E68: Trudeau invokes emergency powers, Bitcoin vs. government, Tiger Global's new strategy and more

Chamath Palihapitiya 0:00 So, Sax, are we gonna talk with each other today? Or, you know, or...

Jason Calacanis 0:03 He's a, ISO player. He turned into an ISO player. He's like the Carmelo Anthony of this (beep) squad.

David Friedberg 0:06 He's the Carmelo Anthony of the All-In pod. Sax, you wanna pass the ball? Or y- you just wanna... You wanna clank it off the rim?

Jason Calacanis 0:13 Rain man! Clank! (laughs)

Chamath Palihapitiya 0:14 I think we should have a focus on having a dialogue with each other today, several points in the thing, as opposed to all standing up, saying our piece, and then hopping off-

Jason Calacanis 0:20 Yeah. Sax, w- we lost a little bit of the fiber of this team here. There's three people playing as a team, and then there's like-

Chamath Palihapitiya 0:24 Sax, I would love to ask you questions, and I would love for you to ask me questions.

David Sacks 0:27 It's not my job to pass the ball, J-Cal. You're the (beep) guard, you pass the ball. I'm supposed to score.

Jason Calacanis 0:31 Oh, really?

Chamath Palihapitiya 0:32 (laughs)

David Sacks 0:32 Remember what, uh, Shaq used to say when he wasn't getting the ball? He gets really unhappy. He said, "Pass the ball to the big dog, he'll score."

Jason Calacanis 0:39 Yeah, okay. Sure.

David Sacks 0:40 I'm Shaq. You're... No, you're not Kobe.

Jason Calacanis 0:42 No.

David Sacks 0:42 Who is the, the shitty little, like, off guard-

Chamath Palihapitiya 0:44 (laughs) Derek Fisher?

David Sacks 0:45 Yeah, you're Derek Fisher.

Chamath Palihapitiya 0:46 (laughs)

Jason Calacanis 0:46 Um-

David Sacks 0:46 Make sure the big dog gets the ball, there won't be any problems.

Jason Calacanis 0:48 N- I'm Bob Cousy, okay? I'm Gary Payton in this (beep) interview here, okay?

David Sacks 0:54 (laughs)

Narrator 0:54 Let your winners ride. Rain man, David Sax. 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. Going all in.

Jason Calacanis 1:10 Hey, everybody. Welcome to the All-In podcast, where three besties talk about a range of talkem- topics-

Chamath Palihapitiya 1:16 (laughs)

Jason Calacanis 1:16 ... and one monologues about Biden derangement syndrome.

Chamath Palihapitiya 1:19 (laughs)

Jason Calacanis 1:19 With you again this week, the sultan of science and the dictator, Chamath Palihapitiya-

David Friedberg 1:25 (laughs)

Jason Calacanis 1:25 ... David Friedberg-

David Sacks 1:26 (laughs)

Jason Calacanis 1:27 ... and playing ISO ball somewhere in the wing is, uh-

Chamath Palihapitiya 1:30 (laughs)

Jason Calacanis 1:30 ... your political commentator-

David Friedberg 1:32 Carmelo Anthony.

Jason Calacanis 1:32 ... Tucker Junior.

David Sacks 1:33 You're, you're engaged in an active projection.

Jason Calacanis 1:35 Rain man, David Sax.

David Sacks 1:36 It's an active projection.

Jason Calacanis 1:37 All right, in our first story, which-

Chamath Palihapitiya 1:39 (laughs)

Jason Calacanis 1:39 ... Sax is gonna lose his mind over. He's got two monologues prepared.

David Sacks 1:43 (laughs)

Chamath Palihapitiya 1:43 (laughs)

Jason Calacanis 1:43 Justin Trudeau has invoked an emergency order to freeze bank accounts linked to trucker protests in Canada. On Monday, Trudeau invoked an emergency law that requires financial institutions in Canada-

David Friedberg 1:56 (laughs)

Jason Calacanis 1:56 ... to examine customer records and take action against people involved with or aiding in the protest. Here's, uh, Trudeau's tweet from yesterday, if you're watching on the video streams, "Illegal blockades and occupations are not peaceful protests. They are a threat to jobs and communities, and they cannot continue." In the House of Commons earlier today, I joined members of the Parliament to speak about that and about the need to invoke the Emergencies Act. The Counter Signal, which is a right-leaning Canadian digital publication, reported that 34 different crypto wallets were also being targeted by Canadian officials. This law grants the government extraordinary powers, like the right to ban public assembly in certain locations. The Canadian Civil Liberties Association said it planned to challenge the government's decision in court. Uh, remember, Sax wrote a piece on financial deplatforming for Bari Weiss's Common Sense about a year ago. The piece was about the private sector financial platforms deplatforming folks. Uh, so your thoughts? Sax, you have 90 seconds on the uninterrupted clock.

David Sacks 2:59 (laughs)

David Friedberg 3:00 (laughs)

David Sacks 3:00 On the shot clock. All right. Thank you, J-Cal. Yeah, it's true. Uh, last summer, I wrote a piece for, uh, Bari Weiss's, uh, Substack, talking about how financial deplatforming would be the next wave of online censorship. And here we are. It's actually happened. What I could not have predicted is that it would occur in our mild-mannered neighbor to the north, and that the reprisals would be directed by the government itself, not just, uh, a consortium of, of private actors. And what Trudeau has done is, he didn't just employ the Emergency Act against the truckers so that he could basically arrest them and break up the protest. They have now directed banks and any financial institution, even cryptocurrency wallets, to freeze the accounts, not just of the truckers', but anybody who's contributed to them. Basically, anyone who's contributed $25 or more. Um, th- there were two, uh, crowdfunding sites that they raised money from. All those people, the thousands of ca- of just ordinary Canadians who did nothing more than contribute to an anti-government protest, they are now at risk of financial ruin because their bank accounts have been frozen. And you have to wonder, w- what is the end here that justifies the means? COVID, you know, Omicron is on the wane, it's on its way out. At the same time that Trudeau was announcing these dictatorial measures, th- uh, Ford, the, the, the guy who runs, uh, Ontario, the largest province-

Jason Calacanis 4:24 15 seconds.

David Sacks 4:25 Ford was out there saying that he was gonna... Uh, that COVID mandates were gonna be over. So, why exactly are they doing this? W- you know, we're at the end of COVID, and, um-

Chamath Palihapitiya 4:35 Sax, let me ask you a question.

David Sacks 4:37 Yes. Go for it.

Chamath Palihapitiya 4:37 If, um, if there were people online making donations to the criminals who loot and kill people in San Francisco, which you've railed against being criminals who are breaking the law and should all be put behind bars, do you think that it would be appropriate in that context for the government to block their donations to supporting criminal activity and a criminal ring, um, you know, that I think we all agree, uh, you know, should- shouldn't be transpiring?

David Sacks 5:03 Well, but the, but you're, the implication there is that truckers are using violence or, or something like that, and they're not. I mean, it's been, it's been largely a peaceful protest. It's been very annoying to people whose, you know-

Chamath Palihapitiya 5:14 But, but hasn't... But isn't, isn't the case being made that they are actually breaking the law by blocking streets? And that's not... You know, there's a peaceful protest where you can go and get a permit and actually go in a public zone and peacefully protest within the con- the, the, the confines of the law and what's allowed in that jurisdiction.

David Sacks 5:28 Look-

Chamath Palihapitiya 5:28 But what, what these folks are doing is civil disobedience, which is not a peaceful protest. It is, you know, kind of breaking the law to make a point.

David Sacks 5:36 It is peaceful because there's been no violence. If you look at actual videos-

Chamath Palihapitiya 5:39 But, but they're breaking the, they're breaking the law, right?

Jason Calacanis 5:41 Well, let me, let me ask the question for Friedberg then. Um, Sax, if a group of truckers were shutting down the Bay Bridge with three lanes of traffic and then shut down the 280 and the 101, and it impacted this... If they in fact are shutting down roads that, that then makes emergency-

Chamath Palihapitiya 6:00 And picked up our families and our businesses and our emergency travel-

Jason Calacanis 6:01 ... and, and ambulances can't get through, would you want them to be towed?... would you want their cars to be towed?

David Sacks 6:05 Listen, here- here's the thing. The Ambassador Bridge, th- this vital chokepoint of commerce between the US and Canada, that was blocked and that was creating a serious problem, but it had already been cleared on Monday by the time that Trudeau invoked the Emergencies Act. And then on Tuesday-

Jason Calacanis 6:21 Right.

David Sacks 6:21 ... he then invokes this Financial-

Jason Calacanis 6:23 Well, but what in your opinion- your opinion, Sax, if they- if they block roads and bridges, would you, if you were in charge-

Chamath Palihapitiya 6:28 If they're breaking the law-

Jason Calacanis 6:28 Yeah, if they're breaking the law in that way, it's not just-

Chamath Palihapitiya 6:31 ... in a way that-

Jason Calacanis 6:31 ... one lane, it's all three lanes.

Chamath Palihapitiya 6:32 ... damages society.

Jason Calacanis 6:33 Yeah.

Chamath Palihapitiya 6:33 I'm just trying to understand the- the- the standard here, because just zooming out to last year and the year before, right, there was a protest happening with BLM, and those BLM protests resulted in damage to private, uh, property, uh, to burning cars. Um, there were protests at the Capitol that involved folks trespassing into federal land, uh, and federal buildings. And now there's protests that are, uh, you know, blocking vital, uh, trade routes and, you know, access to emergency vehicles and all this sort of stuff. To me, and also, you know, people in San Francisco breaking the law and not being put in jail, my personal opinion is anyone that's breaking the law, we should stop them from breaking the law. And anyone that wants to kind of, you know, follow a peaceful protest or- or make a point should kind of make the point. But if the law is the law, shouldn't there be a universal standard to hold up the law? And if the case... And- and if the case is people are giving money to aid in breaking the law, shouldn't we stop the-

David Friedberg 7:27 Hold on-

Chamath Palihapitiya 7:28 ... you know, transmission of that money?

Jason Calacanis 7:29 Let's go to Chamath.

David Friedberg 7:29 Okay. Hold on, hold on a second. Look, I think you're conflating a bunch of really important things there. Aiding and abetting criminals, uh, is already illegal. There are RICO statutes that, um, allow the authorities to go after people that are aiding and abetting, through monetary support, criminal behavior. Separately, there is a whole body of law at the federal, state, local level that allows you to deal with protests, okay? The real question is, why did you have to go and invoke emergency powers at the tail end of a pandemic for what is effectively, um, nonviolent protests? Again, that's the key question, right? So just to give you some Canadian history, uh, as a Canadian citizen what I can tell you is that we've invoked this Emergency Powers Act three times in the past. The first was for World War II. The second... Sorry, World War I. The second was for World War II, and the third was the FLQ crisis, which was a domestic terrorist organization in Quebec that was fighting for a separate homeland. That's- those are the three other times in the past that a sitting prime minister has invoked these broad, sweeping emergency powers, and they did it because you exhaust the natural body of law in the Constitution and the Bill of- you know, the Charter of Rights that governs the normal behavior of a democratic society. What this was is not any of those things. I don't think anybody could claim that a bunch of nonviolent protests... Yes, they were annoying. Yes, they basically, you know, stopped some commerce, but I don't think it was on the order of World War I, World War II, or a domestic terrorism issue like the FLQ crisis. So why invoke this basically get-out-of-jail-free card where you can behave without any checks and balances?

Jason Calacanis 9:13 This is the confounding thing.

David Friedberg 9:14 Di- hold on a second. Did we exhaust the current body of normal governing law? And if we didn't, why is this example okay and the counterfactuals are so many? Imagine Trump invoked this thing during BLM.

Chamath Palihapitiya 9:31 Yeah.

David Friedberg 9:31 Imagine Biden did this right now.

David Sacks 9:33 Right.

David Friedberg 9:33 You would be up in arms.

David Sacks 9:35 I think that's well said, and let me just add something to that. The- the Emergencies Act that Trudeau invoked requires something like an act of espionage against the country or seri- the words serious violence are in the law or the threat of serious violence. Those conditions were simply not met.

Jason Calacanis 9:53 Yeah. 100%.

David Sacks 9:53 And then on top of that, to go after people who contribute as little as $25 to these truckers who are trying to support them because these guys are not making any money. You know, they're c- they have very- they're living under very harsh conditions. So you make a small check, you write a small donation to support these people, to aid them. They're simple working-class people who are protesting for normalcy and to get their freedom back. And now all of a sudden your bank account gets frozen? It is basically creating a- it- it's- it's gonna have a chilling effect because it's essentially creating a caste of untouchables because no one is gonna want to associate with, transact with, or donate to this group of people, these designated people now under the Emergencies Act, who your bank account can get frozen if you deal with them.

Jason Calacanis 10:38 I think it's gonna have the opposite effect. I think this is gonna blow up in Trudeau's face. This is the worst decision-making by any major political leader in a long time to go after a group of people, as Chamath said, in the- in the waning days of a pandemic. What is the point? Why are we picking this- why is he picking this guy to guy on?

Chamath Palihapitiya 10:55 Yeah, why do you guys think so- so why do you think he is?

Jason Calacanis 10:55 It makes no sense.

Chamath Palihapitiya 10:56 But why is he doing it? And, Chamath, why- why did the police not break... So I totally hear your point. Why did the police not break up these protests? Why did he need to invoke the emergency?

Jason Calacanis 11:06 No, they happened. They- yeah.

David Friedberg 11:07 Because, look.

Jason Calacanis 11:07 They happened.

David Friedberg 11:08 I think that the police in some cases did, in some cases didn't. There were probably a lot of police sympathizers. There were probably a lot of sympathizers in general, as there were a lot of people who were detractors.

Chamath Palihapitiya 11:20 Oh, you think the police were- that- you're saying there were police that were complicit?

David Friedberg 11:23 No, it's the- it's the nature of a protest.

Chamath Palihapitiya 11:24 Mm-hmm.

David Friedberg 11:25 You have people for, you have people against. But the point is, I think what's really clear is Justin Trudeau first basically said, "These people are racists and misogynists." Then he said, "They just hold views that are just unacceptable to me," and then like a totalitarian dictator invoked an Emergency Measures Act that allows him to do what he wants. That's the fact pattern. He painted himself into a political corner and then tried to give, successfully, he gave himself absolute power for some period of time. And the real question, I think, is why should this be allowed to happen in a democratic country with democratic norms against people that haven't done, as a far as I can tell, a shred of violent behavior?

Jason Calacanis 12:08 No, it hasn't been violated.

Chamath Palihapitiya 12:09 Do you guys think-

David Friedberg 12:10 And, and where it's clear that the body of normal governing law hasn't been exhausted yet, meaning the minute that these people were asked to actually empty the Ambassador Bridge, they did. Guys, we're Canadians. That's what we do. Yes, we love to protest-

Jason Calacanis 12:26 That's super nice. Yeah.

David Friedberg 12:26 ... but if you just ask us, we'll just go and do it.

Jason Calacanis 12:27 Super nice. (laughs)

Chamath Palihapitiya 12:28 Exactly.

David Sacks 12:29 No, you're right. Trudeau never tried talking to them. I mean, why wouldn't he just try and-

Jason Calacanis 12:32 He never tried talking to the czars.

David Sacks 12:32 ... why, why wouldn't he just try and negotiate with them? Instead, he demonized them right off the bat as white supremacists and Nazis and even, you know, Confederates, or which I don't even understand in the context of Canada.

David Friedberg 12:44 This is yet another example of the dying death, right in front of us, of the woke playbook. Right? We talked about this last week. I think it's related to the San Francisco Board of Ed recall that's now national and probably even international news. You can roll all-

Chamath Palihapitiya 12:59 We'll cite rich media.

David Friedberg 12:59 The, the, the reaction to Rogan, the reaction to Dave Chappelle, it's all part and parcel of this thing where people up and down the spectrum have learned what the mechanism of action is of this cancel culture, and they don't fall for it anymore.

Jason Calacanis 13:14 Troy- Trudeau did not get the memo.

David Friedberg 13:16 Now there's a person, there's a person that's able to escalate it because he's actually in a seat of power, and that's what I think people should be debating.

Chamath Palihapitiya 13:22 You mean shutting down dissenting voices from a position of power.

David Friedberg 13:25 Just because, and he went on the record-

Chamath Palihapitiya 13:26 Unnecessarily!

David Friedberg 13:27 ... he, he went on the record, and he said, "Guys, these views are unacceptable to me." Well, in a democratic society, that's not how it works.

Jason Calacanis 13:33 That's not your choice. Yeah, not your choice, Justin. I mean, could have engaged them.

David Friedberg 13:37 We, we accept the views on all kinds of topics all the time. Unacceptable is not the threshold of World War II, World War I, and the FLQ

David Friedberg 13:45 Crisis.

Chamath Palihapitiya 13:45 Do you guys think that there's a moment here that also is a mile marker on the road towards the state versus crypto, given the actions that were taken against Bitcoin wallets?

Jason Calacanis 13:55 100%.

Chamath Palihapitiya 13:55 Because that seems to be, like, a big trend that's gonna play out over the next decade or two.

Jason Calacanis 13:59 There, there are plenty of-

Chamath Palihapitiya 14:00 Dude, inevitably crypto is the threat to the state, right? And so, you know, you're gonna see skirmishes like this that kind of, you know, hey, wallets that donate are illegal, and you know...

Jason Calacanis 14:10 Friedberg, this is one of the best points you've made.

Chamath Palihapitiya 14:13 Yeah, thank- thank you.

Jason Calacanis 14:13 If you look at what this has done to Bitcoin, and you look at what it's done for other cryptocurrencies, this will do more than McDonald's accepting Bitcoin, because this is the first time, like, a Western democratic state is seizing people's funds, like, in an incredibly unfair, unnecessary way, which is just gonna have more people say, "You know what? Maybe I should keep some of my net worth out of the government's purview if they're gonna seize it anyway," and then now people are gonna start looking into the coins that allow people to-

David Friedberg 14:39 You can't conflate having an enemy with having a different view.

Jason Calacanis 14:43 100%.

David Friedberg 14:43 Those aren't the same thing. Having an enemy is a serious deal, right? Whether that's domestic or international, that's what we had to do in World War I, World War II, and the FLQ Crisis. This is just somebody who has a different opinion. "I don't agree in mask mandates" is what one person says. "I want a mask mandate" is what the other person says. The idea that you can deplatform one or the other, or fire them from their job, or prevent them from having access to the money that they've earned, or preventing other people from donating money, that's really, um... it's a really low bar. And I think when you normalize this kind of behavior, it's a very slippery slope. And so if, if somebody else were to do it, they now have e-... like, it's... again, going back to, um, the René Girard sort of philosophical discussion from last week, one of the things, uh, about, you know, uh, these stoning rituals, right, that Sacks talked about, uh, that we talked about last week, one of the things that René Girard talks about is it is always hardest for that first person, right? The first person that throws the stone, right? That's how Jesus was able to diffuse that, uh, that incident, as described in the Book of John. But in a different example, the first person that throws a stone all of a sudden normalizes it for everybody else after them, and then these stonings become commonplace, or became commonplace. So similarly, it's like, if you're a sitting democratic person who just decides this doesn't work for you, you can't flip the script and, and basically remove everybody's democratic rights. That's really crazy.

Jason Calacanis 16:12 Sachs, you had a closing point you wanted to make.

David Sacks 16:14 Well, okay, just on this point about Bitcoin, the, the reason why Bitcoin is necessary is because the tactics that Trudeau is using is essentially to starve these truckers out, to not only basically arrest them and t-... but he's also taking away their insurance licenses. He's basically preventing them from ever working again. He's talked about that. "We're gonna put... give you a criminal record. It's gonna make it hard for you to get a job." And then most importantly, on top of that, he's preventing anyone from helping them by contributing to them, by making a donation. So he's effe- essentially starving these guys out, and that's the reason why Bitcoin is potentially helpful, is it allows people using noncustodial wallets to make an end run around that and donate and help these, these people who are being persecuted, essentially.

Jason Calacanis 16:57 I mean, he could have just simply chosen to do what Sacks' favorite president, Obama, did with Occupy Wall Street, which is say, "Great, you have something you want to voice. Here's where you can do it. Just, you know, no guns, no violence, but we let..." H- how long did Occupy Wall Street last in downtown Wall Street and in Oakland and other places? Like a year or two. And you just wait them out, and, and that's it.

David Sacks 17:19 I think when you encounter a sincere protest movement, the first thing you should do as a leader is actually listen and try to understand-

Jason Calacanis 17:25 Sure.

David Sacks 17:25 ... what it is that they're protesting on behalf of, and Trudeau never did that.

Jason Calacanis 17:29 That's all right.

David Sacks 17:29 He went straight to, uh, to 11 with this, and I think part of the reason why... I mean, Jcald, you asked wha- why, why is it that, that... you know, there seems to be a common denominator with this and with the Ukraine issue, that the leaders are immediately escalating these situations instead of looking for a way to deescalate it, and they're doing it with the media egging them on. And so as, as harsh as Trudeau's rhetoric has been, the media's rhetoric around this has been even worse. You have this CNN contributor, Juliette Kayyem, who's also a Harvard professor, who basically tweeted that Trudeau, uh, needed to "slash their tires, empty the gas tanks, arrest the drivers," you know, making it unclear how you'd ever get the trucks off the bridge. Uh, but then she said, "Cancel their insurance, suspend their driver's license, prohibit any future regulatory verification."Uh, she says, "Trust me. I will not run out of ways to make this hurt." You know, it's, you have the media cheering this on, egging on Trudeau. They're doing the same thing, beating the drums of war on Ukraine. What is wrong with these people?

Jason Calacanis 18:31 Yeah, deescalate and where's the off-ramp? I mean-

Chamath Palihapitiya 18:33 I think the biggest, the biggest story is this, um, this Bitcoin thing because, you know, if you guys think about like pre-1960s, like capital wasn't digitized. It was like physical, like you had to own like a stock certificate or cash or gold or a bearer bond.

Jason Calacanis 18:50 Yeah, sure.

Chamath Palihapitiya 18:51 Uh, t- t- today everything is digitized, right? Like there's a digital record of, you know, who owns what stock and who, how much is in your bank account, and none of it is tied to your having a physical asset. And, uh, ultimately the law was able to reach into these digital systems and have greater, um, uh, oversight and ultimately control, uh, you know, over accounts and so on. And it's had a, you know, the digitization of, of capital assets has had an incredible ability to drive economic growth and investment and ease of transaction. But it's also significantly increased the centralization of assets or, or the central influence over assets. Bitcoin seems to be the resolution to that, and now you're seeing the ultimate challenge to Bitcoin and the challenge to decentralized systems like Bitcoin and cryptocurrencies and so on. I don't wanna speak-

Jason Calacanis 19:37 Yeah.

Chamath Palihapitiya 19:37 ... specifically to any one, but there, there seems to be like this trend line over the last 60 years that's now being challenged because you could have your accounts frozen any moment, um, you know, for breaking the law or because emergency acts are, are induced. And I think you're right, it's probably gonna accelerate interest in these kind of off-government chain-

David Friedberg 19:57 If Trudeau can do it-

Chamath Palihapitiya 19:57 ... into some separate chain. Anyone can do it.

David Friedberg 19:59 ... a lot of them, anybody can do it.

Chamath Palihapitiya 20:00 They're doing it in China, right, and they're, uh, and I, I, don't know if you guys-

Jason Calacanis 20:04 That's the point of the digital yuan. It's the point of it.

Chamath Palihapitiya 20:05 The digital yuan is like this incredible-

Jason Calacanis 20:07 That's the whole point.

Chamath Palihapitiya 20:07 ... c- it's like absolute centralization of every capital asset.

Jason Calacanis 20:11 Here's where it gets scary.

David Friedberg 20:12 Think of, think of how dangerous the digital yuan is. The minute you say something that Xi Jinping doesn't like, it's a, it's a stroke of a keyboard key and all of a sudden-

Chamath Palihapitiya 20:19 All your assets are, all your assets are locked away.

David Friedberg 20:22 It's a, a database entry and you just basically reroute who it belong, who it belongs to.

Jason Calacanis 20:25 Or it, it could be, it could happen in America. They say, "You know what? California now wants to have a wealth tax. Anybody who's got money, uh, we're just gonna take your money out of your account-"

Chamath Palihapitiya 20:32 Do you guys think-

Jason Calacanis 20:33 "... automatically."

Chamath Palihapitiya 20:34 You guys think we sound like a right-wing politics show at this point?

Jason Calacanis 20:37 No, this isn't a right-wing politics thing. I mean if, if-

David Friedberg 20:40 No, because I think, I think that we have so jumped the shark, there are things that are happening today, every day, that, you know, if you had said in isolation two or three years ago would any of these things ever happen, we all would have just looked at each other and said, "It's impossible that these things could happen." And, but the problem is fast-forward two years of a pandemic, I think we have let a lot of our civil liberties decay right under our nose, and we're not willing to fight for it because it's become too tribal and, and rights have been politicized. So the idea of having rights, you know, and then standing-

Jason Calacanis 21:11 It's at stake.

David Friedberg 21:11 ... up for your rights all of a sudden has to be a decision between whether you're left or right. That's crazy.

Chamath Palihapitiya 21:16 I, I don't think that liberties in the sense of government oversight have decayed. Uh, i- in addition to that, liberties in the sense of, uh, of a social setting have decayed. You know, we've, because of cancel culture, we've normalized the ability to silence minority or dissenting voices. Um, and this is both in the private enterprise setting as well as in the public setting. And it's, um, you know, I don't know, I, I, I don't consider myself a right-wing conservative person by any stretch, um, but I, I do consider myself a person who believes in individual freedom and liberty.

Jason Calacanis 21:50 That's called an American, by the way.

Chamath Palihapitiya 21:52 Yeah.

Jason Calacanis 21:52 It's basically being an American. And I think, you know, as, as we move on to this, uh, uh, recall in San Francisco, I think Sax made a really good point, like what are our political leaders doing here? Are they trying to stir the pot and antagonize these situations? If you look, you know, Clinton, Obama, a lot of people previously were trying to defuse these situations, and then Biden seems to be stirring the pot. Justin Trudeau and then if you look at Trump with BLM, you know, uh, and the immigration stuff, he never sat down and met with them and, and he arguably antagonized them. So I think this is a perfect segue into what happened and, you know, so we, we should expect a little more from our political leaders. Great point from Sax.

David Friedberg 22:30 You just brought up something incredible. You know, Trump railed against these BLM folks, but at no point did he try to shut down their bank accounts and take their money away.

Jason Calacanis 22:38 No.

David Friedberg 22:38 And Trudeau c- you know, did, this, this was not even near in the scale of BLM, you know?

Jason Calacanis 22:43 Yeah. Who's the bigger authoritarian? Yeah. I mean, it's clearly, if you objectively, it's Trudeau in this situation, clearly.

David Friedberg 22:48 The, the scary authoritarianism, as we talked about in previous pods, tends to come from the left. At least the right you see it coming-

Jason Calacanis 22:55 I, I just wanna re-

David Friedberg 22:55 ... because it's, it's veiled under moral virtue signaling and that's why it's so dangerous.

David Sacks 22:57 Right, they're very sanctimonious. They claim, they claim to be the defenders of the working class e- while they're actually prosecuting them.

Jason Calacanis 23:06 Such an unforced error, like so dumb. He's gonna lose, right?

Chamath Palihapitiya 23:10 Sax-

Jason Calacanis 23:10 Trudeau's gonna lose?

Chamath Palihapitiya 23:11 If a DA was elected and a police office, a police chief were elected to San Francisco that said, "We are gonna freeze the bank accounts and, um, you know, uh, uh, demobilize the criminals that are ransacking our city, our, our people, our stores," would you support that?

David Sacks 23:28 No, not if it's an, uh, not if it's an extrajudicial use of power. I mean, the law specifies what you're allowed to do.

Chamath Palihapitiya 23:34 You think San Francisco's in an emergency situation? I mean, would you support the mayor taking on emergency, uh, authority to go and fix the problem? Which she just did, by the way, in the Tenderloin.

David Sacks 23:43 Yeah, but that doesn't give her the power to go to Wells Fargo and say to Wells Fargo, "We want you to freeze all these accounts with no due process of law." That's basically what Trudeau has done.

Chamath Palihapitiya 23:54 That's the overreach, that's the line you think is like go and seize assets?

David Sacks 23:57 You have, you just have to go through a court proceeding to s- to freeze someone's bank account, period. You can't just freeze someone's bank account.

David Friedberg 24:04 The law allows you to do this now. It's called RICO. So you follow the due process of the law and you can do all those things, Friedberg, that, that, that you just mentioned. If you wanna free somebody's bank account-

Chamath Palihapitiya 24:15 Right.

David Friedberg 24:15 ... you can actually do that. The government has the ability to do that. They don't need to pass this basically get out of jail free card to do whatever you want without any oversight.

Jason Calacanis 24:24 ... and to Chamath's point earlier, have you exhausted the regular law here? (laughs) We're not arresting people.

David Friedberg 24:30 They haven't exhausted the regular law.

Jason Calacanis 24:30 They haven't even tried! It's, you can buy Fentanyl-

David Friedberg 24:33 They haven't tried.

Jason Calacanis 24:33 ... for five bucks on, you know, the Nintendo anytime you want.

David Sacks 24:36 And, and, and, and meanwhile, the, all the provinces are ending COVID mandates anyway, so this whole issue is moot.

Jason Calacanis 24:41 So dumb. It, this is like the stupidest behavior at the end of a pandemic that we've ever seen, and shout out to George Lucas for getting it right. I mean, if you look (laughs) at the theme of Star Wars, it was like, "Oh, I just need emergency powers for a minute because of a trade federation blockade," and here we are.

David Sacks 24:56 Well, a fake crisis, a fake crisis.

David Friedberg 24:58 Yeah, that wasn't George Lucas, by the way. I mean, that goes back to the, uh, the Roman, the Roman Empire.

Jason Calacanis 25:03 But he kinda nailed it.

David Friedberg 25:04 Right? Like, yeah.

Jason Calacanis 25:05 Yeah. That was the formation of the empire.

David Friedberg 25:06 Like, C- C- Caesar got, Caesar got emergency authority. I mean, this is a tried and true-

David Sacks 25:09 And the poll, the polls show they're actually-

David Friedberg 25:11 ... authority cycle.

David Sacks 25:12 Right. And the polls show that, uh, most of the public in Canada is applauding. So what was the line? From democracy dies to applause?

Jason Calacanis 25:19 Exa- That's exactly.

David Friedberg 25:20 Lies.

Jason Calacanis 25:20 That was Padme's line in, in the Star Wars films. All right. Uh, they're aging well, the prequels. Uh, three members of San Francisco's Board of Education were-

David Friedberg 25:27 They were the worst, just to be clear. But go on, sorry.

David Sacks 25:29 (laughs)

Jason Calacanis 25:29 Uh, not compared to the three just huge dumps that Disney took on the, our childhoods with the sequels.

Jason Calacanis 25:37 Three members of the San Francisco Board of Education were recalled this week massively. They lost by between 72% and 79%. These were the virtue signaling maniacs who wanted to change the names of all the schools, wouldn't reopen the schools, yada yada. And this, uh, really frustrated, and they wanted to get rid of elite AP classes. All of this, uh-

David Friedberg 26:01 Oh, they, they did, Jason. They did.

Jason Calacanis 26:02 They did, yeah. Um, and these three board members are out, so London Breed, uh, who is-

David Friedberg 26:07 In the middle, Jason, Jason, just to be clear, in the middle of a pandemic, I think my understanding is that instead of figuring out how to get these kids back in class, how to figure out how they could take off their masks, they wanted to drop Abraham Lincoln and George Washington's name from schools 'cause it was, it was too regressive.

Jason Calacanis 26:24 Yep.

David Friedberg 26:24 They canceled the gifted program because it made other kids feel bad. And a gentleman that wanted to serve on a committee who I think was gay but not minority was excluded because he wasn't a minority, enough for them. So th- these are the three people that, uh, 76% of San Francisco citizens or, you know, residents just, uh, recalled.

Jason Calacanis 26:48 And if you're not following this, the tech industry had a, a major part in this in terms of backing it. There was a lot of claims, uh, which I'll let Saks address in a moment, uh, that this was a Republican-driven, out of state movement. But if you look, (laughs) there are not 100,000 (laughs) Republicans in San Francisco in all likelihood. This was actually, uh, parents, uh, in a lot of cases based on the geography of San Francisco and the density of certain populations. A lot of Asian Americans came out in force. In some neighborhoods, 90% were voting to oust these people. Uh, Gary Tan, uh, who is a product of the San Francisco public education system and a great entrepreneur and venture capitalist, uh, was a leader in this movement. So congratulations to him, and this all is going to culminate, I think, in May or June, Saks will correct me, with the recall effort for, uh, Chesa Boudin, uh, this killer DA who won't prosecute anybody. Saks, what are your thoughts on this victory? And full disclosure, you were a major donor to this.

David Sacks 27:44 I was the second-largest donor, and I was the, the largest donor under age 90. Arthur Rock was the biggest donor. What a badass, by the way. The guy's 95 years old. He donated $400,000 to this, uh, recall. Um, you know, he was a-

Jason Calacanis 27:56 But you, in fairness, you live in San Francisco.

David Sacks 27:58 Yeah.

Jason Calacanis 27:58 This is a backdoor issue for you. You care about this.

David Sacks 28:00 Oh, yeah. Yeah, look, I think crime and schools are the key quality of life issues in any community, and that transcends partisan boundaries. If your kids cannot get a quality education and you cannot be safe in your community, nothing else matters. And that matters to Democrats just as much as Repub- as Republicans. And that's why, like you said, three-quarters of San Francisco voted for this recall, even though 85% of them voted for Biden. It's not, it's basically a 90% Democrat city. So, uh, you know, all these claims that it was a Republican recall turned out to be nonsense. This was something that was broadly supported. And, um, and you know, look, it's the same reason that Youngkin flipped a, you know, plus 10 Democrat state in Virginia, which is that, you know, it had a lot to do with school closures. They kept the schools closed for a year and a half. Uh, and then when they were supposed to have conversa- uh, a PTA meeting about reopening it, like Chamath spent, said, they spent five hours debating whether to l- allow this beloved gay parent onto a voluntary school board, they didn't. They spent all their time, you know, talking about changing the names of the schools instead of how to reopen them. They also, there was chronic mismanagement. I mean, the school's something like $125 million in debt despite, you know, being in a very rich, um, city.

David Friedberg 29:13 They opened for one day-

David Sacks 29:14 That's right.

David Friedberg 29:15 ... just so that they could get a state, uh, piece of the state budget pie. So these kids clamored back to school just so that they could lea- technically say, "Yeah, we were open," and to get I think it was a $12 or $13 million check, and then they shut the schools down again.

David Sacks 29:28 Right. And you brought up a key point, Jason, which is that th- the Asian American community in San Francisco has been absolutely galvanized by this issue because the school board also, you know, Lowell High School was one of the best schools in the city, and it was merit-based, and it had great advanced math programs. And this, this board basically got rid of all of that stuff, and it infuriated the Asian American community, many of whose most prominent members have basically riv- risen out of poverty because of the education they got at Lowell. And so this war on merit that's happening is something that is going to, you know, flip the, you know, Asian, uh, American community, I think, to-

David Friedberg 30:06 When I, when I was growing up, I grew up in a French ghetto of Ottawa, and I was supposed to go to a local high school that was just plainly trash. And I was able to go to an equivalent of Lowell, this, a public magnet high school that had, uh, advanced classes and everything, a gifted program.... and it really did change my life. And so I really understand what people are saying, which is like when you're in poverty, the only way out is through an education, really. You may g- you know, get accidentally lucky, but the only really predictable sustainable pattern here is, is through school. And so when you deprive folks from being able to get a decent education and there's no real, you know, orderly logic to it, it's a really ridiculous kind of an idea. The other thing is, I think that this speaks very powerfully, as Sachs said, as a non, as a bipartisan issue that these Democrats have to get right. Because, you know, you saw this also in, uh, Virginia, where Democrats basically went down this one tack and, you know, the Republican candidate, Glenn Youngkin, basically said, "Hey, listen. The schools are broken. It completely doesn't make any sense. We oppose a lot of what's going on, the watering down and the critical race theory, et cetera, et cetera." And he put it to a vote, and a lot of people across the aisle there as well, where typically ardent Democrats basically voted for this Republican governor. I think the point is that there are just several issues that are just so transen- like, they're just, they transcend all party lines, and this is an anchor issue that we have to get right.

Jason Calacanis 31:45 Friedberg, any thoughts on this? Do you think this is the start of maybe a turnaround for San Francisco? 'Cause Chesa Boudin is w- way more hated and safety is an even bigger issue, I think, for a lot of people right now in San Francisco, and it dovetails with Asian hate and the number of Asian people targeted in crimes. So he's gotta ... I mean, if these people got out by 75% on average, he's gonna be out by 95%. Is this a tipping point? Is San Francisco n- gonna make a rebound here, Friedberg?

Chamath Palihapitiya 32:13 I don't know. I mean, look, I, I think there's generally a broader trend and momentum around what we classify as wokeism, which I think is a little bit disparaging to the intention of social justice and recognizing the, the, the primary points of social justice through action and behavior, um, in civic discourse and government behavior. Um, and you know, this, like the, um, election of several DAs around the country, uh, who take a different stance to prosecution of crime to try and create better options for rehab and, and, and so on, um, I think is not a movement that's gonna go away overnight. I think there's certainly a, a, a st- a hef- a hefty amount of resistance, but what we're really doing right now is, I think, we're learning and realizing the boundaries of this movement and of this moment. Um, the one boundary that I think San Franciscans are too bad- San Francisco, like, you know, as in the case in tech, has always been so progressive in terms of, you know, doing these things faster than, than anyone else. But what we're realizing in San Francisco is non-prosecution of criminals, uh, as the DA has undertaken over the past couple of years, leads to really heinous crime, um, and rampant crime.

Jason Calacanis 33:30 Yeah.

Chamath Palihapitiya 33:30 And, um, and, and, and this kind of social justice movement within the education system causes a decline in the value of our education system. Those are two really important learnings that San Francisco has had over the past couple of years with this very important, um, and momentous kind of social justice movement, but it doesn't mean that the movement is over. It doesn't mean that quote unquote wokeism is over. It means that that social justice intent is still there, but we're realizing where the boundaries are and how far things can and maybe should go.

David Friedberg 33:58 I posted this article. Um, Tyler Cowen, who's a, you know, pretty well-known economist, he wrote this op-ed for the, for, uh, Bloomberg, and what he said is that wokeism has peaked. Um, and there's just these two passages that bu- builds on what Friedberg said. Uh, quote, "By wokeism, I refer to a movement that, on the positive side, is highly aware of racism and social injustice and is galvanized towards raising awareness. On the negative side, it can be preachy, alienating, overly concerned with symbols, and self-righteous." Unquote. And I think that that probably does summarize sort of like where it starts, which is, I think, rooted in a very good place, but unfortunately, all too often, where it ends, which is that sort of moral absolutist judgment cancel culture around it. Um, and then the second quote that he said was the following. He said, quote, "Wokeism is likely to evolve into a subculture that is highly educated, highly white, and fairly feminine. That is still a large mass of people, but not enough to run the country or all its major institutions. In the San Francisco school board recall, for instance, the role of Asian Americans was especially prominent." Unquote. So I don't know. I just think that all these things sort of ... You know, people are looking for affiliation, and you start with labels that bring you in, and then you have to sort out are all these labels really true, and how true are they? And I think we're in this moment now where-

Chamath Palihapitiya 35:24 The pend-

David Friedberg 35:24 ... now that we know the mechanism of action of wokeism, I just don't think it works anymore.

Chamath Palihapitiya 35:28 (laughs)

David Friedberg 35:28 And I think a lot of people will say, "I believe in the high order ideals of racial and social justice, but I don't believe in the mechanism of action, and so-"

Chamath Palihapitiya 35:34 Yeah. The pendulum's swung too far.

David Friedberg 35:36 Yeah.

Chamath Palihapitiya 35:36 But, but, but the core intent of a generation of change is underway, which is social justice and climate change. I think those are the two big, uh, points of concern.

David Friedberg 35:45 It just won't be done with this cohort under this partnership.

Chamath Palihapitiya 35:47 Well, it won't be done to this extreme this fast, right? And, um, and I think that the pendulum went too fast, too far, um, and it's, um ... And, and, and there, there are boundary effects that are causing recourse right now. And we're, we're seeing this-

David Friedberg 36:00 Right.

Chamath Palihapitiya 36:00 ... across the country, especially in New York with the election of the mayor, or in San Francisco, the, the DA recalls happening in the next couple of months, so. Sachs, what's your prediction on the DA recall, by the way?

Jason Calacanis 36:09 Well, that's 95%, but I mean, t- to build on your point, th- they were talking about 10% of the people in the United States who are involved in this, you know, retweeting and virtue signaling, and, you know, is Twitter a real place? Well, no. A city's a real place. People have to live in San Francisco. And when these ideologies result in unlivable conditions for people, well, th- they're gonna say, "You know what? Th- there's reality here." How do we get competent people to take the positions, Sachs-... that are being vacated now. Who should London Breed put in these three positions? And maybe tech people need to st- I mean, this is what I think has to happen. I think some number of tech people have to get off the bench and say, "You know what? I'm gonna do a tour of duty as politicians in San Francisco to, to take back the city." What should happen here in terms of who takes these positions? 'Cause Republicans can't win in San Francisco, so you're gonna need moderate Democrats. Right, Sax?

Chamath Palihapitiya 37:00 Befo- before Sax goes, can I just say something? I, 'cause I think, I, I just wanna say something that's really important. Sax, I'm sorry to, to jump in, but J-Cal, I, I think the point you're making about the tech people implies the tech people are effective and good at doing this. But that's not necessarily the fabric of San Francisco. I've lived in San Francisco since 2001. The number of people in San Francisco in 2001 that were in the tech industry was a minority.

Jason Calacanis 37:22 Yeah.

Chamath Palihapitiya 37:22 Since that time, it became a significant size, and over the last two years since the pandemic, it's decreased significantly. But San Francisco's a city with decades and generations of history. My wife's family is multi-generational San Franciscans, and I don't think that traditionally, San Franciscans view tech people as the right people to solve these problems for them, that the intention of that city is not necessarily about, "Let's get tech people to solve our problems." They have a different set of values perhaps, um, and so we, we often overstate and assume that tech people are the right people and are the s- the s- the problem-solvers, but I don't think that that's necessarily the right problems that people wanna solve. So I just, I just wanted to intervene and say that.

Jason Calacanis 37:58 Well, then who should take these positions because-

Chamath Palihapitiya 38:00 Right. People that care.

Jason Calacanis 38:01 ... it's typically-

Chamath Palihapitiya 38:01 Yeah, yeah.

Jason Calacanis 38:02 ... really far left people are motivated to take these positions. I don't see businesspeople writ large across all political, you know, positions, but specifically in San Francisco, don't wanna take these positions. So is this just gonna be replayed, Sax?

David Sacks 38:15 The recall effort was led by two parents, Autumn Luson and Siva Raj. They're the ones who led this thing. They're the ones who rose up to basically oppose these crazy school board members, and that is who London Breed should talk to. I mean, she needs to go talk to the people who are successful in organizing this recall, because they understand the issues obviously, and the people who are with them. So either appoint them to the board or ask them for their recommendations. And I think what you see consistently, whether it's with this SF, uh, school board or the, the, uh, the school boards that we saw in Virginia that Youngkin very effectively ran against, is that they don't believe the parents matter. Terry McAuliffe's fatal, th- his last gaffe was basically saying that the parents shouldn't get to decide what is taught in the schools. He basically said the quiet part out loud. But that is what still across the country the teachers' unions believe and most of the Democratic Party, the activists believe. And until they start losing elections, you're not gonna see a change in that belief.

Chamath Palihapitiya 39:14 Oh my God, how awesome would it be if Sax were on the school board?

David Sacks 39:16 (laughs)

Jason Calacanis 39:17 Oh my God. Yeah, uh, and just to, to put a pin in this, uh, and the cherry on top, the San Francisco Board of Supervisors voted seven to four to send a recall reform bill. So their reaction to all of this is to do a recall of recalls and say, "Now, you, uh, can't recall somebody in their first year, and the people who are placed in these positions can't run again." So now the speculation is the three people who got voted off are gonna run again. So there's a lot more to come on this story.

David Sacks 39:47 Yeah, and also par- part... S- so they're, they're putting this to, to staff that they're putting that on the ballot on June 7th, the same day that we vote on the recall of Chesa Boudin. The Board of Supervisors now put in this measure that would make it far harder to recall people. One of the provisions of that is whoever London Breed appoints as the successor, like you're talking about, they cannot run after that. So it is designed to, it, for no... That makes no sense. They're basically trying to-

Jason Calacanis 40:12 What if they do a great job?

David Sacks 40:13 Right, exactly. It makes no sense. So you have the Board of Supervisors trying to throw a wrench into the democratic process. Meanwhile, these are people who claim to be preserving democracy, saving democracy. They are trying to throw a wrench in the-

David Friedberg 40:26 The thing is, underlying it, David, is they think they know better. That's what it fundamentally comes down to. They are willing to have democracy up to a point, and when that point is an unacceptable view by somebody else, they feel like they know better, and they're willing to be really draconian in whatever they do to decide.

David Sacks 40:44 Yeah.

Jason Calacanis 40:45 Uh, and shout out to Mike Bloomberg. I'll pull up the, the tweet for everybody. He hasn't been very vocal or been on the stage much, but obviously he did a great job in New York on reforming schools. "The San Francisco School Board recall should be a wake-up call to elected officials, especially Democrats, across the nation. Parents are fed up with the status quo, and that put adults, uh, that puts adults ahead of kids-"

David Sacks 41:08 Yeah, well, Bloomberg-

Jason Calacanis 41:08 "... and ideology ahead of results." Well said, Mike.

David Sacks 41:11 Yeah, well said.

Jason Calacanis 41:12 Well said, Mr. Bloomberg.

David Sacks 41:13 Yes, that was very good. And Bloomberg has been very good on calling out the Democrat, their, Democratic Party's blind loyalty to the teachers' unions. And until they're willing to break with the teachers' unions who are their biggest donor, we're not gonna get any real progress on school reform. And this is the issue. My favorite political commentator, one of them is Roy Teixeira, who's a Democrat. He wrote the Emerging Democratic Majority. He wrote a blog post talking about how the Asian, how Asian American voters are gonna swing away from the Democra- Democratic Party because of issues like this, because of the decline-

Jason Calacanis 41:44 And safety.

David Sacks 41:44 ... of standards in school, and safety. And, and, and the Asian American community, I think, is galvanized on this Chesa Boudin issue because they have seen in all these cases of Asian hate where elders in their community have been violently assaulted, Chesa Boudin has done nothing except release the perpetrators.

Jason Calacanis 42:00 Bonkers. All right. Well, listen,

Jason Calacanis 42:02 this is, seems like a good turning point. Let, let's, um... We talked about on this podcast over and over again about the compression in SaaS multiples, in the public market valuations, uh, something that we're still working through in the stock market, uh, which has been choppy at best over the last couple of months. An information story came out, uh, just this week, major crossover funds like Tiger and D1 are slowing down their investments in late-stage private companies. And I was talking to some folks who said the multiple compression is here now. They're not doing the deals at 75 or 100X, uh, revenue. This was reported, uh, in an article by The Information. Tiger Global told their LPs in a webinar...... earlier this month that it would no longer focus on backing late-stage startups preparing to go public. Instead, they will focus on two things, going even earlier (laughs) into series A and series B rounds, and buying shares of public tech companies that have sunk in value compared to the all-time highs. Uh, obviously we know Twilio, Zoom, Block, all down over 60% from their one-year highs. I could get into more details here, but let's stop for a second. And Chamath, what are your thoughts?

David Friedberg 43:05 In, uh, (clears throat) the dot-com bubble, it took somewhere between three to five years for most stocks to bottom, and they bottomed, I think, peak to trough, somewhere, you know-

Jason Calacanis 43:17 90.

David Friedberg 43:17 ... towards 80% of where they were in 2000, right? So, it took three to five years to go basically minus 80%. We did that in three months, you know, maybe four months.

Jason Calacanis 43:30 Efficient.

David Friedberg 43:30 And so, uh, the markets have become a lot more efficient over time. So, now that we have that reset, it's pretty natural that there's going to be a very quick reset on the private market side. And, you know, you have to go where the bodies are buried, and what I mean by that, in this case, is the overwhelming misvaluation of late-stage private companies. And so these folks don't have much of a choice. They have a lot of money that they've raised before all of this happened. They have a huge portfolio of stuff that they've marked up or have been marked up by others, and they don't want to go through the pain now of resetting. So, part of the easy strategic decision there is to say, "You know what? We know this is a little bit radioactive, but instead of really figuring out what the mark on these companies are, we'll go to a different sort of part of the, um, playground and play there because we don't have to go and deal with these issues, and, you know, we're, we can do $10, $15, $20 million checks into early-stage businesses." Pretty normal reaction strategically, but I think the reality is that at some point in the next year or two, these other companies have to get public. The hope is that the market catches back up so that you can defend the last valuation, and that's the, that's the way that this stuff doesn't require a lot of pain. The problem is if you're high burn and you were counting on yet another successive round, or you're at a point in your life cycle where you need to go public, in the next two years, if you go public, you will get taken to the woodshed.

Jason Calacanis 45:06 Taken to the woodshed being, your valuation might be half of what it is in your last round. So there's gonna be medicine that has to be taken. Sacks-

David Friedberg 45:12 There'll be medicine.

Jason Calacanis 45:13 ... some people are gonna have to take some medicine. Sacks, what's your best advice, being one of the great operators in the history of Silicon Valley as the CEO of PayPal and Yam-

David Sacks 45:20 Oh, gee, thanks, JCal.

David Friedberg 45:21 (laughs)

Jason Calacanis 45:22 Well, I'm gonna put you up there with Sheryl. I mean, I think the s-, I think everybody would agree, the top four, people can correct me here, Tim Cook-

David Friedberg 45:28 I was a good operator.

Jason Calacanis 45:29 (sighs) I mean, I, I saw what you did to ICQ, man. You were riding that, that bad boy down. That wasn't easy.

David Friedberg 45:35 I mean, I delivered a billion fucking users to a company on a product.

Jason Calacanis 45:37 Okay. All right.

David Friedberg 45:37 It's pretty decent.

Jason Calacanis 45:39 Um, you did pretty good at Facebook, I'll say that. But if, I would think most people would say Sacks, Sheryl, Tim Cook, Keith Rabois. We'll put that aside for the debate in terms of operating-

David Friedberg 45:49 Oh, throw in a little d- throw in a little dark spicy barbecue pork here. Come on. Give me, give me a little-

Jason Calacanis 45:52 I'll put you in the top 25, Chamath. Sure.

David Friedberg 45:54 Okay. Good. Good.

Jason Calacanis 45:54 Uh, okay. But I mean, it wasn't your cr-

David Friedberg 45:56 All right.

Jason Calacanis 45:56 It wasn't your chosen career, let's be honest.

David Friedberg 45:57 A little dark meat. A little dark meat. Nice, JCal.

Jason Calacanis 45:59 (laughs) Please don't get me in trouble, my good-... Bring me into your-

David Friedberg 46:02 A little dark meat, bro. Thank you. I appreciate it.

Jason Calacanis 46:03 ... your orbit. (laughs) I'm stepping back for-

Chamath Palihapitiya 46:05 Wait, JCal, who are your top four? Sheryl, Tim Cook-

Jason Calacanis 46:07 I put my top four in this order. I'll give it in order.

Chamath Palihapitiya 46:10 So basically four white people when, uh, basically-

Jason Calacanis 46:13 No, no, no, hold on, hold on.

Chamath Palihapitiya 46:14 ... Asian and Indian CEOs run most of the tech companies in Silicon Valley.

Jason Calacanis 46:17 I'm talking about number two COOs, not CEOs. Just for the CEO position, to be clear. I'm not talking CEO, I'm talking COO. I would say Tim Cook when he was Steve Jobs. That's my number one operator last 20, 30 years. Number two, I put Sheryl Sandberg, who did obviously amazing things for Google and then Facebook, right? Those two would be my top two. And then I tie my top two, Sacks, uh, as, uh, at PayPal, uh, and Zenefits, even though it didn't work out, it was still a great run at the time, and then I put Keith Rabois, Square, uh, and a couple of other companies he did. Those are my top four. Anybody else wanna come at me? Go ahead. I don't have complete s- data set on COOs. What, where would you put Sacks? You, uh, did I put you fairly?

David Sacks 46:59 Who am I to disagree?

Jason Calacanis 47:00 Who am I to disagree?

David Friedberg 47:01 (laughs)

David Sacks 47:02 (laughs)

Jason Calacanis 47:02 Oh, and Rab- wasn't Keith at, uh, LinkedIn, at LinkedIn as well?

David Sacks 47:05 Have I said, have I said how brilliant you are, JCal, lately?

David Friedberg 47:08 (laughs)

Jason Calacanis 47:08 That's a love fest now. It's a love fest.

David Sacks 47:09 Yeah. Okay.

Chamath Palihapitiya 47:09 There we go.

Jason Calacanis 47:10 Uh, so Sacks-

Chamath Palihapitiya 47:10 There we go. They're back together. Besties.

Jason Calacanis 47:12 ... you were advising... Well, listen-

Chamath Palihapitiya 47:13 Besties forever.

Jason Calacanis 47:14 ... you and Friedberg are at each other's throats, so I'll just let you guys fight it out, and I'll be all about the love.

David Sacks 47:19 Yeah. Friedberg, why are you attacking JCal?

Jason Calacanis 47:21 Yeah, Friedberg.

David Friedberg 47:23 (laughs)

David Sacks 47:23 Be quiet over there. No one's asking you.

Jason Calacanis 47:24 Come on. Stay in your lane, Friedberg. So Sacks, as an operator extraordinaire, what's your best advice to the company, uh, that raised 100 million? And let's say their valuation is now not a billion, it's 500 million. What are the steps you take? You got 14 months of runway in the bank. Do you lay people off?

David Sacks 47:38 Right.

Jason Calacanis 47:39 Do you extend it to 24? What are your thoughts?

David Sacks 47:41 Okay, there's-

Jason Calacanis 47:41 You must be dealing with this with companies in your portfolio.

David Sacks 47:44 Well, there's a few things going on. First of all, I think Tiger built a great business in providing late-stage, sort of passive, non-dilutive capital to, to companies, SaaS companies. We have a bunch of, of, uh, SaaS businesses that they provided later-stage financing. I think those valuations are gonna come down. I don't know that they're gonna be such a great partner for series A firms, because they are passive, and, you know, what we see is that series A companies need a lot of help. They need a lot of advice, they need a lot of help with recruiting. Uh-

Jason Calacanis 48:12 Governance.

David Sacks 48:12 ... governance. They need, you know, to... When they're growing from, say, 20 employees to 100, they need to know what that org chart looks like, and on and on and on. So I don't know that if, if this repor- I don't know if this reporting is actually true, but if the goal is all of a sudden for Tiger to become a series A investor that competes with Craft or Sequoia or these other firms that are-

Jason Calacanis 48:30 Yeah, not happening.

David Sacks 48:31 ... very hands-on, doesn't, that doesn't seem like a great strategy to me. I do think that for our later-stage companies, they have to realize that, you know, if they raise and-

David Friedberg 48:39 Wait, can I take the other side of this? Sorry. David, I just want your reaction to this.I think it'll, it's gonna work, but not for the right reasons. The reason it'll work is there are way more entrepreneurs now than there are great entrepreneurs. And so of all of these entrepreneurs that exist, the idea of getting passive money where you won't get fired, where there is that... Remember, like, remember when we were growing up in Silicon Valley, the risk is always, like, if you take Sequoia, Benchmark, you know, Social Cap, like, there is a high bar for that capital, which means we are helping you run this business effectively. And there's a cost where if you don't perform, you will get fired. There's always been that risk.

David Sacks 49:20 It's true, and, and I guess that's the argument they could make. But the flip side is that there's a lot of these-

David Friedberg 49:24 So the C, so the CEO now, why would you take a $15 million Series A check from Sequoia where they could fire you, whereas $15 million from Tiger, they may never call you?

David Sacks 49:33 We, we, we address that by doing... Look, if a, if a founder's really worried about that, we address that by giving them three board seats. You know, we might have one, they might have three. I mean, my, my view on it is you just never fire a founder unless he does something criminal. It's just that simple. But, um, so look, I think there's ways of addressing the governance where, uh, you can get the help or the value out of an early-stage firm without giving up the control. So yeah, I mean, look, that's the pitch that Tiger wouldn't make, but I think that's addressable.

Jason Calacanis 50:02 Uh, what do you think of that pitch, Friedberg? Uh, we'll give you the $15 million Series A. You don't have to have a board. You can just be passive and, and let us know how it goes. Give us a quarterly report. We'll look at the P&L. The end.

David Friedberg 50:13 By the way, that's all of crypto now anyways.

Chamath Palihapitiya 50:15 That's true.

Jason Calacanis 50:16 Well, I mean, that's a fair point. No governance in crypto is leading to a lot of weird stuff, I can tell you.

Chamath Palihapitiya 50:20 I tell people this a lot. So I had, um, three term sheets for my Series B. Uh, it was from Andreessen Horowitz, Khosla Ventures, and Founders Fund. And Founders Fund is, uh, came in kind of last minute. But I went with Khosla, uh, even though it was a lower valuation because Vinod was pretty insistent, like, "Let me put someone that could be useful, some, you know, government person," because we were doing a lot of work lobbying in, in, in DC, "on your board. We won't be on your board. We won't bother you." And I took the round. And then my Series C, I took from Founders Fund because Bryan Singerman, who's obviously a good friend, um, you know, made the case, like, "Look, uh, our model at Founders Fund is we let founders run the business. We're not here to tell you how to run your business." And they were both great fits and, you know, it worked out well. I didn't... I had, I have had experience with antagonistic VCs on boards. And, um, you know, it generally creates a pretty negative dynamic. Now, when I'm on a-

Jason Calacanis 51:11 Tell us the worst story without the person's name.

Chamath Palihapitiya 51:13 I don't think I want to go public with it, so I'm not gonna do that. Um, but when I was on-

Jason Calacanis 51:16 Give us an idea of what the behavior would be, because there are people in the audience who want to know what is bad behavior of VC. Just give us a composite.

Chamath Palihapitiya 51:22 When you're an entrepreneur or a CEO running an early-stage business, you live that business 20 hours a day. You know the details. If you're smart, you're thorough, you're analytical, you're creative, there is no one that's gonna come in the boardroom for two hours a quarter and suggest things to you that you haven't thought of. There's no one that's gonna come in the room and be smarter than you at your own business. And so more often than not, Vinod's been exceptional at defining this problem. The problem is VCs, they join a board, and they think that they have to, quote, "add value." So they come in and they make a bunch of suggestions and recommendations and push you to do a bunch of things. And as Vinod has said correctly many times, they more often than not add negative value. They can actually destroy and damage a business because they need to feel like they're exerting some degree of influence over the business, and as a result, they push the business to do things that the CEO or founder otherwise wouldn't be doing. And that often ends up in a kind of weird sticky kind of place. I think you-

David Friedberg 52:14 So I just validated the Tiger pitch right there.

Chamath Palihapitiya 52:16 I think that's right. And, and by the way, it's why Founders Fund... Founders Fund is fantastic. They, I mean, I don't know if you guys are LPs, but their investment returns are so far beyond what I think anyone really realizes. They're incredible investors. And a big part of it is they try and find the entrepreneur that doesn't want and doesn't need the help, and then they give them the capital to go and execute, and they leave them the heck alone. And they are just so good at finding those folks, identifying them, and then literally being passive in, in, in how they kind of manage and operate their business. And that's why they are so freaking good.

Jason Calacanis 52:45 I think the people you're talking about are a lot of rookie VCs who come in and then, yeah, they, they think they have to add value.

Chamath Palihapitiya 52:50 Not just rookies, just, just experienced ex-operators even, people who ran businesses-

Jason Calacanis 52:54 Yeah.

Chamath Palihapitiya 52:54 ...who say, "I know how to run a business." And look, no two businesses are alike. So maybe the way they ran their business with their team and their market and their industry worked well for them. But now when they got to come in and do it with someone else's business in some other space, with some completely different team, you know, they try and exert influence. And really, it's just, you know, not wanted.

Jason Calacanis 53:11 Let me go to Sachs. Sachs, hold on. I want to just get one from you. Give us an idea, because you've been in the business for over 20 years, uh, I mean, by the looks of it, maybe 40, but 20 years-

David Sacks 53:21 (laughs)

Jason Calacanis 53:21 ...just crushing it in the business. What's the worst behavior you've seen on a board? Uh, you can make a composite of, like, a VC being destructive on a board.

David Sacks 53:32 Yeah, I mean, look, I think sometimes VCs will have sort of hobby horses, and they'll keep pushing for things that the founder doesn't want. Um, that's not productive. But what, what, what I would say is... First of all, let me just say, like, I'm not somebody who likes to take board seats. And I, I do it as, uh, it's like, I see it as a cost, not a benefit to me, because it takes up my time. If I didn't have to ever take a board seat, that'd be a great... Uh, as far as I'm concerned, that'd be a good thing. I'm not somebody who wants to, you know, insert myself and get on these boards, you know?

Jason Calacanis 54:03 You offer it as an incentive, no?

David Sacks 54:04 I only, I only take up board seats-

Jason Calacanis 54:06 To close deals.

David Sacks 54:07 Yeah, the only reason I'll ever take a board seat is because I have to do it because the founder insists that, otherwise, they won't go with-

Jason Calacanis 54:12 Yeah, I've seen it, yeah.

David Sacks 54:12 ... with offers, so exactly, so-

Jason Calacanis 54:13 And then you'll do it for one year, right? You'll say, "Hey, I'll do it for a year."

David Sacks 54:16 I always time limit it now because I just can't... I mean, I can't make a 10-year obligation, you know? It's typically like one or two years and then, you know, we'll see. Doesn't mean I'll roll off it in two years, but, um, but I, but I need to have the expectation set up. And, and the reality is, if the company can perform well for another two years, they'll be at a different stage, and maybe they won't, you know, need my help as much, so.

Jason Calacanis 54:39 Chamath?

David Friedberg 54:40 The two most valuable pieces of private equity that I own...... is a company called DCG and it's a company called Netskope. And collectively, it's like (beep) billion dollars worth of stock that I own.

Guest 54:53 What?

David Friedberg 54:53 I'm on the board of one, I'm not on the board of the other anymore, and I text with these guys maybe once every two or three months at best. So, you know, completely confirming, David, your point, that great founders are just n-of-one individuals. You know? Barry Silbert, um, Sanjay Bary, next level guys. But that's very different than the, the Series A playbook because when I ran institutional money, I'm telling you, there is a pressure to be involved and show some value, and I do think that there is a, a level of judgment on the CEO that has happened. Now, maybe that's changed historically, but I think that's the single biggest pivot that one would exploit if you were Tiger or Coatue or D1 stepping into the early stage game, which is to essentially make it a feature. And it's not dissimilar to when DST and Yuri Milner entered the late stage round. You know, what was his big differentiation? "I'll take common stock and I won't take a board seat." And it just seems so-

Guest 55:53 I do not need a board seat to be influential.

David Friedberg 55:54 It seems so counterintuitive and so against the grain, but he acknowledged what was this thing that up until that point was true, which is common and preferred converged in price per share, so buying common in an late stage company was the same as buying preferred-

Guest 56:11 You know, that's something you should explain-

David Friedberg 56:13 ... and second-

Guest 56:13 ... Chema for a second. People don't know this, but-

David Friedberg 56:15 So when you set up a, when you s-

Guest 56:15 ... at an IPO, yeah, explain.

David Friedberg 56:16 Well, well, a certain... So when you set up a company, you have a price per share of the common stock and then a price per share that the Series A investor has. The Series A investor is buying preferred shares that actually looks more like debt than equity. And what I mean by that is there's typically a coupon, there's a rate of return, there's accumulated dividends. All these features give it a certain price per share, and the common has none of those features and so it has a lower price per share.

Guest 56:41 Protective provisions.

David Friedberg 56:43 And that gap is typically around 20:1 when you set up a company. Okay? And that's what allows you to hire employees and give them very, very cheap options with embedded upside. Then what happens is you raise more and more of these series Bs, series Cs, series Ds, these preference stack, right? Pre- preferred shares build up. But the value of the common keeps rising too, and by the time you go public, the gap converges. What Yuri realized was, "Hey, wait a minute. I'm buying a company a year or 18 months before it goes public. The price of the common and the price of the preferred are roughly the same, and so I'm just gonna, you know, do that, and I'm not gonna take a board seat because it's clear this company is successful." So similarly, for Tiger, D1 and Coatue, I would just observe the obvious and kind of put everything that we've just said on the table, which is, "Hey, guys, I'll give you the money. You're either n-of-one or not. I'm making a guess that you are, and I'm just gonna (laughs) get out of your way and leave you alone, and I'll never find you."

Guest 57:37 So unbundling governance and advi- unbundling the governance and advice piece from the capital piece, but you're gonna still-

David Friedberg 57:43 I think it can work.

Guest 57:43 ... need that governance and advice piece, I think.

David Friedberg 57:44 I think it could work.

David Sacks 57:45 Yeah, I mean, I, I think that there's a lot of great founders or they're, they're founders who start young and inexperienced become great. And the smart ones listen to advice on the way, and they, they seek out people who've done it before. And so, you know, yes, they may be an n-of-one business by the growth stage, but that doesn't mean they don't need any help whatsoever at the Series A stage.

Guest 58:04 Such a good observation.

David Sacks 58:05 Yeah. And look, I think there's been, I think there's been an evolution in Silicon Valley. I'd actually say there's been, like, three distinct phases in the venture capital world, and I remember all of them. So you go back to the, the nine- the late '90s, okay? When, you know, you had this mentality on the part of VCs that if a company became successful, you would just automatically replace the founders, right? You would go bring in a professional CEO.

Guest 58:25 Upgrade.

David Sacks 58:25 That was a disaster, okay? And, and that's when Founders Fund, Peter came in, I think founded, um, Founders Fund in 2003, and the reason they called it Founders Fund is to indicate they were going to be pro-founder and they would never replace the founder, and they would let you do whatever you wanted. And I think Zak-

Guest 58:41 You wanna tell the backstory of the Sean Parker stuff and how that happened?

David Sacks 58:43 Well, yeah, I mean, so basically both Peter and Sean Parker had, you know, experiences they felt were very negative with Sequoia. And, and by the way, I have, I have great relationships with Sequoia. Roelof, who worked with us at PayPal, is there, and I think they've evolved as a firm, so I'm not calling them out or anything. But, uh, but both Sean Parker and Peter felt like Sequoia pushed to have them replaced. And so-

Guest 59:06 With Plaxo specifically.

David Sacks 59:08 There were a couple of different companies involved, but when Peter was, uh, CEO of, of PayPal as well that, you know, he felt, he felt that pressure as well. So when they then founded as two of the four founding partners of Founders Fund back in 2003, the whole point was, "We are going to be pro-founder. You are never going to replace you. We'll let you do whatever you want." I think that was, that was phase two, and that became, I think, the dominant model, and so becoming pro-founder was now table stakes. And I think the third phase has been, you know, what Andreessen Horowitz has now done with this massive, like, the services and the value add, which is that we're going to basically not only be pro-founder, but we're going to, like, bring all these resources to help you. And that's the era we're in right now. I mean, from the, from our perspective, like, as, as Craft, I mean, look, it's not in our interest to get into any dispute with a founder, and if we feel like our advice isn't being taken, well, we just back off. You know? Of course we're pro-founder. Like, we don't want the control. We're not control investors. And, you know, if it's, if it- if it's- if it's becoming frictional, we'd rather just get out of the way.

Guest 1:00:11 No, of course, but-

David Sacks 1:00:11 It's just not worth it.

David Friedberg 1:00:12 ... the, the underlying thing that you're not saying, though, is because you have enough of a fund that's large enough where you can have enough bets where any of these, any of these things to the upside is a total needle mover. But anything that goes to zero doesn't actually diminish the fund or impair it meaningfully. So there is no upside to getting engaged and really being non anti-founder. So-

Guest 1:00:31 Yeah.

David Friedberg 1:00:31 ... I think it's a, I think it's a part of a business model. The one thing I'm gonna tell you about Parker, Parker was single-handedly incredibly responsible for keeping Zuck in the seat when he was president of Facebook because Parker wrote, you know, uh, the structure that really allowed Mark to keep control.

Guest 1:00:46 Super voting shares. Sax, to, to, to add on to your, your point, I think that there's been...

Chamath Palihapitiya 1:00:51 Uh, so- so it- there seems to be a bifurcation around the services model or not. But the fourth thing that seems to have happened, and you guys tell me if I'm wrong on this, but it- it plays into the Tiger Global story. When- when I was, um, uh, when I got that term sheet for my series B at Climate Corp, Marc Andreessen- I was trying to raise like $25 to $30 million, and Marc Andreessen was like, "We're gonna give you a term sheet for $40 million. More than you were asking for, uh, because we want you to use that extra capital to go faster, to go harder, to grab the market, 'cause we have this big belief-"

Jason Calacanis 1:01:20 Good pitch.

Chamath Palihapitiya 1:01:21 "... in businesses gr- grabbing the market." And that seems to have also become a bit of a mainstay, but not just a mainstay, but now almost like the- the- the- the kind of, uh, standard pitch that a lot of the later stage guys are taking, which is like, "Here's so much capital that it helps you make the market." And then the Softbank Vision Fund kind of took that to the extreme with $100 billion raise. And Tiger Global, I think last year, have publicly said they deployed about $15 billion into startups, where a startup may, in a natural cycle, kind of evolve to needing $70 million raise or $100 million raise, and they're like writing checks for 250 or 300 and saying, "This extra capital gives you the ability to move faster." And the reason is, the faster a business moves, the higher the multiple they get on their revenue. So the higher the growth rate, the higher the multiple. So if you can deploy capital faster, if we can find a business where we can pump money through you to get it out the door faster, your multiple goes up. And Tiger's model was, let's just get the multiples up. There's multiple expansion and growth, so we'll make money two ways when the company goes public in 18 to 24 months. Obviously, when the markets end up tanking and all those multiples compress, no growth rate is gonna solve that problem for you. Um, but re- having more capital than maybe you were thinking or asking for also seems to have become kind of a- a tactic. I don't know if that, if you view that as kind of this fourth evolution, but that certainly wasn't the case 20 years ago when VCs were being careful about, is it a $6 million round or an $8 million round? What's the right amount of capital? And nowadays, it's much more about take more than you need.

Jason Calacanis 1:02:47 I'll- I'll say there was a 3.5 in there, which is you saw a little bit of lack of governance or superpowers on the part of, like, some incompetent founders or bad founders, just, you know, whether it's WeWork, Theranos, whatever, too much control, not enough governance, things go off the rail. But, you know, based on this discussion, I really think this bifurcates when it's a first-time founder versus a second-time founder in what I see, because I have been doing board training for seed companies, where I will just have three founders sit in on each other's first board meetings. We do one board meeting each, and I train them how board meetings works and what I experienced with Sequoia on my board and other boards. And first-time founders, like the tactical stuff, how to run a board meeting, legal, HR, hiring, partnerships, go-to-market strategies. Man, it- it is all tactical all the time. And then when I've been on with second and third-time founders, you know, they really are like, "Here's all the materials. Here's what I'm thinking about. What do we think strategically?" So they go from the tactical level to the strategic and mission level awfully quick, and they actually seem to enjoy having those four meetings a year, whereas the first-time founders really need to have six to 10 a year in those, in that first, you know, call it year two of a company. That's my experience.

David Friedberg 1:03:57 I realized in this discussion that the market has really meaningfully changed, meaning when I was actively investing, even in the early 2000s, uh, or sorry, in the- in the, you know, 2011, '12, '13, there was a culture where if you underperformed, you would get replaced. And I think, David, what you just spoke about, which I guess is true, has really changed, which is if you're running a multi-multi-billion dollar fund where every check is $20 million, the upside is billions, but the downside is negative 20, there's just no point. And so, you know, Sequoia used to be known as a very, very, very tough, tough, tough place for CEOs that were underperforming.

Chamath Palihapitiya 1:04:36 Now they got a $9 billion fund.

David Friedberg 1:04:38 And now you have a $9 billion fund, and it-

Jason Calacanis 1:04:38 Yeah, maybe 20 years ago, yeah.

David Friedberg 1:04:40 ... it doesn't matter anymore. Not, no, not, even- even 10, less than 10 years ago, I think it was, I think it was known as a very tough, demanding place. I think Benchmark was known as a very tough, demanding place, because the money was much more finite.

Chamath Palihapitiya 1:04:51 Well, Bench- Benchmark's still- still that case. I mean they- they-

Jason Calacanis 1:04:54 High expectation culture.

Chamath Palihapitiya 1:04:55 ... they never, they never grew their fund size.

David Friedberg 1:04:57 No, Jason-

Chamath Palihapitiya 1:04:58 If-

David Friedberg 1:04:58 ... you're not, you're not hearing me. (laughs)

Jason Calacanis 1:04:59 I am. I- I think what's happening is, I... Listen, I had Sequoia on my board and I worked at Sequoia, so...

David Friedberg 1:05:04 (laughs)

Jason Calacanis 1:05:04 (laughs)

David Friedberg 1:05:04 There's a difference between high expectations, which I think all these folks have to have, and the willingness to replace the founder as CEO. And what I'm saying is, every VC claims this, but there were a handful of VCs that had the courage to do this. I mean, famously, Mike Moritz and John Doerr, you know, had it out with Larry, uh, at the, you know, right- right after this round, like either, "Go public, you know, get your business model in order, or give us our money back," famously at Google. So they're not, they're willing to draw a line in the sand. I think that that has fundamentally changed at all these organizations, because the fund sizes have gone up and the, and the mathematical reality of venture capital has changed.

Jason Calacanis 1:05:41 Something else you're missing, which is, you gotta remember, Moritz and Doerr were not operators, and now these companies are being run. Roelof is running Sequoia, and he's an operator, and he was there. So the changing of the guard, and Marc Andreessen and Ben Horowitz were operators, so the operator class behaves very differently than-

David Friedberg 1:05:58 I disagree with you. I think that it-

Jason Calacanis 1:06:00 Okay. We respectfully disagree.

David Friedberg 1:06:01 ... fund size dictates... No, hold on, I think that fund size dictates its behavior more than any singular other feature. When you're running a $9 billion fund, you just don't sweat that changing of the CEO, and David said it really well. You just say, "Okay, I'll cut our losses and move on." We don't lose any brand-

Jason Calacanis 1:06:16 I think it's more about the culture change in Silicon Valley of a bunch of MBA finance people who have never run a company now moving and running companies. But, you know, let's move on to the next one. Any, uh, closing thoughts on this one?

David Sacks 1:06:27 Well, just, I mean, J- Jason, you started to make this point, that if- if you're a founder and you wanna eventually run a great public company, when you IPO, guess what? You're gonna have governance. And what I've seen-

Jason Calacanis 1:06:39 Big time.

David Sacks 1:06:39 Big time, right? I mean, there's just Delaware law. There's just a lot of, like, expectations around being a public company. And so if you don't have a board, you know, and you're not constituting one until you go public, there's gonna be a massive amount of cleanup that you have to do. I mean, that's what I've seen.... and so, you know, you'll end up scrambling to create a board. I think that a board se- serves so many purposes early on of giving you advice, of giving you structure, uh, of providing support, help, services. You can still remain in control while getting those things, and I'm just, I'm just skeptical that, like, if you form a company with completely passive VCs who don't even serve on a board, like, you're gonna have to do a lot of cleanup later, I'd say, at a minimum.

Chamath Palihapitiya 1:07:23 Totally.

Jason Calacanis 1:07:24 I think that that's true too.

Chamath Palihapitiya 1:07:25 Totally agree.

Jason Calacanis 1:07:25 I'm not... Uh, by the way, I, I'm not saying I'm a- I advocate this, but I'm, I, I just think that the reality is that if these large late-stage crossover firms really step into the early stage, I think they could really build a big book of business. Um, I do think there are a lot of founders who would love to just be given the money and just to be left alone. I'm not saying that they think... They know that it's better for them, but on the margin, just to be able to be left alone. Now, what has changed maybe, though, is everybody's going to be very hands-off just because all the fund sizes have exploded. So, at that point then, you know, what is the difference between Sequoia and, and D1? Time will tell.

David Sacks 1:08:01 I just know that, like, wh- when I see a founder doing something that I think could risk the company going off the rails, I'll say so and then, you know, if it keeps happening and the situation gets worse, I'll say so again. I might mention it a third time, I might not. At a certain point, I'm just like, maybe after, like, two times, I'm just like, "They don't wanna listen to me, that's fine. It's their decision." Their company, their decision. They go off the rails, their problem, you know? We'll move onto the next one. I mean, that's the reality.

Jason Calacanis 1:08:28 Sometimes founders have to learn by doing it. Like, sometimes their intent... And you know what? They could be right and you could be wrong too. So, it's-

David Sacks 1:08:34 Right.

Jason Calacanis 1:08:34 ... it's hard as a, as a... It's hard as a board member, you know. I, that's why I'm very judicious in giving advice as a board member now, and I'm on a bunch of boards and do board training, because when Roelof was on my board, and he still is, you know, he would ask great questions and he, he would be very thoughtful about, "Hey, have you thought about this?" Or when I got advice from Doug or Michael Moritz directly, you know, Doug would say, "Hey, well, can you share the two-year plan with me?" And I'd say, "You know, we haven't built a plan." And he said, "Well, you know, Jason, you know, hope is not a plan." (laughs) "Let's make a plan and let's discuss, you know, the milestones along here." And it, it was amazing to have that level of thoughtfulness around-

David Sacks 1:09:07 Totally.

Jason Calacanis 1:09:07 ... your vision as a founder.

David Sacks 1:09:09 I love... I mean, as, as a founder, I love getting advice, and I think you gotta be really dumb not to seek it out. I mean, I... When I was a founder, I would... Even though I was sort of competing with Benioff, I would meet with him and I would, like, get amazing tidbits. Um, just recently, we did... It wasn't like an official board meeting because Roelof isn't on our board, but he's, uh, a big investor in one of my incubations, uh, Call In. Um, and we just did a meeting with him and, and, uh, and, uh-

Jason Calacanis 1:09:35 Gets it in every time.

Chamath Palihapitiya 1:09:36 Not to be confused-

David Sacks 1:09:37 And the, the co-founder-

Chamath Palihapitiya 1:09:37 ... with All In, but-

David Sacks 1:09:38 No. No, listen, we had-

Jason Calacanis 1:09:38 Yeah, not to be confused with All In trademark.

David Sacks 1:09:40 It was, it was me and Axel, who's the co-founder-

Jason Calacanis 1:09:43 Keep that out.

David Sacks 1:09:43 ... of Call In, and, um, and Roelof. And we had, like, an am- amazing meeting where we got, like, I'd say amazing advice from Roelof that, like, focused us. And it wasn't that I didn't know these things, but it's just like when you're in the weeds sometimes-

Jason Calacanis 1:09:57 Yes.

David Sacks 1:09:57 ... you don't necessarily crystallize on focus on the most important thing. And I came out of that meet- meeting