All-In PodcastE95: Winter is Coming, Europe's energy crisis, Kim Kardashian's new PE firm & more
EVERY SPOKEN WORD
150 min read · 30,098 words- 0:00 – 3:34
Bestie intros: Luxury brand influencers, Birthday Party stories and more!
- JCJason Calacanis
... point of privilege. Sax wore this hat last week. Wh- what's this brand? Is this a Moncler hat you're wearing?
- DSDavid Sacks
Moncler, yeah. And actually, did you see that, that tweet? People- it started a-
- JCJason Calacanis
It's trending.
- DSDavid Sacks
It started trending after I wore it, so.
- JCJason Calacanis
It's sold out, dude. You sold out the Moncler hat.
- DSDavid Sacks
(laughs)
- JCJason Calacanis
So we have no advertising. We- it's stuck-
- DFDavid Friedberg
I feel like if, if we're not gonna do any advertising on this show, we should at least get free clothes. We get to pick through them, wear what we like.
- DSDavid Sacks
I know. Where's my cut? Where's my cut as an influencer?
- CPChamath Palihapitiya
The tweet basically said that I name-dropped Loro Piana and sent it through the roof, and then Sax, they've dropped Moncler. Both brands obviously are Italian, both entrepreneurs we know very well. Uh, and so I asked Nat, I said, "Nat, can you basically send this tweet over to them so maybe they can give us free clothes?"
- JCJason Calacanis
Yeah.
- CPChamath Palihapitiya
I haven't heard back.
- DSDavid Sacks
Yeah, I'll take free stuff. (laughs)
- JCJason Calacanis
Let's get the grift going, boys. Now, we're talking.
- DSDavid Sacks
(laughs)
- JCJason Calacanis
Now, we got some bestie grifts going.
- CPChamath Palihapitiya
Yeah.
- JCJason Calacanis
You're speaking my language.
- DFDavid Friedberg
Yeah. This is his cup of tea. Let's go.
- JCJason Calacanis
Speaking of grifts-
- DSDavid Sacks
I do like Moncler the way that Chamath likes Loro Piana.
- CPChamath Palihapitiya
Just so you guys know, at the birthday, Jason, that you missed-
- JCJason Calacanis
Are we gonna lash out to him?
- CPChamath Palihapitiya
... we played poker. We had a birthday- we had a surprise birthday party for me. Nat threw it. Sax showed up, Friedberg showed up, their wives showed up. It was incredible. J-Cal basically stiff-armed me. Um, but-
- JCJason Calacanis
I'm very sorry. It was a... By the way, that came together four days before your birthday, so just so you know.
- DFDavid Friedberg
Uh-huh.
- CPChamath Palihapitiya
Well, you know what? Kevin Hart showed up.
- JCJason Calacanis
Give us the best one-liner. Which one landed?
- CPChamath Palihapitiya
Oh, no. Jake, uh, you have no idea. These guys roasted me. It was fucking incredible. But the best of it was at the end, K Hart gets up with no preparation and skewers everybody. Friedberg, I mean, do y-... What did you think of, like, Kevin's roast? It was-
- DFDavid Friedberg
I have never laughed harder. He was so funny. He's like, "My wife walked in here and she looks at me and she's like-"
- 3:34 – 12:53
Jason reflects on the final Kara Swisher-hosted Code Conference, All-In media and hit piece requests
- NANarrator
in.
- JCJason Calacanis
We were at the, the Code Conference. We had the poker game. It was the last one after 20 years.
- CPChamath Palihapitiya
Big shout-out to Kara Swisher. Big shout-out to Kara Swisher.
- JCJason Calacanis
Yeah. Just, I wanna say, uh, to Walt Mossberg and Kara Swisher, um, 'cause they did the conference many years together, congratulations on a 20-year run. Uh, they're, uh, not gonna do it. Oh, Kara's not gonna do it next year, but, uh, my friend Jim Bankoff, uh, who runs Vox is gonna run it next year. Uh, so congratulations to him and Kara for, for a great run in all things D. They, you know, they, they, they, they had Steve Jobs at the first one for a speaker and, um, you can look it up. I got to ask him a question.
- CPChamath Palihapitiya
J-Cal, I don't know if you remember this-
- JCJason Calacanis
So nice.
- CPChamath Palihapitiya
... but you and I were there when, uh, Gates and Jobs, uh-
- JCJason Calacanis
Yes.
- CPChamath Palihapitiya
... did that speech together.
- JCJason Calacanis
Unbelievable. What a, what, what, what an incredible-
- CPChamath Palihapitiya
Unbelievable.
- JCJason Calacanis
... legacy that she documented all of this for the industry.
- CPChamath Palihapitiya
Unbeli- Code, Code is incredible. Like, I mean, the number of, the amount of memories I have from that place is incredible.
- JCJason Calacanis
Yeah, it was great. And so we'll see where the poker game goes next year, probably the All-In Summit.
- DFDavid Friedberg
And to think the All-In Summit could have been that.
- JCJason Calacanis
It, it's-
- DFDavid Friedberg
Just to see.
- JCJason Calacanis
... it's tr- heartbreaking. It's heartbreaking.
- DFDavid Friedberg
Heartbreaking.
- JCJason Calacanis
I'm not saying that I'll be hosting the Code Conference next year, but, (laughs) you know, they're looking for an impresario. This is the problem with this pod is we're drawing too many high profile people in now. Um, but, uh, interestingly, Friedberg and I, uh, we now have, uh, the press wants... The, the, the, the press are trying to do a profile of the pod and so we had three or four different press outlets now, I won't say which ones, but have all asked us to do like a, a sit for a profile. We've said no, uh, but, uh, just because we don't-
- DFDavid Friedberg
And I said, "Why don't we do a profile of them?" Who's to make them the media, you know?
- JCJason Calacanis
Well, I mean, it's-
- DSDavid Sacks
Exactly.
- DFDavid Friedberg
We've got to super flatter them.
- JCJason Calacanis
Our competitors, our competitors want to do a piece on us. Why would we cooperate with that?
- DFDavid Friedberg
Who's got the audience? I don't know.
- DSDavid Sacks
You know it's gonna be a hit, a hit piece.
- JCJason Calacanis
It'll probably be a hit piece, yeah.
- DSDavid Sacks
Of course.
- DFDavid Friedberg
Uh.
- 12:53 – 15:39
Passing of Queen Elizabeth II
- JCJason Calacanis
get to work, guys. There's too much- there's too much shit here.
- DFDavid Friedberg
Hey, do you guys want to talk about the Queen? The passing of the Queen real quick before we start? Or is that-
- CPChamath Palihapitiya
I would like to, yeah.
- JCJason Calacanis
Go ahead, Samath.
- CPChamath Palihapitiya
I was born in Sri Lanka. I was raised in Canada, so... And now I live in the United States. Obviously, I've been a citizen of all three countries. So two of the three countries, I've been a subject t- to the Queen. I mean, I mean, I'm part of the Commonwealth. And I just want to say, it was really sad for me. Like, these last couple of days when I would... saw that she was sick and then she had passed, I got to be honest with you, like it really touched me. She is an inc- I can't describe to you guys, for someone who is part of that realm, how important she is as a person. And then, you know, if you've seen, you know, the, the show on Netflix, it kind of romanticizes a little bit. But, you know, she has seen 17 prime ministers. She's seen so many presidents. She has seen the history of the world, uh, the modern world being made in front of her. So yeah, I'm a little sad, and I think she's an incredible person. And even if you don't agree necessarily with monarchies in general, I think you have to be super positive about her.
- DFDavid Friedberg
Or the history of imperialism. There's a lot of people that are kind of using this as a moment-
- CPChamath Palihapitiya
Yeah, look-
- DFDavid Friedberg
...to be negative, right?
- CPChamath Palihapitiya
Jamaica wants to become a republic. Australia wants to become a republic. They'll prosecute that in due time. But for right now, w- I just think that we have to celebrate this incredible woman who lived to an incredible age, who saw incredible things, and who dedicated her entire life to the public service, and lived it totally neutrally, which in today's world, nobody else does. Everybody else takes a point of view.
- JCJason Calacanis
That's a good point.
- CPChamath Palihapitiya
Everybody else, everybody else tries to basically, like, you know, create a schism. She never did that in 70 years as the Queen.
- DFDavid Friedberg
Yeah. Like very stoic, very stoic, and a symbol of service, not a symbol of dictatorship, right? I mean, there seems to be a very different role that she's taken as a monarch than, I think, what-
- CPChamath Palihapitiya
Yeah.
- DFDavid Friedberg
... has maybe historically been the role, which is, uh-
- CPChamath Palihapitiya
It's incredible.
- DFDavid Friedberg
... pretty profound, right?
- JCJason Calacanis
I- it's extraordinary that-
- CPChamath Palihapitiya
It's incredible.
- JCJason Calacanis
...somebody would put 70 years of service and be that diligent, uh, and I think stoic, and, and there for her people, and to the people who are, you know, suffering and, and, and grieving, you know.
- CPChamath Palihapitiya
That word you said really resonated with me. Like diligent is such a great word, because it's like you're disciplined, you put in hard work, you're focused on the long-term goal, and then you're selfless.
- JCJason Calacanis
Yes.
- CPChamath Palihapitiya
Not many people, not many people, J-Cal, you know this, exhibit that at all, but then definitely don't exhibit it over 70 years.
- JCJason Calacanis
It's a s- it's extraordinary. And, you know, it's, I, I know a lot of people are grieving right now, so y- you have our sympathy-
- CPChamath Palihapitiya
As somebody, as a citizen of the monarchy, I am... of the Commonwealth rather, I am pro Queen Elizabeth and it deeply saddens me to see that she
- 15:39 – 53:03
Winter is Coming: Europe's energy crisis, potential fracturing of the Western Alliance, how we got here, endgame, and more
- CPChamath Palihapitiya
passed away.
- JCJason Calacanis
All right, listen, we got to talk about, uh, winter is coming. I'm not talking (laughs) about Game of Thrones. Let's talk about something serious that's going on here. Um, and we, you know, we don't like to be too repetitive here, but I think we correctly, um, predicted that, you know, this, if this Ukraine... I think maybe, Sachs, you pointed this out, of this Ukraine-
- DSDavid Sacks
Yeah, what do you mean we, kemosabe?
- JCJason Calacanis
All right, listen, I'm trying to give you fucking credit and you're interrupting me.
- DSDavid Sacks
(laughs)
- JCJason Calacanis
Can you just take the fucking win? You're such a miserable bastard. I try to give you one fucking win-
- DSDavid Sacks
Okay, finish, finish what you were saying.
- JCJason Calacanis
...and you cut me off. All right, listen, we've been talking about this Ukraine thing. Sachs correctly predicted, if this goes to winter, this is going to get acute. And, of course, uh, right on cue, here we have it, Russia has essentially cut off, uh, gas, uh, to Europe right now by claiming that the Nord Stream 1, uh, the North Pipeline, uh, that Russia built that goes under the Baltic Sea, they basically say a turbine's broken in it magically at this point in time, right before winter, this turbine broke, according to Putin, um, and he needs a turbine. Um, and if they give him a turbine, he said he's gonna turn it back on. Uh, this in the face of, uh, Europe saying they were gonna cap the price of Russian gas. I don't know how that works exactly, that you tell people what they can charge for gas. But, uh, Russian gas shipments, uh, which Germany is particularly, uh, dependent on, have fallen 89% since last year, and the price of liquefied natural gas in Europe is four times the level a year ago, uh, and eight times, uh, the level of the US. Obviously, we are... have gotten incredibly lucky to find all this, uh, natural gas here, and we are a huge exporter of natural gas and oil in the United States. So we're good. Uh, this is the highest power prices have been in three decades. And, uh, the perfect storm is not limited to oil and the Russia and the Ukraine war. Uh, France's 56 nuclear power plants are running at half strength because of shutdowns over corrosion problems, and as we talked about maybe two episodes, droughts have undermined hydroelectric power, (laughs) uh, because of the-
- DSDavid Sacks
That's not the main issue here. The main issue is the cut-off-
- JCJason Calacanis
Well, no, I'm just saying-
- DSDavid Sacks
...of Russian gas.
- JCJason Calacanis
...th- th- this is... there is a perfect storm here.
- DFDavid Friedberg
It's not just that. 40% of Europe's, uh, energy consumption comes from Russian natural gas. 40%. And so you could see variance. There's a baseload requirement for lighting and electricity, and then there's industrial production, and then there's heating and cooling. Heating and cooling demand is linearly tied to the number of degrees above or below 65 Fahrenheit, on, on average. And so as the temperature goes up, people turn air conditioners on. As the temperature goes below 65, they turn their heaters on. So there's a linear demand for power consumption at those. So number one is you could kind of, you, it's... you can either cut baseload, which is lighting and basic kind of, uh, operations. Number two is cut industrial production, which is already happening. A lot of fertilizer plants are shutting down in the country, that are dependent on natural... in, in the, in the continent, uh, that are dependent on natural gas. A- and number three is this heating, uh, heating and cooling, and that really ends up being kind of a market-driven function, which is how pricey is this stuff.... 'cause there's limited supply. So you could normal, in a normal year, see fluctuations around 5, 10, 15%, maybe, with good kind of action and behavior. 40% of energy being cut is a massive, massive problem. There will be significant price climbs for the v- kind of variable demand and heating and cooling and so on, but for the price to go up by 6X, 7X, 8X, 10X, 15X over normal prices for someone is unbearable by the average household, unbearable by the average small business, unbearable by the average small building. Um, and so it, it's causing critical failure, uh, across the economy, across the currencies, across debt markets, uh, and there's real concern that ultimately the shutting off of 40% of the energy supply to the continent leading into winter, winter is coming, where energy demand spikes because of the need for heating, is gonna cause real kind of problems. So there's the cataclysmic problem of people actually being able to heat their homes, there's the industrial problem of parts of the, uh, economy shutting down, and then there's the currency problem of the governments needing to step in and bail out industry, buy super expensive gas, give it to their citizens and their businesses at a discounted price, and seeing their national and sovereign debts skyrocket, which is now expected to happen. And as a result, the British pound is trading at its lowest level since 1985. And as a result, people are rushing to the street from Prague to Cologne, Germany, even in London, proclaiming that the governments aren't doing enough, number one, to stall the, uh, the rate of inflation, to make, uh, energy prices cheaper through action by having the government subsidize, and number three, which I think was inevitable and is now becoming kind of the surprise factor to the Ukraine crisis, citizens are saying, "End this war now. Get to the table with Russia, come up with a settlement, and get the heck out of Ukraine." By the way, that's not everyone saying it, just to be clear, but there is this rising rioting, protesting behavior happening across Europe, particularly in Eastern Europe, um, as a result of the Ukraine war. And so we're seeing, you know, I think a big shift in attitude and a big shift in kind of the societal perception of this war, particularly in Europe because they're so acutely feeling the effects and we are not in the US. They're acutely feeling the effects and they're saying, "We need to stop this war now. We need to get out of the way. We need to let Russia turn the gas pipeline back on, and we need to figure out a resolution. Stop supporting Ukraine." And that's a-
- CPChamath Palihapitiya
Chemath, what is the, um-
- DFDavid Friedberg
... yeah, that's a voice that, that's a voice that did not exist very loudly at the beginning.
- CPChamath Palihapitiya
Yeah, let me-
- DFDavid Friedberg
And it's, and it's starting to swell.
- CPChamath Palihapitiya
Running out of food or, (laughs) you know, running out of heat to keep your kids warm, I mean, these are pretty acute situations. Chemath, what's the vibe in the Middle East about this? Are, are they looking at it and seeing it as an opportunity? Are they looking at it and seeing it as, you know, a manageable crisis? And, or, and what do they consider their participation in this to be? There's a very structured framework for energy production, which is OPEC and OPEC+, and, you know, they have done, not just the Middle East, but frankly the Middle East plus, um, the United States, the best job possible to basically get the maximum demand so that there's as much energy as possible. The reasons that Europe are in an energy crisis really should be discussed honestly. So number one, an entire continent essentially allowed a 16-year-old girl to dictate their energy policy. And when Greta Thunberg was able to shame an entire continent into basically walking away from nuclear and not really evaluating how you can actually have energy independence, what they did was they put Europe in an incredibly fragile position. And at the beginning of this war, it wasn't clear how much damage the lack of Russian energy would do to the European economy, but now it's absolutely clear, which is that Europe- How do they not see that, Chemath?
- DFDavid Friedberg
We said it on the pod.
- CPChamath Palihapitiya
It's incredible because-
- DFDavid Friedberg
We said it on the pod in February. We said-
- CPChamath Palihapitiya
How did they not... I mean, Trump said it years ago. I mean, it, it's-
- DFDavid Friedberg
The first thing we said-
- CPChamath Palihapitiya
How is it not obvious? The problem is, you had these... Look, to be honest, you had these two goofballs. You had a goofball on the left, which was a 16-year-old girl who knew nothing, and you had a goofball on the right, which was a president whose language turned people off, even though the message that he was delivering was 100% right. When, when Trump went to the United Nations, he was clear, he was precise, and in hindsight, and I'm saying this as a Democrat, he was right. Oh, obviously right, yeah. About the German reliance on Russian gas- Yeah. ... and, and the European reliance on gas. Uh- What did they think would happen?
- DSDavid Sacks
The important thing was, was the reaction. Remember the German delegation snickering while he was talking?
- CPChamath Palihapitiya
They were laughing.
- DSDavid Sacks
Yes.
- CPChamath Palihapitiya
They were laughing. But, but we're, what we're... but we're missing the real lesson. The real lesson is that in all of our haste to basically overtly judge Trump because of his delivery and his, you know, his personal style or whatever, we ran towards a 16-year-old person who has no rooting in science or technology to dictate the energy policy of an entire continent. I mean, the... She was nominated for a Nobel Prize, just to remind you guys. This is how insane all of these people were. So in an effort to virtue signal to the hilt and beyond, what we essentially did, what the entire world did, was turn a blind eye to science and turn a blind eye to mathematics and simple understanding of supply and demand. And so now you have this situation where the entire continent of Europe is probably on the precipice of a- at, at the minimum a recession, but frankly, there's a lot of scenarios where it could be meaningfully worse. And I think what it does is ultimately, it has forced a Russian endgame. And that Russian endgame is essentially the following, which is that...Germany will probably be the first to capitulate, but it'll be a combination of the United States and Europe who negotiate some kind of a settlement.
- JCJason Calacanis
They have to fold.
- CPChamath Palihapitiya
And, and the reason, well, without calling it folding, I would just say there's a settlement. And the reason the settlement is necessary is you're gonna start to impact tens of millions of people's lives in an incredibly arduous way. And those people are asking their leaders to tell them why it's worth it. That's why you're seeing protests all around Europe. People have decided that this war has gotten two or three steps beyond what they thought they were getting into, and that it was shining light on a whole set of decisions that never should have been made.
- 53:03 – 1:03:46
Kim Kardashian's new PE firm, content as the dominant distribution channel, what will mega-influencers do to legacy brands
- DSDavid Sacks
problem.
- DFDavid Friedberg
All right, let's go. Come on, let's talk about Kim K., come on.
- JCJason Calacanis
There is no word on how much money she's raised for her private equity firm from Russian oligarchs. But Kim will serve as co-founder and co-managing partner. Uh, the firm was co-founded with 16-year Carlyle veteran, Jay Sammons, uh, who will run day-to-day ops. And, uh, uh, people may not know this, but Kim founded SKIMS, that's her, uh, undergarment company in 2019. It was last valued at $3.2 billion. Um, she has obviously got the largest following and is the biggest influencer in the world. 329 million followers on Instagram alone. Our friend, Gavin Baker, uh, responded with a tweet-
- CPChamath Palihapitiya
MrBeast actually, MrBeast actually just passed him.
- JCJason Calacanis
Okay. So, those are two examples of people who can put a consumer packaged good in the world and make it number one instantly.
- DFDavid Friedberg
Okay.
- JCJason Calacanis
Gavin, uh, Baker, a friend of ours, uh, tweeted, uh, that she adds massive value, uh, in this exact regard. Uh, what do you think, boys? Is she gonna have a-
- DFDavid Friedberg
Here's, here's why I think, here's why I think-
- JCJason Calacanis
... consumer growth?
- DFDavid Friedberg
... this is so important.
- JCJason Calacanis
Go.
- DFDavid Friedberg
I, I have a really strong belief that in the next 30 years or so, all traditional brands are gonna die. And I think that, um, what we're seeing happening right now with the, with the power of, um, democratized media, like us creating a podcast, there are hundreds and now thousands of individuals who have stood up and created their own brand and their own presence because of the content that they create on Twitch, on Twitter, on YouTube, et cetera, on podcasting. And as a result, they become the trusted sources of influence, and it's why they're called influencers. And ultimately, these influencers are becoming the brands. They can, like MrBeast launched a chocolate bar, became like the number one chocolate bar in the country. He just opened up a burger restaurant last week. Number one, number one...
- JCJason Calacanis
10,000 People showed up.
- DFDavid Friedberg
No, more than that. Like, 100,000 or something. It was insane. It was like the number one burger restaurant, uh, opening, or number one restaurant opening in history. Um, Kylie Jenner launches a makeup brand, takes off, becomes this billion dollar brand. Kim Kardashian launches a clothing brand, becomes a $3 billion brand. These are not just brands, they're businesses. And here's what I think is the most prescient M&A transaction of 2022, and you guys can tell me I'm crazy. I think the most important M&A deal of 2022 was when Penn Gaming bought Barstool Sports because it shows that every consumer packaged good or every consumer services business ultimately needs to be a content business. And if you don't naturally have content creation in your blood, you have to go and buy a content business or you are gonna die. And that's why I think all traditional brands that aren't oriented and built around...... content creation as their primary differentiating foundation will not survive and will not be able to compete effectively. And instead, what we're gonna see is influencers and, um, individuals that create content build and distribute consumer goods and consumer services in a more efficient way because, guess what? They've got distribution built in.
- JCJason Calacanis
Distribution built in, of course.
- DFDavid Friedberg
And distribution is the number one problem with all consumer services and all consumer goods. So I think in the future-
- JCJason Calacanis
It's cap.
- DFDavid Friedberg
... all advertising-
- JCJason Calacanis
Yeah.
- DFDavid Friedberg
... all advertising and marketing gets replaced by content creation, and content creation direct to consumers through the pl- the social media platforms becomes the mechanism by which people are aware of and buy goods and services.
- JCJason Calacanis
Chemal, you're next.
- DFDavid Friedberg
So that's why I think this deal is so important, and I think it's a, it's a, it's another one of what we're seeing in 2022, which is the stacking away towards the end of nameless, faceless brands and the evolution of the influencer.
- CPChamath Palihapitiya
I think Kim Kardashian is incredible. She is an incredible businesswoman, and the fact that she can stand up what will probably be, like, a multi-billion dollar private equity fund. Um, and frankly, the companies that she invests in has, um, a really compelling chance of being successful because she can basically pour so much visibility and notoriety and awareness of a brand into that company that that cap table, if I was a director, I would say, "Of course, give her whatever she wants." So that's the first thing. And the second thing I would say is that I think what Friedberg says is completely right. I think we're at a point in time where the biggest thing that if you wanna build a consumer business, my advice to you as an entrepreneur is you need to build direct distribution scale because what that translates into, what Kim Kardashian proves, what MrBeast is proving, is it's all about subsidized CAC, where you don't custo- cost of acq- uh, customer acquisition, where you are not paying dollars to Facebook and Google. But instead, because you have direct distribution and a relationship with tens or hundreds of millions of users, you can pour them into different experiences. And when you can do that at s- basically virtually zero cost, your entire margin structure of how you build a consumer business has changed overnight. So that's what they've proven. They've proven that you need to first build a brand, and then you can put, you trick, convert that brand into a distribution funnel and then to basically pour all kinds of services into it. And one of the services, as it turns out, is now a private equity fund. So I think it's incredible, and I hope she's super successful.
- JCJason Calacanis
Sax, do you think this, um, influencer, uh, strategy is here for and gonna have a major impact on the venture business?
- DSDavid Sacks
I think it's pretty interesting.
- JCJason Calacanis
I mean, we're soaking in it, (laughs) but ...
- DSDavid Sacks
I think it's pretty interesting in the consumer space for the reason Friedberg said, which is distribution is so hard. So creating a great product is hard. Distribution's even harder. And this is a realization I had, you know, many years ago and which is when I started doing Yammer and then, you know, Craft started focusing on SaaS, which is at least when you do a B2B product, you know, a software as a service, you can charge enough money for it that you can get a sales team to pencil. So in other words, you charge an enterprise enough money for the software that you can then pay a salesperson to go out and sell it. So there was always a distribution model built in for B2B, and that's why I've always liked that is there's a playbook there, where if you just build a good enough piece of enterprise software, good enough product, there's always gonna be distribution for it. However, that's not true with consumer because consumer products are usually ad-based. You can't generally charge that much, if you can charge at all. They have high churn rates. And so therefore, B2C only works if you can find a very low-cost, scalable distribution channel. And I think that's what, to Friedberg's point, I think that's what the Kardashians are offering. It's clearly worked for their own products. I guess we'll see how extensible it is, but this is really the key challenge with all consumer stuff is just, how do you find a very cheap way of distributing it? In the past, the consumer products I've been involved in, like PayPal or investing in social networks like Facebook, they were viral. Then, they were exponentially viral. So they were able to basically grow virally for free. So you either have to have, you know, extraordinary virality to the product or some other distribution trick that allows you to scale at low cost because you can't afford a sales team.
- DFDavid Friedberg
And what we're seeing i- is the base of doing that is to create content. MrBeast created content for years before he built a big enough audience to do that. Kim Kardashian did content for years before she had a distribution to do that. Dave Portnoy and Barstool Sports. I mean, the guy, Dave Portnoy, and this is incredible-
- JCJason Calacanis
Jason Calacanis.
- DFDavid Friedberg
Jason Calacanis, yeah. Seriously. I mean, Portnoy was out, uh, rating pizza, and you know, now he has all these other kind of, you know, media and content kind of, um, branches of his platform, but it's all content creation. And on top of that content creation-
- 1:03:46 – 1:11:08
Overprescribing of amphetamines to children
- JCJason Calacanis
people show up. Anybody have plugs or anything that they, uh, wanna get off their chest? Sax, anything else you wanna plug it out with you?
- CPChamath Palihapitiya
I do. I do.
- JCJason Calacanis
Okay, we got a plug.
- CPChamath Palihapitiya
I do. There is a- an epidemic right now of the over-prescription of amphetamines to children who are diagnosed with ADHD.
- JCJason Calacanis
Terrible. It's terrible.
- CPChamath Palihapitiya
Um, it is an enormously important issue that doesn't just touch kids anymore, but now also touches adults. You've seen a lot of really kind of bad companies that are over-prescribing this stuff get shut down and get sanctioned. Um, so I just wanted to let anybody who's listening know, and this is me talking my book, so take this with a grain of salt, but there's a company that I'm involved in that has a video game that has been approved by the FDA to be, uh, a useful treatment for kids who have been diagnosed with ADHD. So, if you have an eight to 11 year old, you can go and talk to your pediatrician to find out about this solution. It's called Akili, and it will allow you to prescribe to them a video game that they play 30 minutes a day.
- JCJason Calacanis
I just wanna make sure people hear the name. It's Akili, A-K-I-L-I. So, if you would do-
- CPChamath Palihapitiya
A-K-I-L-I.
- JCJason Calacanis
... a Google search for Akili, A-K-I-L-I Interactive, and you'll find it.
- CPChamath Palihapitiya
And go talk, go talk to your pediatrician if you are a parent-
- JCJason Calacanis
Make a good decision. Yeah.
- CPChamath Palihapitiya
... of a child that's dealing with this issue. Go and read the label, have the doctor decide, okay? So I'm not telling you to go do this, but I'm asking you, it applies to you.
- JCJason Calacanis
Look into it. Just look into it.
- CPChamath Palihapitiya
But the, the idea is that there are drugs that affect your brain. And now we are increasingly able to design software that exquisitely targets certain aspects of your brain and are able to train them. And this is really the first example of such a thing, that the FDA, who has reviewed all kinds of clinical data, um, has, uh, decided to approve. And so it's launching in the next few weeks. We've already written prescriptions to kids in every single state of, of the United States. And so to the extent that you're deciding what to do, or you have a child, or you have somebody in your family that is of age, eight to 11 years old, that's dealing with this, I would just encourage you to learn about it. That is a plug, and you know, all the disclaimers I just wanna I know, it's a great plug. ... make I, I think we should, at the end, just talk about some of the things we're working on. And this is an incredible one, the number of kids on these, you know, ADHD drugs, attention drugs, depression drugs- Millions.
- JCJason Calacanis
... anxiety drugs-
- CPChamath Palihapitiya
Millions. Millions.
- JCJason Calacanis
... it is out of control. There is...
- CPChamath Palihapitiya
Millions.
- JCJason Calacanis
And I, listen, I don't want to tell parents, I had a parent, um, but I will say this is becoming a dependency, and the number of drugs, I, I don't know if you saw that New York Times story where they put this one girl on 10 drugs, they're prescribing multiple drugs, and we don't know exactly what the long-term effects of children using these are. And there are other solutions. I'm not judging any parent. I'm not judging any teachers who's advising this, but this country and our society needs to really look deeply at this issue and say, "Should children..." 'Cause we didn't go on these drugs when we were kids. They didn't exist, and they haven't existed for all of humanity. And we need to think, "What kind of experiment are we running on 10, 20, 30% of kids-"
- CPChamath Palihapitiya
You are-
- JCJason Calacanis
"... in some schools."
- CPChamath Palihapitiya
... you're, you're stating something so incredibly important. You know, when you have kids that are pre-teens and teenagers, their physiology is changing dramatically, and all of a sudden, when you introduce a secondary chemical compound into all of that, you're exactly right. We don't really know what the outcomes are. And right now, I think a lot of people are worried that the over-prescription of drugs in this kind of condition is gonna create a next version of an opioid pandemic or epidemic, and I think, like, that's the thing that's so concerning.
- JCJason Calacanis
That's exactly the analogy, Chamath. Right now, I, this statistic is crazy. This is in The New York Times. Express Scripts, a mail order pharmacy, recently reported that prescriptions of antidepressants for teenagers rose 38% from 2015 to '29. We are prescribing these at an alarming rate. I have many parents in my circle who have kids who had what I would consider...... modest behavioral issues, or modest attention issues. And they talked to me about this, a- and they felt, in multiple cases, like they were being bullied or pressured by teachers to put their kids on behavioral drugs because their kids were behaving 10% as badly as I did in middle school or, or high school. Th- this is being used, I believe, this is my personal belief, I, I know there are some kids who need these drugs, or I assume that there are, but I think this is being used to keep kids in their seats and to make it easier for parents to have to deal with what are normally the hardships of teenager, you know, uh, teenagers. And just be very careful, parents, about the extent to which, you, you know, you might be being pressured. Perhaps... Parents have told me they felt bullied into giving their kids these drugs. It really is infuriating to me, and I think it's really great that you made an investment.
- CPChamath Palihapitiya
We, uh, we-
- JCJason Calacanis
People should look into it.
- CPChamath Palihapitiya
... had a guidance counselor-
- JCJason Calacanis
Exercise, talking to your kids, these things also work. Sound like fucking Tom Cruise.
- CPChamath Palihapitiya
We had a guidance counselor, we had a guidance counselor at, uh, at our school tell me that they thought that one of my children should just get put on these drugs. And I was like, it was the most random statement, and all I could get from her was that she just didn't want to deal with the fact that every now and then this kid would just, you know, be exuberant.
- JCJason Calacanis
Yeah.
- CPChamath Palihapitiya
To your point-
Episode duration: 1:15:00
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