   8. DSDavid Sacks12:48

      So I think it's, I think it's Omicron, (laughs) but, uh, that's the, um-

   9. JCJason Calacanis12:51

      Omicron, got it. Okay.

   10. DSDavid Sacks12:52

       Omi- Omicron.

   11. JCJason Calacanis12:54

       Omicron.

   12. DSDavid Sacks12:55

       And it's, um-

   13. CPChamath Palihapitiya12:56

       Try it, try it again, J-Cal. Last time.

   14. DSDavid Sacks12:57

       Yeah. One last time.

   15. CPChamath Palihapitiya12:58

       Yeah.

   16. DSDavid Sacks12:58

       'Cause now the transformer-

   17. JCJason Calacanis13:01

       Omi- Omnicron. Om- Omicron.

   18. CPChamath Palihapitiya13:01

       (laughs)

   19. JCJason Calacanis13:01

       No, no, there's no N. Omicron. Omicron.

   20. DSDavid Sacks13:04

       Let's unitize the Greek alphabet.

   21. CPChamath Palihapitiya13:07

       Megatron? Cal-

   22. JCJason Calacanis13:08

       Yeah.

   23. CPChamath Palihapitiya13:08

       It's not a transformer, J-Cal.

   24. DSDavid Sacks13:09

       (laughs)

   25. JCJason Calacanis13:09

       Omicron. Omicron.

   26. DSDavid Sacks13:10

       Omicron.

   27. JCJason Calacanis13:11

       Hi, Mr. Sax.

   28. CPChamath Palihapitiya13:12

       (laughs)

   29. DSDavid Sacks13:13

       (laughs)

   30. JCJason Calacanis13:13

       Wait, wh- how many miles away from here? Let's go get a-
3. 24:49 – 33:44

   Tech stocks plummet: why the selloff?

   1. CPChamath Palihapitiya24:49

      It's stupid.

   2. DSDavid Sacks24:50

      Well, so, so the mark- the markets are obviously reacting. Maybe we should talk about the markets.

   3. CPChamath Palihapitiya24:52

      They're not reacting to that. I think that they are pitting-

   4. JCJason Calacanis24:55

      You think it's an excuse, like people wanted to trim positions-

   5. CPChamath Palihapitiya24:58

      Yeah, yeah, yeah, yeah.

   6. JCJason Calacanis24:58

      ... and this is a great excuse? Yeah.

   7. CPChamath Palihapitiya25:00

      Look at, look, look, the week before when I started to trim, it was like, "Oh, how dare you," blah, blah, blah. You know, and I'm like, "Well, I don't know, if the smartest people are selling, maybe it makes s- makes sense to sell." So I started to trim, and I'm so glad that I did, 'cause it was, you know, 10 days ahead or a week ahead of all of this craziness. Now, look at what's happening in the markets today. People are going massively risk off. You know, there are almost 500 stocks that are off 30 or 40% in the last 30 days.

   8. JCJason Calacanis25:26

      Yeah.

   9. CPChamath Palihapitiya25:26

      But the stock market is still basically at all-time highs. So think of that for a second.

   10. JCJason Calacanis25:30

       Yeah, yeah.

   11. CPChamath Palihapitiya25:30

       So everybody that thinks that the stock market is doing poorly is wrong. It is doing exceptionally well. It's just that the 400 stocks that people in Silicon Valley really care about have been getting kicked in the teeth.

   12. JCJason Calacanis25:42

       Yeah.

   13. CPChamath Palihapitiya25:42

       And the paper company and the, you know, the, uh, specialty chemicals company, um, have actually done reasonably well, which are nothing-

   14. DSDavid Sacks25:50

       Airplane parts and pliers, yeah.

   15. CPChamath Palihapitiya25:51

       ... which is nothing that a- any of us have exposure to, or, you know, some of us don't have exposure to. So-

   16. JCJason Calacanis25:55

       Can-

   17. CPChamath Palihapitiya25:55

       Go ahead, Jason.

   18. JCJason Calacanis25:56

       Ch- Chamath, can we, can we, can we, can we then look at this as, hey, the era of, we're gonna give a lot of credit to companies for, you know, what's gonna happen in the next 10 years-

   19. DSDavid Sacks26:06

       Ten-year outcomes, yeah.

   20. JCJason Calacanis26:08

       The 10-year outcome that we saw, Rivian came up, uh, you know, and then many other stocks, and obviously crypto falls into this. This idea of gi- giving people a decade of forward-looking credit maybe is gonna come back to-

   21. CPChamath Palihapitiya26:19

       I think it's too early-

   22. JCJason Calacanis26:20

       ... let's weigh these and look at earnings or maybe two years of credit?

   23. CPChamath Palihapitiya26:23

       No, I'm not gonna, no, I'm not gonna say that because I think it's too early-

   24. JCJason Calacanis26:26

       Okay.

   25. CPChamath Palihapitiya26:27

       ... for us to sort of go and jump to these conclusions. Right now, we are in a moment, there have been 70 one or two of these moments since 2009, where you have either a sector drawdown or a market drawdown. In this case, we're in the middle of a massive growth sector drawdown, okay? The, the multiples on these companies are shrinking. Companies like Snowflake and-

   26. JCJason Calacanis26:54

       Peloton.

   27. CPChamath Palihapitiya26:55

       ... uh, sure, Cloudflare-

   28. JCJason Calacanis26:56

       Zoom.

   29. CPChamath Palihapitiya26:57

       ... were trading at 70 to 100 times revenue, and people are reevaluating whether those multiples are worth it, i- irrespective of the quality of the company, because those are very high-quality companies. So we're just re-rating the risk right now, okay? And it's not broad-based. The real problem is all these companies that I think raised a lot of money in private markets-

   30. JCJason Calacanis27:18

       Mm-hmm.
4. 33:44 – 44:57

   Inflation: here to stay? What's the 10-year outlook?

   1. JCJason Calacanis33:44

      Uh, Chamath, I- I think we should talk a little bit about this inflation concept. I did a little tweetstorm that, you know, uh, about this sort of transitory versus, you know, perpetual. And I do think, and we've talked about it here, we've crossed that Rubicon of everybody is raising prices because everybody else is raising prices, not necessarily even because they are experiencing, you know, higher costs in their business, but they're just like, "You know, I- I- my haircut's costing more, my steak's costing more, I've got to charge more for whatever my services is." Is there any way to unwind this inflation? It seems to me like the reason we've had no inflation for so many decades of our entire lives, like, I mean, jeans in the 1980s cost the same as genes now, was because of globalization and efficiency. Well, that took, what, three decades or four decades of just constant innovation and constant globalization. Well, we've already got globalization maxed out, perhaps too much globalization, right, that we learned that we actually have risk associated with this, you know, uh, supply chain, and how much more efficiency is there in making a pair of jeans? I don't know if we're going to be making them in a slurry. So is there a path to unwind it? You know, rich people not having their equities be worth as much, then maybe it trickles down? I- I don't... It's unprecedented, right?

   2. CPChamath Palihapitiya35:02

      I think what happens in the stock market is absolutely irrelevant.

   3. JCJason Calacanis35:05

      Huh.

   4. CPChamath Palihapitiya35:06

      It doesn't matter. I mean, you know, we focus on it a lot, but, you know, when we talk about the core structural economy, the stock market is a lagging indicator of a whole bunch of things. Sometimes it's cash flow. A lot of the times it's emotion.

   5. JCJason Calacanis35:22

      Money supply.

   6. CPChamath Palihapitiya35:23

      Money supply. I think that there's a much more important thing which we've talked about, which is that, you know, we have said, and I have said, that coming out of the pandemic, we are moving the world back into a more, you know, decentralized place, right? The centralization was this just-in-time, you know, single supply chain, single point of failure existence. And if you look inside of China, the thing that they want more than anything else is to become even more centralized, right? I don't know if you saw it today, but there was an article in the Wall Street Journal about how China is going to create, um, basically an overall holding company, um, to own all the rare earths that are made inside of China and then to apportion them out as they see fit. So the government will now control a critical element and supply chain into climate change, okay?

   7. JCJason Calacanis36:16

      So basically they're creating their own OPEC in a way, like their own version of...

   8. CPChamath Palihapitiya36:19

      It's a- it's a very good way of saying it, exactly. So-

   9. JCJason Calacanis36:22

      Yeah.

   10. CPChamath Palihapitiya36:22

       So China's pushing m- more and more for centralization. We... So for example, you know, myself and Fortress, we did this deal a few, a year ago, to bring this company public called MP Materials and the whole idea was to start to build diversity in the supply chain, to build a decentralized supply, uh-... of all kinds of things. In that case, it was around these rare earths because we saw this thing happening in China, okay? The problem is, those kinds of investments are very much few and far between. So the, the f- the solution to fixing the core structural inflation we have is gonna take a decade.

   11. JCJason Calacanis36:56

       Hmm.

   12. CPChamath Palihapitiya36:56

       It's gonna take trillions of dollars of investment and, more than that, I think it's gonna take an enormous amount of coordination between private and public participants, and I think that that's where this whole thing fails, which is why, you know, I'm a little bit more concerned about it. Like, and I think I've explained this to you, but, look, we have massively underinvested in the level of infrastructure we need-

   13. JCJason Calacanis37:24

       Hmm, we outsource it, yeah.

   14. CPChamath Palihapitiya37:25

       ... to support ourselves.

   15. JCJason Calacanis37:25

       Yeah, we outsource it.

   16. CPChamath Palihapitiya37:27

       Like as an, a simple example, like starting in 2016, we absolutely decapitated the ability for the United States to invest in our own true energy independence, okay? You know, the level of fracking, the level of NAT gas, oil, all of this stuff basically fell off of a cliff. And you would say, "Well, that was the right capital allocation decision because of climate change." Well, it turns out today not really because we have absolutely no investments on the climate change side.

   17. JCJason Calacanis37:53

       Right.

   18. CPChamath Palihapitiya37:54

       We don't have rare earths. We don't have lithium. We don't have nickel. We don't have cobalt. We don't have graphite. So we actually can't make the batteries, which means that now oil is at $100 a barrel and gas costs 10 bucks at the pump. So that was a coordination problem. Really, the right thing to have done would've been to continue to invest in our domestic supply chain for energy while we also created incentives to decarbonize. So this is what I mean by these issues have been building up for years, Jason.

   19. JCJason Calacanis38:20

       Yeah, decades, yeah.

   20. CPChamath Palihapitiya38:21

       Inflation is now here. I think it's here to last. I've been pretty consistent about this, and this is the real reason why we're gonna have a few years of pain. And so money losing unprofitable businesses selling future cash flows in 10 to 12 years, I mean, some people will buy them but I won't be. Friedberg?

   21. DSDavid Sacks38:42

       I just sent you a, um, a link to, um, freight rates, uh, for cargo ships coming from China to LA, and you'll see in the last, um, you know, call it month and a half or so, you know, starting in-

   22. JCJason Calacanis38:59

       September was the peak, yeah.

   23. DSDavid Sacks39:00

       Yeah, so starting in April it was like, whatever, $2,000 and it climbed up to nearly 20, nearly went 10X over that period of time. And then in September, it started to decline. It's dropped by 50% and it's continuing to drop week after week right now. Um, and we're seeing the same in lumber prices right now. I'll send you another link to, um, uh, to how lumber prices have kind of declined precipitously also from an early part of the year peak. Um, and we're seeing this across a lot of these kind of, um, uh, supply markets, uh, where we were talking about inflation being the driver and some of the other... you know, a lot of the economists at the Fed and other policy makers were talking about these being kind of transitory pricing effects, and so there's a bit of a mixed bag emerging, right? We are seeing in some of these markets that prices have declined by 50%, 75% in just the last few weeks-

   24. CPChamath Palihapitiya39:46

       By, by the way, the-

   25. DSDavid Sacks39:47

       ... as the supply chain distortions have sort of right-sized and the demand and the supply started to balance out a bit more. Um, and that's creating, I think, you know, a, a, a better kind of certainty around pricing, better reliability on these supply chains. And a lot of folks estimate that this will take all the way through 2022 for that supply chain kind of glut and mismatch to work its way-

   26. CPChamath Palihapitiya40:06

       Indigestion, yeah.

   27. DSDavid Sacks40:06

       ... all the way through the consumer, yeah, to the consumer.

   28. CPChamath Palihapitiya40:09

       Yeah.

   29. DSDavid Sacks40:09

       And, and so there, there are a number of points of view that say, look, these pricing issues that we've been seeing in the, in the recent term may in fact still be transitory and we may see them work their way out at the end of 2022. And we're starting to see the early signs of that actually playing out, um, and so the j- I would say the jury's still out. Generally, we've obviously doubled the amount of US dollars that are in supply or increased it by 50% in a year. We've gotten, you know, interest rates at zero. Um, we've got, um, you know, people aren't gonna d- reduce their wages, right? Wages are only gonna go up, um, and there's a lot of things that you make the point of, like spending's only gonna go up. The government's never gonna spend less. I mean, so-

   30. CPChamath Palihapitiya40:44

       By the way, just on that point, the-
5. 44:57 – 54:45

   Anticipating a "Great Resignation" of successful VCs

   1. CPChamath Palihapitiya44:57

   2. JCJason Calacanis44:57

      One thing I'm seeing in the market, and I think, uh, David's back with us, David Sacks, um, is that Keith Rabois had this tweet, and I think we talked about it four or five episodes ago, a bunch of, uh, capital allocators are saying, "You know what? It was a great run, but I think I'm gonna opt out. I'm going to move on to my next adventure. I don't wanna deal with what we're dealing with here on this podcast," which is, uh, what do you even make of this confluence of the pandemic, crypto, you know, printing more money supply, and interest, um, un- and unknowable valuations in the face of massive technological change from AI, biology, et cetera? Uh, so I thought it'd be interesting to talk about all of our decisions to stay in the capital allocation game, and what we think about this retiring group of capital allocators who are, let's face it, retiring at 50 or-

   3. DFDavid Friedberg45:47

      Well, I was... I h- I had coffee with Keith this morning, and then he tweeted that on the heels of our conversation, so I think I can provide a little more insight into what he was thinking there. I think part of the backdrop here is the concern that we're going into a very different environment than the one we've had over the last 10 years. I mean, over the last 10 years, we've basically had record good times because of this low interest rate environment, right? And low interest rate environments are fantastic for growth stocks. Now, it looks like we're moving into an environment in which inflation is certainly not transitory. We don't know how long it's gonna last for, and that creates an expectation of its rates are gonna rise, and so the next decade may not be as good for growth stocks. And you've also had, over the last year or two, price levels have been much higher. So you got to figure there's a whole cohort of VCs who've had a great decade, who've made a lot of money, and now they're asking, "Does it really make sense for me to sign up for another decade that may not look as good?" And, you know, the truth is if that... if you're not the principal of your firm, if you're one of 20 partners, it doesn't, you know, it doesn't make as much sense for you to stay in the game when you've just had a fantastic decade, you've probably made more money than you thought you were gonna make, and now you're not so sure about the next one.

   4. JCJason Calacanis46:57

      Priyam, any thoughts? I mean, you, you still wanna build companies.

   5. DSDavid Sacks47:01

      Uh, yeah. I'm like... I'm, uh, I, I don't know. I like building stuff and building new stuff that's kind of gonna have a, you know, uh, an impact and it's technically difficult. So that, that's kind of where I get drawn to spend my time. But, um, I can understand people whose job it is to kind of manage other people's money and invest it for them, you know, and they participate in the profits they generate, realizing after some period of time, like, "Hey, I've bought a bunch of lottery tickets." I mean, if you buy lottery tickets at, at the local 711 every day, and one day you hit the $12 million jackpot, you're not going back to 711 the next day to keep buying lottery tickets. Um, and so, you know, in, in the context of being a money manager to generate returns, and that being kind of your principal interest, and you kind of hit a return outcome that statistically you know will not happen again, I, I don't see the point of the hassle of going back to work. I, I could see the psychology of saying that that's enough for me. I do think, however, most VCs are truly... You know, uh, we, we can kind of generalize all we want, but as we all know, we have lots of friends who are VCs, and I'd say generally, the majority of them are very intellectually curious and driven. And what I am seeing is a shift of people who have had successful investing, um, track records, and have had massive outcomes, shifting their attention now. They take some time off, and I'd say almost 100% of them come back and they always ask for a meeting, and I'm like, "Sure." And then they're like, "I wanna work on climate change solutions." And so what I'm seeing is this kind of second act happening now, and we've seen it with guys like Chris Sacca, and, you know, folks who had these massive, massive outcomes in their first run. They know they're not gonna... You know, the statistical likelihood of doing that again is very low, but then, you know, after spending a couple of years on the ranch or, you know, surfing, you kind of wake up and you're like, "Hey, I want to do something meaningful with my life." Like, I got kids, I look them in the eye and I'm like, "What should we do to get... What, what do I wanna do for the future for my children?" And they all kind of come back around. So one of the things I'm seeing, um, is this kind of second act phenomenon.... where VCs are moving away from being pure play technologists and making money to saying, "I wanna do stuff that's a little bit more meaningful and altruistic," coming into climate change. And as a result, we're seeing insane, um, funding happening in climate change tech companies, or climate tech, or whatever the heck the, the label is this week. Stuff that, in my opinion, doesn't make any sense, businesses that aren't real businesses, technologies that don't actually make sense, that'll never work out, but, hey, that's always been the case in venture, right? One out of a thousand works and, you know, changes the world. But we are seeing that. A- and that, that's kind of a personal observation, is I'm seeing a lot of these second acts going after climate change.

   6. JCJason Calacanis49:35

      Chamath, e- this last year has, like, or 18 months, pretty exhausting as a capital allocator to try to make sense of the world and get your bearings. It's like going through multiple storms. Does that make you more engaged? I, I get the sense knowing you for a long time, that you and I might be similar. Yeah, the chess boards are getting mixed up, the pieces and the values are getting changed, whatever. It's making me more excited to participate and try to figure it out.

   7. DSDavid Sacks49:59

      Yeah.

   8. JCJason Calacanis50:00

      It's like a hand of poker to me. I'm more intellectually stimulated now.

   9. CPChamath Palihapitiya50:04

      Me too. I, I'm, I'm the most, uh, engaged I've ever been.

   10. JCJason Calacanis50:07

       Yeah.

   11. CPChamath Palihapitiya50:07

       I, I mean, look. I, I, I left the money management business five years ago, I guess. And, um, honestly, it was a very hard, uh, path, but it's been the most rewarding, because I was able to focus on, on the things that I wanted. Look, if you do this job well, this job is voting for change with your money and making change using money. And that's great, because money is not that useful beyond a very small amount. And then you have to question, like, what are your real priorities? So yeah, like, grinding away at something that matters, to me, I've always find fulfilling. And I feel like I am an athlete whose muscle doesn't decay by my mid-30s, but probably decays in my 70s or 80s, which is my brain. And so, you know, I'm only, you know, I'm only... I'm a rookie. So, uh, I'm excited. I'm glad.

   12. JCJason Calacanis51:07

       Yeah. And the fact that things are compressing, or maybe there'll be less startups or less capital allocators involved, what I've seen in my career, post dot-com era, web 2.0, amazing time to be alive. Amazing time. Because there were less... Anybody who started a company after the dot-com bust or after the 2008 financial crisis was a legitimate warrior who wanted to change the world and was incredibly focused. And then the sense of entitlement I'm seeing on all sides of the table right now, from founders to board members to investors, it just seems like everybody's in some sort of mad dash to secure some bag by any means necessary, and there's no focus on the customers and the product and the team. Everybody's, you know, living in some just manic l- you know, grab, money grab.

   13. DSDavid Sacks51:50

       You know, when you're in the middle of a paintball war, you know, you're trying to, you're trying to shoot the paintball gun and you're trying to hit people and it's a little bit crazy on the field.

   14. JCJason Calacanis51:58

       Yeah.

   15. DSDavid Sacks51:58

       But, you know, as everyone kinda gets back to the locker room and they take their win, um, you know, a- all humans ultimately are gonna be driven by a desire to, to leave something in the world, to make an impact of some sort. And at some point, all, all the folks who have made a ton of money in this cycle, and there were a lot of folks who made a ton of money in the last cycle, are kinda asking themselves, you know, "How do I leave an impact? How do I make an impact in the world-"

   16. JCJason Calacanis52:20

       Sure.

   17. DSDavid Sacks52:20

       "... and I still have the skill set and I still have the capability to do so?" And so then there's this search for meaning. And, um, a- and that's where you see kind of the climate change and the healthcare and all these other kind of paths start to form for people. I do think Web 3.0 also offers another path of opportunity for folks, where they can kind of rewrite the internet, um, and think about how to reinvent the social, um, model for humanity, the economic model for humanity, the governance model for humanity, the communications model for humanity. And Web 3.0 kind of-

   18. JCJason Calacanis52:50

       Super exciting. Yeah.

   19. DSDavid Sacks52:51

       Yeah. And Web 3.0 creates that, that kind of, you know, that, that, that visionary kind of platform opportunity. And folks are all kind of excited about what's next. So, you know, once the, the dust settles a little bit and you put some money in your pocket, and you realize, you know, it's not gonna change your life more than, you know, it did last week, and, you know, you, you want to make an impact, and then folks kind of come back and they start pursuing, you know, w- where impact will lie. Um-

   20. JCJason Calacanis53:13

       Sax, let's go to you. Um, d-

   21. CPChamath Palihapitiya53:15

       Well, what...

   22. JCJason Calacanis53:16

       Sax, w- what was Rabouy, what was Rabouy talking about? What were you guys talking about in this breakfast?

   23. DFDavid Friedberg53:21

       Keith and I just talked about how we're about to enter a very different kind of macro environment for growth stocks. And we don't know how long it's gonna take, but, uh, but, uh, there's no question that multiples and valuations are gonna come down. And there's a lot of younger founders and investors who never lived through a bare market or a, a down cycle, and they're about to get a rude awakening. So look, I think it's a little different for us because we're all principals at our firms. And so therefore, if we're not happy about something, we could simply effectuate a change in strategy. But if you're one of 20 partners at a giant firm, even if you're the most successful one, it's hard for you to move that ship. And, you know, your returns get divided by, you know, as one over N, where N is the number of, like, full partner shares. And, you know, if you've just made a ton of money over the last 10 years and you're thinking about whether you wanna sign up for going through a bunch of choppy waters, uh, there's a lot of good reasons right now for people to reevaluate. Um, now look, Keith and I were both discussing this in the context of, "Hey, this would be great for us, because we're not going anywhere." But, um, but Keith did think that because the macro picture is changing, that is one more reason for people who are on the fence and thinking about retiring to move forward with that.

   24. JCJason Calacanis54:38

       All right. So I think we, we, we've, uh, we, we talked about capital a- allocation, and we got the variant, and we got the markets.

6. 54:45 – 1:02:08

   Tech people ruining Art Basel, comparing Bay Area / South Florida immigrant communities in terms of political activity, success of Indian-Americans in tech

   1. JCJason Calacanis54:45

   2. DSDavid Sacks54:45

      Can I just point out how, like... Sax, uh, it seems like you and J-CAL and everyone are kind of in Miami at Art Basel, and this thing's been going on for years, and it's a art fair.

   3. JCJason Calacanis54:54

      Yeah.

   4. DSDavid Sacks54:54

      But it's like tech has taken it over. Like the tech industry-

   5. JCJason Calacanis54:57

      Basically, yes.

   6. DSDavid Sacks54:59

      Yeah, like the tech community seems... has this kind of consistent trend of going to these, like, esoteric, kind of call it o- originally artistically ... created events and spaces. It was like Sundance, and then it was Burning Man, and now it's like Miami Art Basel and kind of like-

   7. JCJason Calacanis55:15

      And ruining it. (laughs)

   8. DSDavid Sacks55:16

      Ruining it, taking it for themselves. (laughs)

   9. DFDavid Friedberg55:17

      (laughs)

   10. DSDavid Sacks55:17

       Like, you know, hey, now it's Tech Week in Miami, but it was like, it's Art Basels have been going on for- forever.

   11. JCJason Calacanis55:22

       And it's, it's NFT Basle, they're calling it.

   12. DSDavid Sacks55:24

       NFT Basle, yeah. Brutal.

   13. JCJason Calacanis55:25

       It's-

   14. DSDavid Sacks55:26

       Brutal.

   15. JCJason Calacanis55:26

       ... it's literally-

   16. DSDavid Sacks55:27

       I feel bad for all the real creatives.

   17. DFDavid Friedberg55:28

       Yeah. Yeah. We're, we're the ugly Americans who come in and ruin the artisanal, you know, feel to the place.

   18. DSDavid Sacks55:34

       (laughs)

   19. DFDavid Friedberg55:35

       And, and flood the place with cash. But look, no-

   20. DSDavid Sacks55:37

       Yeah.

   21. DFDavid Friedberg55:38

       ... one difference between Florida or Miami in particular and California and San Francisco in particular is nobody hates money or success over here. They are happy for, you know, all these rich people to come in and spend their money. Uh, they really believe in capitalism over here. You've got this, um, huge Cuban immigrant population who had direct experience with socialism, and Argentinians and people from South America. And, I mean, they teach their kids in schools the evils of socialism. So yeah, nobody here is looking to purge the rich.

   22. JCJason Calacanis56:09

       That's nice.

   23. DSDavid Sacks56:10

       It's, it's funny, Sax, because the Bay Area, right, the Bay Area has a huge South Asian population, right, um, and a, a huge immigrant population. Why, why is that not the case in California, right? Why, why is this huge immigrant population, whether they come from, uh, South America, Latin America, or they come from South Asia, India, China, do we not have the same sort of response here for, you know, pushback against the socialist tendencies and, and the push for-

   24. JCJason Calacanis56:37

       Well, the big, the, the big difference-

   25. DSDavid Sacks56:38

       ... capitalism and entrepreneurism. Yeah.

   26. JCJason Calacanis56:39

       The big difference in South Florida is that those immigrant communities were politically active and got really ingrained in the political process. And so they were a loud voice. You know, systemically, what happens in South Asian families is we just don't do that.

   27. DFDavid Friedberg56:54

       Mm-hmm.

   28. JCJason Calacanis56:54

       It's just not a thing. And in fact, if you look inside of our countries, the, the politicians are just, (laughs) just the absolute sketchiest, most brutal folks.

   29. DFDavid Friedberg57:03

       (laughs)

   30. JCJason Calacanis57:03

       And so, you know, when you have people that got, you know, double E degrees from IIT, the last thing that they're thinking is like, "I wanna run for mayor of Santa Clara." That doesn't happen. So it's just a big cultural distinction between the Chinese and South Asian populations versus the South American population.
7. 1:02:08 – 1:07:52

   Mike Bloomberg donates $750M to charter schools

   1. JCJason Calacanis1:02:08

      here.

   2. CPChamath Palihapitiya1:02:08

      I wanna talk about Mike Bloomberg's $750 million donation.

   3. JCJason Calacanis1:02:11

      Okay, that's what we'll end on. Uh, e- explain to people what happened. He's given 750 to charter schools. Am I correct?

   4. CPChamath Palihapitiya1:02:16

      First of all, Mike's a boss. I've known him for 15 years.

   5. JCJason Calacanis1:02:19

      The best.

   6. CPChamath Palihapitiya1:02:20

      He is the best. He is an-

   7. JCJason Calacanis1:02:21

      The best.

   8. CPChamath Palihapitiya1:02:21

      ... absolute stone-cold boss.

   9. JCJason Calacanis1:02:24

      Killer.

   10. CPChamath Palihapitiya1:02:24

       Before I tell the story of what he did, you know, Mike was the largest donator, donor to Johns Hopkins, and for years he would donate without any fanfare, and this is something that I've actually copied from him. I've given up money to my alma mater, not anywhere near the same amount as he has, but ... You know, after he passed a billion dollars of donations, he made it public and he was able to make Johns Hopkins permanently, uh, need-blind. And so, it's kind of like Johns Hopkins became this bastion to attract the smartest kids, period, bar none. Right? And everybody gets, and everybody gets their, their way paid basically. So he announced a program, $750 million over the next four or five years, I think, to get 150,000 kids, Jason tell me if I got this wrong, um, into charter schools, um, all around the country. And he basically just talked about how, you know, the pandemic has really let our kids down, uh, in every single way possible. And he had these quotes from the leader of the California Teachers Union, and it was so odious the things that she said. And the biggest quote was basically like, "You can recall Gavin Newsom and you can recall the mayor of a city, but you can't recall me, so I'm just gonna do what I want." And it was un- it was unbelievable. It was disgusting, actually.

   11. JCJason Calacanis1:03:41

       Man, I wish he had won for president.

   12. DFDavid Friedberg1:03:43

       Number one issue why Glenn Youngkin won in Virginia was, it was schools.

   13. JCJason Calacanis1:03:48

       Yeah.

   14. DFDavid Friedberg1:03:48

       It was the fact that you had these school lockdowns and closures, and then also-

   15. JCJason Calacanis1:03:52

       Sure.

   16. DFDavid Friedberg1:03:52

       ... parents weren't happy with what's being taught in the schools. And the unions and the politicians who are beholden to them are completely arrogant about this, and explicitly saying to the parents, "You don't get to decide what your kids-"

   17. CPChamath Palihapitiya1:04:03

       By the way, arrogant is the right word, David. If you read these quotes in the Wall Street Journal article, it's-

   18. JCJason Calacanis1:04:08

       Somebody

   19. DSDavid Sacks1:04:08

       Yeah. Yeah.

   20. CPChamath Palihapitiya1:04:09

       It's disgusting the way this woman talks about our kids. It's really disgusting. And ...

   21. DFDavid Friedberg1:04:14

       Well, it takes a rare Democrat like Bloomberg to basically stand up to them. I mean, Biden certainly doesn't because they are the number one special interest Democratic Party in terms of the manpower and boots on the ground, the donations. You will never hear a politician like Gavin Newsom ever stand up to them because he wants to be president, and he doesn't wanna basically ... He doesn't wanna cross any major interests in the Democratic Party. It takes an outsider like Bloomberg to do it.

   22. JCJason Calacanis1:04:37

       I can't understand how they were able to sell so effectively anti-choice for parents and schools. Like, everybody in the world, 100% of people in America know that choice and competition equals better outcomes, better products. Th- that's not up for debate. And somehow they were able to flip people's thinking that, no, no competition in schools was more equitable and that created more equity in the world. How did they do that? Or how did they pull this off? They just paid-

   23. CPChamath Palihapitiya1:05:00

       I disagree.

   24. JCJason Calacanis1:05:01

       ... everybody off?

   25. CPChamath Palihapitiya1:05:02

       They didn't do that. They never gave parents a choice because parents didn't know a choice was possible. We took a system and we-

   26. JCJason Calacanis1:05:08

       That's my point. How did they-

   27. CPChamath Palihapitiya1:05:08

       ... and we tried-

   28. JCJason Calacanis1:05:09

       How did they delude people into thinking that?

   29. CPChamath Palihapitiya1:05:10

       I'll tell you.

   30. JCJason Calacanis1:05:11

       Yeah.
8. 1:07:52 – 1:09:55

   Jack Dorsey's departure from Twitter, what it means for free speech

   1. CPChamath Palihapitiya1:07:52

      beliefs.

   2. DFDavid Friedberg1:07:52

      Speaking of, of crazy woke progressives, can we just go back to the, the Twitter thing for a second? Because I think there's a little bit more to say there about Jack Dorsey stepping down. Because I think there's a real fear on the part of a lot of people that Twitter now is gonna slide into even greater censorship, like YouTube has. Because now you have a CEO who, uh, you know, Parag, who said last year in 2020... There was an article where he basically said that Twitter does not need to follow the principles of the First Amendment in its content moderation policy. So here you have a company... I mean, you just look at the bookends of Jack Dorsey's reign as CEO, and it's really a sharp contrast. You had... When Dick Costolo was CEO 10 years ago, he said, "We are the free speech wing of the Free Speech Party." And now to Parag as CEO, Dorsey's handpicked successor, 10, 11 years later, basically saying that the First Amendment does not matter, they don't have to follow it when it comes to their cont- to moderation. So I think it's been a real sea change over there in how they view their mission. They used to be in favor of free speech, they used to think that what they were doing was democratizing. Now they basically are pushing this agenda of censorship. We've seen it. Censorship of opini- of really any opinion that violates the elite consensus, like on COVID, like on, um, you know, many of these issues.

   3. JCJason Calacanis1:09:11

      It could be simpler, David. It could just be that it's just really hard to run these things at scale, and so they're all just saying, "You know what? It's so hard, I don't wanna run it anymore."

   4. DFDavid Friedberg1:09:19

      I don't think it's that hard. I mean, so, so here's the thing. So Mike Solana had a column where he's basically arguing that, that Jack Dorsey was really a secret, uh, uh, defender of the First Amendment, and, and the censorship would be even worse, or will be once he's gone.

   5. JCJason Calacanis1:09:31

      I agree with that.

   6. DFDavid Friedberg1:09:31

      I think there's some-

   7. JCJason Calacanis1:09:32

      Yeah, I agree with that.

   8. DFDavid Friedberg1:09:33

      I, I agree that it was... Well, let me, let me tell you the part I disagree with. I agree that... I agree things are only gonna get worse once he's gone, but I don't think-

   9. JCJason Calacanis1:09:40

      Well, no, I know Jack. He is for freedom of speech. He just didn't like to have to deal with the government and all these issues. Like, I, I think it just became untenable because of the scale. But he is a free speech guy.

   10. DFDavid Friedberg1:09:51

       But the one th-

   11. DSDavid Sacks1:09:51

       Same with Larry Page.

   12. JCJason Calacanis1:09:52

       Same with Larry Page, yes. We... This is on a personal basis. We know this.

Episode duration: 1:18:23