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

1. 0:00 – 8:01

   Bestie intros, All-In Summit update, and more

   1. JCJason Calacanis0:00

      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.

   2. CPChamath Palihapitiya0:14

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

   3. JCJason Calacanis0:19

      (laughs)

   4. DSDavid Sacks0:20

      You sound wrecked.

   5. CPChamath Palihapitiya0:21

      Th- how big was your night last night? Admit it.

   6. DSDavid Sacks0:23

      (laughs)

   7. JCJason Calacanis0:23

      I didn't go that big. On a scale of one to Charlie Sheen-

   8. DSDavid Sacks0:25

      (laughs)

   9. JCJason Calacanis0:25

      ... it was like a six.

   10. CPChamath Palihapitiya0:27

       There's like a Martin Sheen in his 30s.

   11. DSDavid Sacks0:28

       What does that mean, one to Charlie Sheen?

   12. JCJason Calacanis0:30

       Yeah, I had a couple of beverages.

   13. DSDavid Sacks0:31

       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?

   14. JCJason Calacanis0:36

       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.

   15. CPChamath Palihapitiya0:47

       Mm-hmm.

   16. DSDavid Sacks0:48

       Didn't they have to go to rehab?

   17. JCJason Calacanis0:49

       Yeah. (laughs) They had to go to-

   18. DSDavid Sacks0:50

       Exactly. (laughs)

   19. CPChamath Palihapitiya0:50

       They did.

   20. JCJason Calacanis0:50

       I'm super high functioning.

   21. DSDavid Sacks0:52

       (laughs)

   22. JCJason Calacanis0:52

       Let me tell you something. Charlie Sheen cannot be six.

   23. DSDavid Sacks0:54

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

   24. JCJason Calacanis0:58

       Three times, yeah.

   25. DSDavid Sacks0:58

       Like, what are you talking about?

   26. CPChamath Palihapitiya0:59

       Yeah.

   27. DSDavid Sacks0:59

       That's a six on his scale.

   28. CPChamath Palihapitiya1:01

       (laughs)

   29. JCJason Calacanis1:01

       (laughs) That to me is a six.

   30. DSDavid Sacks1:03

       (laughs) I don't wanna know what seven is.
2. 8:01 – 14:09

   Layoffs and shutdowns: Fast, Better.com, GoPuff; Chamath gives a macro- and micro- overview for startups

   1. JCJason Calacanis8:01

      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?

   2. DFDavid Friedberg10:26

      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.

   3. JCJason Calacanis12:37

      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-

   4. DFDavid Friedberg12:43

      Look-

   5. JCJason Calacanis12:43

      Or is it inflation coming down a couple of points?

   6. DFDavid Friedberg12:46

      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.

   7. JCJason Calacanis13:53

      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?

3. 14:09 – 41:51

   Preventing layoffs, culpability in Fast's shutdown, VC diligence strategy, VC/founder model

   1. JCJason Calacanis14:09

      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?

   2. DSDavid Sacks14:15

      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.

   3. JCJason Calacanis14:58

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

   4. DSDavid Sacks15:03

      Yeah, I mean, look-

   5. JCJason Calacanis15:03

      ... suspension of disbelief that creates this kind of stupidity?

   6. DSDavid Sacks15:07

      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?

   7. JCJason Calacanis15:28

      Yeah. (laughs)

   8. DSDavid Sacks15:29

      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.

   9. DFDavid Friedberg16:33

      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.

   10. DSDavid Sacks16:41

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

   11. JCJason Calacanis16:48

       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.

   12. DSDavid Sacks17:02

       Right, exactly. No, look, the reason why a strategic investor-

   13. JCJason Calacanis17:05

       I don't know why you're making that distinction. Sorry, go ahead.

   14. DSDavid Sacks17:06

       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-

   15. DFDavid Friedberg17:22

       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.

   16. DSDavid Sacks17:42

       (laughs) I mean, Stripe raised-

   17. JCJason Calacanis17:43

       It just doesn't make, it doesn't make any sense.

   18. DSDavid Sacks17:44

       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.

   19. DFDavid Friedberg17:53

       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-

   20. DSDavid Sacks18:12

       But I guess Stripe, it was a board-

   21. JCJason Calacanis18:13

       To be clear, Stripe was on the board, Index was on the board.

   22. DSDavid Sacks18:16

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

   23. JCJason Calacanis18:20

       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?

   24. DFDavid Friedberg18:38

       Do you guys remember when Philip Kaplan used to run a website called Fucked Company?

   25. JCJason Calacanis18:42

       Absolutely.

   26. Oh, yeah.

   27. Yeah, a good friend of mine, yeah.

   28. (laughs)

   29. DFDavid Friedberg18:44

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

   30. JCJason Calacanis18:47

       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.
4. 41:51 – 1:03:24

   Elon buys a 9% stake in Twitter and joins the board: what does this mean for Twitter, free speech online, evolution of deplatforming

   1. JCJason Calacanis41:51

      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.

   2. CPChamath Palihapitiya43:08

      (laughs)

   3. JCJason Calacanis43:08

      Thoughts on what this does for-

   4. DSDavid Sacks43:10

      (laughs)

   5. JCJason Calacanis43:11

      That wasn't ... Why are you laughing?

   6. CPChamath Palihapitiya43:13

      It's like such a funny transition. "Sacks, you worked with Elon at PayPal."

   7. JCJason Calacanis43:18

      Worked for Elon, I guess?

   8. DSDavid Sacks43:19

      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-

   9. JCJason Calacanis43:55

      Who is Mike Solana? ... tweets about this. Who does he work for? Is he a Founders Fund guy?

   10. DSDavid Sacks43:58

       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.

   11. JCJason Calacanis44:14

       He's iconoclastic and, yeah.

   12. DSDavid Sacks44:16

       Yeah.

   13. JCJason Calacanis44:16

       He, he, he'll, he'll swing the sword.

   14. DSDavid Sacks44:18

       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-

   15. JCJason Calacanis44:52

       Yeah, Parler, Truth-

   16. DSDavid Sacks44:52

       ... what we want over here." Right.

   17. JCJason Calacanis44:54

       ... whatever.

   18. DSDavid Sacks44:55

       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.

   19. CPChamath Palihapitiya45:06

       I think it's really fabulous.

   20. JCJason Calacanis45:08

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

   21. DSDavid Sacks45:12

       (sighs)

   22. DFDavid Friedberg45:12

       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-

   23. JCJason Calacanis46:29

       Misinformation comes to mind, yeah.

   24. DFDavid Friedberg46:32

       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.

   25. JCJason Calacanis47:04

       All right. Friedberg?

   26. CPChamath Palihapitiya47:05

       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.

   27. DFDavid Friedberg48:43

       But Facebook and Google are concentrated.

   28. CPChamath Palihapitiya48:45

       Yeah, they- they actually have that dual class, yeah.

   29. DFDavid Friedberg48:45

       They have a dual-class structure and- so what are you talking about?

   30. JCJason Calacanis48:48

       The issue, Chamath, is in those companies, they're scared to death that they'll lose their employees and have chaos at work.
5. 1:03:24 – 1:09:40

   Food shortage update, ideal US objectives going forward

   1. JCJason Calacanis1:03:24

   2. DSDavid Sacks1:03:24

      Yeah.

   3. JCJason Calacanis1:03:25

      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?

   4. CPChamath Palihapitiya1:04:15

      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-

   5. JCJason Calacanis1:06:56

      It's 5%, yeah.

   6. CPChamath Palihapitiya1:06:57

      ... 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-

   7. JCJason Calacanis1:07:09

      ... 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.

   8. CPChamath Palihapitiya1:07:49

      Well, Sri Lanka does grow a lot of its own food, so they may be okay, 'cause they also have rice.

   9. JCJason Calacanis1:07:52

      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-

   10. CPChamath Palihapitiya1:08:13

       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?

   11. DSDavid Sacks1:08:20

       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 take Kiev. They obviously failed in that. Now we're in this, uh, phase where the fighting's over in the Donbass. It's basically the civil war has been going on there since 2014. And, um, and, and really, that's what it's now about. Uh, Zelenskyy has acknowledged that Ukraine will not be part of NATO, so that issue is kind of off the table. And so what they're really fighting over now is the status of these disputed territories in, uh, Eastern Ukraine, and I think it's gonna go on for a long time. That's what, you know, General Milley testified, it could go on for years. I think it's gonna become a sort of permanent feature in the background of Biden's presidency. And, um, I mean, I think the good news is that hopefully, the World War III, uh, aspect is off the table. It seems like the calls for us to im- impose a no-fly zone or to put boots on the ground, which y- you were hearing a lot of a few weeks ago, seems like that's off the table. So now it's just gonna be a protracted, I think, uh, civil war going on in the Donbass, uh, with between Ukraine and, and, uh, Russia and their proxies.

Episode duration: 1:17:37