E75: Fast shuts down, board culpability, Elon buys 9% of Twitter, deplatforming's evolution & more

Jason Calacanis 0:00 Hey, everybody. Welcome to another episode of the All-In Podcast, your favorite podcast. And, uh, a lot of, a lot of topics on the, uh, docket including... Well, we'll get to that in a minute. Uh, tons of stuff to talk about, not just politics, but a lot of tech news.

Chamath Palihapitiya 0:14 You do sound really hungover today, J-Cal. You sound like an old man that's been smoking cigarettes for three weeks.

Jason Calacanis 0:19 (laughs)

David Sacks 0:20 You sound wrecked.

Chamath Palihapitiya 0:21 Th- how big was your night last night? Admit it.

David Sacks 0:23 (laughs)

Jason Calacanis 0:23 I didn't go that big. On a scale of one to Charlie Sheen-

David Sacks 0:25 (laughs)

Jason Calacanis 0:25 ... it was like a six.

Chamath Palihapitiya 0:27 There's like a Martin Sheen in his 30s.

David Sacks 0:28 What does that mean, one to Charlie Sheen?

Jason Calacanis 0:30 Yeah, I had a couple of beverages.

David Sacks 0:31 I'm sorry, on a scale of one to Charlie Sheen, I don't think I've ever been past the one in my life, so what is a six?

Jason Calacanis 0:36 A six is like, you know, Paris Hilton, you know, in her heyday or like Lindsay Lohan in Hollywood in the '90s. It's like, you know, like a good time, but not crazy.

Chamath Palihapitiya 0:47 Mm-hmm.

David Sacks 0:48 Didn't they have to go to rehab?

Jason Calacanis 0:49 Yeah. (laughs) They had to go to-

David Sacks 0:50 Exactly. (laughs)

Chamath Palihapitiya 0:50 They did.

Jason Calacanis 0:50 I'm super high functioning.

David Sacks 0:52 (laughs)

Jason Calacanis 0:52 Let me tell you something. Charlie Sheen cannot be six.

David Sacks 0:54 He's like, "Oh, it's just like Lindsay Lohan." Wait. Lindsay Lohan, the one who went to rehab like five times?

Jason Calacanis 0:58 Three times, yeah.

David Sacks 0:58 Like, what are you talking about?

Chamath Palihapitiya 0:59 Yeah.

David Sacks 0:59 That's a six on his scale.

Chamath Palihapitiya 1:01 (laughs)

Jason Calacanis 1:01 (laughs) That to me is a six.

David Sacks 1:03 (laughs) I don't wanna know what seven is.

David Friedberg 1:06 I'm going all in. Let your winners ride. Rain Man, David Sachs. I'm going all in. And I said we open sourced it to the fans and they've just gone crazy with it.

Jason Calacanis 1:18 Love you guys.

David Friedberg 1:19 Queen of Quinoa. I'm going all in.

Jason Calacanis 1:22 Joining us, of course, the Queen of Quinoa is here, the thriller from Amila Valley.

David Sacks 1:27 (laughs)

Jason Calacanis 1:28 He puts the I in anxiety, got his degree from his Google pedigree, the Sultan of Science, David Friedberg with us again.

David Friedberg 1:34 All right. Next up, of course, the czar of ARR, he perfected the flywheel with his boy Peter Thiel, LPs don't be nervous 'cause he's only investing in software as a service, the world's biggest asshole, the Rain Man himself, David Sachs.

David Sacks 1:50 Wait. Did you call me a Sasshole?

Jason Calacanis 1:51 A Sasshole.

David Sacks 1:53 (laughs) That might stick. I don't know. I hope not.

Chamath Palihapitiya 1:54 I feel like this might be heading towards kinda like a high school talent show kind of-

David Sacks 1:57 (laughs)

Chamath Palihapitiya 1:57 ... uh, episode, but yeah, go ahead.

Jason Calacanis 2:00 And finally, the king of Spacs himself, the guru of growth, he puts the dick in dictator-

David Sacks 2:05 (laughs)

Jason Calacanis 2:05 ... he's gonna upset her with his sweater, Chamath Palihapitiya. All right, boys.

Chamath Palihapitiya 2:10 (laughs)

Jason Calacanis 2:11 I don't... I can't... (laughs) I'm just letting the audience know, I can't keep this up every week.

David Sacks 2:14 Yes, yes. It's become a, a very anticipated new feature of the show.

Jason Calacanis 2:19 It is. (laughs) It's a new feature. But you know, I forgot we had like wet our... wet your beak and, you know, all this stuff and i- i- all these like-

David Friedberg 2:27 It adds and flows. We come up with new things.

Jason Calacanis 2:28 It adds and flows. We come up with new things.

Chamath Palihapitiya 2:30 Yeah.

Jason Calacanis 2:30 Um, all right, listen, uh, just a quick programming update, All-In Summit sold out, um, basically, and it's gonna be a great show. We got about a dozen speakers lined up, uh, all kinds of great folks, and, uh, three great parties I wanna highlight. Monday, uh, Sunday night will be the poker tournament. That's gonna be our Goodfellas, Godfather kinda theme, dress to impress the family. Night number two, Monday night, is going to be our Havana white party. Wear your best linens and whites. And then closing night party on Tuesday night is going to be our Miami Vice, big '80s party, neon and T-shirts under suits. It's gonna be a hell of a party.

Chamath Palihapitiya 3:06 Jason, 2,999,700 people don't give a shit about what you're talking about right now.

David Sacks 3:13 (laughs)

Chamath Palihapitiya 3:13 There's like-

Jason Calacanis 3:14 Well, I just wanna let people know we're trying to-

Chamath Palihapitiya 3:15 ... maybe 300 people that are gonna go to this party that you're throwing and-

Jason Calacanis 3:17 No. It's gonna be-

Chamath Palihapitiya 3:17 ... they're the only ones that care.

Jason Calacanis 3:18 It's 700 tickets. I think there's gonna be 700 tickets issued, and there'll be probably 400 people at the party, so they're gonna be pretty good parties.

Chamath Palihapitiya 3:25 Uh-huh. We're in the party business here at the All-In Pod.

Jason Calacanis 3:28 Well, I mean, uh, the world needs some good parties, in my opinion. It's gonna be three back-to-back great parties.

Chamath Palihapitiya 3:33 (laughs)

Jason Calacanis 3:34 And the theme of the conference is, the problem I most wanna solve in the world or the problem I most wanna see solved in the world. So we're asking every speaker to think about that, and we're gonna kinda talk about the world's biggest problems and then who actually wants to solve them.

Chamath Palihapitiya 3:47 The world needs more parties.

Jason Calacanis 3:49 Well, that, that's what I'm doing. (laughs) That's my... That's gonna be my 10-minute talk, my TED Talk.

Chamath Palihapitiya 3:53 I've been, I've been watching the WeWork show. Have you guys been watching it on, uh-

Jason Calacanis 3:56 Oh, it's fabulous.

Chamath Palihapitiya 3:57 ... Apple TV+. Yeah.

Jason Calacanis 3:58 It's great.

Chamath Palihapitiya 3:58 It's like elevating the world's con- Jared Leto is so freaking good in that, as that character, by the way.

Jason Calacanis 4:03 Nails it.

Chamath Palihapitiya 4:03 Yeah, it's incredible.

Jason Calacanis 4:04 He gotta get an Emmy.

Chamath Palihapitiya 4:05 But the whole like elevating the world's consciousness as the-

Jason Calacanis 4:07 It's great.

Chamath Palihapitiya 4:07 ... mission and then just throw parties is the way to do it.

Jason Calacanis 4:09 (laughs)

David Friedberg 4:09 (laughs)

Chamath Palihapitiya 4:09 I feel like you're, you really got that vibe, like yeah.

Jason Calacanis 4:12 I- it's aspirational for me. I-

Chamath Palihapitiya 4:13 You can elevate the world's consciousness with your, with your summits.

Jason Calacanis 4:17 I, I told Bill Ger-

David Sacks 4:18 While pocketing millions of dollars.

Chamath Palihapitiya 4:19 (laughs)

Jason Calacanis 4:19 (laughs) I- it's not gonna make a profit.

David Sacks 4:21 (laughs)

Chamath Palihapitiya 4:21 (laughs)

Jason Calacanis 4:21 Whatever profit it makes is gonna go to Chamath's Star Chamber 50-person conference he's doing with the All-In brand, so every- everybody gets to leverage the All-In brand.

Chamath Palihapitiya 4:29 The All-In brand. Yeah.

Jason Calacanis 4:30 You... First, you did it, Sachs, with your call-in. Now I'm doing it with the summit. Chamath's gonna do it with his think tank and-

Chamath Palihapitiya 4:36 I'm not gonna do it.

Jason Calacanis 4:37 Coming soon from Friedberg, the All-In unique special, lose weight like your besties. (laughs)

Chamath Palihapitiya 4:43 (laughs)

David Friedberg 4:43 He's gonna... The... It's, it's, it's the All-In brand that allows you to lose weight in the following way. He brings his best vegan chef to you.

Chamath Palihapitiya 4:50 Oh, yeah.

Jason Calacanis 4:51 Tempeh.

David Friedberg 4:51 He spins up some fucking tempeh garbage.

Chamath Palihapitiya 4:53 Tempeh and, and vegan shakes. Your favorite, Chamath.

David Friedberg 4:56 It's double fucking yuck.

David Sacks 4:58 Right.

Chamath Palihapitiya 4:58 Yes.

Jason Calacanis 4:59 You vomit after you eat it.

David Friedberg 5:00 You don't eat it. You're, you're in a caloric deficit for the month that that person refuses to leave your house.

Jason Calacanis 5:05 Yes.

David Friedberg 5:05 Boom! Everything's solved.

Jason Calacanis 5:06 You lose weight.

Chamath Palihapitiya 5:07 They're like, "Hey, want some quinoa?" You're like, "No."

David Friedberg 5:09 No.

Chamath Palihapitiya 5:09 And then you lose weight.

Jason Calacanis 5:10 No. Give me-

Chamath Palihapitiya 5:10 That's pretty... Avocado shake?

David Friedberg 5:12 Give me, give me my olive-infused beef, please.

Jason Calacanis 5:15 Ah, the olive-infused beef.

David Friedberg 5:17 No, I'm sorry, not olive-infused.

Jason Calacanis 5:18 Olive-fete.

David Friedberg 5:19 Th- these beef only ate olives, guys.

Chamath Palihapitiya 5:21 (laughs)

Jason Calacanis 5:22 Right, and then we murdered them and ate them.

David Friedberg 5:23 (laughs)

Chamath Palihapitiya 5:24 You know, you know what you guys need to do?

Jason Calacanis 5:25 You're gonna have a great life.

Chamath Palihapitiya 5:27 You guys, yeah, you guys need, you guys need to elevate your consciousness, okay? (laughs)

David Sacks 5:31 And have a party. Let's go.

Jason Calacanis 5:33 We need to get some morels and some chickens and make some-

David Friedberg 5:36 Yesterday, we had morels.

Jason Calacanis 5:37 ... chicken with morels.

David Friedberg 5:37 Sean made morels, white, white asparagus-

Jason Calacanis 5:40 Oh, it's so good.

David Friedberg 5:40 ... with morels for you.

Jason Calacanis 5:40 Mm. Mm. So good. So good. The morel season has started. Everybody enjoy it.

Chamath Palihapitiya 5:47 (laughs) Morel season.

Jason Calacanis 5:47 Lots of different news this week.

Chamath Palihapitiya 5:49 You guys appeal, you guys appeal to the common man. The morel season has started. (laughs)

Jason Calacanis 5:54 Morels aren't that expensive.

David Friedberg 5:55 Tempeh is more expensive than both-

Jason Calacanis 5:57 Absolutely.

David Friedberg 5:57 ... quinoa and morels.

Chamath Palihapitiya 5:58 (laughs)

David Friedberg 5:59 100%. That vegan bullshit is way more expensive than normal people food. 100%.

Jason Calacanis 6:02 All right, listen, we have to elevate the world's consumption of steak and meats. (laughs) Um-I think a good place to start is, we've been talking about-

David Friedberg 6:10 Sorry, by the way-

Jason Calacanis 6:11 Yeah.

David Friedberg 6:11 By the way, have you guys ever looked at, on the back of any carton of oat milk how much chemical nonsense is in that stuff?

Jason Calacanis 6:20 Yeah, no, I'm not interested.

David Friedberg 6:21 Can that really be, can that really be good for you?

Jason Calacanis 6:23 No. You know what I want? I want-

David Friedberg 6:24 Oh my God.

Jason Calacanis 6:25 Give me-

David Friedberg 6:25 Where's the, where's the oat milk that's just oats and water?

Jason Calacanis 6:28 Doesn't exist.

David Friedberg 6:30 It doesn't exist. It's like soy lecithin, xanthan gum, like is... That stuff can't be good for you.

Jason Calacanis 6:35 You know, Sax drinks an, a 12 ounce glass of milk with every dinner. (laughs) He just drinks it.

David Friedberg 6:40 By the way, the almond, the almond milk at like the Whole Foods, riddled with sugar and all this other nonsensical chemicals as well. Man, I mean, I mean, people trash milk, I get it, but like, uh, and as, if you're lactose intolerant, I understand you're in a pinch, but like, why go to an alternative milk that is just riddled with just all of this terrible, terrible stuff?

Jason Calacanis 6:59 You know, Sax used to love to eat Brie cheese so much that whenever we'd have a party, somebody would bring-

David Friedberg 7:05 No, do you remember the Brie blocks-

Jason Calacanis 7:06 ... a wheel-

David Friedberg 7:06 ... with the sh- with the-

Jason Calacanis 7:07 Yes.

David Friedberg 7:07 ... with the wheel of Brie? And, uh-

Jason Calacanis 7:09 He would literally eat an entire Brie wheel on his own.

David Friedberg 7:12 And brown sugar. No, they would put the brown sugar on top, they would melt it-

Jason Calacanis 7:14 Ugh.

David Friedberg 7:14 ... and Sax, free brick Sax has eaten an entire brick of Brie in front of us.

7:19 (laughs)

Jason Calacanis 7:19 What, what was the origin of your Brie obsession, Sax?

David Friedberg 7:22 Stanford. Happened at Stanford.

Jason Calacanis 7:24 You just at some point became a francophile?

David Friedberg 7:27 He's a Brie guy. You gotta meet the guy that eats Brie, yeah.

Jason Calacanis 7:28 He's the last guy I would think that would eat Brie. What's the matter? You just don't have... I mean, what about cheddar? What, a great American cheese? No, you just prefer the French, huh?

David Friedberg 7:36 Yeah, you know.

Jason Calacanis 7:37 You still got that fetish for Brie or no?

David Friedberg 7:39 (laughs)

David Sacks 7:39 (laughs)

Jason Calacanis 7:39 Can we start the show? I gotta go.

David Sacks 7:41 Yeah, we got shit to do.

Jason Calacanis 7:42 We got work to do.

David Friedberg 7:43 Let's go.

7:44 I got 45 minutes.

Jason Calacanis 7:45 All right, listen.

David Friedberg 7:46 Sax, Sax, is that fermented kombucha?

Jason Calacanis 7:48 (laughs) Stop, stop.

David Sacks 7:49 This is just plain iced tea.

David Friedberg 7:53 Sometimes it's just good to be normcore.

David Sacks 7:55 To Java, unsweetened.

Jason Calacanis 7:56 Unsweetened. Oh, oh, you're back on trying to catch up? Trying to catch up? Okay, here we go.

Jason Calacanis 8:01 Listen, we've been talking a little bit about the contraction in tech, the growth stocks, uh, having their multiples, um, lowered. And we knew this was coming, but, um, it's been a horrible week, uh, for large companies, uh, starting the layoffs. We knew this was coming. We predicted it probably six months ago. Fast.com is a one-click checkout startup, uh, fast.co., they announced they're shutting down on Tuesday. This after the company grew to 450 employees and generated a reported $600,000 in revenue. Uh, I think that their employees could have made more money if they did one DoorDash a day (laughs) delivery. At its peak, Fast was burning $10 million a month according to reports. I think The Information got most of this information. While only generating about $50K a month in revenue. Their $102 million Series B was led by Stripe in January of 2021. Company raised $124 million in total. Also, Better.com, which we talked about, you remember, they had their, uh, horrific cringe-worthy founder lay off a bunch of employees over Zoom. (laughs) Um, and they laid off 900 people December 1st, 3,000 people on March 8th according to TechCrunch. For the 5,000 remaining employees, on April 5th, Better.com offered corporate and product design engineering employees the opportunity to voluntarily resign in exchange for 60 days paid severance and health insurance coverage. Better CEO Vishal Garg, uh, hopefully I'm pronouncing that correct, noted, "The uncertain mortgage market conditions of the last couple of weeks have created an exceedingly challenging operating environment for many companies in our industry." And then going to Gopuff, which, you know, I had the founder on, uh, This Week in Startups, and he's a pretty good, um, you know, like pretty realistic about the margins in that business. They're making a modest cut of 3% of their 15,000 staff. Seems like a reasonable thing to do, uh, given how the market has changed. But again, their valuation was absurd, $1.5 billion at 40, at a $40 billion valuation in December. Chamath, you predicted a lot of this, uh, and that people would have to sharpen their pencils. We had a discussion about this, you know, the, the good times are RIP. What's your take? Is this the, the beginning of the end? The s- the middle? Wh- where are we at in this cycle? A- and what's the reasonable thing for founders to do here?

David Friedberg 10:26 I think, uh, so y- we probably should take the, the macro and then boil it down to the startup. So at the, at the macro level, I think that we're playing a very dangerous game of chicken with the Fed. And you can kind of summarize it in the following way, which is that, you know, three or four months ago, we only thought that there was going to be a handful of interest rate increases. And increasingly what has happened, the market has remained so resilient that the Fed has sort of put out more and more data as the data has justified them being a lot more aggressive. And it kind of crescendoed this past week where they basically said, "Listen, you know, we're gonna move by 50 basis point increments for the foreseeable two or three rate hikes, and we're gonna start quantitative tightening." What does that mean? That means that instead of basically printing money and coming in and buying securities from the market, right? So what happens? When they enter the market with money that they literally do print and buy your bonds, they're giving you cash in return. And typically what that has led to is the inflation of all assets, right? Equity assets have gone up, bond assets have gone up, because there's just nothing else to buy. When quantitative tightening happens, they reverse that. And what they're going to do is about $95 billion a month of the opposite action, which means they're taking money out of the system, right? Or in this case, what they're gonna do is, uh, they're gonna let a bunch of maturities roll off and not, um, ra- not renew them. Okay, so why is this important? Well, it's important because, you know, we're still 4% from the highs. So we have 7% inflation, we have all this crazy stuff happening. We have a war, you know, going on. We have, uh, massive price issues, we have supply-demand issues, and the market keeps shaking it off.So, I think what the Fed's gonna do is get even more aggressive. So you're gonna probably see, you know, a lot of 50s, maybe even a 75 point hike. You probably are going to see them, you know, even ratchet up quantitative tightening until there is a bit of a bloodletting in the equity market. They need to see that the market's cracked.

Jason Calacanis 12:37 And so, they literally need to see what percentage draw down or just to go sideways? What do they need to see in order to-

David Friedberg 12:43 Look-

Jason Calacanis 12:43 Or is it inflation coming down a couple of points?

David Friedberg 12:46 Well, the problem that we suffer from is that they're gonna look at the highest level indexes, right? They're not looking at single stocks. And so when they s- like, when you and I think this market is down 4%, we don't feel that 'cause some of our companies are down 50 and 60%. Right? But that's because we're all focused on high tech growth. But they look at the broad indices, and the broad indices have held up really well. And mostly, it's because, you know, if you look inside the S&P 500, 40% of every dollar is, you know, Apple, Amazon, you know, Microsoft, et cetera, Tesla. So, we're in a situation where I think until the Feds see that there's a massive trading of liquidity, which means like you see these indices crack big time, 35, 3600 in the S&P, they're just gonna keep ratcheting things up. As it comes all the way down to our companies in Silicon Valley and tech, what that means is, like, you have to start planning for the worst. And I think the worst means that there's an 18-month period where you cannot raise money on your terms. You have to raise money on the market terms. Um, and so if you're not in a position to show good growth over these next two years, I would encourage you to just get your balance sheet in order to wait it out.

Jason Calacanis 13:53 Saks, nuclear winter is a possibility here. Markets for startups raising money. Again, as Sharat's saying, could be on the terms of the capital allocators. What, what's your advice to founders? What are you seeing in the boardrooms that you're on the board of?

Jason Calacanis 14:09 A- and if you were running one of these high growth companies for the past year, what are the first two or three things you'd do?

David Sacks 14:15 I mean, the first thing you gotta do is look at your burn multiple. I mean, how much are you burning relative to how much incremental ARR are you generating? When you look at Fast, they raised 120 million, what, like a year ago? Th- they're out of money now, so they burnt 10 million a month, like you said. Here's the crazy thing. If they just slammed on the brakes three or four months ago, when we were talking on this pod about the coming downturn, they could still have $30 million in the bank. That's a lot of money. The only reason it doesn't seem like a lot of money is 'cause they've been burning 100 million over the past year. But objectively, $30 million is a grow series B, which is actually a lot of money for a company that only has 100,000 in revenue. So they could've saved that company if they had slammed on the brakes three months ago and rationalized the cost structure, and they didn't. They hit the wall at 100 miles an hour.

Jason Calacanis 14:58 Who's responsible when something like that happens, David? 'Cause you, we've all seen it. What, what is the-

David Sacks 15:03 Yeah, I mean, look-

Jason Calacanis 15:03 ... suspension of disbelief that creates this kind of stupidity?

David Sacks 15:07 That, I mean, that's what it is. I mean, you've got a, y- you've got people who are kinda drinking the Kool-Aid, and there's nobody advising them to stop. Or if there is, they're not listening. I mean, look, PayPal had this situation back in, uh, 2000, the year 2000, uh, right after the dot-com crash. We were burning $10 million a month, like Fast. We had no revenue and no business model, okay?

Jason Calacanis 15:28 Yeah. (laughs)

David Sacks 15:29 And we had said the, the service would be al- always free. We had four months, basically, of life, and we pulled up on the throttle, and what we did is we basically introduced, um, paid accounts. We started charging transaction fees, and we caught the c- we cut the cost structure of the company, and we made that last $40 million last a lot longer than four months. It lasted until we could then do another fundraise the following year, and we were able to then raise with good numbers, real revenue, a business model, et cetera. So, you know, and that was because we were just paying attention to the changing environment. The world had changed from sort of the pre-dot-com crash, you know, 1999. Your business model didn't matter. Your margins didn't matter. Revenue didn't matter. None of that stuff mattered. All that mattered was growth. But by, you know, mid-2000, everything had changed. So, you have to be attuned to what the fundraising environment is looking like. And if you're a high burn company right now that's not generating a lot of revenue to go along with it, you better slam on the brakes and rationalize your cost structure before it's too late.

David Friedberg 16:33 David, tell me, like, w- what do you think is going on in this board meeting? I mean, like, this is a group of incompetent incompetents.

David Sacks 16:41 (laughs) I don't even know who's on the board, because Stripe led two rounds, I think, and so, look, when you guys-

Jason Calacanis 16:48 Is that part of it, David, that you, you... And listen, we all love Stripe. It's a great company. It's a legendary company. But one of the reasons we don't like to have strategics is maybe they're not thinking the same as a, a proper capital allocator, and for them, this is peanuts.

David Sacks 17:02 Right, exactly. No, look, the reason why a strategic investor-

Jason Calacanis 17:05 I don't know why you're making that distinction. Sorry, go ahead.

David Sacks 17:06 I think the reason why a strategic investor invests is 'cause it's strategic for them. I mean, it was in Stripe's interest to try and back a winner in the whole e-commerce checkout line sort of payment space. And so they did that, and I don't even know if they had a board seat, um, and so no one was really-

David Friedberg 17:22 But I don't, I don't understand that strategic decision, because I, I, I suspect the rationale somewhere internally in Stripe, which is pretty flawed, is, "Hey, we can't do it ourselves, because if we did, we would be competing with our customers." But picking a winner and putting $120 million is tantamount to the same thing, so I don't understand.

David Sacks 17:42 (laughs) I mean, Stripe raised-

Jason Calacanis 17:43 It just doesn't make, it doesn't make any sense.

David Sacks 17:44 Right, and Str- Stripe raised money at a, what, $95, 100 billion valuation, so look, it all flows down from, you know, the, the frothiness at the peak.

David Friedberg 17:53 No, no, I'm saying I think I would've, I, I... It would've been much more credible for Stripe to say, "This is a critical piece of the infrastructure and value chain in payments that we wanna own, so we're just gonna go and put some of our better engineers as, like, a, you know, side project and see if we can tack away at something that works." I mean, I, I think a lot of people would have adopted it. But the thing is, the goal should be-

David Sacks 18:12 But I guess Stripe, it was a board-

Jason Calacanis 18:13 To be clear, Stripe was on the board, Index was on the board.

David Sacks 18:16 Okay, okay, that's interesting. I mean, those are some good investors. Um, there's s- there's a couple people-

Jason Calacanis 18:20 Who else was on the board? Index and who else?According to Crunchbase, Stripe was on the board, a- a business development person from there. Index was on the board and Dom, the founder, uh, and, uh, looks like Brian Sugar, uh, who I know, uh, who's an angel investor and a founder. Uh, but who knows if that's outdated information in Crunchbase?

David Friedberg 18:38 Do you guys remember when Philip Kaplan used to run a website called Fucked Company?

Jason Calacanis 18:42 Absolutely.

18:43 Oh, yeah.

18:43 Yeah, a good friend of mine, yeah.

18:44 (laughs)

David Friedberg 18:44 Do you want to tell the Fucked Company story, J-Cal, for all the people that have no idea what you're talking about?

Jason Calacanis 18:47 Well, I mean, basically what happened was dotcom, the dotcom world was imploding. All the employees didn't have a voice. There was no social media at the time, there was no blogs at the time. The- the only thing you could really publish on the- in the world was, like, a- a Geocities page. You could put up a homepage if you knew how to do HTML. This is even pre-MySpace. Um, and so a friend of mine, Phil Kaplan, who does a very successful company called DistroKid now, started Fuck Company, and it was a message board. And what he basically let people do was, he would write three headlines, one sentence each, kind of like before Reddit existed where you just put a one-line hit, and then there was comments underneath them. They'd say, "This company, we just got an email, this company's laying off people." And he would beat all the news stories to the layoffs 'cause he would just run with any email that came in. And then people would detail and savage the management of those companies underneath it for malfeasance and explain exactly how ridiculous the spending was in that era, where people were burning money like drunken sailors.

David Friedberg 19:40 I think this time around, it's probably important for employees to understand a couple things. One is, like, who doesn't know what they're doing, right? So, like, companies that are making layoffs, th- those are, those are happening, they shouldn't get punished for that. But you gotta think, like, the fiduciaries that are ripping this money in, I mean, do you really want to be the person that goes to work at a company that's backed by these folks in round two? Uh, I mean, that's not a signal. Like, like, the opposite has always been a signal, right? Meaning, when Mike Moritz makes an investment, we all pay attention because we all think, "Wow, there's a picker." You know? And he did that with Stripe and with so many other, you know, great companies. And so the likelihood of an employee wanting to work for a Mike Moritz-backed company, or a Mike Moritz-governed company, is very high, right? Same thing with Gurley's, you know, same thing with, uh, a lot of, uh, a lot of really, really good investors. John Doerr. But the opposite should also be true then, because if it, if you really want to work for a Peter Thiel-backed company, (laughs) you should probably not work for one of these companies where these folks who are just completely absent are also governing the board. 'Cause that just means, like, nobody knows what's going on.

Jason Calacanis 20:45 We haven't had proper governance for a long time in Silicon Valley, so ... I mean, I think that's wh- what We- WeCrashed, WeCrashed and The Dropout were, in some ways, about incompetent boards, both of those TV shows.

Chamath Palihapitiya 20:56 No, I mean, I definitely see this, um, you know, I- I think you guys know the- the incentive for a traditional venture capitalist that- that- that maybe isn't, um, you know, motivated by improving their craft, but they're motivated, you know, incentivized primarily by making money, is to- to raise more capital and get more deals. And as you guys know, like, every venture firm has maybe one or two superstars, and then they fill out the ranks and hire a bunch of folks who are maybe not superstars or they don't pay as much attention. You know, it used to be maybe a VC would sit on a handful of boards, and now it's like you're the- the board representative for 12 companies. And that's a, you know, you're not gonna be able to provide quality time and service to- to, and support to the CEO and the- and the company. And more importantly, as you guys point out, like, not provide good governance. And governance isn't just about are you signing the DocuSigns as they come in to approve stuff, but it's about actually critiquing the business strategy with the CEO at the board discussion, critiquing the spending, reviewing the financial plan, making sure that everyone's aligned that this makes sense in this funding environment to continue to do this work. And I don't see that a lot. I- I don't know about you guys, but I see a lot of VCs either pandering to the CEO because we have founder culture hysteria in Silicon Valley, where it's true, the best founders make the 1,000x returns and that's it. But that doesn't necessarily mean that the rest of the businesses, um, should be left to their own vices just because there are a few, um, ultra-successful founders, that there are a lot of businesses that actually need governance, uh, in order to achieve outcomes. And I see that lacking heavily in Silicon Valley, because the VCs are more incentivized to raise more money, to make more investments, and then pay less attention and just go raise the next fund.

David Friedberg 22:41 Well, I think, I think you said the key thing. There are really very few star pickers in our business. Um, it takes decades to really prove that out. And, and those p- people-

Chamath Palihapitiya 22:49 Yeah.

David Friedberg 22:50 But those people that are real pickers, I don't think put up with bullshit from anybody.

Chamath Palihapitiya 22:52 They're not just pickers. Like, so John Doerr was deeply involved in Google in the early days. Like-

David Friedberg 22:58 Yeah, right. I'm- I'm- I'm simplifying our job.

Chamath Palihapitiya 23:00 Yeah, yeah, yeah, yeah, yeah.

David Friedberg 23:00 But what I'm saying is, our job, okay, at the end of the day, is we're picking. Okay? And then once you pick, you got to do the work. If you pick poorly and you do the same amount of work, it doesn't matter, nobody's going to remember you.

Chamath Palihapitiya 23:11 Yeah. And what ends, what ends up happening is the VC flushes the deal 'cause it's not gonna be the 100-bagger. They don't pay as much attention, they let the thing ride into the sunset, and they're- they're moving on to the next thing. But there is still a duty and a responsibility, I think, to the shareholders and the employees of that company to, you know, do what Sacks mentioned, which is, can you reduce burn under these circumstances? And can you actively engage as a board member to encourage leadership to do that? And that doesn't happen a lot.

David Friedberg 23:35 But you said the key thing, there are few practitioners that really have the gravitas to actually enforce those decisions. So, you know, there's a reason why in, during the great financial crisis, there was only one organization that even had the courage, forget whether it was right or wrong at the time, to even write the RIP Good Times deck. Right? It was Sequoia. Nobody else dared to even put that on a page, let alone give it to all of their companies, knowing that it would leak, lest they be wrong. And the reason Sequoia could do it is they're looking at a 40-year franchise and saying, "The integrity of our franchise is at stake, we need to keep doing what we've done before." And what it did, I think in that case, was pulled along a bunch of folks that were not as good as the top few folks, and it helped reorganize. 'Cause if you see the three or four years after that GFC deck, Sequoia flushed that whole business, right? There's an entire turnover of that team. And so I think what it speaks to is, and we talked about this in a few episodes ago-If you're seeking out AUM, you're gonna hire a very different kind of person than if you're helping- trying to help build companies. And the difference is that when you're trying to raise AUM, your customer is not the company-

Chamath Palihapitiya 24:38 It's the LP.

David Friedberg 24:38 ... your customer is the LP. And what the LP wants to do is be able to write their investment memo and not get fired. And the way that you do that is by pointing to the team and saying, "Well, this person worked at this company. This person was a VP at that company." And it seems credible, but between... But being able to invest and being able to actually be a good operator is so different.

Chamath Palihapitiya 25:02 Look, I'll, I'll also say one thing that's important. You know, I, I don't like this celebration or, or sorry, the, the mockery and the entertainment that comes from failure. I, I thought Fuck Company... Like I, I was young when it, when it was out and, you know, I would read it and kind of giggle at the stupid companies that got funding, you know, but to me it's, it's not like the kinda thing that could- should kind of be funny or, or, or laughed at, or even to mock failed companies. I mean, it's cynical. I, I think the capital that's available in the markets today to support building-

David Friedberg 25:34 So wait hold on. Ho- ho- how... That wasn't... That, that's not what Fuck Company was. I don't, I don't think it was people taking potshots as much it was people-

Chamath Palihapitiya 25:39 No, there was a lot of that. Oh, yeah. There was a lot of that. That, that... And 'cause, yeah, there was a t- there was a-

David Friedberg 25:43 But would you admit... But would you admit-

Chamath Palihapitiya 25:44 Yeah.

David Friedberg 25:44 ... in fairness that there was a lot of people telling the truth?

Chamath Palihapitiya 25:46 Oh, yeah, yeah. Totally. No, no, no. But th- but, but a lot of it was like this mockery, like, "Can you believe this shit even existed?" Yada yada. And the cynicism, I think, you know, kind of, um, you know, it's, it stales out the opportunity for, for capital to support, you know, new, new ventures, new initiatives like this. You know, I also think that these businesses that today are looking to raise capital that are, um, you know, let's call them good businesses, they have a good opportunity, they're gonna be challenged in a marketplace where everyone is cynical. Um, and I- I'll say like scarcity breeds success. When there wasn't a lot of venture money and, um, there were only uh, uh, you know, kind of a few investments that could be made each year, there was a decision-making process that says, you know, "Look how valuable could this be versus this other opportunity that I could invest my capital into?" That says, okay, the best opportunity ge- wins and gets picked and gets capital. In a world where everyone was raising a billion dollar second fund or a three billion dollar fourth fund, and you suddenly had an influx of a hundred billion dollars of venture money in a year, it's a lot like what we saw in crypto markets, which is an extraordinary explosion in highly speculative bubble assets. And a lot of these businesses maybe shouldn't have existed in the first place.

Jason Calacanis 27:05 Too much demand for the stock of private companies, uh-

Chamath Palihapitiya 27:09 And all the hedge funds that came into it, all the mutual funds that came into it.

Jason Calacanis 27:11 Yeah, and not enough supply of great founders and serious teams that are working hard on this. I think with the case to Fast, I agree with your general sentiment about dunking. In, in the case of Fast, what you had was a founder who was on Twitter every day tweeting about how great the company was and giving startup advice while he was taking none of it and should not have been giving any of it because they didn't even have product, uh, market fit.

Chamath Palihapitiya 27:34 Lesson learned. You know, you, you know who... You know who should be criticized? The next person that backs that guy. (laughs) That's it.

David Sacks 27:39 (laughs)

Jason Calacanis 27:40 Yeah.

Chamath Palihapitiya 27:40 You know, that guy is what he is.

David Sacks 27:41 And he's got, he's got a very interesting history actually as well, I think, if they had done any diligence.

Jason Calacanis 27:44 Yeah, it's a little colorful.

David Sacks 27:44 Yeah.

Jason Calacanis 27:44 They didn't do any diligence on him. Apparently, he had two companies that were kind of major red flags. And I think the diligence issue, Sacks, is one, uh, maybe you are having a similar experience to me. On the early stage, we were seeing deals last year close in a week. Um, we normally have 30 days to vet a deal and maybe a week or two to get our diligence wrapped up. Sometimes these things overlap, but it's... What was it, you know, historically? A four to six-week process, and then it went down to a four to six-day process, and then people were meeting with you one day and saying they're closed the next. Were you... did you feel like over the last couple years people were doing proper diligence or not? Uh, and what impact did diligence have on any of this?

David Sacks 28:23 You know, I- it's certainly... I, I can't speak to what our competitors were doing. I don't think our diligence process changed much. We would just have a mentality of when there was a deal that was urgent, we would drop everything and focus on that deal and get our work done. And it can be done quickly. Uh, although it's easier for SaaS companies because the metrics that you're looking at are so standardized and it's just, uh, it's an easier process. You, you know-

Jason Calacanis 28:45 What's the most important thing in diligence? For in your mind, what is the, like, bullet that, like, people can't... the silver bullet thing people can't fake?

David Sacks 28:53 Probably off-sheet customer references. So the, the first thing we do is focus on the, on the metrics, right? And the, the financials, the SaaS metrics, all that kind of stuff. But then you want to talk to customers and you wanna understand the value they're getting out of the product, and ideally their off-sheet customers.

Jason Calacanis 29:09 Explain what off-sheet means.

David Sacks 29:10 Off-sheet just means that, you know, you frequently ask a founder to give you customer references. Those are on-sheet references. The off-sheet references are the ones that you find yourself that they never gave you. So, like, the easiest off-sheet references to do are when your own portfolio companies are using some other, like, piece of software and they tell you about it. So, y- no... You know, that it's a totally non-conflicted situation. So th- that's what you're looking for.

Jason Calacanis 29:38 So one of your companies is using Stripe, they tell you how great Stripe is, they tell you what's good about it-

David Sacks 29:42 Yes.

Jason Calacanis 29:43 ... what's bad about it, but-

David Sacks 29:44 Right.

Jason Calacanis 29:44 ... references you're giving, so it's sort of like backdoor references. If somebody tells you, "Here's my references."

David Sacks 29:48 Yeah. And, and you can do the same thing on founders too. You can have on-sheet and off-sheet references for founders.

Jason Calacanis 29:52 And you could do it for VCs.

David Sacks 29:53 Yeah, but, but look, I think, um... I think it's probably a little bit unfair to blame the board of this company too much, because the reality is that VCs don't have the leverage or the power in this business. I mean, it's found... This, this whole construction of the industry is set up around founders and at the end of the day, it's up to the founder to run the company and they get to do what they want. Unless they do something criminal, otherwise they're gonna be able to do whatever they want. And boards-

David Friedberg 30:21 I, I disagree.

David Sacks 30:21 Hold on. Boar- boards generally are very deferential to founders, and if the founder's not willing to listen to advice, what are you gonna do about that?

David Friedberg 30:28 Well, that... No, this is... But this is the point you're making, I think is not right.You think that if Peter Thiel gave some advice to slow the company down, that this guy, uh, would have not taken it? Of course, he would have taken it.

David Sacks 30:39 I don't know. I don't know about that.

David Friedberg 30:40 He would have had to consider it. If Mike Moritz actually said it, he would have had to consider it. And I think what you're actually speaking to is in the-

David Sacks 30:46 The-

David Friedberg 30:46 Hold on. In the rush to put so much money to work, we've elevated people who don't understand what the job is to do the job, and if they're not credible, of course, they're going to be ignored. We all have ignored stupid board members. You've done it too, David. But even, you know... Let's, let's actually look at Yammer as an example. There were one or two of us that you would talk to pretty consistently. You didn't talk to all of them.

David Sacks 31:06 I would always seek out advice. Look, a go- a great founder, a good founder always seeks out advice. No question about it. But look, this idea that it's governance versus advice, I mean, the problem with it being governance is all the institutional incentives for VCs are to be co-founder. So no one wants to jam a founder by making them do something-

Chamath Palihapitiya 31:23 That didn't used to be the case.

David Sacks 31:23 ... they don't want to do. Well, I'm just saying that's, that's the way it is now.

Chamath Palihapitiya 31:26 By the way... No, to be clear, that became a competitive tactic that emerged as more venture capital funds were raised and more venture capital was raised from LPs. Prior to that, there was a scarcity of venture capital and VCs could be g- could have good governance and not have to have this whole co-founder model that became the thing that Founders Fund and Andreessen and others kind of proclaimed as being core to their advantage and the reason to pick them over some other VC who's going to meddle in your affairs. And by the way, both are true. There are... Most VCs, as Vinod has said publicly, add negative value, and I totally agree with him on this because they... Many VCs, particularly the ones who aren't, you know, valuable and don't really have much to add try, to add stuff, try to say stuff, and they just, you know, create negative value in the process. But on the other hand, the whole co-founder model led to the, the WeWork and Ubers of the world that, you know, I think we all kind of see the-

David Sacks 32:18 That's right. There's a trade, there's a trade off. I mean, look, I remember in the 1990s, the default was that the founder just got replaced, right?

Chamath Palihapitiya 32:24 Right, right.

David Sacks 32:24 Like, as soon as the company is successful-

Chamath Palihapitiya 32:26 Right.

David Sacks 32:26 ... you hire a professional CEO. That was just, like, rule of thumb.

David Friedberg 32:29 Eric Schmidt. I mean, even the mighty-

Chamath Palihapitiya 32:31 Eric Schmidt.

David Friedberg 32:31 ... Google did that.

Chamath Palihapitiya 32:32 Yeah. No, I mean, that was... By the way, that, that was-

David Friedberg 32:34 That was pretty much the last one.

Chamath Palihapitiya 32:35 ... that was the point I was trying to make which was, like, so much of John Doerr's influence was in getting Larry and Sergey to take Eric on as CEO. And I really do think that that was, like, you know, a critical move that created probably the, uh, that created the most valuable company, uh, in history. Um-

David Sacks 32:50 Right.

Chamath Palihapitiya 32:51 And, you know, it's... It, it, it was an important... Imagine if you had one of these Founders Fund... And by the way, you know, as you guys know, I'm very close to the, the guys at Founders Fund and, um... But, but imagine if you had a Founders Fund type approach where you said, "Look, Larry and Sergey are the founders, they know what they're doing, let them do it," as opposed to the John Doerr nuance of, "Let's make sure that we think about the development of this company successfully over time," and then convince Larry and Sergey through a bunch of meetings and riding bikes and whatever else they did with Eric, you know, to like... And then, and then what about Jim Breyer? Didn't he bring Cheryl over to Facebook? I mean, like, there's a lot of these stories of the really cr- um, you know, the VCs that really changed the trajectory of the business through their work.

David Sacks 33:28 Right. And, but look, all I'm saying is the, the, the good VCs can still have that influence, but it's in the form of advice rather than governance.

Chamath Palihapitiya 33:35 Right.

David Sacks 33:36 Look, we just don't call the shots.

David Friedberg 33:37 No, no, you're right, you're right. It's, it is, it is-

David Sacks 33:39 You're right.

David Friedberg 33:39 ... advice. But, but, for example, governance, as an example, in, in, in every board that I take, the first thing that I say is, "Here's a template I want. I'm not going to ask you a bunch of stuff, but I just want some transparent reporting." And the first page is always how much money at the beginning of the month, how much money did you burn, you know, how much equity did we give out, how much is left in the pool. Simple basic checks and balances, right? Where you're not asking all kinds of crazy questions. You're just like, "All right, how much money are we burning? How much dilution did we take? Now tell me what we've done." And those are simple elements of governance way before you get into advice.

Chamath Palihapitiya 34:14 Just basic level setting. What's the speed of the play?

David Friedberg 34:16 Basic level setting.

Chamath Palihapitiya 34:16 What's, what's the elevation? Where are we at? What's the altitude? And when you ask people for this today, Chamath-

David Sacks 34:20 We actually do that too.

Chamath Palihapitiya 34:22 Yeah, I don't anyone who doesn't do that.

David Friedberg 34:23 Well, I do it as well.

Chamath Palihapitiya 34:23 I'll be honest, like-

David Sacks 34:24 Yeah.

Chamath Palihapitiya 34:24 ... yeah.

David Friedberg 34:24 Anybody that doesn't do it, honestly, is f- is being completely irresponsible.

Chamath Palihapitiya 34:27 Well, that's not what we're talking about, Chamath, because I, I don't know anyone that doesn't do that. I mean, I'm talking about the hard... You know, there's a little bit of that going on.

David Friedberg 34:31 I would love to see... I would love to see a fast board deck.

Chamath Palihapitiya 34:33 There's a little bit of that going on. Yeah.

David Friedberg 34:35 I would love to see a fast board deck and to see if that first page is that page, the first page. And by the way, you know, where I learned that from? From Sequoia and Kleiner Perkins. Because back in the day, what I saw from founders was, "Oh, this is the first thing I have to report on." I was taught by founders when I was a, when I was a principal at Mayfield, they're like, "This is how you do the job." And I was like, "Great, thanks." And I was, you know, sitting beside these guys that were old hands at doing it and that's how I learned this business through that apprenticeship, but there was governance and advice. And the governance is just about being transparent about how much money are you burning. And so you can't... You know, to David's point, if you had just seen that data, even if you take those board decks, by the way, because you have these information rights. I don't know about you guys, but we did it, we did it as well. You take the board deck, you circulate it to your other partners. There's lots of times where I see board decks in companies where one of my partners are on the board and I send them an email of like, "Hey, here's some bullet points of things to think about that I've seen before," et cetera, et cetera. You don't think nobody at Stryper or Index could have said, "Uh, you're burning $10 million a month and there's no revenue?"

David Sacks 35:38 (laughs)

David Friedberg 35:38 So the point is that data was not there.

David Sacks 35:40 And there's only $30 or $40 million in the bank.

David Friedberg 35:42 Give me a break, guys.

David Sacks 35:44 Yeah.

David Friedberg 35:44 So this was a wh- whole, a cataclysmic failure at the advice level and at the governance level, and all I'm saying is it's a good lesson for folks to learn.

Chamath Palihapitiya 35:54 Absolutely.

David Sacks 35:54 Yeah, so let me, uh, point people's attention to two articles I wrote that I think are relevant. So first, we actually published an article on the SaaS board meeting deck that we would like people to use, and obviously they're free to use it or not. To Chamath's point, right up at the top as a context setter, we need to know what's your monthly burn and how much money is in the bank. And that, and then we just divide those things to create runway. We don't like looking at projections for runway.

David Friedberg 36:17 Totally.

David Sacks 36:18 We just look at how much did you burn last month and how much money you got in the bank.

David Friedberg 36:21 Totally. Month's cash out. Month's cash out. Just tell me.

David Sacks 36:22 Exactly. And when they were down to 30 or $40 million, burning 10 million a month, somebody should have, like, thrown up a red flag and said, "You better slam on the brakes right now because you're gonna be out of business in three or four months." So, so that- that- that's, that's sort of piece number one. The, the other piece was an article I wrote.... a couple of years ago called Blitzfail, which is how not to go off the rails because a lot, there's a lot of li- literature out there about blitzscaling. And a lot of startups think they need to scale as rapidly as humanly possible, and I wrote this piece about how fast-growing companies that raise lots of money at high valuations basically go off the rails, and they end up imploding. And th- there's like 11 reasons why this happens, I sort of categorized them. One of the biggest ones is founder psychology. You have a founder who believes that things are always gonna be up and to the right, it's, they, they, i- i- it's funny, they're always described the same way, described as visionary, charismatic, and the word crazy is often used, but it's crazy good. And then when everything goes to shit, all of a sudden the word crazy means something pejorative and bad. And, you know, the, the, the problem is that, you know, the- these characteristics of being highly visionary and charismatic, they also can be combined with an unwillingness to listen to advice. And so, you know, founders who have those qualities, they're, they can be a good thing but they have to seek out advice from people who've had experience, otherwise they're gonna make a mistake and hit the wall.

Jason Calacanis 37:45 Being delusional is, you know, what you need to start these companies, like, "I'm gonna beat these incumbents, I'm gonna change the world." I- i- a little bit of delusion is good but not when you're looking at h- the runway, right? (laughs) Like, that's when you need to be pragmatic.

Chamath Palihapitiya 37:59 I think, um, you know, th- th- there's a term of coachability, you know, how, how coachable is this person as, as a CEO, as a leader? Um, and I do think that coachability goes hand-in-hand with intellectual curiosity. I mean if you look at the Collisons, Patrick Collison and, and how much breadth he has and some of the, the topics he's interested in and the things he writes about, it indicates to me a high degree of intellectual curiosity. And people who are intellectually curious generally are very humble because they're, they're constantly seeking things they don't know and they recognize that they don't know a lot of things. And in that same kind of mentality, they are willing to recognize that other individuals can have good points of view that can inform their perspective and they're willing to change their perspective. And I think that's a really key cr- key, key thing that if you look across the, the, the range of successful founder/CEOs that scale to $100 billion plus valuations for their businesses, that to me is one of the more common threads, uh, is this kind of intellectual curiosity which translates into a coachability, which translates into an adaptability as... And, and being willing to take advice. And so your board is a tool, not kind of a governance structure sitting over you.

Jason Calacanis 39:04 We, we figured out-

Chamath Palihapitiya 39:04 I think the less you are like that, the more you are likely to feel like your board is a governance structure, an umbrella sitting over you, telling you what you can't do.

David Friedberg 39:10 I don't think that's what governance means, by the way.

Chamath Palihapitiya 39:12 Well governance meant to, it's, it's meant to look out for the shareholders, that's the job. Right?

David Friedberg 39:16 Sure, but, but, but to act as a fiduciary doesn't mean to like tell the CEO what to do...

Chamath Palihapitiya 39:20 No, that's right.

David Friedberg 39:21 This is my point, like...

Chamath Palihapitiya 39:22 I'm just saying like there... Yeah.

David Friedberg 39:22 So there is, it's, it's not to say it's always...

David Sacks 39:23 No, but I think, I think he's right about, I think Freidberg's right about how boards are often perceived by founders. I think there is an increasing l- uh, let's call it a Hollywood director, a Hollywood auteur mentality towards VCs...

Chamath Palihapitiya 39:37 JCAL and The All-In Podcast, right? (laughs)

David Sacks 39:39 Well it's... It's basically, it's basically... Look, there, there are certain incubators out there and accelerators and whatever who teach these young founders that it's all about their vision and anyone who stands in the way of it is basically interfering with them.

Chamath Palihapitiya 39:53 Right. Totally.

David Sacks 39:53 And they, they are the auteur, like a Hollywood director...

Chamath Palihapitiya 39:56 Totally.

David Sacks 39:56 And you gotta stay away from those suits, the studio guys, right? Or whatever. That's the mentality they're trying to, they're teaching them and-

Jason Calacanis 40:02 An adversarial mentality. Again.

David Sacks 40:04 An adversarial mentality. And look, there are, to Chamath's point, there are plenty of VCs who don't know what they're doing, they have no useful advice to offer. But the better mentality to teach a founder would be like, "Look, it, the world is so complicated and building a company is so complicated, it's gonna be 10 times more difficult if you don't seek out advice. So go find board members who will let you ultimately do what you want, but will still give you the advice if something's going wrong."

Jason Calacanis 40:28 And, and what was true at one point in time when Paul Graham gave this advice and he set up Y Combinator, you don't want to say their name, but it, it is Paul Graham had a terrible experience in his company with venture capitalists, so he set up that wartime stance between founders and the investment community and, you know, Founders Fund became the antithesis of the traditional venture funds and they were gonna be founder focused. So, but that advice then might have been true, and now it's not. Now we've swung the pendulum too far the other way. We did two things, 'cause we saw this 10 years ago when I started seed investing and then when I started building positions of over 5%, I just said to founders, "If we own over 5% or 10%, we should have an option of a board seat and we'll do board seat, we'll do board training with you, where we'll just teach you, we'll take like, 'Here's some decks that we've seen from other, you know, here's some decks that are available and we'll show you what a board is like.'" And then I would have three founders come, two would sit in on one board meeting and I would do three back-to-back board meetings, bring your counsel, bring your founders, and sit in on the other two board meetings and we'll have a little Socratic discussion about what was good about each board meeting. We did board meeting training as a proxy for venture worthiness later on. And when those companies did go out to get venture and they had an ESOP and they had board minute meetings, they just looked more impressive to the venture community. So I know people say, "Don't do a board, it's not cool." It actually turns out doing a one-hour board meeting four times a year, six times a year, even as a seed stage company, it's, it does differentiate you to the venture community, I find.

Jason Calacanis 41:51 All right, moving on and speaking of boards, Elon bought a, uh, chunk of Twitter last week, a 9% stake and he's joining the board. Uh, that makes him the largest individual, or the largest shareholder, um, individual or institutional. Uh, he bought the shares in, uh, March. Twitter CEO Parag Agrawal, uh, tweeted, "I'm excited to share we're appointing Elon Musk to our board." Uh, and then Jack tweeted in support, "I'm really happy Elon is joining the Twitter board!" Just to give some level setting here, uh, in Q4 of 2021, Twitter had 1.5 billion in revenue, up 22% year over year. They've really been starting to ring the register over there. Uh, daily active users are solid but modest, 217 million, uh, daily active users, 38 million of which are in the US, 179 million are international.... and their stated goals, uh, for Q4 of next year, 2023, so in a year and a half, they want to have 315 million, and they want revenue in 2023 to hit 7.5 billion. Again, they're on a $6 billion run rate, so I guess that would be an increase of 25%. Uh, just general thoughts on, uh ... And Elon obviously has been making, uh, some Twitter suggestions, uh, for the product. Sacks, you worked with Elon at PayPal.

Chamath Palihapitiya 43:08 (laughs)

Jason Calacanis 43:08 Thoughts on what this does for-

David Sacks 43:10 (laughs)

Jason Calacanis 43:11 That wasn't ... Why are you laughing?

Chamath Palihapitiya 43:13 It's like such a funny transition. "Sacks, you worked with Elon at PayPal."

Jason Calacanis 43:18 Worked for Elon, I guess?

David Sacks 43:19 Look, I'm sure, I'm sure, I'm sure he's gonna have some great product ideas, but what this r- is really about is free speech. You know, right before Elon announced this, he was doing polling asking the Twitter user base whether Twitter was succeeding or failing in his mission to be an open town square, an open marketplace of ideas. Something like 70% said they were failing at it. Elon, on many occasions, has spoken up for free speech. He believes that Twitter's historic mission is as an open town square, and I think he's gonna bring that emphasis to the board, and it's a great thing. Now, I think the person who had the best take on the reaction to this was Mike Solana, and he had a few funny-

Jason Calacanis 43:55 Who is Mike Solana? ... tweets about this. Who does he work for? Is he a Founders Fund guy?

David Sacks 43:58 I think, yeah, I think he, he works for Peter at Founders Fund, but he's got a ... He also writes a great news Substack newsletter, kind of like a blog post called, uh, Pirate Wires. It's worth checking out. He's, he's a pretty ... In addition to being a pretty sharp analyst, he's, actually says a lot of funny things too.

Jason Calacanis 44:14 He's iconoclastic and, yeah.

David Sacks 44:16 Yeah.

Jason Calacanis 44:16 He, he, he'll, he'll swing the sword.

David Sacks 44:18 Yeah, so the way he put it is that, you know, Elon joining the board has all the worst people on Twitter furious. They think that this guy might actually say free speech, and for authoritarians, that is an existential threat. And then he added, um, "I don't get what the problem is, guys. If you want censorship, you can just go build a new social media company and do censorship there. It's a free market." Thereby turning on its head everything they've been saying, which is, you know, when the people who, the authoritarian s- the authoritarian people who love censorship, whenever anyone complained about censorship, they would always say, "Well, just go create your own social network. You know, we're free to do-

Jason Calacanis 44:52 Yeah, Parler, Truth-

David Sacks 44:52 ... what we want over here." Right.

Jason Calacanis 44:54 ... whatever.

David Sacks 44:55 Exactly. Well, this is, this is the free market acting in a way they don't like, which is finally somebody who believes in free speech is willing to stand up, buy the largest stake in Twitter, join the board. I mean, this is fabulous.

Chamath Palihapitiya 45:06 I think it's really fabulous.

Jason Calacanis 45:08 I think it's pretty amazing, yeah, and the stock went up 30%. What do you think, Chamath? Yeah.

David Sacks 45:12 (sighs)

David Friedberg 45:12 I texted you guys in the group chat. I think that if he is able to make free speech cool again, he'll, he'll actually do more doing that than potentially through SpaceX and Tesla, and that's already saying a lot. Because free speech really is this fundamental principle of democracy, and it's been decaying. We don't know the implications of a large technology company keeping free speech as a principled pillar of their, uh, reason to exist. Right? Because we have seen free speech kind of decay, and we've seen sort of, you know, random decision-making that seems arbitrary by a lot of these technology companies and, you know, the payments companies. Friedberg was mentioning Visa and Mastercard earlier in the group chat. But all of these things can change on a dime if Elon makes free speech cool again and figures out a way to make that a principle that everybody can embrace, because then if you really believe in that, then you go to the next logical conclusion, which is what David has said for forever, which is, the only solution to f- you know, speech you don't like is more speech. And then that creates a surface area that I think you can technically maneuver around. So meaning, what are the real problems that all of this speech creates? It creates a, you know, content moderation issue, right? It creates a, a spam issue, and it creates a sort of wisdom of the crowds ranking rating issue. So-

Jason Calacanis 46:29 Misinformation comes to mind, yeah.

David Friedberg 46:32 But that's a, that's a wisdom of the crowds ranking rating issue in my pro- So, I, I guess the point is that, you know, if he can get the Twitter employee base fundamentally on side of this idea of free speech as a principle, that's, I think is enormous, because you know that none of the other big tech companies will ever even do that. And the capital structures of those companies will never allow a single strong voice like his to enforce that idea. So, this is the only company where that could happen, and I think, you know, we want to see what this, how this plays out. I think it's a really, really big deal.

Jason Calacanis 47:04 All right. Friedberg?

Chamath Palihapitiya 47:05 Yeah, I'll tell you what I think changes. Facebook, Twitter, even Google, all acquiesced to significant external pressure over the years. I've said this in the past. I believe the founders of those companies are all philosophically, fundamentally philosophically aligned with the notion of free speech and, um, absolute freedom of information, you know, enabling truth-finding over time, and the, um, the edge cases, uh, of those platforms ultimately, um, identify and uncover ways that they can be used, uh, against what, you know, many would consider kind of the, the, the betterment of society, and as a result, they acquiesce to external pressure that drive some of these censorship decisions and drive some of these, um, these behavioral, uh, changes by management. But I think that if you concentrate the ownership of those businesses and rather than have kind of a distributed shareholder base, meaning the public markets where the largest single shareholder in Twitter to date, uh, has been Jack Dorsey at 2.3%, he actually serves the shareholders, and the shareholders ultimately want to see the stock price go up, and they ultimately want to see the business make more money, and as a result, they don't have the same sort of ... Uh, you know, the, the, the stakeholders there have kind of a different set of alignments over time. You know, they're not necessarily the same long term, uh, or, or focus, meaning, th- does the philosophy come before the money? And I think as you kind of concentrate ownership, you have the opportunity and the option now, uh, to, you know, make, make those sorts of decisions that you can't make when you're a broadly owned stock.

David Friedberg 48:43 But Facebook and Google are concentrated.

Chamath Palihapitiya 48:45 Yeah, they- they actually have that dual class, yeah.

David Friedberg 48:45 They have a dual-class structure and- so what are you talking about?

Jason Calacanis 48:48 The issue, Chamath, is in those companies, they're scared to death that they'll lose their employees and have chaos at work.

Chamath Palihapitiya 48:54 Government. Government. Government. No, the issue is-

Jason Calacanis 48:55 And the government?

David Sacks 48:56 It's both. It's both.

Jason Calacanis 48:56 No, no, but also, it's- you could also lose all your employees. The employees are whining.

David Sacks 48:58 It's both. It's pressure- it's both. It's pressure from above and below.

Chamath Palihapitiya 49:00 It's- yeah. It's shareholders. It's shareholders and government regulators, right? And so in both cases-

Jason Calacanis 49:05 And employees.

Chamath Palihapitiya 49:05 ... you acquiesce to the pressure. A- and employees. That's a good point, yeah.

David Friedberg 49:08 I understand, but I'm not sure how Twitter changes any of that.

Jason Calacanis 49:12 There- it does. I'll tell you why. 'Cause w- if we look at what's happened is l- sometime last year, I think it happened around Chappelle and I think it happened because of Coinbase, we saw a group of folks say, "You know what?"

David Friedberg 49:22 "Enough's enough."

Jason Calacanis 49:23 "Yeah, we told you to bring your whole self to work, we told you would do your laundry." And then at some point, Netflix was like, "Listen, you don't have to agree with every comedian on our platform. There's a range of comedians and if you disagree with this one, you can do a walkout, you can protest, you can make your feelings hurt, or you can choose to not work here." And then Daniel Ek kinda did the same thing. He said, "Listen, at Spotify, we're gonna put labels on it. If you don't like Joe Rogan, don't work here." And then, of course, we know Coinbase did it, and Toby from Shopify did it. And now you have Twitter doing it. And when you apologize and you start listening to this very vocal minority when they're upset and they wanna cancel people or they wanna deplatform people, what do they do? They double down. You've shown that you're going to listen to them. They're not doing it at Coinbase anymore, they're not gonna do it at Spotify anymore, they're not doing it at Netflix. And Apple acquiesced, right? They're like, "We don't like, you know, Antonio's book, Chaos Monkeys, and he said these three things in an award-winning book that we find are ... We're gonna fire him." I think at some point Apple's gonna have to say, "You know what? Leave your feelings at work a- a- a- and this is a company."

David Friedberg 50:30 At home. Yeah. Leave them at home.

Jason Calacanis 50:31 Leave them at home. Thank you.

David Sacks 50:31 This is why Elon is so dangerous to- to these people, is because he won't be pushed around. The fact of the matter is that this whole woke mob thing, it's a paper tiger. They don't have the support of most the population. It's a handful of very noisy voices on Twitter and social media who insist on having a monopoly on the right to shape all of our narratives. And-

David Friedberg 50:53 Yeah, no, they- they want a monopoly on moral outrage.

David Sacks 50:56 They want a monopoly on moral outrage, they want a monopoly- but they also want a monopoly on the ability to basically- to- to define, uh, what is acceptable and- and- and what the- what the narrative on any topic's gonna be. And all it takes is one strong person to stand up to the mob, as we saw Brian Armstrong do at Coinbase, and the mob dissipated. He took- you know, Brian had to suffer what-

Jason Calacanis 51:18 No, they go find another target. They find another target.

David Sacks 51:20 They find- exactly. So-

Jason Calacanis 51:22 Yeah.

David Sacks 51:22 ... Elon doing this is a really big deal because, again, he cannot be pushed around and i- he is showing leadership here. And all it will take to end this woke censorship is for other founders to stand tall the way that Elon has.

Jason Calacanis 51:35 And let's- let's go into the nuance-

Chamath Palihapitiya 51:37 I don't think- I don't think he'll care what, um, employees kind of gripe about. I don't think he'll care what regulators gripe about. And I don't think he'll care what other shareholders gripe about. He'll talk about the long-term opportunity, the philosophical alignment with mission, and- uh, and plow forward. And I think that that level of leadership is what separates some, you know, great businesses from others. But this is a very-

Jason Calacanis 52:00 And listen, there were-

Chamath Palihapitiya 52:01 Yeah.

Jason Calacanis 52:01 ... moments of deplatforming that were earned by people like Alex Jones, who was saying that the- you know, families of Sandy Hook were false flags and their children weren't murdered. There are- you know, Milo Yiannopoulos and some of these alt-right Nazi-sympathizing people throwing up swastikas. You know, people promoting violence or brigading on these services to attack people and to dox people. Those people, those were just cancellations, deplatformings from YouTube-

Chamath Palihapitiya 52:28 In your opinion. In your opinion.

Jason Calacanis 52:28 Well, I mean, anybody inciting violence, I think we would all agree-

Chamath Palihapitiya 52:31 It doesn't matter.

Jason Calacanis 52:31 ... should be displatformed.

David Sacks 52:32 Jason, look at how it's evolved. We start with isolated cases like an Alex Jones-

Chamath Palihapitiya 52:37 Exactly.

David Sacks 52:37 ... like a Milo-

Chamath Palihapitiya 52:38 Exactly.

David Sacks 52:38 ... that nobody likes and nobody supports. The next thing you know, the president of United States is being deplatformed, but again, that's supposedly based on him inciting a crowd. Then what's happening today? Now we have entire categories of- of opinion being banned. It starts with COVID.

Jason Calacanis 52:53 I- I agree.

David Sacks 52:53 Anyone who has-

Jason Calacanis 52:53 And that's exactly my point.

David Sacks 52:54 Anyone who has a dissenting opinion-

Jason Calacanis 52:55 There were valid ones and now they're as invalid. I agree.

David Sacks 52:57 Anybody who has a dis-

Chamath Palihapitiya 52:58 100% agree with you.

David Sacks 52:58 Hold on a second. Anyone who has a dissenting opinion on COVID gets banned. Now, anybody who has a dissenting opinion on climate change can be banned. There's a story this week on CNN where Pinterest of all com- look-

Jason Calacanis 53:08 (laughs)

David Sacks 53:09 Pinterest is a photo-sharing site. I don't know- no one's talking about climate change on Pinterest, and yet-

David Friedberg 53:14 I was, but then I got deplatformed. (laughs)

David Sacks 53:18 You- (laughs) I mean, it just shows, this censorship now is on autopilot. I mean, even sites where the conversation is not taking place are banning entire categories of thought and opinion because it disagrees with, you know, what the experts say.

Jason Calacanis 53:33 I agree. And J-Cal, you could point out your Alex Jones case to make the case that deplatforming should be allowed. The problem is as soon as you make that case, it's only a slight degree-

David Friedberg 53:42 Other people point to it.

Jason Calacanis 53:43 It's a slight degree away from the next case and then a slight degree away from the next case and then fast-forward three years and you're banning entire topics of conversation that ultimately may end up being proven to be a topic of conversation we should have had. And if you look back- by the way, one great movie, Woody Harrelson, The People Versus Larry Flynt. Larry Flynt was a pornographer. It was easy for everyone to chastise him and for everyone to say, "You know what? Let's go ahead and deplatform this guy" back then and ban him and- and charge him by the government. And at the end of the day, he fought for his rights for free speech. Now, all that being said, Larry Flynt was publishing using his own printers and selling on the street in a very legally compliant way. There is a difference in having someone else's platform be the mechanism that you use to promote your voice. If they choose, like Pinterest and Twitter and YouTube and Facebook and Google, to change how their platform operates, Sax, I actually think that's a commercial decision made by a private company. They should have the right to do that, but they're gonna lose users over time. They're gonna end up looking like idiots when they're wrong by banning certain topics that we should be having conversations about over time. And I do think that there are other mechanisms for us to use the free and open internet. This is why I think the free and open internet is more important than anything.

Chamath Palihapitiya 54:54 ... to have conversations using other platforms and other mediums.

Jason Calacanis 54:56 Absolutely. I mean, and, and I, I, I mean, hold on. I just want to respond to, to David since he did, you know, uh, counter my point. I agree with you, I think it went overboard, and I think there are more reasonable solutions. I think a time-based, uh, ban would have been better for somebody like Trump, um, and maybe waiting to see what happens with the January 6th Commission. Putting that aside, I know it's very controversial. Um, you know, when you just look at what Spotify did to our podcast. I don't know if you've looked at us in Spotify, every other episode says, "COVID-19 information here." I think this is one of the best things. If people wanna talk about ivermectin and it's in open science, and Freeburg, you know more about it than any of us, and people wanna debate it, why not link them to-

David Friedberg 55:32 I have a question.

Jason Calacanis 55:33 ... the most credible sources? I think that's a great solution.

David Friedberg 55:35 I have a question.

Jason Calacanis 55:36 Yeah.

David Friedberg 55:37 Is there an oat milk tag on Spotify?

Jason Calacanis 55:39 Yes. There is.

David Friedberg 55:40 'Cause if someone is... Oat milk, oat milk, oat milk.

Chamath Palihapitiya 55:42 Wait, when you listen to All-In Pod on Spotify, there's a tag that says there's COVID-

David Friedberg 55:47 COVID-19.

Jason Calacanis 55:48 Yeah. Get COVID-19 information here. Yeah.

David Sacks 55:50 Kind of got to Freeburg's argument about these companies should be free to do whatever they want. So, I know that Freeburg... I, I wanna make two points about this. First of all, I know Freeburg is sincere and genuine in that belief. However, most of the people making that argument are completely disingenuous about it because, on the one hand, they say that these companies should be free to limit speech when they like the outcome of that censorship. But meanwhile, in Congress, they're pushing six bills forward to regulate these companies as monopolies.

Jason Calacanis 56:15 Yeah.

David Sacks 56:15 So they don't believe that they should be free to do whatever they want.

Jason Calacanis 56:18 Yeah.

David Sacks 56:18 They believe that they're monopolies. And indeed, many of them are monopolies and even the ones that aren't monopolies act the same as all the other ones. They act as a cartel to limit speech. So, that's point number one, is that nobody believes this argument that these companies should be free to do whatever they want. The second point is that... Listen, the founding document of our country, the, is the Declaration of Independence. It says that all of us have rights. They're inalienable. That means they cannot be taken away, okay? And in the first couple hundred years of this country, it meant that those rights meant that the government couldn't t- take away your right to free speech. But now today, where does speech occur? It, it occurs on these giant social networks that are privately owned, they're owned by these large corporations. And the fact of the matter is, if they take away your right to free speech on these platforms, if they censor you, if they de-platform you-

Jason Calacanis 57:11 It's a great point, David. It's a great point.

David Sacks 57:12 ... you do not have a right to free speech in this country. That right needs to be protected.

Jason Calacanis 57:16 The Founding Fathers did not anticipate that four people would be mitigating the majority of conversations online. It's, you know, like if you're, if you're taken off... If you look what happened to Bilo and Alex Jones, like, they don't exist in the public sphere anymore, right? Like, they've been literally-

David Sacks 57:29 They've been un-personed. When these big-

Jason Calacanis 57:30 Yes.

David Sacks 57:30 ... tech companies all get together as a cartel to deprive you of your free speech rights, you have been de-personed. You've been digitally de-personed. And they're not just doing it on speech. They're also taking away your right to engage in payments, in transactions, to earn a living. And unless we-

Jason Calacanis 57:44 We, we have to-

David Sacks 57:45 ... stop this now, it'll keep going.

Jason Calacanis 57:46 Yeah. We, we have to address the giant elephant in the room, huge, uh, which is Trump. Uh, I think a lot of this, uh, you know, he hit its pinnacle when people were saying the, the, the sitting President of the United States could not be on Twitter. That was, I think we all agree, ridiculous and absurd that the president who was duly elected couldn't have a Twitter account. But then with the January 6th and the inciting of the violence and, you know, all the stuff that's coming out, and obviously, we'll, we'll see where that all winds up, I'm curious what everybody thinks here about should Trump... Or is Trump being put back and reinstated on Facebook or Twitter? And it's supposed to be a lifetime ban on Twitter, but if corporate governance changes and people lobby for that, do we think that there is any kind of situation where Trump has his Twitter handle or Facebook accounts reinstated, and should he have them reinstated?

David Friedberg 58:37 I think, Jason, what you suggested is probably the most reasonable thing, which was there was a time-based penalty. You know, we're, we're getting through... We're probably, what, a third or two-thirds of the way through the January 6th stuff, so that's gonna come and go. And I think all roads will probably lead to a conclusion that after three years, it's probably okay to let this guy back and be able to tweet (laughs) . I mean, it's not, this is not, you know, controversial stuff at this point.

David Sacks 59:03 Y- you know that the current thing is moving on from Ukraine when, uh, the topic all of a sudden is January 6th all over again and Trump, which it is on MSNBC. It's all January 6th all the time again. So, listen, I mean, thi- this is not a justification for the widespread censorship that we've seen. Like I mentioned, we've gone so far beyond isolated cases. Now it's entire categories of thought, and this has to be stopped.

Jason Calacanis 59:27 Well, what's your feeling on Trump? Should he be reinstated? If you were running Twitter, would you have done a time-based...

David Sacks 59:31 If you don't like Trump, just don't follow him. I mean, but, but frankly, it's, it's, um... Listen, I don't miss the tweets at all.

Jason Calacanis 59:39 My thoughts are-

David Sacks 59:40 But-

Jason Calacanis 59:40 Yeah.

David Sacks 59:40 I don't miss the tweets at all, I really don't. Um, I don't think that-

Jason Calacanis 59:42 They were damaging your party. That's how you felt.

David Friedberg 59:45 My thoughts have evolved. Before, when he first got banned, I was really supportive of it. Um, and there was part of me which was just afraid that he would get reelected, et cetera, et cetera. Now, come two years later, and to see all of the stuff and the escalation of de-platforming, I think the problem is exactly what you guys have just talked about, which is the person that does it today points to the person that does it yesterday, who points to the person that did it the day before as the justification. And so even though we don't want to draw a straight line between an Alex Jones and a Trump and climate change, unfortunately, there is this line. And so in general now, I'm much more free speech because I think it's much more fragile than I thought it was before.

Jason Calacanis 1:00:26 Gotcha. Your opinion has evolved and-

David Friedberg 1:00:28 Yeah.

Jason Calacanis 1:00:28 ... intelligent people should respond to new data. I appreciate that.

David Friedberg 1:00:31 And I was a person that, you know, as David said, was a little disingenuous in the sense that I kind of was for free speech as long as it was stuff that I agreed with. But two years later, I'm much more on David's original camp now, which is we just need to establish this as a pillar of society and not deviate, and find credible voices on both sides. And then algorithmically and through people power, meaning through crowd, you know, um, wisdom of the crowds type stuff, help people figure out...... what is truthful and how much truth there is because that's a tractable problem. But the minute you start canceling stuff, today, as I sit in 2022, what I would tell you is I think it's very, very bad 'cause it's going in a really bad place.

Jason Calacanis 1:01:15 Friedberg, what are your thoughts on Trump specifically? Because it does seem like that's a part of the undercurrent here of, you know, he's gonna be coming back, possibly gonna be running again, and January 6th is considering-

Chamath Palihapitiya 1:01:25 He's got the Truth Social network. Download the app, listen to what he's got to say. It's rocking and rolling over there on the, the Truth app. I heard they took it down, like it wasn't even working, right? The, uh, the new thing he built. But look, I mean-

Jason Calacanis 1:01:36 What does that, what does that SPAC trading at? (laughs) Was it at $20 billion or something? (laughs)

Chamath Palihapitiya 1:01:40 Yeah. Still doing well. Um, but look, they had, you know, obviously a reaction, um, a market-driven reaction to the fact that he was taken off Twitter, and he said, "I'm going to go make an alternative." And that's, you know, certainly proving to be technically difficult. But as we all know, it's not technically impossible, he's just got probably the wrong people working on it. Um, but if they wanted to have an alternative platform for hearing that voice, you know, have at it. Uh, I don't know what else to say. I mean, it's Twitter's decision. They're, they're curating their audience. All these guys want to be free speech advocates, but at the end of the day, they're all editorializing, and that's just the world we found ourselves in.

David Friedberg 1:02:16 I hope Elon takes a sledgehammer to that.

David Sacks 1:02:18 Yeah. I mean, it's exactly what Shamass said, is they're all, they all believe in free speech and free markets when it produces the outcome they like. But when the outcome is not what they like, all of a sudden they're like, "Whoa, whoa, whoa, these companies are monopolies."

Jason Calacanis 1:02:29 Well, and here's another opportunity. If you're not libertarian and believe in, like, you know, free speech and, you know, constitution, like, uh, you could buy shares, you could lead a group, start a Dow, start a hedge fund, whatever, build a block to buy a bunch of shares, and then you could get a board seat on Twitter and you could have this debate on the board of Twitter. And it's important that-

David Friedberg 1:02:49 You're absolutely right. You are absolutely right. And you can see, by the way, you know, small hedge funds with small amounts of capital, like Engine No. 1, you know, they were able to go up against an Exxon and beat them. So to your point, Jason, for the people that actually want to censor more, if they can organize the capital, they absolutely have the right to do that, and I, and I think that they, if they, if they're able to do it, they should win.

David Sacks 1:03:11 That's what, that's, that's what Mike Solana was kind of getting at. He's like, "Look, if you don't like, if you don't like the, the free speech that's happening on Twitter, go create your own social network," 'cause that's what they were saying before about-

Jason Calacanis 1:03:20 Or buy the shares. Buy the shares and have influence.

David Sacks 1:03:21 Yeah.

Jason Calacanis 1:03:21 That's how corporations work. The shares or the votes.

David Sacks 1:03:24 Yeah.

Jason Calacanis 1:03:25 Friedberg, update us on, you know, the Ukraine is month two now. Uh, I'm sorry, Ukraine is in month two. Sorry for putting the thumb before it, it's a tough habit to break. Friedberg, tell us, um, you know, the second-order, third-order effects of fertilizer and food at this point. We've had this back and forth, and now I think the world is starting to realize, "Hey, Friedberg was right. These downstream effects are gonna be significant." I asked you a question about these which is, can the world not mobilize? If these are about 1% of the calories, 20 or 30% of calories in a certain country, could the world not mobilize to find other caloric sources? Rice, fish, soybeans, whatever. Or is our system so fragile that we can't rally around sending food to anywhere on the planet despite the fact that we can fly anywhere and go on vacation for two weeks anywhere on the planet?

Chamath Palihapitiya 1:04:15 No. The food system is complex and efficient, but it, um, does not have strong, um, redundancy or malleability. Uh, so, uh, take for example, you know, how do you get flour? You get flour in, um, uh, in your food from, uh, a food company that bought the flour from a miller. There are mills around the world that process flo- wheat into flour. You can't take that same mill and process corn into flour. There's different technology, different equipment that's used. Same with soybeans and so on. So when you look at how the food supply chain is constructed, you know, there's a local point of consumption, which is a store, then there's a food processor, and you work your way kind of up the supply chain, and there's a certain input that's required to make the output that people consume. And so calories, while they might be fungible practically speaking, or, or, um, philosoph- or fundamentally speaking, they're, they're not necessarily fungible practically speaking on the ground. When you actually try and plug in, let's say, soybeans into the milling supply chain to make the pasta or the bread that everyone consumes in Tunisia, it's not gonna work. And the same is true with rice. And then the, the more important, um, dynamic force that's underway is that these markets for food and commodities globally are not controlled by government. They're controlled by private businesses, and there is a market for these products. And so what happens is, as the food supply chain threat hit, countries like China and others started to stockpile. They started to buy lots and lots of supply, drive up their stocks and their reserves, you know, for fear of the famine that's about to hit us in about nine months, and when they did that, there was now less food available to Tunisia and to Eritrea and to Egypt and so on. And so we're starting to see the effects of that dislocation driving dynamic market forces where certain buyers stock up, and then the folks that can't afford to step in not being able to acquire product and being left. So not only do we have a local production differential that makes it hard to have all calories be fungible, we're also seeing this dynamic where there's a bifurcation where the haves have more and the have-nots have less, and that's gonna really make this famine kind of hit home in a, in a really, really sad way in the months to come. We're already seeing, as, as I mentioned two weeks ago, yeah, I, I, I, and as I mentioned a few weeks ago, the fertilizer problem driving acreage down. So the USDA farm report comes out, they survey farmers and figure out how much they're gonna plant every year, and they just downgraded the number of corn acres that are gonna get planted this year, which is happening starting this month, from 93 million acres to n- 89 million. That doesn't sound like a lot, but four million acres-

Jason Calacanis 1:06:56 It's 5%, yeah.

Chamath Palihapitiya 1:06:57 ... four million acres coming out of production of corn in the US is an incredible amount of calories that are not gonna be planted to corn. And so that has all these downstream effects. And again, this, this crop doesn't come to harvest till-

Jason Calacanis 1:07:09 ... you know, September, October. Then it's gonna get processed and it turns into food. So by the time the e- the effects of this decision-making hit the marketplace, the availability of calories and the stockpiling that's going on, it's like boom. Some countries are gonna be, uh, you know, they're gonna have a limited budget, they're only gonna be able to access so much food, and they can't access any. And other countries are gonna be fine. The United States is gonna be fine. Western Europe will be fine. China will be fine. Sri Lanka is gonna be a mess. Northern and Eastern Africa is gonna be a mess. I mean, there's, like, places around the world that we are gonna have to scramble. I, I don't have a real easy answer. There's no s- simple plug and play here. It's gonna be a really complex set of problems that are gonna, uh, need to be solved.

Chamath Palihapitiya 1:07:49 Well, Sri Lanka does grow a lot of its own food, so they may be okay, 'cause they also have rice.

Jason Calacanis 1:07:52 They're a net importer, right? I mean, they're a pretty big net importer. So they make a lot of food, but they em- they, they rely on imports a lot for, for calories there. So, yeah, I mean, and, and that's the case with a lot of places. A- all around the world, a lot of people think, "Oh, we have farmers," but most countries, you know, particularly in the developing world, are net importers. They, they, they rely on third-party supplies of food. So, again-

Chamath Palihapitiya 1:08:13 Sure, but, but a lot of what you're talking about, though, are not, um, they're, they're processed foods that come into the country. Sacks, anything to add here?

David Sacks 1:08:20 Well, I mean, I think that the Ukraine war is kind of entering a, a chronic phase. I mean, it's sort, sort of entering a new phase. The first phase, you'd have to say that the Ukrainians won. Uh, you know, the, Russia wanted to topple Zelenskyy's regime, maybe