E7: California's collapse, how SPACs are opening the markets for growth stocks & more

Jason Calacanis 0:00 Hey, everybody. Welcome back to the All In Podcast. Besties have reunited. It's been a bestie summer. Chamath, how are you doing? You're back in America, yes?

Chamath Palihapitiya 0:09 I am back in America. Feels good.

Jason Calacanis 0:10 Back in America. That feels great. Uh, good summer, yes? Did you have any summer?

Chamath Palihapitiya 0:15 I had an incredible summer. I had, uh, seven weeks in Italy. It was really incredible.

Jason Calacanis 0:19 What is the vibe in Italy post-pandemic? Obviously, they had the, the roughest of any nation, I think, except for China and Wuhan, um, with-

Chamath Palihapitiya 0:28 Well-

Jason Calacanis 0:28 ... with COVID-19. How h- how is the psyche there?

Chamath Palihapitiya 0:30 That was incredible because they're... I mean, they're so resilient. They basically decided that they don't ever want to go through it again, so everybody wore a mask and, um, people socially distanced. There was lots of dinners outside. No restaurants were really seating people indoors. You'd walk into a, a store and you'd have to put some, you know, Purell on your hands and wear a mask and, um... There was like, you know, 40, 50 cases a day. And then I, I keep looking at the news when I was there. It was 60,000 a day here. I was... It, it was just really... It was sad. And then on top of that, to see the riots, the fires. I mean, there was uh... You know.

Jason Calacanis 1:08 It's been a disturbing summer here.

Chamath Palihapitiya 1:09 Oof. Oh my gosh.

Jason Calacanis 1:11 Uh, uh, how are you doing, David Sacks? You're back in San Francisco and, uh, you got to spend a little bit of time in an undisclosed location, as we, we know from the pod-... last couple episodes of the podcast. How is San Francisco right now? How has your bestie summer been?

David Sacks 1:25 Uh, it's been great. Um, yeah, I was... I guess I can now disclose that my-

Jason Calacanis 1:30 (laughs)

David Sacks 1:30 ... undisclosed location was, uh, was Mexico, specifically Cabo. And that was... It was a great place to be for a couple of months.

Jason Calacanis 1:38 Spoiler alert: Nobody cares. (laughs)

David Sacks 1:39 Yeah. Yeah, exactly. Um, but actually, um, it, it, it was great. It was a great place to be in the early stages of the pandemic because everyone was wearing masks, you know. They did take it really seriously. And, uh, there were very few cases, and it seemed like it was, uh, under control, at least in the area I was. And then, um, you know, we came back to San Francisco for, for school, for, for the kids' school, which, um, you know, I'm not sure we have to be here. But, um, but that's, that's, you know, where we came back for-

Jason Calacanis 2:06 And is the kid's school actually open? Are they going to school or they keep pushing it out two weeks like my kids are?

David Sacks 2:11 Yeah, it's... We don't... Uh, they're not going in person yet, but I think they keep trying to figure out when they're gonna be able to start doing that. So it's, it's all Zoom-based right now.

Jason Calacanis 2:20 Yeah, which means no learning, right? I mean, do you, do you think these kids are actually learning on Zoom or do you think it's just glorified babysitting?

David Sacks 2:26 A little bit. I mean, a little bit. I think it's, it's, it's difficult.

Jason Calacanis 2:30 Yeah. We, we gave up on it. And Friedberg, are you there?

David Friedberg 2:34 I'm here. Bay Area.

Jason Calacanis 2:35 Uh, h- how has your bestie summer been, uh, during this crazy time?

David Friedberg 2:40 I've been in the Bay Area. I've been, um, uh, crossing all, all seven layers of, uh, Dante's Inferno-

Jason Calacanis 2:48 (laughs)

David Friedberg 2:48 ... here in California, moving from the outer layer of COVID to the, uh, middle layer of California's proposed wealth tax, to the, uh, inner layers of, uh, extreme heat, smoke, and the absolute central layer of pain. Uh, more recently, my three-year-old daughter decided 34 nights ago to not sleep anymore. So, um, yeah, we've been living, living the life. It's been glorious. And, um, you know, I wear a mask now for COVID, and then I wear another mask on top of that mask for the smoke. So we're just living the California dream. What my-

Jason Calacanis 3:20 Oh, God.

David Friedberg 3:21 ... parents immigrated here for, you know? Paradise.

Jason Calacanis 3:24 Well, I guess that's a good place to start, and, um, just if anybody cares, I spent, uh-

Chamath Palihapitiya 3:29 (laughs)

David Friedberg 3:29 (laughs)

Jason Calacanis 3:29 ... 10 days in Malibu and had a great-

Chamath Palihapitiya 3:31 (laughs)

Jason Calacanis 3:31 Had a great time. I guess nobody cares. Yeah, I mean how my bestie summer was, but, um-

Chamath Palihapitiya 3:36 We forgot... Jason-

Jason Calacanis 3:37 We forgot. (laughs)

Chamath Palihapitiya 3:37 ... how was your bestie summer? JayCal, how was your bestie summer?

David Friedberg 3:39 Yeah. (laughs)

Chamath Palihapitiya 3:40 Yeah. (laughs)

Jason Calacanis 3:40 I... You know, I've been lonely and I tweeted I'm lonely-

Chamath Palihapitiya 3:43 (laughs)

Jason Calacanis 3:43 ... and I got about 50 phone calls (laughs) from people who are like, "I can't imagine JayCal being sad," but I actually had a talk with, uh, my wife and I said, "I... What are the symptoms of depression? Because I, I think I might have depression." And I went through and I was like, "I don't have depression. I'm just... I have great empathy for all the people suffering." And it... You know, I... Just being isolated. You guys know me very well, better than anybody. Like, I like to talk to people, and-

Chamath Palihapitiya 4:09 (laughs)

Jason Calacanis 4:09 ... it's been really difficult for me to... I'll be totally candid, to be isolated like this. And the podcast is, is great, and doing this podcast is great. But, man, I miss people. I just miss people, and-

Chamath Palihapitiya 4:18 What are the, what are the symptoms of your depression? Just-

Jason Calacanis 4:21 (laughs)

Chamath Palihapitiya 4:21 Before you were self-diagnosing. I'm just curious. (laughs)

David Friedberg 4:24 (laughs)

Jason Calacanis 4:24 Well, I was... I, I was feeling like, um, just sad about watching the riots and watch people shoot each other, and then watching, you know, the, the s-... the f-... the wildfires, watching people die unnecessarily, and then watching the madness for the election. It was just all becoming, like... I wouldn't say overwhelming, but it just made me very sad that, you know, so many people can't go back to work, and then the stock market's ripping. And it, it's a very... I, I don't know how you guys feel, but it feels very surreal, right? Because in our world, and I don't know how your portfolios and investments are doing, you know, a lot of the companies we've invested in as angel investors, um, are, are doing just wonderfully and we're investing more than ever, but then you, you turn on the television and it's like the doomscrolling is crazy. So I had to just stop doomscrolling. I think that was the key thing, Chamath, was just looking at Twitter, is the, the trending topics is so depressing, and, and just so overwhelming at times, that I took three days off this weekend and went camping, and I literally didn't pull up Twitter and I felt much better. So, I think it's really Twitter-related, like just opening up the trending topics. I don't know if you did that on your holiday in Italy, but it really is a quick way to get depressed.

Chamath Palihapitiya 5:34 The, the best thing is that I was using it in a different time zone, and so I was basically out of the flow. And it makes, uh, a huge difference, because then you're not in the emotional, uh, turmoil, um, of people's immediate reaction. And so you can just kind of, uh, move on.

Jason Calacanis 5:54 Yeah.

Chamath Palihapitiya 5:54 And then also, I just had a really fun summer, because I really tried to detach and not use my phone. I ha-... I had a f-... You know, I kept my meetings to a few hours a day, and then otherwise I was doing things.

Jason Calacanis 6:05 Yeah.

David Sacks 6:05 Y- y- you want to know... You want to m-... Want to know my phone call to JayCal?It's like-

Guest 6:10 Yeah.

David Sacks 6:10 ... "H- hey, J-Cal, I, I saw on Twitter that you're, you're sad and lonely." (laughs) It's like, "Yeah, yeah." It's like, "Are you suicidal?" It's like, "No." "Okay, goodbye."

Guest 6:19 (laughs)

Jason Calacanis 6:20 (laughs)

David Sacks 6:20 (laughs)

Guest 6:20 (laughs) I'm too much of a nar- I'm too much of a narcissist to ever consider that as a solution, but... (laughs)

Jason Calacanis 6:24 (laughs)

David Sacks 6:24 (laughs)

Guest 6:24 (laughs) But I do, I do want to thank you, David, uh, for having me down to Cabo. And we, we got to have some good times. We watched some good movies. Uh.

David Sacks 6:32 Yeah.

Guest 6:32 Gladiator Extended Cut was great. Uh, some other movies that we watched could get us canceled, so we won't admit that we watched History of the World or any other Mel Brooks movies.

David Sacks 6:40 Right.

Guest 6:40 But we had a good time. We played a couple of rounds of golf, and that was good

Guest 6:43 times.

David Sacks 6:43 Yeah.

Guest 6:43 Uh, but let's talk about California, 'cause I think, you know, we're, we're all residents currently of California. But let me just put it out there, how many people on the call are considering, uh, leaving California? Anybody? Is that going through anybody's mind right now? 'Cause it's going through mine.

David Sacks 7:00 No. Um, for, well, it's not for me, um, but, uh, I think that California is sort of emblematic of what could happen if you actually have, um, you know, the legislative bodies plus, you know, the, the top sort of political leader up and down on one ticket. I mean, you know, you, you basically have, like, massive rife incompetence. And it's been compounded. You never... I mean, you know, if people who are Democrats would have said, "Oh, the best thing that can happen for Democrats is if you have, you know, local cities plus an assembly, plus the state senate, plus the governor as a Democrat." Republicans would have said the same thing for Republicans. But as it turns out, uh, it basically creates the worst outcomes. And so instead what you need is a little diversity of ideas and a little push and pull. Um, but California is like a bunch of clowns in a clown car right now. It's a joke. But I'm not gonna move.

Guest 8:01 Yeah.

David Sacks 8:01 Right.

Guest 8:01 Now, a part of I- why I'm not gonna move is I, I, you know, my taxes, I've set up in such a way where California can't get access to most of my assets anyway, so, you know, they can pound sand.

David Sacks 8:13 (laughs)

Guest 8:13 Definitely something to say on the podcast.

David Sacks 8:16 (laughs)

Jason Calacanis 8:16 Yeah. David, how are you... Uh, uh, uh, Sachs, how are you feeling about California right now? Um, and just the craziness in San Francisco, the homelessness problem in San Francisco has become acute during this. It, it's, it's really getting crazy.

David Sacks 8:29 Well, it's a, it's a disaster.

Jason Calacanis 8:30 And then the wealth task on top of it. And...

David Sacks 8:32 It's, it's a disaster. It's a disaster. Um, I mean, I'm not, uh, I'm not leaving or anything, but it's certainly a topic of conversation that's come up a lot. And I do know people who have left. Um, I know a couple of people, you- you know, prominent people in the venture community who've, who've recently moved to Austin. And, uh, it's a horrible time for the, the city and state to be proposing all these new taxes as... Just take one example, because people are already realizing that because of COVID and, and this new sort of work from home and, uh, and Zoom, uh, business culture, where you can kind of work from anywhere, that people are realizing they don't need to be in San Francisco or in Silicon Valley anymore to be, you know, in the technology industry. And so at precisely the time that people were re-evaluating where they wanted to be, realizing that they could be anywhere, California is now, you know, proposing to massively increase the cost of being here. Um, so it's, it's horrible timing. And then, you know, you do have this, uh, sort of seemingly chronic, uh, issue in San Francisco, particularly with, with the sort of homeless problem, uh, just seems to keep getting worse. Um, and there's, there's sort of this, um, weird hostility to technology and tech workers, um, here that I think it somehow uses a scapegoat to prevent the city from dealing with its real problems.

Jason Calacanis 9:55 And what do you perceive those real problems to be in, in the city? Um, I mean, you, you used the term homeless. I think most people looking at the problem, as one person candidly told me, "You know, what we have is not..." And I, I won't say who said this, but it's a prominent person. They said this, you know, "Jason, the, the issue here is this isn't a homeless problem, this is a junkie problem." And they use specifically said, "I'm using that term because that's the term to refer to people who are addicted to opioids, methamphetamine, fentanyl, and that if you were to actually unpack what we're calling a homeless crisis, it's actually a crisis of drug addiction, uh, and specifically fentanyl." And I don't know if you guys saw that we're gonna hit something like 500 overdose deaths this year, we're like going to double last year, and it's all fentanyl.

David Sacks 10:34 Right.

Jason Calacanis 10:34 Um, which is a particularly, you know, deadly drug. So, I mean, what, how much do you think that is the problem, David?

David Sacks 10:41 Huge, huge. I mean, it's, it's... You're right that homelessness is not the, the, the cause of the issue. The homelessness is the consequence of long-term drug addiction and mental illness. I mean, this is the, it's the end state.

Jason Calacanis 10:55 Yeah.

David Sacks 10:55 And, uh, you're right, the city is, it's not really tackling the underlying issues. In fact, it's kind of aiding and abetting them. I mean, how many millions of needles does the city give away every year, and then it only collects a small fraction of them, with the remainder ending up on the streets?

Guest 11:11 Yeah.

David Sacks 11:11 Um, it's just, it's, it's bonkers. And I think part of the problem is that we keep saying that until we, uh, it, it... Is that we can't demand any, uh, improvement in the situation in terms of homeless people. You know, we have this like poop squad in, in San Francisco that's literally cleaning poop off the sidewalks because, um, homeless people are using our sidewalks as, as like a latrine, basically, as a bathroom. And it... And you, what you keep hearing is that, "Well, we can't do anything about that problem until we solve the homeless problem." And that, that's a, that, that... And certainly we should try to solve that problem, but it's a very long-term, you know, difficult and intractable problem. In the meantime, we can certainly do things like demand that homeless people not do that.

Jason Calacanis 11:59 Yeah, and the policing, uh, seemed to... There seems to be a distinct issue with policing right now. I, I watch the San Francisco Tenderloin Twitter account, David Freiberg, and they have arrested something like 260 meth, uh, meth and fentanyl dealers. But we have a, uh, DA, Chesa, I believe his name is, who doesn't believe in prosecuting any of those crimes, uh, related to drugs or petty crime. Freiberg, what has this city turned into for you as somebody who's been a long-term investor in the Bay Area?

David Friedberg 12:30 Um, well, I moved here after I graduated college in 2001. And I loved San Francisco. It was, it was a, a quieter city and a quieter city. I, I honestly, um, over the years have found, uh, the traffic and the congestion and the buildup of the city to be frustrating. I'm a little bit of a anomaly in this sense, 'cause I think a lot of people, you know, think that the city should continue to grow and progress and, and build housing and so on. Those are all, uh, you know, fine objectives, but I think the quality of life has degraded for some time in the city as, as infrastructure hasn't kept up with the, uh, the changing pace of, of, uh, companies growing here. Um, and as a result, we've kind of got this ballooning, inflating budget that's been poorly managed. You've got, um ... I forgot the statistic, but there's, um, some number of thousand people plus that are city government employees in San Francisco earning over $300,000 a year. Um, and so there, there's a, there's a chronic kind of bureaucratic issue, um, that is the cancer that has caused, uh, you know, a lot of the follow-on crises that I think we're, we're now experiencing acutely y- here in the city. Now, in terms of leaving, to your earlier question, I, you know ... Um, I, I was really, like, I've just been like everyone, you know, like the, I ca- kind of talk about the li- the Dante Inferno layers. It's also like for me growing up, it's like a seven-layer burrito. It's like one layer of shit after another.

Chamath Palihapitiya 13:51 (laughs)

David Friedberg 13:51 Um, start with the beans and in the middle you got the sour cream, and, um, you know, this city has just gotten, um, kind of at the state has gotten more and more difficult to live in, and I s- and I was certainly thinking and talking to my wife, like, "We gotta leave. Her family's here, so, so we're not gonna leave the state."

David Friedberg 14:05 But then I get a call last week that, uh, that I think 18 of us were on with Governor Newsom, and, um, you know, he, he made a couple of really interesting points that really did honestly reset my perspective. I, you know, I, I try to take a step back and, and think a little bit more broadly about the long-term opportunity in California. The way this state operates, uh, right now, i- i- it's the fifth-largest economy in the world. They ran a surplus. They refinanced their debt. They've done a great job kind of managing kind of the fiscal gap that, that's, that's being created by the COVID crisis. Um, and, you know, Governor Newsom made a point, like we have had the California exodus story that's percolated and cycled really for decades. Uh, he pointed out an article which I've not been able to find, but I've been looking for it from Time Magazine from 1959 that would have, like, declared this is the year everyone's gonna exit us out of the state. And we hear it every couple of years, there's some crisis that precipitates the mass exodus, and it hasn't happened because it is a great place to work. There's a diversified industrial base. It's not just tech. Tech is a lot of the growth, but there's a, a lot of industry here, largest ag producer, largest, um, uh, large military aerospace industry, and on and on and on. Uh, this is a, it's a great, um, diversified economy. It's a great diversified cultural base. It, it's by the oceans, it's by the mountains. It's an incredible place to live and work, and I don't think any of us want to give that up, and, uh, and the, the, the media has done a great job kind of, um, magnifying these, these small stories that aren't really a story. Uh, Governor Newsom made the case that this wealth tax proposal, you know, was one assembly member. It didn't even get into committee. It wasn't even really being considered, but it kind of created this, this press flourish and everyone got involved, and everyone I know kind of freaked out about it, and it became this kind of another catalyzing event, but it wasn't really real. So if we kind of broaden our perspective a little bit, both in terms of space and time, I, I think we get a little more kind of comfortable with, like, of all the places to live and all the places to work, this is the best. And you negotiate some taxes and move to Austin, but, I mean, then you got to go live in Austin. You know, whatever. Uh-

Chamath Palihapitiya 16:06 Well, it's, it's, it's the be- it's the best ... You're, you're right that it's the best in terms of climate, geography, natural beauty, uh, resources, and the industries that have developed here and have, you know, strong network effects. But it's not the best politically. I mean, it's among the worst politically, and it seems like the politicians are doing everything they can to mess it up. I mean, I almost wonder if there's, like, a resource curse issue, particularly with San Francisco where, you know, there, there's this thing in, in, um, I mean, this, this observable w- thing with governments that, um, that sometimes you get a resource curse where if there's, like, a lot of oil in the country or something, uh, you end up with, with a government that's not very good because people just spend all their time going to war to try and capture it. And I kind of wonder if, you know, San Francisco has been the beneficiary of being proximate to Silicon Valley, this enormous, like, wealth creation, prosperity, job creation, um, ecosystem, that it had nothing to do with creating and, uh- Yeah. I would say two things to build on what you're saying. Um, the first is I think that when the economies in an environment are really, really good, all the really, really smart people want to go into those economies, and that leaves generally dumber people to do things like politics. So, uh, and that's less true in places that have shittier economies. Uh-

David Friedberg 17:25 Yeah. Fascinating, yeah.

Chamath Palihapitiya 17:26 And, and I, and I actually think that that's, that's practically true. We may not want to think it and it may not, may sound a little harsh, but it's true. And, you know, the, the way that you reverse it is what Singapore does, which is you make the civil servants the highest paid people in the economy, right? And you treat them like knowledge workers and you say, "Wow, look, I'm gonna pay this person $250,000, $300,000 a year," you're shocked at the quality of the person you get. That's the, the first comment I want to make. The second one though is, is that unlike all these other times where I think people have been, um, you know, sort of, uh, prognosticating the doom and gloom of California, the, the, the thing that's different now is that because it is such a dominant political environment for the Democrats, it's much easier to judge if they actually know what they're doing and if they are going to do things that are aligned with the sort of, like, the moral code of the party that elected them. And so, like, let's just talk for example about the fact that, uh, we are not going to have police reform of any kind in California.... which is where you'd think would be the first state where people got their act together and said, "Okay, if we really believe that we need to reform police, um, we can do it in our own backyards." But that legislation is going to get blocked because, uh, Californians have decided that they care more about the alignment to police unions than they do to the right of law and to social justice for minorities and Blacks. That's crazy.

Jason Calacanis 18:57 We should be the most progressive is your point on this, Chamath. And the point is, to say it explicitly, is the politicians are in the pocket of the unions. And because they're in the pocket of the police unions and the education unions, we cannot make forward progress, even though we're supposed to be the most liberal of all locations. Correct? That's in summary?

Chamath Palihapitiya 19:15 Yeah, exactly. The, we, we, we actually, if we believe that we have, you know, up and down the ticket the ability to implement justice, right? At least justice in the vein of the Democratic Party and what that platform represents. Or, for example, all of the people that were out protesting, okay, uh, during Black Lives Matter, during that entire movement, I suspect the overwhelming majority are Democrats/Progressives. Or, you know, let's just say the majority.

Jason Calacanis 19:43 Yeah.

Chamath Palihapitiya 19:43 Or at a minimum a plurality. Okay? But then the idea that then you have a state, the most populous and the richest, filled up and down the ticket with people who are theoretically aligned with those political values, but then when push comes to shove and the legislation hits the floor, it basically gets mothballed, to me is inexcusable and disgusting.

Jason Calacanis 20:05 Yeah. I mean, look at the housing issue. We, we just had a bill that was an incredibly simple bill. I think it was 11... Yeah, SB-1120. I don't know if you followed this one, but I've been following it on the Twitter. And it was a very simple piece of legislation. Any single family home lot could have a duplex on it. So you could have two homes on a single lot. And they couldn't even pass that in a city where, you know, a firefighter, a teacher, et cetera, cannot live within 90 minutes of where they work. And they, they couldn't even pass that. Um,

Jason Calacanis 20:37 Jason-

David Sacks 20:37 Well, also there's, there's also AB5, right? I mean, Jason, as Uber's third or fourth investor-

Jason Calacanis 20:43 (laughs) Yeah.

David Sacks 20:43 I'm sure you have something to say about that, right?

Jason Calacanis 20:45 Well, they tell me third or fourth, but-

David Sacks 20:47 Which, which one is it exactly?

Jason Calacanis 20:48 (laughs) I think third or fourth.

David Sacks 20:49 (laughs)

Jason Calacanis 20:49 But, uh, (laughs) here we go to the VC brags controversy.

David Sacks 20:52 Can we just... Yeah. Could we just, could we just pin down exactly which one it is so you could just say you were the fourth investor or something like that?

Jason Calacanis 20:58 It's so much better to say third or fourth, and that was my schtick obviously.

David Sacks 21:02 (laughs)

Jason Calacanis 21:02 Uh, but, um, you know, AB- AB5's another one. It, look at all the careers in which you can be, David Sachs, a freelancer. And the high- the more money you make, the more you get to dictate your schedule. But if you are poor, uh, and if you are in an entry level job, the California government will not let you, even though 70% of drivers for these services want to be freelancers, and the services themselves-

David Sacks 21:25 Right.

Jason Calacanis 21:25 ... said they will put into a fund for healthcare. Like, they literally, Uber, you know, Dar is like, "Hey, we're gonna put money into this. Lyft is gonna put money into it." They still will not let people decide for themselves what shift they want.

David Sacks 21:37 That's right.

Jason Calacanis 21:37 It makes no sense. I mean, and, and, and you see-

David Friedberg 21:41 And it trickled into, like, journalists too. I mean, there's, they said now journalists-

Jason Calacanis 21:44 Freelancers can't.

David Friedberg 21:44 ... if you write, if you, if you write 30 articles a year for a single outlet, you're technically considered an employee even though you're writing the articles on your own time with your own research and you're getting paid for successful artic- for good articles that are accepted. And then there was this follow-up controversy about translators. It's like, well, translators, takes five minutes to translate an article, so why would 30 articles apply to a translator? And i- obviously when you have that degree of confusion and complexity, something's off, right?

Jason Calacanis 22:11 Yeah, and, and, it-

David Friedberg 22:12 I mean, it's just such a-

Jason Calacanis 22:12 ... it feels like virtue signaling, yeah.

David Friedberg 22:15 Yeah.

David Sacks 22:15 Well, I think, well, I mean, the, the reason why AB5 happened is it was at the behest of the Teamsters, right? They're trying to unionize the Uber and Lyft drivers and they can't do it unless they're employees. And so, you know, the, the author of the, the bill, L- Lorena Gonzalez, who's sort of in their back pocket, um, you know, that, that's why she put forward the bill. And then the absurdity of it was that, you know, they realized after introducing it that it would ensnare all these other occupations, like the writers and journalists and photographers and translators-

Jason Calacanis 22:47 Real estate brokers.

David Sacks 22:47 ... and r- yeah, even, like, people like manicurists-

Jason Calacanis 22:49 Stylists.

David Sacks 22:49 ... and so on.

Jason Calacanis 22:50 Yeah.

David Sacks 22:50 Right. And so what they've been doing is they've been now modifying the legislation to exclude all of these categories. And in the process, they're kind of laying bare what's really happening here, which is this is all about, um, either s- b- basically shutting down or forcing, uh, Uber and Lyft to comply with, um, with the will of the Teamsters.

Jason Calacanis 23:12 And it seems like the legislation blinked when Uber and Lyft said, "Well, we'll just shut the service down." So what were your thoughts on when that happened, Sachs? Do y- what do you think will happen? Who, who will win this AB5 shutd- showdown?

David Sacks 23:23 Well, the- the- what Uber and Lyft-

Jason Calacanis 23:24 In California.

David Sacks 23:24 They, they, yeah, they threatened to basically stop service and they got a stay, I think, from a judge, um.

Jason Calacanis 23:29 Yes.

David Sacks 23:30 So, so AB5 doesn't go into effect until November when... And there's a ballot initiative that they're sponsoring to get AB5 overturned. So I think, you know, I don't, I, I don't... It's hard to predict whether it's gonna win or not, but that to me is, like, a- a- whether- if, if AB5 were defeated by a ballot initiative in November, that'd be a really positive sign for the state of California.

David Friedberg 23:51 I'll say there was, um, on, on this call with Governor Newsom last week, he did point out that AB5 was more of kind of a law of inevitability as a result of that whole Dynamex, uh, state supreme court decision where the, uh, you know, the Supreme Court basically said, "Look, here's the criteria that defines an employee versus an independent contractor." Um, you know, they get to decide what work they do or what hours or whatever, and there's, like, some set of criteria. And they said, "Look, Uber drivers and all these other kind of technically independent contractors don't meet those criteria fully, therefore they are employees." And as a result, California Assembly tried to and had to effectively codify what it means to be an employee versus an independent contractor. And I'm not arguing for the case, I'm just saying what was conveyed by the governor last week on why this ended up coming to bear. Now, if they strike it down, there's gonna be some other law that's gonna pop up because this- of the state supreme, the Dynamex decision, and that's kind of, you know, something's gonna have to get written down. So Sachs, don't you think it ultimately ends up just being some sort of negotiated-... point between all of these industry leaders and, you know, the state to kind of figure out, okay, what's everyone gonna compromise on to, to get something written down that's law?

David Sacks 25:01 I mean, possibly. I mean, D- Dynamex is not, like, constitutional. It's not a constitutional decision, so the legislature can do whatever it wants here, you know? And so if you were going to respond to Dynamex, you don't have to kind of enshrine it. Um, so... And I guess there, there was certainly some question whether Dynamex would apply to Uber and Lyft in, in, in this way.

David Friedberg 25:26 The problem is-

David Sacks 25:26 You know, like they, they, they could have made, they could have made their arguments, um, in front of a court, right?

Chamath Palihapitiya 25:31 The pr- okay, look, the problem is now... And whatever applies to California applies to every state legislature. How are these people supposed to figure this out? I'm sorry, but like, you know, d- who, who are we entrusting here to go and then all of a sudden understand the nuances of Lyft and Uber and really understand the job that they do, versus the translators, versus the this person, versus the that person, versus the Dynamex decision? Again, I think 20 years ago, I kind of would have believed that politicians were generally some of the smartest people, um, you know, frankly, amongst us. Um, and it, it really did attract a certain level of intellectual person who cared about legislating. But, you know, now basically you just have like, you know, Jerry Falwell Juniors running around. I mean, these are, these are... They're all just running around until they get caught on Instagram and get fired. I mean, they're just, uh... They're not the smartest people that we're dealing with. And so what was, what was Gavin Newsom's answer to that? Is really what I would want to know.

David Friedberg 26:32 You know, the j- the Jerry Falwell Junior point didn't come up too much, but-

Chamath Palihapitiya 26:35 (laughs)

David Friedberg 26:35 ... we can, we can follow up, I'm sure.

Jason Calacanis 26:38 Uh, it does seem to me that if it, if they do become full-time, this would be a tragedy for the people who are trying to just do 10 to 20 to 30 hours of gig work. Like, what happens to those poor people who wanted to fill in between when they drop their kids off at school and pick them up, and just grab a couple of hours here or there as a second gig? Like, if this actually does pass and they're full time-

Chamath Palihapitiya 27:04 Honestly, guys, honestly, you guys are such... You're, you're, you're, you're honestly... Look,

Chamath Palihapitiya 27:11 it won't affect them. It'll affect the long-term profitability in the margins of the companies that have to hire them as full-time employees. And they'll have to like, you know, make a bunch of rules and blah, blah, blah. But it has huge operational implications, and it has really terrible OPEX implications for a company. But for the person that wants to work 10 hours, Jason, they'll still be able to work 10 hours. So I think, I think the point is that like-

Jason Calacanis 27:32 On a specific shift. Like, they're going to have to come in at a certain shift time.

Chamath Palihapitiya 27:36 I think the point is-

Jason Calacanis 27:37 And that sucks.

Chamath Palihapitiya 27:37 ... like, the entire public markets who all of a sudden think that a business looks one way has to figure out that it's really a cost plus business. And what it really means is you've... If you were comfortable with a 60% or 70% reduction in the market cap of some of these companies, you'd be okay with AB5. And I think that's where the tension is, where the people that made the law don't care about the market cap because they don't own the stock anyways.

Jason Calacanis 28:01 Yeah.

Chamath Palihapitiya 28:01 And the people that are reacting to AB5 are the ones that own the stock and are really thinking about the market cap.

David Sacks 28:07 Well, but the drivers, the drivers obviously own the stock and they're against it. I mean, it's not-

Chamath Palihapitiya 28:11 No, the drivers own eight shares, David. I mean, come on.

David Sacks 28:13 No, no, no. That's what I'm saying is they're not shareholders f- for the most part, um, but this really does reduce their flexibility to contract for their labor.

Chamath Palihapitiya 28:24 No, but I think what you're saying will happen, which is that they will create a, you know, AB5 Prime, which is a modification that's neither this nor what it was. Uh, but it seems that the tailwinds are pretty clear, which is that we're moving to a place where these companies have to get built in a very clever way. And even if they are super clever in capturing consumer demand, the unit economics are going to be pretty shitty. And I just think we have to own that. And, and it... Probably what it means more than anything else is it's not a real venture kind of business. And so you may be deficit financing it or building it in a very different way than we used to.

David Sacks 29:02 Right, but it doesn't have to be that way. What you're saying is, is, I think, that this law will have very adverse consequences for their business. Okay, I mean, I grant you that. Um, but it's, it's why is the, the state interfering in the relationship between Uber and its drivers in this way when everyone's happy with it?

Chamath Palihapitiya 29:19 No, but it's not. I think what actually is happening is the state is effectively capturing the excess return of Uber and Lyft. Meaning, I think if you just take a pure, unemotional economic view at this, it's like any other market. If there is a huge amount of margin available and there are not many competitors, what happens is somebody comes in to take the excess margin. So-

Jason Calacanis 29:40 And you think that's the government who wants to take it and the unions want to take it?

Chamath Palihapitiya 29:44 Absolutely.

Jason Calacanis 29:45 Yeah.

Chamath Palihapitiya 29:45 Absolutely, and, and, and-

Jason Calacanis 29:46 So the question is, should we, should we let them then dictate what hours people work?

Chamath Palihapitiya 29:50 The thought exercise that I would ask guys, if there was, in a market, 90 different competitors for transportation, would AB5 have been written, passed, adopted? And my answer to you would be that it would not have been.

Jason Calacanis 30:07 So Uber and Lyfts and DoorDashes success is what leads to people wanting to get a cut-

Chamath Palihapitiya 30:11 No, the-

Jason Calacanis 30:11 ... and get a slice.

Chamath Palihapitiya 30:12 The oligopolist model of success where not enough other companies are pulled through.

Jason Calacanis 30:17 Got it. Well, that gives us a good segue into-

Chamath Palihapitiya 30:19 By the way, sorry, last point on this.

Jason Calacanis 30:21 Yeah.

Chamath Palihapitiya 30:21 And the funny thing is that people who created the problem are the ones that hate it the most, which are the investors, because they pile in the incremental dollars into the winners trying to king make a winner through capital. And now what's happening is their rate of returns are basically getting taken away. And I think that in, in, in a weird way, that's also kind of fair.

David Sacks 30:42 Well, I, uh, uh, I would just disagree slightly in the sense that just because this has big distributional consequences, like basically who, who makes the, the surplus...

Chamath Palihapitiya 30:53 ... that doesn't mean it also doesn't have a huge deadweight loss associated with it. And whenever you prohibit people from engaging in the type of economic contracts or relationship that they want to engage in, you're reducing, um, surplus. And so I, I, and so I hear what you're saying, but ... And, and I think there is, I think this is all about regulatory capture, right? This is the Teamsters trying to capture a big piece of the value of Uber through their politicians at the legislature. So you're right about that. But I also think that we should care about it not just as Uber shareholders, but as consumers of the product, because it's gonna get worse.

Jason Calacanis 31:29 Well, and also, the product's gonna go away in certain jurisdictions. I mean, if Freebird wants to get a, an Uber north of the Golden Gate Bridge or in the East Bay somewhere, they're just not gonna have the economics-

David Friedberg 31:41 Or I gotta use one-

Jason Calacanis 31:41 ... in some communities-

David Friedberg 31:43 Yeah. (laughs)

Jason Calacanis 31:43 ... to, to even operate the service. So just like Uber Eats and Postmates stopped delivering to Treasure Island, a lot of the drivers were in their local communities at home with Uber turned on and when they, or DoorDash, and when they got a call, they would leave their house. And that was part of the magic of it, is you could just be sitting there, you know, Netflixing or hanging out with your kids and then a call comes in and then you leave your house. That's why you would have that, like, one-minute pause, if you ever saw it, you know, in an Uber ride where it's like, "Why, why isn't the car moving?" It's 'cause that person's at home. And they were capturing the, the one ride every hour in their local, you know, suburban area. But if you force them to be hourly, Uber's gonna say, "You know what? It's not worth having an eight-hour shift in, you know, whatever, uh, suburb." And, and the service will go away. And then guess who's gonna not have service-

David Friedberg 32:26 You're gonna-

Chamath Palihapitiya 32:27 I think people-

Jason Calacanis 32:27 ... for Freebird. No, go ahead.

David Friedberg 32:29 Sorry, I was saying it's like Sak's point, like, you know, from a consumer perspective, or Chamath's point, if you end up with 90 of these service providers and, um, I'm a consumer, I'm less likely to order a cab or order a, a, a ride share service, or I'm less likely to order food for delivery. I don't wanna deal with 50 fucking apps. I don't wanna have to, like, go find the one app that has the contract with the one restaurant. Then the natural market dynamics, the, the way that the market naturally evolves is I want simplicity as a consumer, I want efficiency. That's what makes me want to use it more. And when you take that away because you're interfering from a regulatory perspective in how that market operates, the product sucks for me. And-

Chamath Palihapitiya 33:08 Yeah, I th-

David Friedberg 33:08 ... the shareholders ultimately suffer.

Chamath Palihapitiya 33:10 I, I think to your point, the way that that would probably get solved is you have people that are higher order in the consumer behavior that own these relationships that enforce basically, uh, a user experience. For example, Facebook and Google and Apple essentially say, "We're abstracting all these services 'cause there's 90 of you." Google says, "I'm gonna put all of you guys on the map view." Um, you know, Yelp says the same thing. And essentially what opens ... what happens is there's some, like, open way where essentially, uh, a service provider can turn themselves on and broadcast into a network that says, "I'm available to do A for B." And it all gets fixed. Now, that's a future state.

Jason Calacanis 33:53 Which was the original idea of Uber, by the way, was to make a marketplace like that. And now Uber's talking about doing a franchise. Exactly what you're saying, Chamath, is let some franchisee take the East Bay and then provide their inventory-

Chamath Palihapitiya 34:04 I think franchising-

Jason Calacanis 34:04 ... to the Uber network.

Chamath Palihapitiya 34:05 I think franchising is a really, really smart business idea. And I think that particularly in transportation, um, and a lot of these services that have this natural dynamic to be local, um, where they're, there are an infinite sum of many local markets, I think it's, it's like a Burger King, it's like a McDonald's. And the, the company that moves to a franchising model and then figures it out, I think will be a huge winner. Um, and that will be an, that will be a very asset light, really operationally, uh, sophisticated, very well-run, highly profitable business, I think.

Jason Calacanis 34:43 Let's talk about the public markets.

Jason Calacanis 34:45 Um-

Chamath Palihapitiya 34:45 Wait, Jason, can we just talk about-

Jason Calacanis 34:46 Yeah.

Chamath Palihapitiya 34:46 ... the police brutality thing in California? I just want to get your guys' take.

David Friedberg 34:48 Sure, let's do it.

Chamath Palihapitiya 34:49 Like, it really bo- it really bothers me that California ... Like, I bet you there's gonna be states that are, um, diverse in its Democratic and Republican composition, and some Republican states, uh, that pass comprehensive police reform, and California will be one of the laggards.

Jason Calacanis 35:09 What do you think ... If you could wave a magic wand, Chamath, what are the one, two, and three things? Take a minute to think it through. And everybody on the call can. What are the one, two, and three things you would do to change policing in the United States? I have my own list, but I'm curious what you guys think. And I, and I actually put a tweet storm out about my number one thing. Um, but-

David Friedberg 35:28 Well, the, the-

Jason Calacanis 35:28 ... what do you ... What are the specific tactical things? Let's get tactical for a start.

Chamath Palihapitiya 35:31 The, I mean, th- the first one that I've always been a big fan of as I've studied it, at least from 10,000 feet, is ending qualified immunity. Um-

Jason Calacanis 35:38 Okay. Explain why and what that is.

Chamath Palihapitiya 35:40 You know, qualified immunity is essentially that there, there, there is this immunity that, uh, certain individuals have and that they, uh, that they're not subject to prosecution. And so, um, you know, they essentially have a carte blanche to behave in ways that can be good in some cases, very, very bad in other cases, gray in other cases, yet there's no adjudication of their behavior. And so you have to allow people with solid, dispassionate, detached judgment to be able to enter and say, "Hey, listen, you are way out of line here and there are consequences for it." And people coming in doing those jobs need to understand those consequences, versus you have a carte blanche to basically do whatever you want. And I think that that-

Jason Calacanis 36:23 Let's talk specifically about the mur ... Well, uh, the shooting involving ... I won't say murder right now, um, because I think all the facts are not in. But Jacob Blake was shot in the back. Um, he was obviously not listening to the police. The police then followed him to his car. There was a discussion of if there was a knife on the floorboard. Um, and point blank they shot him in the back multiple times. And I've heard both sides of this. You know, this person is not listening to the police, this person's going into the car, they're reaching potentially for a weapon and the cops had no choice. It seemed to me that, you know-... the training of a police officer might actually be that that was a legitimate shooting. Um, but that means maybe they have to rethink policing because you could've easily taken that person down with even the most modest of a chokehold or a tackle. Um, and when we see that, it feels like that's the Rorschach test right there of, like, how you look at shootings, um, eh, in police when... You saw that shooting, I take it, Chamath? Of Jamie Blake? And, and-

Chamath Palihapitiya 37:19 Uh, I, I saw it and I, I just, like, eh, I, I, I can't see these anymore. They, they send me off the rails for days. Uh, but yeah-

Jason Calacanis 37:27 Yeah.

Chamath Palihapitiya 37:27 ... I did see it. I did see it.

Jason Calacanis 37:28 Yeah. And so, I mean, and when you, when you look at something like that, that's clearly training has to change because I, I, I believe that based on police training a- and qualified immunity, this is going to be considered even though it's shocking to see it. I think it's going to be considered, um, you know, an allowed shooting or-

Chamath Palihapitiya 37:47 Yeah.

Jason Calacanis 37:47 ... and it's, there's not gonna... The person's not gonna be prosecuted because the person was clearly not listening and there was a knife on the floor and he was going for it. And, you know, it seems to me, like, we really need to change the actual training. The average is six months of training, so I think that's one of the top things that has to change is that these, these police officers have to be trained not to fire first but to, to, to use other tactics.

Chamath Palihapitiya 38:08 So, so for me, the first one is that. The second one for me, which I'm a really big fan of, is that there needs to be a new way to actually intercept 911 calls. And instead of, um, deploying police officers, we have a separate branch of people that we, you know, massively pay and train that are effectively, you know, social workers plus plus. And-

Jason Calacanis 38:30 Negotiators, yeah.

Chamath Palihapitiya 38:31 And, and they should be deployed in all kinds of situations, um, where I think that what, what people want is a de-escalation. And I think that sometimes the words de-escalation and police don't really sync up and in most, a lot of people's minds, they think of escalation. So-

Jason Calacanis 38:51 Yup.

Chamath Palihapitiya 38:51 ... people who are trained to de-escalate, I think, uh... And so for example, like, you know, all of the, uh, mental health checks, all of the mental health issues, um, could probably be dealt with folks like this.

Jason Calacanis 39:03 Domestic, domestic disturbances would probably go into that category.

Chamath Palihapitiya 39:05 The, the third one is I would very much rationalize, uh, drug use, um, just because I think the amount of low level offenses and arrests around drug use is antiquated for people's general views on drugs. Um, and I think that it needs to sort of correlate to how society views it. And then, um, you know, the, the, the last two that I would give you is that there is a concept of no-knock warrants. That's how Breonna Taylor was killed. Um-

Jason Calacanis 39:31 Insane. Insane.

Chamath Palihapitiya 39:32 ... it's, it's kind of really scary, the idea that we could all be sitting in our houses right now, as we are, and literally the police can just charge in. It's a little scary-

Jason Calacanis 39:40 A- I mean, totally unnecessarily. I mean, uh, th- she was being... For, for some, like, low level drug idea, they're gonna knock the doors in. And of course a person's gonna try to protect themselves. Uh, the, that's, they're going to have house... Sax, what, what are your thoughts on-

David Sacks 39:52 Well, they knocked, they knocked the doors in and they were plain clothes wearing police officers. So people are coming in-

Jason Calacanis 39:58 That's insane.

David Sacks 39:58 ... an- an- and they did it at, like, midnight when she was asleep, so yeah, people busting into her house at midnight, screaming, making noise, and not dressed as cops, that's, that's a crazy situation.

Jason Calacanis 40:08 What do we expect to happen, yeah.

Chamath Palihapitiya 40:09 Yeah. And then the last one I would give you is militarization of police. Um, a lot of these ideas, by the way, are Justin Amash's ideas. I, I've retweeted and I follow him, but he was the one that put me onto these things. Um, but, you know, like, you have all this excess military equipment in the army that gets basically passed through and now directly sold into police departments.

Jason Calacanis 40:27 Yes. Especially post-911. We, we basically militarized then.

Chamath Palihapitiya 40:30 So those are my ideas.

Jason Calacanis 40:30 Sax, do you ha- what are, what are your ideas around policing and, and how we should change it? You've heard Chamath's.

David Sacks 40:35 I, I, I don't have more detailed ideas than, than Chamath. I think he's given some good ones, um, for sure. I mean, I think we definitely need better training and I think better oversight over the use of force. Um, the, the, the body cam idea, Jason, I'm seeing you, you tweet about. I think that's pretty interesting too. Um, I think that you're right that-

Jason Calacanis 40:54 I'll just explain that for a minute.

David Sacks 40:55 Yeah.

Jason Calacanis 40:55 The, the body cam idea I had was I asked does anybody know and, you know, does Black Live Matter or another organization track which police departments... 'Cause we could get a list of every police department. That exists in some database somewhere. Do we actually know what percentage actually have body cams and what model they use and what percentage are working? Because one of the things that I think has happened this year is, you know, the live streaming and the, the live video and the number of smartphones out there has resulted in us being able to see what Black and Brown people have been telling us for decades which is, they're murdered by cops. And now we get to see it and, you know, when you see George Floyd get murdered, it's, it's fairly obvious that that's what happened. We don't have a video... Or they, they have the video of Breonna Taylor getting murdered, so that's from a cop webcam. I'm sorry, body cam. So I was thinking we should just start with that as a basic, which is every single cop car should have a 360 camera in every cop. It should be a federal mandate. And I don't exactly know how federal mandates works, Sax, but don't you think there should be a federal mandate for just cameras and car cameras?

David Sacks 41:56 I think, I think it's a good idea. I think the use of cameras is a good idea. Um, I mean, maybe not recording the police officers when they're sitting in their car. But every time there's like a...

Jason Calacanis 42:05 A call.

David Sacks 42:05 You know, like, yeah, they pull somebody over-

Jason Calacanis 42:07 Movement.

David Sacks 42:07 ... sort of, you know, like Fourth Amendment type search and seizure, seizure type situation, yeah, I think it would make sense to have that on video. Why not?

Chamath Palihapitiya 42:16 Yeah, and I mean, there was a-

David Sacks 42:16 You know what I mean? There was a-

Jason Calacanis 42:16 I think, you gotta think everything needs-

David Sacks 42:17 There was a-

Jason Calacanis 42:17 ... police will behave better. Go ahead, Freeburg.

Chamath Palihapitiya 42:20 Um, there was a case the other day, uh, a young, um, guy, I think he was 19 years old, was shot in DC named Deon Kay. I don't know if any of you guys watched the body cam footage. Um-

Jason Calacanis 42:32 No.

Chamath Palihapitiya 42:32 And so he was a 19-year-old Black man, he was shot, died. Um, but in the body cam footage you can see that he pulls out this gun and throws it. And when he pulls out the gun and flings his hand around, he's got the gun in his hand, that's when the cop shot him. And so there was about a hundred protesters that showed up, but it's largely become a non-story as a result of the facts associated with the body cam footage. But I just want to propose something else that's a little bit more radical. Maybe my libertarian ideals kind of cross with my socialist ideals in, in forming this, this concept. (laughs) But perhaps, um, you know-

Jason Calacanis 43:03 You're a socialist? (laughs)

Chamath Palihapitiya 43:05 No, yeah, I don't know if... I've never been accused of that but, um-

Jason Calacanis 43:08 No.

Chamath Palihapitiya 43:08 ... if we, uh-

David Friedberg 43:10 ... if we trace back, you know, the, uh, these systems are, are really chaotic. Everything you're talking about is layers and layers of bureaucracy and ideas, and shit we should do to manage the problem. But there is kind of one common, you know, butterfly effect, butterflies at the source of all of, uh, a lot of what we're talking about, which is guns. If there weren't any guns in the United States, I would not feel threatened as a police officer. I would never have any reason to feel threatened, and I would never have any reason to pull a gun. The reason I always make to pull a gun as a police officer is my life is threatened. And in the absence of firearms, I have no right to pull a gun. And that's the case in, like, the UK, for example, where there are, like, no police officer shootings of, of civilians, because they're never under threat of being killed by a gun. So, there's a simple answer, which is get rid of the guns, but, you know, a little too controversial and, um, obviously, many layers, uh, to, to that argument, um, especially from kind of both sides. But I, I would say, um, you know, much, much of what's going to go on now and in the future is just chaos theory. It's gonna be building more layers of complexity. It's more entropy. It's more kind of associated complexity to try and resolve the underlying problem of all of this, which is that we've got guns on the streets, we've got guns in people's hands. And therefore, you know, there's always this threat against every individual that their life might be taken by another.

David Sacks 44:29 Well, let, let me make a prediction right now that there's not going to be, uh, any new gun control legislation for a generation, um, because of the, the looting and rioting that's going on. Uh, gun sales are at an all-time high. I mean, every single gun store that you can possibly go to-

Jason Calacanis 44:43 Ammunition is sold out, right?

David Sacks 44:44 You can't, you can't get guns. You can't get ammo. And there are more first time gun buyers, uh, in the United States over the last several months than there's ever been. Um, I mean the, the ranks of the NRA must just be swelling right now. Um, and so, so this idea that you're gonna get gun reform, I don't think it's gonna happen. People aren't gonna support it. And, you know, I think ... y- uh, you know, you used the word, I think, idealistic. I mean, I, I, I think it's, like, a little bit naive, um, to assume that you're gonna be able to get rid of all the guns, uh, in the hands of bad actors. Um, there are a lot of people in this country who feel the need to have a gun to protect themselves. Um, and, uh, you know, the cops can't always get there quickly enough. Um, and a lot of people feel the need to, to have that for self-defense.

Jason Calacanis 45:29 I also think the minimum amount of training for a police officer should not be six months. I think they have to re... I mean, if we really want to have the society move forward and, you know, to solve our issue of race, which is, you know, like, the original sin of America, we're, we're gonna really need to start thinking about making, you know, police go back to school for 18 months, 12 months, and, and rethink how we, how we address this situation. Because it's, it's just tragically unfair that one group of people's children, uh, has to worry when they're driving in a car and, you know, other people on this call don't have to worry, right? And, you know, uh, that is just crazy. Let, let's, um, take a hard, uh, shift to the economy, and then we'll go into, um, the election.

Jason Calacanis 46:13 Wh- what do you think, Chamath? You've been talking a little bit about the economy and, and the stock market ripping again, and we seem to have hit a pause. Um, but we did have, like, a massive rip with Tesla and Amaz- uh, Tesla and Apple, I guess, doing a stock split, uh, and we hit all-time records. Why are we hitting all-time records, Chamath?

Chamath Palihapitiya 46:31 We have the most important thing that's happened, I think, in economics in the last 10 years. Um, the Federal Reserve, Jerome Powell gave this landmark speech, and he basically said, "We are going to keep rates at zero for the next half decade." Uh, basically. And quite honestly-

Jason Calacanis 46:47 Five years at zero. Yeah.

Chamath Palihapitiya 46:48 I mean, quite honestly, it's coul- it could be a decade. But they're gonna let inflation run before they basically match it with rates. There's no path to any near-term inflation of any kind whatsoever. Um, and so, Jason, my, my honest perspective is, you know, uh, you're basically going to get paid to be long equities, because, uh, your risk-free rate is zero and will soon be negative. And what are you supposed to do if you're an asset manager? What are you supposed to do if, you know, your... Take California, back to using California. Let's just say you're CalPERS, you're the California pension system and you have hundreds of billions of dollars. Then you need to generate 5 or 6% a year to make sure that your pension isn't insolvent and the government is paying you zero.

Jason Calacanis 47:39 Okay. So that eliminates that option. No treasuries for you.

Chamath Palihapitiya 47:42 You're long equities. Um, and when everybody is in that situation, you're overwhelmingly long equities, and, you know, the, you cannot fight the Fed. And so, you cannot wait them out. It's not like you can say, "Oh, don't worry, they're gonna change their mind." Uh, they will change their mind, but in reaction to market conditions that are out of your control. So, uh, all of these opportunities, in my opinion, are generally buying opportunities. And, uh, I'm generally bullish. I'm more bullish now than I was before.

Jason Calacanis 48:12 So, you can't put your money into treasuries. You can't put it into a savings account, obviously. You can't put it... You, you... It doesn't seem like real estate, uh, or commercial real estate is a great bet right now. (laughs) Uh, so your options are private companies or public companies. Correct, Chamath?

Chamath Palihapitiya 48:29 Um, I think it really is just public companies. And I don't, I don't even think it's private companies. So meaning where- wherever capital is constrained, um, the returns, um, again, these excess returns are getting eaten up. Um, and so the, the most unimpeded market for gains right now is the public markets. I mean, like, no offense, but I think that if you are a very good stock picker in the public markets, you're generating better returns than, uh, Sequoia, Benchmark, name your best venture fund. You know, I see all these people spouting off, uh, on Twitter about how good they are in the early stage of markets. It's all kind of small dollars and not that meaningful. Uh-

Jason Calacanis 49:05 You know I'm on the call, right, Chamath? (laughs)

Chamath Palihapitiya 49:09 (laughs)

Jason Calacanis 49:09 I mean, (laughs) I'm on, I'm on the call. I mean, you're literally talking to the guys spouting off, about hitting home runs.

Chamath Palihapitiya 49:14 Uh-

Jason Calacanis 49:14 Uh, Sacks, what are your thoughts on this? Like, p- private markets, obviously, is the op- where we operate, both Davids, Friedberg, and Sacks. Um, and you're seeing great deals, I think. Uh, I, I'm, I've invested in twice as many companies during the pandemic as I did before in the same six-month period. What are you seeing in the private markets and where do you think... What is your take on best CCs public markets, Sacks? And what are you-

David Sacks 49:33 I, you know, we, we saw some of the best deals that we've seen, uh, during COVID. And, um, you know, I'm, I'm very bullish about the state of entrepreneurship in the US. I mean, just the, the number of interesting companies doing interesting things. Um-... and the, the infrastructure that makes it so easy for founders to get started and create new companies, it's so much easier now to create a, to create a company than it was 10 years or 20 years ago. And of course, it's easy to point to all the ones that don't work or that don't seem like good ideas. But, uh, but there's so many more experiments that are happening, and I think it's gonna ... like, I'm, uh, you know, I'm very bullish about that part of the, the American economy.

Jason Calacanis 50:11 Uh, and Friedberg, what are your thoughts on private markets? And obviously, you're building private companies. You have unlimited capital to build them, I take it, um, given your track record?

David Friedberg 50:21 I spend most of my time accepting rejections from my very close investor friends-

Jason Calacanis 50:25 Mm-hmm.

David Friedberg 50:25 ... in my various projects, so, um, I wouldn't say that that ever becomes true, I'll tell you the truth. Uh, I'm still selling every day, dialing for dollars. But, um, no, there are certainly more investors, more capital, uh, more risk-taking, um, more kind of valuation extending than I think is, um, it was the case, uh, pre-COVID.

David Friedberg 50:46 I think Chamath's point is right though. Uh, there is, uh, uh, so, so much more liquidity available through access to retail and international market, um, participants, um, in, in, in a public setting than there is in a private setting. And it is because of this liquidity premium and the easy access to, to putting capital in. Um, it's just extraordinary how much ... As I've watched close friends in companies and companies I've invested in, I'm sure you guys have done the same, transition from private to public, uh, the valuation jump is extraordinary. Like, uh, on, on, on a metrics basis, right? So what, whatever the metric might be, you get public, there is this flurry of, of market participation as a result. It drives up, there's, there's a multiple expansion-

Jason Calacanis 51:26 Wait, wait, I thought-

Chamath Palihapitiya 51:27 You're beast f- ... Sorry, can I just say something? That's such a, such an important, smart thing that Friedberg said. So Jason, for example, like, all of us r- ha- ... We're all still in the private markets. And I'm not trying to take away from the private markets, but what David said is so important. If you used to look at a SaaS deal, you'd price that SaaS deal 10 times ARR, right?

David Friedberg 51:46 Right.

Chamath Palihapitiya 51:46 Then there's a little bit of inflation. You know, uh, the rates go up, um, the prices that people pay go up. Now all of a sudden we're paying 12 times, 15 times. Now it's 20 times if you're growing 100% rate of return. So what's happened? The market has become more efficient, and the excess return is getting eaten up. And so you're like, "Okay, well, that's still really good." And you wait four, five, six years, and you think you're gonna get paid. The crazy thing is, like, once that company transitions to the public markets, I mean, all of a sudden, if you actually turn the investor base over and you actually create a float so that public market guys can buy it, they'll pay 30 times.

David Sacks 52:23 That's right. Right.

Chamath Palihapitiya 52:23 35 times, 40 times. So there's-

David Sacks 52:25 A-

Chamath Palihapitiya 52:25 ... a massive multiple expansion. So companies should be going public sooner.

David Friedberg 52:30 If you think about this, like, if I'm trying to raise money for one of my companies, I'm gonna call on my 10, 20, 30 friends that I know that are investors in private markets and say, "Hey guys, do you wanna look at this company?" And maybe I'll get two or three interested parties, and maybe we'll kind of agree on what a fair valuation would be. If I could take that same company and instantly make it available to a million investors, and all I need to do, by the way, is raise $10 million. All I need is some small number of them to write a couple hundred dollar check, and I'm able to fill that a- that round out. The, the valuation as a result of the liquidity available in that market is so much higher, because there, everyone's gonna, there's gonna be much more participation and bidding. And so, you know, what I think Chamath has tapped into with the SPAC vehicle and, um, what Robinhood is realizing, and, and, and I don't think that we all talk about this enough, but there's this massive, massive, massive market of international investors, of small ... of international retail investors who are now rushing into US equities.

Jason Calacanis 53:25 Friedberg, didn't we see that in the ICO craze as well, where you, you ... I think if we took anything from the ICO craze, it was-

David Friedberg 53:33 And the dotcom boom.

Jason Calacanis 53:33 ... the global appetite for risk and the dotcom boom before that. And I think we have to give Best EC a lot of credit here for leading the SPAC movement. I mean, what's your take on everybody copying you down the SPAC path, Chamath, at this point? I had Desktop Metal as an early angel investment that just SPACed. Um, and then I've been-

Chamath Palihapitiya 53:49 I did the pipe job. I led, I co-led the pipe.

Jason Calacanis 53:50 Thank you.

Chamath Palihapitiya 53:51 Yeah.

Jason Calacanis 53:51 Yeah. And then they, they told me that. Thank you for the markup. Um, and I've been hearing ... Like, I b- I'm ge- if, if I'm getting inbound as an angel investor from ... I literally got a cold email from some high profile people, and they're like, "Hey, can you ... Do you have anything for us to SPAC?" I mean, I, this is like the third or fourth time people are coming down to my dipshit level of angel investing saying, "Can you introduce us to the com guys? Can you introduce them to Robinhood?" I'm like, "I think you can go direct to them." But, uh, what, what is your take on how many SPACs have been created since you s- like literally single-handedly restarted the SPAC movement, Chamath?

Chamath Palihapitiya 54:20 I think that-

Jason Calacanis 54:21 'Cause I don't think you've ever gone on record about this.

Chamath Palihapitiya 54:24 Uh, I'm really proud of what we did when we created this thing two years ago. I said I wanted basically create a new way of doing IPOs. I called it IPO 2.0. I reserved IPO A through Z on the NYSE. I, I hope, um, uh, to fulfill that. Um, and I think I will. Um, but taking a step back for a second, in the year 2000, there were 8,000 public companies in America on the, uh, American stock exchanges. And in the year 2020, there are 4,000. So we've shrunk in half the number of public companies, while at the same time, we've, you know, 10X'd the amount of comp- uh, the amount of capital and the number of people. So we don't have a large enough surface area in the public markets. That's why companies are better off going public, because they're going to have a much more receptive audience of people that are dying to own c- growth of any kind.

Jason Calacanis 55:18 What's the earliest and the median that people should go public, Chamath?

Chamath Palihapitiya 55:21 Well, so, so here's the thing. So like, if you're, like, one of 30 companies in a venture portfolio that's growing at 50 plus percent, you're one of 30. But when you go public, you're one of one. You know, when you're growing 50, 60%, you, you become very unique all of a sudden. You're a sort of a 1% kind of a company. You're an outlier, and so you get treated, you know, incredibly well. So that's the backdrop. I think a company should be going public around year five, year six.

Jason Calacanis 55:51 Um, what revenue footprint?

Chamath Palihapitiya 55:53 About 50 million.... you know?

Jason Calacanis 55:55 Wow.

Chamath Palihapitiya 55:55 At $50 million and when they're doubling, I think that they should be going up. And, you know, it allows them to build capital slowly. It allows them to basically contain control. It minimizes dilution. Um, I think it's a really powerful model. And then on t- on the number of SPACs, what I would say is, I think it's really good that the market is getting diversified. I think what's going to happen is like, s- the, the thing with SPACs is, it's, it's gonna be no different than in some ways the banks that preceded us, which is that there's going to be a distribution. You can go to Goldman Sachs, and that'll mean some, one thing. You can go to Merrill Lynch or BofA or UBS or Jefferies. It'll mean other things. You can go to Allen & Company. It'll mean yet another different set of things. And I'm sure there's gonna be a, a, a, you know, an, an organization that, uh, is all about cost. Some is gonna be all about relationships. Um, so I just think that's going to be the distribution. My personal perspective, it's probably us and maybe one or two other people who really dominate the space. And I'll, and I'll tell you the only reason why I say that. I think it's going to be really important when these people try to get these SPACs done, what they're going to realize is, it's really hard. And it's hard for a couple reasons. Number one is, you have to marry operational insight and public market sophistication. And the founder will get really smart about being able to figure out whether this person is just a financial arbitrager or if the person has enough operational experience to deeply understand the business. Why? You have to translate it to the public markets well. That's one huge thing that I think that people will, um, will start to, will start to hone in on. Um, anyways, there's a bunch of other things, but, um...

Jason Calacanis 57:33 Are you now competing with-

David Friedberg 57:35 But I want to, I want to hear from the SPACs. S- SPACs agree with the $50 million dollar mark?

Chamath Palihapitiya 57:37 SPACs agree, yeah.

Jason Calacanis 57:38 Yeah, sure.

David Sacks 57:39 Um, I'm, I'm cool with that. You know, I invest well before that, so I'd be, I'd be happy for...

David Friedberg 57:44 You probably have a bigger portfolio of $50 million investors, yeah.

David Sacks 57:47 Yeah. Yeah. It is, it's great for, for, for me and Jason. And I, you know, I, I think Chamath deserves a ton of credit on, on this whole SPAC thing. It is, I don't know if all the listeners, um, are aware of this, but the SPAC thing's become a huge wave. Um, there's a ton of people creating them. Kevin Hartz has a new one. Reid Hoffman has a new one. They're, you know, the East Coast hedge fund guys-

Jason Calacanis 58:06 Pincus is another one, yeah.

David Sacks 58:06 ... Pincus and, um, and then the East Coast hedge funds like Bill Ackman or whatever, they're all creating them. So Chamath has really started a wave here. And I think the appeal of a SPAC to a founder, I'll put in a plug of why I think it's a good idea for a founder to consider this, is because you essentially... What, what founders are used to is doing, you know, private rounds, right? You agree on a, on an amount raise and a valuation and it's a percent dilution, and you're done. That's it. And-

Jason Calacanis 58:33 Simple.

David Sacks 58:34 ... the, it's simple, right? And, and when you IPO and need to raise money, it's not like that. You have to then work with an investment bank. They'll put together a book. You do like a road show. You do this whole dog and pony thing. You don't know how much money you're going to get at the end of that process or what the valuation's gonna be. And then on top of that, we know statistically, Bill Gurley published all the stats, the investment banks are going to rip you off. So, you know, so the, what a SPAC does is, it prices like a late-stage private round. You just agree with a SPAC promoter on a valuation and an amount raised. And then on top of it, you get kind of a direct listing along with it. And all of a sudden you start trading as a public company. And so a SPAC is like a combination direct listing plus private round. And I think that's going to be appealing to a lot of founders as they start to discover this more and more.

Jason Calacanis 59:22 It's... SPACs, in a way, you're saying it's going to feel more like doing a series D than it does a road show.

David Sacks 59:27 Right. Yeah.

Jason Calacanis 59:27 And, you know, I think that comfort level for somebody like Robinhood or Calm or DataStax or Thumbtack or any of these companies that you and I are investors in...

David Sacks 59:36 (laughs) Every company in your portfolio, you just said. (laughs)

Jason Calacanis 59:39 I'm just... Listen, I got two IPOs in... I got two IPOs in two years.

David Sacks 59:42 Any, any company...

Jason Calacanis 59:42 This is, I think this is going to be the new thing for early stage investors, is we're not going to count unicorns anymore. We're going to count SPACs, we're going to count public listings, right? And, and, and I think that's probably better.

Chamath Palihapitiya 59:52 The other thing... By the way, the other, the other thing that I'll say to founders is, one is I think you need to, you need to think about, do these people have the combination of operational and financial acumen in the public markets, um, and investing experience in the public markets and the, uh, operational credibility to describe the business? And I think you can trade off one for the other if one is so deep. Meaning if Warren Buffett was doing a SPAC, you'd say, "Well, he has no operational experience, but he's so credible in the public markets, then, you know, that's all that matters." But you need to be super, super deep in one or have a really brilliant and thoughtful level of credibility in the publics. Meaning an early stage investor who isn't married to somebody who can basically say, "I know how hedge funds work. I've made them money and I'm going to make them more money." And mutual funds, et cetera, is troublesome. The second thing is, for founders, you have to really make sure you understand what is in it for the person that's doing the SPAC. I mean, in every deal, I write a minimum of $100 million personally. And that's a lot. And so I feel-

Jason Calacanis 1:00:58 That's skin in the game.

Chamath Palihapitiya 1:00:59 ... I feel very much at risk. And so I take a lot of time to make sure these things go well. And then the third is that for the SPAC person, what I'll tell them is they are going to find that there's a bunch of landmines. Um, and I'm not going to, you know, say it up front because I think it'll be fun for them to find out themselves along the way.

Jason Calacanis 1:01:17 (laughs)

Chamath Palihapitiya 1:01:17 Uh, but they're... But these things are hard. The first one took me two and a half years. Uh, they're hard.

Jason Calacanis 1:01:22 I remember, yeah.

Chamath Palihapitiya 1:01:22 They're hard.

Jason Calacanis 1:01:23 They're hard. Hey, let's, uh, swing to the election now, um, and, um, talk a little bit about the flip-flopping we're all doing, because we've gone from Trump's a lock to Trump's not a lock. Uh, you know, and we've had many different theories, but here we are. Uh, are we 60 days out now? How many days till the election? Is it exactly 60?

Chamath Palihapitiya 1:01:42 A little less.

Jason Calacanis 1:01:43 November 3rd.

Chamath Palihapitiya 1:01:43 September 29th?

Jason Calacanis 1:01:45 Yeah.

Chamath Palihapitiya 1:01:45 Yeah. So we're, we're, we're at the 55 or 56 days, marks the taping of this. And the first debate, I think is September 30th. So we're, we're, we're about three weeks away from Joe Biden and Trump going at it.

Jason Calacanis 1:01:56 ... what's everybody's handicapping now? The, the mark- the markets seem to be saying even money, or a slight edge to Joe Biden? Uh, what, what are our thoughts?

Chamath Palihapitiya 1:02:07 I, uh, I think that, uh, I think Biden's looked the crispest he's looked.

Jason Calacanis 1:02:15 Okay.

Chamath Palihapitiya 1:02:15 And so, um...

Jason Calacanis 1:02:16 (laughs) Is that actually encouraging or not encouraging?

Chamath Palihapitiya 1:02:19 I th- I think it really is, because I think he's a really good... Like I said, he doesn't have to, uh, be better than Donald Trump. He just has to not be Donald Trump, for a lot of people. And so, you know, he becomes a very good do-no-harm alternative. Because, you know, to support Donald Trump, you have to have a view. To support Joe Biden, you can have no view.

Jason Calacanis 1:02:41 Right.

Chamath Palihapitiya 1:02:41 Um, and I think that, that... In general, that's a d- that's a demand-maximizing thing to do. So, I think he's relatively well-positioned. It's the crispest I've ever seen him on television. There's less stuttering. There's less... Not stuttering, but, like, less, like, mental gaps.

Jason Calacanis 1:02:57 Gaffes, yeah.

Chamath Palihapitiya 1:02:57 You know, the, the...

Jason Calacanis 1:02:59 What do you think of the VP choice? Kamala?

Chamath Palihapitiya 1:03:02 I think safe.

David Sacks 1:03:03 So, I, I, I agree with Chamath that that was kind of the, the, the take or, or theory on Biden, like, a month or two ago is that he could just run as a protest vote against Trump. Um, and, um... And, and that's why the basement strategy appeared to make sense is that, he would say nothing, do nothing, go nowhere...

Jason Calacanis 1:03:21 (laughs)

David Sacks 1:03:21 ... and just, and just try to run-

Jason Calacanis 1:03:22 Yeah. (laughs)

David Sacks 1:03:22 ... as a protest vote against Trump. And I think that was working a couple of months ago when, you know, A, COVID seemed a lot worse. Uh, B, the economy seemed a lot worse. We're now down to about 8% unemployment. We were at 13 or 14%. Um, and, uh, C, you know, Trump had seemed to kind of mishandle the, the reaction to, to Floyd. He seemed to be inciting it. But now we have this, this issue of the, the looting and violence in predominantly Democrat-run cities. And I think, you know, Trump has sort of found his sales pitch now, um, in opposing, um, the, the... basically, the, the, the radical left, um, and these, these mobs and, and protests that seem to be, uh, you know, causing, uh, tremendous, uh, unrest and, uh, looting and violence in our cities. And I think it's... I think it's, uh... In combination with the improving conditions of the economy and COVID, I think it's a winning pitch for him, uh, unless Biden finds a more compelling way of responding, which he has not to date. Um, I think, you know... Somebody like Bill Clinton would know exactly how to respond. I think he would, you know, in the-

Jason Calacanis 1:04:32 Just better instincts. Yeah.

David Sacks 1:04:33 Well, I think, you know, he would pull a Sister Souljah, to use a term from the, the, you know, political dictionary, where, you know... Maybe he would take this crazy new book, In Defense of Looting, and figure out, you know... and give a speech denouncing that. I mean, he would find somebody to his left who represents, you know, a fringe of the, the left that he presumably doesn't support, and find a way to distance himself or denounce them. And he hasn't-

Jason Calacanis 1:04:55 Like Antifa, maybe.

David Sacks 1:04:57 Like Antifa, like, you know, the, the... anyone, you know, the- any of the left-wing groups in Portland.

Jason Calacanis 1:05:02 Left-wing groups in Portland.

David Sacks 1:05:02 Looting in Portland. I think there's a lot of targets, certainly.

Jason Calacanis 1:05:04 Nobody wants to see... Nobody wants to support that, and so Biden comes out and says, "Hey, we don't support that," and it gives him that law-and-order vote.

David Sacks 1:05:11 But, and he hasn't-

Jason Calacanis 1:05:12 And he hasn't done it.

David Sacks 1:05:12 ... he hasn't really done that. I mean, so two of my favorite political pundits right now are Andrew Sullivan and Matt, uh, Taibbi, who are, you know, very... Uh, they're, they're strong supporters of Biden. They're very anti-Trump. But they think he's failing on sort of this, these issues, uh, because he's not f- he's not figuring out the right way to, uh, to denounce what's happening.

Jason Calacanis 1:05:34 I, I think a lot of this has to do with when kids go back to school and the death rate, uh, of COVID. And as I was tweeting, and I got an- I got a lot of people angry at me, um, about tweeting this. But I said, "I think this is a setup for Trump to go into the first debate with, you know, well under, you know, 6, 700 d- deaths a day. And then, the next debate in October with, you know, call it f- three or 400 deaths a day." And basically declared that he did solve COVID, um, because we've been trending down for five weeks now, and he started wearing a mask fi- six weeks ago, seven weeks ago. July 11th was the first day he wore a mask. A cynic would say he almost timed mask-wearing, which is obviously what we talked about in the first episode or two of all-in podcast, was our discussion about why is m- wearing a mask so difficult for him. And it seems like he slow-played it. He sl- he... you know, he set his... he's, he slow-played. He hit a set on the turn, and here he is. Like, he wore the mask on July 11th. He wore it four months late. But guess what? As Chamath was saying, everybody wears a mask, and every... and, and these things go down in Italy. We're, we're gonna come into the first debate. What if it's 400 deaths a day? And then the second debate, it's 200 deaths a day, and then our kids are back in school in October, which it seems to be the case, right? Y- all the schools are saying, you know, be ready for October to open. And what if he actually does have a vaccine that has somewhat a credibility or any of these high-speed testing machines come on? I mean, this could be a setup of all setups for him to just, you know, drop the microphone. "Hey, look, the economy is at an all-time high and COVID deaths are at an all-time low."

David Sacks 1:07:04 Well, I mean, yeah, I think-

Jason Calacanis 1:07:05 And, and democratic cities-

David Sacks 1:07:06 That, to m-

Jason Calacanis 1:07:06 ... are on fire.

David Sacks 1:07:07 ... that to me seems like the, the trajectory. I mean, um, we spent a long time on this pod talking about what a disaster, uh, San Francisco and California are. Those are one-party states and cities. And I think, you know, we're not just electing a person as president. We're also electing a party and a movement and a governing philosophy. And however much, uh, Trump is, um, you know, disliked by a lot of people, I think a lot of people are looking at, you know... I, I think they, they, they may like Joe Biden personally and, and think that he personally is safe, but they don't like the movement and the party and the governing philosophy that is now associated with Biden.

Jason Calacanis 1:07:45 So if you had to put your entire net worth on it, Chamath, Biden, or Trump?

Chamath Palihapitiya 1:07:51 Uh, Biden. I think Biden's good.

Jason Calacanis 1:07:54 Okay. And Sax, entire net worth?

David Sacks 1:07:56 I, I, I would, uh... I predict Trump.... at this point.

Jason Calacanis 1:08:00 Wait, wait. You predict, but you, but you wouldn't put your entire net worth on it. If you had to, I could see your hesitation. You want Trump, Trump to win.

David Sacks 1:08:06 Oh, sure. It's-

Jason Calacanis 1:08:06 But you would, you wouldn't put, you wouldn't put your entire net worth on him?

David Sacks 1:08:09 Oh yeah, of course not.

Jason Calacanis 1:08:11 You would put it on Biden.

David Sacks 1:08:12 This is, this is, uh, this is about a 55% sort of thing.

Jason Calacanis 1:08:16 So Biden has a 55% chance of winning. So even though you're voting for Trump, you are not going, you would not put your fortune on Biden, correct?

David Sacks 1:08:24 I, uh, you, you asked me who I predict. Right now, I'm predicting Trump. You'll remember, on the last pod, I predicted Biden. So it moves depending on what I see happening.

Jason Calacanis 1:08:32 Yeah. Yeah, and I, I'm gonna go with Biden-

David Sacks 1:08:33 (smacks lips)

Jason Calacanis 1:08:33 ... but, but if Biden knows-

Chamath Palihapitiya 1:08:35 Yeah, by the way, Jason. Jason, I think, I think a better way to get a better answer is not to force somebody to put their entire net worth on the line. It's just say-

Jason Calacanis 1:08:41 Okay.

Chamath Palihapitiya 1:08:41 ... "Who do you think is gonna win?"

Jason Calacanis 1:08:42 Who do you think is gonna win, Sax?

David Sacks 1:08:45 How many times (laughs) do I have to answer this question?

Jason Calacanis 1:08:47 You think Trump's gonna win. You actually do.

David Sacks 1:08:49 Yes, yes. I do, actually.

Jason Calacanis 1:08:51 Really?

David Sacks 1:08:52 Yeah.

Jason Calacanis 1:08:52 That's fascinating, huh? And is Freeburg still there or not?

David Sacks 1:08:54 And it's re- remember, remember, it's the first time I've said this.

Chamath Palihapitiya 1:08:56 Yeah, he's-

David Friedberg 1:08:56 I'm here. I think it's, I think it's the same as it was last time for me and has been most of this process, is it's a coin flip, and it still is a coin flip. And, uh, there's a lot of noise between here and 60 days from here.

Jason Calacanis 1:09:09 All right. Well, then if we, if we do think it's a coin flip, Freeburg, what happens if Trump is elected again? Some people think this is all institutions are broken forever, America's broken forever, hyperbolic, or-

David Friedberg 1:09:19 Well, that, that, that's the, that's the perception on both sides, right? So the perception and the motivation on both sides is democracy is crumbling, and the resultant action is to elect the, the, the person you think will restore democracy. The reality is both candidates, to some degree, might move us a little bit further away from democracy. And, um, some might argue that Trump makes us feel a little bit more, uh, like a autocratic (laughs) dictatorial regime, and some might say that Biden makes us feel a little bit more like an AOC Socialist regime. It's not all the way as if we had Bernie in the seat. But, um, you know, the, the, the reaction, uh, isn't necessarily, "Let's go back to the middle. Let's become a centrist government. Let's, uh, let's have good political debate, and a, and a good..." By the way, the one show I've been watching a lot of lately, just to, nostalgia to, to Chamath's tweet earlier today and make me feel better about life, is West Wing, where (laughs) you know, Jed Bartlet is the President, and he wants a great national debate. And we all wanna have this intellectual exercise of coming to the truth and coming to the best decision for the nation. And I don't think anyone feels like that's the case today, nor will that be the case tomorrow with either of these guys in the seat. And I think the, the point then becomes, "Well, who's gonna better align with my values?" And, you know, um, it, it is really a crumbling democracy kind of motivation, I would guess, if you were to survey people as to how they're making their choice. Um...

Jason Calacanis 1:10:35 If Trump is elected, Freeburg, do you feel it is an acute, you know, existential crisis for America as a democracy? You personally?

David Friedberg 1:10:42 Look, I don't, I don't, I don't think democracies end, um, with a bang. I think they end with a whimper, and I think that's been the case historically. And, you know, no democracy has, uh, has lasted. Our, our, our democracy in the US has, has lasted longer, uh, than many. Um, but democracies... L- I'll just tell you my, my point of view on this. De- democracies ultimately enable, uh, freedom of operation and free markets that, um, that result in, in greater progress than any other governing system. The problem with progress is that progress is asymmetric. You have some people who progress at