"Founder Mode," DOJ alleges Russian podcast op, Kamala flips proposals, Tech loses Section 230?

1. 0:00 – 1:03

   Bestie intros! Jason goes "Founder Mode"

   1. JCJason Calacanis0:00

      Hold on, you guys. I gotta get into Founder Mode.

   2. DFDavid Friedberg0:03

      Oh, wow. Founder Mode?

   3. CPChamath Palihapitiya0:04

      If he Founder Modes, I'm gonna, I'm gonna Founder Mode.

   4. JCJason Calacanis0:06

      (sighs) Shit.

   5. DFDavid Friedberg0:06

      I gotta Founder Mode too.

   6. JCJason Calacanis0:08

      Ugh.

   7. DFDavid Friedberg0:08

      Where's J Cal? Oh, shit.

   8. JCJason Calacanis0:12

      Okay. (laughs)

   9. CPChamath Palihapitiya0:12

      (laughs)

   10. DFDavid Friedberg0:12

       What?

   11. JCJason Calacanis0:13

       Let's go, Freeburg. Let's get this fucking started, baby. Come on, podcast, number one podcast in the world. Here we go.

   12. CPChamath Palihapitiya0:20

       (laughs)

   13. DFDavid Friedberg0:20

       Okay. Okay, guys, let's start the show. You are Founder Moding.

   14. CPChamath Palihapitiya0:23

       J Cal, if you Founder Mode anymore, you're gonna get pneumonia.

   15. JCJason Calacanis0:26

       (laughs) All right. Sachs is like '90s again.

   16. CPChamath Palihapitiya0:29

       (laughs)

   17. JCJason Calacanis0:29

       Back at Stanford.

   18. CPChamath Palihapitiya0:31

       (laughs) .

   19. JCJason Calacanis0:31

       (inhales deeply) This is the funniest cold open we've ever done. Sorry, guys. (laughs)

   20. CPChamath Palihapitiya0:35

       Oh my God.

   21. JCJason Calacanis0:36

       I got Belgium waffle mix everywhere.

   22. CPChamath Palihapitiya0:39

       You got... It's right here, J Cal. You got a bunch of Founder Mode right there.

   23. JCJason Calacanis0:42

       Oh. (laughs) I got a little Founder Mode there?

   24. CPChamath Palihapitiya0:44

       (laughs)

   25. JCJason Calacanis0:44

       Okay. Thanks for looking out.

   26. DSDavid Sacks0:46

       I'm going all in. Don't let your winner slide. Rain Man, David Sachs. I'm going all in.

   27. DFDavid Friedberg0:55

       And I said we open source it to the fans and they've just gone crazy with it.

   28. CPChamath Palihapitiya0:58

       Love you, S. D.

   29. DSDavid Sacks0:59

       West Side Queen of Kinwah. I'm going all in.

2. 1:03 – 9:01

   All-In Summit lineup announcement

   1. DSDavid Sacks1:03

   2. JCJason Calacanis1:03

      Founder Mode, baby. Let's go.

   3. CPChamath Palihapitiya1:05

      Oh, man.

   4. JCJason Calacanis1:05

      All right, everybody. Welcome back to the number one podcast in the world. With me again, the chairman dictator, Chamath Palihapitiya. How are you doing, buddy? Have you acclimated? Now you're 15 days back on American soil. How are you, how are you adjusting?

   5. CPChamath Palihapitiya1:20

      Uh, I'm doing well. I, uh, turned 48 two days ago.

   6. JCJason Calacanis1:24

      Oh, I know. The big 50th is coming. I've already called dibs on chairing your 50th. So we will, uh, be certainly getting arrested in 24 months. Save up your bail money, boys. Friedburg, you look like you have had a record number of panic attacks in the last 48 hours. How is summit planning going? (laughs) Are you okay, buddy? You took this responsibility on. Are you okay?

   7. CPChamath Palihapitiya1:49

      I'm hanging in there. I'm just waiting for the shoe to drop, J Cal, on what you're gonna do to blow shit up. But I think we're almost there, so we're super excited. Um, we have, uh, speaker names going out today.

   8. JCJason Calacanis1:59

      Oh.

   9. CPChamath Palihapitiya1:59

      So we'll talk a little bit about who the speakers are. You guys know your bestie, Elon, will be there.

   10. JCJason Calacanis2:04

       Oh, third year in a row.

   11. CPChamath Palihapitiya2:06

       Mark-

   12. JCJason Calacanis2:06

       Okay.

   13. CPChamath Palihapitiya2:06

       Third year in a row. He's the only, uh, repeat this year. We've got Marc Benioff joining us-

   14. JCJason Calacanis2:11

       Oh, okay.

   15. CPChamath Palihapitiya2:11

       ... for a conversation about the future of enterprise. We've got Bari Weiss from the Free Press.

   16. JCJason Calacanis2:16

       Mm.

   17. CPChamath Palihapitiya2:17

       We've got Arizona Senator Kyrsten Sinema. We have, uh, John Mearsheimer and Jeffrey Sachs to talk about geopolitics with David Sachs. Sachs on Sachs.

   18. JCJason Calacanis2:26

       Nikesh Arora. We're gonna talk to him.

   19. CPChamath Palihapitiya2:28

       Nikesh Arora.

   20. JCJason Calacanis2:29

       What about Peter Thiel, my guy? I haven't-

   21. CPChamath Palihapitiya2:31

       Peter Thiel, your guy.

   22. JCJason Calacanis2:32

       ... interviewed Peter Thiel in a decade.

   23. CPChamath Palihapitiya2:33

       Peter Thiel.

   24. JCJason Calacanis2:33

       He's amazing.

   25. CPChamath Palihapitiya2:34

       We've got the legend, the legend from LA, Michael Ovitz, joining us.

   26. JCJason Calacanis2:39

       Love that book.

   27. CPChamath Palihapitiya2:39

       We're gonna get into some really cool, uh, tech. We have, uh... Have you guys read Michael Ovitz's book? Oh, it's incredible.

   28. JCJason Calacanis2:45

       Yes.

   29. DFDavid Friedberg2:45

       Oh, yeah. Phenomenal.

   30. CPChamath Palihapitiya2:46

       Great book. It's incredible.
3. 9:01 – 32:52

   Understanding "Founder Mode"

   1. JCJason Calacanis9:01

      uh, it's time to talk about founder mode, founder mode. On Sunday, the Y Combinator founder, Paul Graham, published an essay titled Founder Mode. It was based on a talk that Airbnb CEO, Brian Chesky, gave to a group of YC founders last week where he said, "Hey, the advice I got on running a large company, uh, was to hire good people and give them room to do their jobs." He says he took that advice, and the results were a disaster. So he studied how Steve Jobs ran Apple, and according to PG, Paul Graham, that is, a bunch of very successful founders in the audience kind of nodded their head and said, "Hey, that is, uh, similar to my experience." PG, uh, defines the world now in two ways, two philosophies for running a company, manager mode versus founder mode. In manager mode, eh, it's just the conventional way of doing this, what you teach in business school. You hire good people, you give them room to do their jobs, you tell your direct reports what to do, they figure it out. You don't micromanage. Uh, PG says... He doesn't give too many specifics about founder mode. He kind of says, "Hey, we gotta figure out what this thing is." So in some ways, this blog post, Chamath was a way of starting the conversation. But he said things like, "Less delegation and more hands-on." And, uh, if you haven't heard of it, skip-level meetings. This is where the CEO will meet not with their manager or direct report but maybe a group of people who are reporting to that manager without the manager in the room. It's a notable and well-known management technique to kinda get information to the CEO a little bit faster. And, um, what do you think, Ch- Chamath? This got a lot of attention on a Sunday. Did you have any takeaways from it?

   2. I was confused when I read it because everybody was breathlessly panting about how incredibly insightful it was. And when I read it, my first thought was, "Where's the second half that actually explains what this is so that you can have an opinion?" And then the next thing I thought was, "I don't really understand what any of this is all about." And I tweeted this. In a quarter century now in Silicon Valley, I think I've encountered two different kinds of people. One are the groups of people that can go right to the heart of issues because they can break things down and look at it from first principles and just ruthlessly attack what's not working with absolutely no nostalgia for people or sunk cost or tech debt. And then there's everybody else. And I think that that is an archetype that actually drives successful companies. It's not the case that those are only exhibited in founders. I think it's a psychological makeup of a person. And the people that have it tend to build good companies. You know, we'll have such a person, for example, at the All In Summit. If you look at what Nikesh Arora was able to do at Palo Alto Networks, it's re- it's incredible. I mean, in eight years, he's created $80 billion of value. How do you do that? I think it's important to understand how that happens. If you look at a whole bunch of other people that are managers, Shantanu Narayen, how has he built Adobe? Satya Nadella, how did he build Microsoft? These are all just like a handful of examples of people that have just...... tacked on, collectively, trillions of dollars of market cap, way more than all founders added together in most companies, but for one or two. So I think the takeaway is instead of looking for some label, I think you're going to have to do the really hard work if you want a successful business, which is when things are working, have the courage to change the few things that still need changing. And when things are not working, break it down to the studs. And most people don't have the courage to go through the glass eating that is required to get to the other side of that process.

   3. Sacks, did you read the piece? Um, you clearly saw all the (laughs) uh, memes and, you know... I guess kudos for the piece on X, uh, this past weekend. What are your thoughts on it generally speaking? Anything that you took from it that was notable or is this just some obvious stuff?

   4. DSDavid Sacks13:17

      Yeah, I mean, my reaction to it was that this is hardly new. I mean, I remember way back in the PayPal days over 20 years ago, we had a rule that we weren't, wouldn't hire MBAs. We had a no MBA hiring rule. And the reason was 'cause we figured out pretty early on that MBAs were bringing more of a traditional management toolkit that seemed less applicable at a startup. Subsequent to that, obviously, Elon has taken a very hands-on approach at his companies that Walter Isaacson described in his book as demon mode. And so that's been described. Ben Horowitz did a very interesting series of blog posts about management and addressed the topic of micromanagement years ago. And so he's written extensively about it and put a lot of substance behind it. Ben drew attention to a book by Andy Grove that came out 40 years ago called High Output Management that also addressed this problem in significant detail. And this, uh, boil it down into a nutshell for you, the way that Grove defines this problem is he says that the output of a manager is the output of that person's team. And whether that manager is the CEO or a team lead or a, a VP or what have you, the way you m- uh, again, measure their output is just to look at the, the output of their team. So therefore, you ask what's gonna maximize the output of that, that team or that org? And, you know, obviously if the CEO tries to do everything and make every decision, probably that's not gonna result in the maximum output. Conversely, if you delegate everything, I call it the problem of infinite delegation, where CEO delegates to VP, VP delegates to director, director delegates to manager, manager, uh, delegates to the summer intern-

   5. JCJason Calacanis15:07

      Yeah.

   6. DSDavid Sacks15:07

      ... you know, and then all the most important work in the company gets delegated all the way down to the newest, most inexperienced people, that's not gonna work either.

   7. JCJason Calacanis15:15

      Yeah.

   8. DSDavid Sacks15:15

      So again, you're gonna have to find the right balance. And again, the way that you figure out what the balance is, is to apply growth's principle of maximizing the output of the team or the organization.

   9. JCJason Calacanis15:27

      And we've seen in some of the big companies, Sacks, that they've cut out middle management because so much of the work was just being playing telephone and handing it to the next person that when you took out that swath of people at Facebook or Google or Microsoft-

   10. DSDavid Sacks15:40

       Right.

   11. JCJason Calacanis15:41

       ... the company seemed to work better-

   12. DSDavid Sacks15:42

       Yeah, great point.

   13. JCJason Calacanis15:43

       ... 'cause you're taking out a layer of overpaid people.

   14. DSDavid Sacks15:45

       And it just took out a huge amount of middle management and it, and it didn't seem to harm the performance. Performance got better. And again, you can apply growth's principle. Look at what happens to the aggregate output. So this topic has been addressed at length.

   15. JCJason Calacanis15:58

       Mm-hmm.

   16. DSDavid Sacks15:58

       And I think has been understood for, for decades.

   17. JCJason Calacanis16:01

       Yeah.

   18. DSDavid Sacks16:01

       Maybe the only new thing here is a little bit of branding around founder mode versus manager mode. The, the problem with that branding is I think it's an overly simplistic and Manichaean view of the world where it kind of fits into really all of the, the, the PG essays and, and the YC model, which is founder's always right.

   19. JCJason Calacanis16:26

       Mm-hmm.

   20. DSDavid Sacks16:26

       And everybody else in the ecosystem, especially traditional managers, they're, they're either liars or fakers. And that basically ha- has been the Manichaean model that Paul Graham's been pumping out for decades. And-

   21. JCJason Calacanis16:38

       Is there, uh, something wrong with that model? You're, you're kind of looking at it and I'm, I'm kind of hearing a little bit of a tone there, maybe I'm reading into it, that that doesn't match reality?

   22. DSDavid Sacks16:48

       Well, sure. I mean, look, the, the whole ecosystem in Silicon Valley exists to help make founders successful. I mean, I was a founder myself. Now I'm a investor. There's also talent who don't found companies themselves but want to join them. The whole thing is organized to make founders successful. And the whole idea that people are out to get the founder, I mean, this is a really antiquated idea. There was some truth to it in the 1990s. Uh, by 2002 or 2003 when Peter Thiel created Founders Fund, he called it that to emphasize that, you know, founders should be in charge. I'd say by the mid to late 2000s, no one really disagreed with that anymore.

   23. JCJason Calacanis17:25

       Yeah. Very obvious.

   24. DSDavid Sacks17:25

       So this whole idea that, like, people are out to get founders rather than make them successful is antiquated by at least 15 years, I would say.

   25. JCJason Calacanis17:32

       Kind of why Y Combinator is marketing, wouldn't you say, is like to kind of put themselves next to the founder and say, "Hey, we're the only ones who really care about founders. Everybody else is out to get them," kind of?

   26. DSDavid Sacks17:42

       Yeah, I mean, look, it, there was some truth to it, you know, I would say in the 1990s.

   27. JCJason Calacanis17:46

       Yeah.

   28. DSDavid Sacks17:46

       There was a prevailing view in Silicon Valley 30 years ago that once the company got to a certain level of size, you hire a professional manager. Subsequent to that, people figured out that the best performing companies are indeed the founder-led companies, the ones that keep the founder engaged for a long period of time.

   29. JCJason Calacanis18:02

       Yeah.

   30. DSDavid Sacks18:02

       They tend to build the most value. Everybody understands that. Everyone wants the founder to be successful. The question is how do you make this founder successful? And I think there is a perverse dynamic where if you teach the founder that, "Hey, you're always right and everybody else is a liar and a faker," then that can create a, a distortion effect where founders don't feel the need to level up.... we all want the founder to level up. I mean, I would always rather invest in the founder who has vision over some professional manager, right? You want the visionary to succeed but you need them to level up and learn, you know, just basic management over time and if you're teaching them that, "Hey, founder's always right," there's less incentive to do that.
4. 32:52 – 52:28

   Bolt is back in the news as Ryan Breslow goes "Founder Mode"

   1. JCJason Calacanis32:52

      uh, speaking of founder mode, (laughs) I mean, this story keeps coming back. Ryan Breslow is back in the news. We talked about this company before. Breslow is the founder of a company called Bolt. That's a payment startup, and I have to set the story up in a, in a couple of acts here. Sacks and I (laughs) had been following it for a while. Bolt was a payment startup. They did one-click checkout products. If you don't know the one-click, Amazon had a patent for this for a while. It came out of, um, it- it came out of p- patent protection. Everybody sort of jumped on it. Their Shop Pay by Shopify, you probably have experience. You, you buy something at one store, and then, uh, you log into another store with your phone number. It has all your credentials, you've been cookied, and that basically takes out the friction and allows you to make a purchase at another vendor without having to put in all your credentials and credit card and everything. So, Bolt makes that through an API for different shops online. They generated 27 million in revenue on a $300 million loss last year. They get two to 3% commission when they sell something. Anyway, we talked about Bolt back in January 2022 because they had raised at an extraordinary valuation, 355 million at an $11 billion valuation, 366 times revenue, Sacks. I, I guess we missed those. Then Breslow made waves on Twitter by calling Stripe and YC the mob bosses of Silicon Valley. He alleged they were kind of acting in cahoots to keep people from using Bolt, and he claimed YC was skewering rankings on Hacker News, all this other stuff. Anyway, it's been two and a half years since we talked about this craziness at Bolt, and Breslow stepped down as CEO after posting that thread. He was accused of overstating Bolt's customers and technical capabilities to investors while raising money. That got probed by the SEC. They didn't take any action, but then their valuation was slashed 97% to 300 million earlier this year. That's where, uh, the story had ended until just last week when an insane story came out that Bolt's interim CEO, not Breslow, had emailed investors informing them out of the blue that they were going to raise 450 million at a $14 billion valuation. This came as a surprise to investors. They didn't know this was happening, according to reports, and that this deal would put Breslow back in charge as CEO. It was confusing to all the investors, and they've all started to lawyer up and try to figure this out. Here's what we know so far. Bolt is on pace to generate 28 million in revenue this year, roughly the same as 2021, and so a $14 billion valuation would be 500 times revenue, Chamath. I'm not sure who would pay for that deal, but this deal is, uh, unique in that it's called pay-to-play. If you don't know that term, it basically means if you're an existing investor, if you don't invest in this round, you are going to lose your existing shares or have them diluted massively. So, uh, some investment bank out of the Seychelles, which is that tiny island in Africa that rich people go on vacation, was supposed to put in 200 million. It's a... That firm was called Silver Bear. The other 250 million would come from a firm called The London Firm in marketing capital and credits on a venture investing platform. So, anyway, (laughs) there's a ton of carve-outs here and other stuff. I'm gonna stop there at the notes, and just, Sacks, this is the craziest story. Sorry it took so long to get here. What, what are your thoughts on what we're seeing here in this drama and this ZIRP valuation?

   2. DSDavid Sacks36:35

      Yeah, look, uh, r- Ryan has been right before. He's been right in the past. But in this case, it looks like he's clearly over his skis and, if the reporting is correct, it looks like he's trying to drum up interest in a financing round by representing things that aren't true or haven't happened yet, saying that certain investors aren't important, and those investors are coming out and saying that they're not. The question I- I think that's relevant, and that relates back to our previous topic, is this founder mode?

   3. JCJason Calacanis37:05

      Hmm.

   4. DSDavid Sacks37:05

      I mean, what makes this not founder mode? And I think that this is where it'd be helpful to have a little bit more substance and not just a branding exercise. Let me give you a- a- a more mundane example. I was in a board meeting the other day and I commented to the team on how they had, uh, gotten their burn down substantially since the last board meeting and somebody joked, one of the founders said, "Founder mode," and it was kind of a joke. Okay, great, but then it got me thinking, what if in this board meeting it had gone the opposite way and the founders had taken the position, "You know what? We're not gonna try and cut burn. We're gonna put the pedal to the metal and accelerate the business and spend a lot more because somehow it's gonna get us to the next funding round faster."

   5. JCJason Calacanis37:44

      Founder mode.

   6. DSDavid Sacks37:45

      Would that have been-

   7. JCJason Calacanis37:45

      Founder mode. (laughs)

   8. DSDavid Sacks37:46

      Would that have been founder mode- mode two? Would that have been founder mode two?

   9. JCJason Calacanis37:48

      Hold on, let me find out. Ugh. Yeah, that's founder mode, baby. Let's go.

   10. DSDavid Sacks37:53

       Exactly.

   11. JCJason Calacanis37:53

       Let's double the burn. (laughs)

   12. DSDavid Sacks37:55

       So- so when you start branding these concepts without putting any substance behind them and, quite frankly, you've never been an operator yourself, you've never actually created a unicorn company, but you're representing yourself as a unicorn whisperer, like you're a guru in something you've never really done before, then it just allows people who want to justify bad behavior to basically get away with doing whatever they want. And that's what you're seeing with founder mode now, J Cal. The reason why that joke is funny, your doing your Tony Montana bit-

   13. JCJason Calacanis38:24

       Yeah.

   14. DSDavid Sacks38:24

       ... is because you can justify any bad behavior as founder mode.

   15. JCJason Calacanis38:27

       Yes.

   16. DSDavid Sacks38:28

       And I think that's what all the memes are about right now, is that founder mode's become a joke because there's no substance to it and it allows you to justify anything a founder wants to do. And I think a more honest way to approach this would be to define, here are the actual behaviors that make a founder successful, including when a founder is wrong.

   17. JCJason Calacanis38:51

       How about slightly differently? There are stupid outcomes and smart outcomes, and there are all-

   18. DSDavid Sacks38:56

       Okay. (laughs)

   19. JCJason Calacanis38:56

       ... kinds of different people that can get to stupid outcomes and smart outcomes. And so you have to have the courage to say, "That was stupid. Don't ever do that again," and, "That was smart. Do more of that." And if you can't distinguish the two or you can't get to the latter, you're gonna fail.

   20. Instead of founder mode, why don't we call it founder responsibility? Like, what are their responsibilities?

   21. DSDavid Sacks39:14

       Or founder authority is good too. I mean, founder authority is good.

   22. JCJason Calacanis39:15

       Founder authority, founder responsibility.

   23. Steph Curry is not the founder of the Warriors, but he's the linchpin, okay?

   24. Yeah.

   25. My point is-

   26. He's a captain. Yeah.

   27. ... teams- teams need winning players and then you need to put together your own game plan for winning, but the goal should be winning. If you are not winning, you are a loser.

   28. And what does winning have? Really talented, really driven people in different positions who understand their position and-

   29. You gotta win. You gotta win.

   30. ... are held accountable for their positions.
5. 52:28 – 1:08:45

   Tech's Section 230 protections might be in danger after new ruling

   1. JCJason Calacanis52:28

      we go. A panel of California judges has ruled that Section 230 does not protect TikTok's algorithm in the case of the death, tragically, of a 10-year-old girl. We've talked about Section 230 and, uh, legislation to protect algorithms or to make algorithms more editorial. We'll get to that in a second. But let me just queue up this story, and then we'll play a clip from Episode 99 of All-In podcast. In late-2021, a 10-year-old Pennsylvania girl accidentally killed herself while participating in a blackout challenge she saw on TikTok. That is a challenge that encourages viewers to choke themselves with objects like belts until they pass out. According to Bloomberg, this challenge has been linked with the deaths of 15 young people.

   2. Oh, my God.

   3. Yeah, this is terrible. Uh-

   4. What?

   5. ... the, the child's mother sued TikTok arguing that their algorithm served blackout challenge videos to her child, thus making them responsible. In the past, algorithmic decisions, as we've talked about here, were protected under Section 230 of the Communications Decency Act. Just break this down very simply, if you're Section 230, that grants internet platforms featuring user-generated content immunity from being sued over content published by those users on their platforms. So YouTube, TikTok, Twitter, you know, a blogging platform, et cetera. So because of 230, you're technically not supposed to be able, able to go after something like TikTok because a random user posted crazy videos like this. But an appeals court, Chamath, has reversed that ruling with the judge arguing that TikTok's algorithm represents a unique, quote-unquote, "expressive product," which communicates to users through a curated stream of videos. The judge claims TikTok's algorithms refect, reflect editorial judgment. So here's the interesting legal detail, the new ruling specifically cites the Supreme Court's recent decision, Moody versus NetChoice, in which the court ruled unanimously to vacate that Florida law we talked about here that banned tech companies from deplatforming political officials. So that was viewed as a big win for speech protections acts and moderation rights in big tech, but this is all super ironic because the same ruling that affirmed big tech's First Amendment protections in content moderation may also have nullified the Section 230 immunity. So let's play this quick clip here. Chamath, this is a discussion you and I had about should algorithms be part of Section 230 back in 2022.

   6. Let me break down an algorithm for you.Okay. Effectively, it is a mathematical equation of variables and weights. An editor 50 years ago was somebody who had that equation of variables and weights in his or her mind. And so all we did was we translated, again, this multimodal model that was in somebody's brain into a model that's mathematical, that sits in code. And-

   7. You're talking about the front page editor-

   8. ... and I think-

   9. ... of The New York Times.

   10. Yeah. And I think it's a fig leaf to say that because there is not an individual person who writes .2 in front of this one variable and .8 in front of the other, that all of a sudden that this isn't editorial decision-making is wrong. We need to understand the current moment in which we live, which is that these computers are thinking actively for us. And that is just true. And so I think we need to acknowledge that because I think it allows us at least to be in a position to rewrite these laws through the lens of the 21st century.

   11. There's such an easy way to do this. If you're TikTok, if you're YouTube, if you want Section 230, if you want to have common carrier and not be responsible for what's there, when a user signs up, it should give them the option. Would you like to turn on an algorithm? Here are a series of algorithms which you could turn on. You could bring your own algorithm, you could write your own algorithm with a bunch of sliders, or here are ones that other users and services provide like an app store. So, Chamath, that was, uh, your take on it and here we are, what are your thoughts on Section 230 and algorithms today? Should, if you use an algorithm, should that nullify, void your Section 230 protection?

   12. I think it is a fig leaf to say that we've, there's a level of distraction that should give us immunity. I think that these algorithms are taught to iteratively become better and better at hooking people on whatever is trending in that moment. And I think it's probably known to these companies at any given time what's trending. So, even though they're not literally going and changing something in the moment, doesn't mean that they don't support it and doesn't mean that they're not aware of it, and it doesn't mean that they haven't created a net to sort of catch these lightenings in a bottle and spread them around. And so, I think we just need to have a, a more intelligent discussion about how responsibility should be shared in a world where Section 230... Yeah, you're right. I'll just say it again. We're not writing deterministic code anymore. It doesn't say, "If this, then that. Show them the blackout video." There is no piece of code anywhere, but it's, it's kind of a fig leaf to say that that isn't the intention of the way that the new form of software is written.

   13. Yes. Correct. Sax, your thoughts here on balancing 230 with the fact that I think we all agree that these algorithms are the new modern-day editors.

   14. DSDavid Sacks57:55

       I don't agree. I have a very different opinion on this than you guys do and I-

   15. JCJason Calacanis57:57

       Oh, okay. Here we go.

   16. DSDavid Sacks57:58

       ... and I always have.

   17. JCJason Calacanis57:59

       Let's hear it.

   18. DSDavid Sacks57:59

       Well, first of all, let me just speak to the, the, um, legal precedent here. Last year, there were two Supreme Court decisions addressing this very issue of whether algorithms basically obviated 230 protection and the court found that they didn't. There were a couple of cases involving in- users who basically went down a rabbit hole of, like, terrorist videos and got-

   19. JCJason Calacanis58:23

       Yep.

   20. DSDavid Sacks58:23

       ... recruited by ISIS. Remember this?

   21. JCJason Calacanis58:25

       Yes.

   22. DSDavid Sacks58:26

       And they were sued by the families of victims, or at least the social networks were, and the argument was that they basically had been recruited into ISIS and committed the terrorism because of the algorithms and the social networks were liable for that. The Supreme Court found that they weren't, which is just to say that algorithms were not treated differently than if the content had been on a, a regular feed, you know, just a chronological feed. And what Section 230 says is that you can only hold the user liable. We're gonna treat social networks as distributors, not publishers, for the purpose of user-generated content. I've long held the view that if you wanna make online platforms liable as publishers for every piece of user-generated content, then you're gonna have very little free speech left, because I just think that corporate risk aversion is gonna force these guys to become even more censorious than they already are. Every piece of content that could potentially lead to a lawsuit is gonna get shut down, and I think that the net effect of that will be much more negative. Now, to the argument about aren't algorithms just the new editors, I don't, I don't think so. I think there's a fundamental difference between what an editor does and what an algorithm does. If you look at an editorial page of The New York Times, the Wall Street Journal, it has a very specific point of view that it's promoting. In fact, sometimes you can't tell the op-ed page from the news page because it seems like that publication is so biased in favor of one point of view or another. An algorithm isn't supposed to do that. An algorithm is supposed to give you more of what you want. And so therefore, if you are pro-Trump, you'll see more pro-Trump content. If you're pro-Kamala Harris, you'll see more Harris content. In other words, X or whatever the platform is isn't supposed to be taking an editorial position on whether it supports Trump or Harris, but rather, it's giving you more of what you want. Elon recently spoke to this that he had a, uh, a tweet recently where he talked about, hey, people are coming to him saying, "Hey, I'm, I'm seeing all these, like, offensive things in my feed. Why is this?" Well, it turns out that they had been sharing those posts that were offensive to them and so they were-

   23. JCJason Calacanis1:00:39

       Yes.

   24. DSDavid Sacks1:00:39

       ... seeing more of them. And that's a really good example of how the algorithm just gives you more of what you're interacting with, so don't interact with outrage porn. If you don't wanna be outraged, stop interacting with outrage porn and you'll see less of it.

   25. JCJason Calacanis1:00:53

       Mm-hmm.

   26. DSDavid Sacks1:00:53

       I just think that is fundamentally different than having an editorial point of view. X does not have an editorial point of view that it wants you to see more of that outrage. It's simply the user is making clicks...... and, you know, clicking a share button in a way that it interprets it to be saying, "Oh, this user wants more of that content."

   27. JCJason Calacanis1:01:12

       Yes.

   28. DSDavid Sacks1:01:13

       And so this is why I don't think that, all of a sudden, Section 230 protection should be voided. I just think it's a fundamentally different thing than what a publisher does.

   29. JCJason Calacanis1:01:23

       I have a third view, and, uh, uh, I'll bring you in on this discussion here, Friedberg, is that these algorithms have come- become so powerful, they are even better than editors at catering to users' needs because they're obviously, uh, one-to-one casting, right? And so this is a perfect opportunity not to get rid of 230 but to evolve it. And as I said in that previous clip, you know, there is a big issue as to who's making these algorithms, in the case of TikTok, the Chinese government's influence. And, you know, what is their intention and are they being thoughtful about it 'cause they are powerful? And what responsibility do they take? Is the responsibility stopping at increasing the session? Because if you want to increase a session, all you have to do is keep showing more rage and getting people more upset, and that leads to division in society and all kinds of weird things that can occur. And so empowering users and having more transparency would be a great way for the government, uh, for individuals who are frustrated with this, and the platforms to find some common ground and evolve. What do you think of this possibility, Friedberg, of maybe you come to YouTube and instead of shutting down 230 and causing chaos, to your point, Sax, which I-I agree with that, it would cause chaos and more censoring, just saying to people, "Hey, welcome to YouTube. Here are three ways you can view your content by default. You can pick our algorithm, you can pick an education-leaning algorithm, you can pick a music-leaning algorithm, or you could have no algorithm at all, and you'll just be faced with a directory." What do you think of that as a maybe a middle ground here?

   30. CPChamath Palihapitiya1:02:59

       I'm not sure that giving people a choice of an algorithm is gonna work. Consumers just wanna have stuff that incites emotion. There's a reason, you know, horror movies do well and also romantic comedies and also adventure films. Like, they're all emotive. At the end of the day, the more emotive something is, the more emotionally inciting it is, the more likely you are to kind of want to have something like that again. And so that's simply the nature of how, you know, humans, uh, interact with the world around them. When something is emotionally inciting, you want more of it and you get more of it, then that- that creates the dopamine and that drives the- the behavior. The crazy thing about social media or digital media firstly is that the cycle, the feedback cycle, is much faster. Used to be that you put out a book, you wouldn't get the results on how the book sold and how many people liked it and how many people read it till a year later. And then with movies, you get results in a weekend. But with social media, you get results instantly when a piece of content comes out online. You get an instant result. And then with the concept of a feed, where the next content is dynamically selected for you based on your reaction to the content prior to it, you kinda get this immediate feedback loop that then tunes and lines up the next thing, and now you're getting hundreds of iterations an hour. So I'm, I'm not sure that there's really this, like, simple solve where let me show you something that's, like, less inciting. At the end of the day, if it's something that's horrific or something that's romantic or something that's inspiring, if it's emotionally, uh, kind of activating enough, you're gonna be happy watching the next one. You're gonna keep watching and you're gonna keep watching it.
6. 1:08:45 – 1:22:42

   DOJ charges two Russians with infiltrating US media company

   1. JCJason Calacanis1:08:45

      yes. Since you wanna go into Russia, here we go. (laughs) It's 50 days before the election-

   2. DSDavid Sacks1:08:50

      You're the one with Russia on the brain.

   3. JCJason Calacanis1:08:51

      ... and as predicted, we're 50 days before the election and who shows up? Putin. This is the greatest story ever. Ah, I need-

   4. For those of you listening, Sax just rolled his eyes.

   5. (laughs) It's so funny. Ah, this is just great. Okay, the DOJ-

   6. DSDavid Sacks1:09:07

      Who would've predicted there's gonna be another Russiagate hoax just in time for the election?

   7. JCJason Calacanis1:09:10

      You did, you did, and here we are.

   8. (laughs)

   9. And, and by the way, there's breaking news, more Russia am, stuff has dropped while we're on the pod.

   10. DSDavid Sacks1:09:16

       There's a lotta people who started with Trump derangement syndrome and then they held Putin responsible for Trump getting elected, so the TDS became PDS-

   11. JCJason Calacanis1:09:25

       Mm-hmm, all right, well, let's get to the story.

   12. DSDavid Sacks1:09:26

       ... and they got Putin derangement syndrome.

   13. JCJason Calacanis1:09:27

       Let, let's get to the story here, uh, comrade.

   14. (laughs) Comrade.

   15. DSDavid Sacks1:09:31

       I think this whole story is such a waste of time, we shouldn't even waste time on it.

   16. JCJason Calacanis1:09:34

       Well, we're gonna do it anyway, so here we go. The DOJ (laughs) just charged two Russian media operatives with infiltrating podcasts, yes, to push pro-Kremlin talking points. This was a wild drop on Wednesday, Chamath. The DOJ charged two Russian media operatives as part of an alleged, wait for it, propaganda and (laughs) misinformation scheme. According to the charges, these two employees of the state-run Russia Today, uh, outlet, RT, funneled $10 million into a Tennessee-based media company to influence public opinion and sow social divisions. The wire transfers happened between October of last year and recently, as last month. This included placing blame on Ukraine, Ukraine, Ukraine for its conflict with Russia. Interesting. Both Russians are charged with conspiracy to violate the Foreign Agents Registration Act and conspiracy to commit money laundering. They're looking at 20 years in jail. The indictment did not mention the company by name, but people quickly figured out who it was because of their location. The company's called Tenet Media, founded in 2023 by Lauren Chen, a conservative commentator, and their personalities included Tim Pool, Benny Johnson, Dave Rubin, and Lauren Southern. These are right-leaning podcasters. In the last year, Tenet has posted 2,000 videos which collectively had 16 million YouTube views according to the DOJ charges. Looks like the Russian operatives were coordinating-

   17. Let's say the, Jason-

   18. ... with the founders.

   19. Jason, let's say the quiet part out loud, okay?

   20. Mm-hmm.

   21. We've heard this from Bobby Kennedy, we've heard this from a whole host of other people, we've now heard this from the DOJ. There is an inextricable link between the media and the people that pay for the media that want to influence what the media says. We know that to be true.

   22. Mm-hmm.

   23. Now, in this specific case, I hope the DOJ runs this to ground and, and gets, and gets justice served. What I would say generally is, the most incredible decision we ever made is to not have ads. It has been the single biggest clarifying function for our ability to maintain our own opinions and be credible. It's allowed us to change our minds. It's allowed us to evolve. If, if we were sort of characters in a movie, we wo- we will have gone through different transitions, frankly, as, as these last four years have gone by. I think that that would've been much harder to do-

   24. Hm.

   25. ... if we had people paying us money.

   26. Yes.

   27. So, this is just yet another example of your media diet, the more it can come from people who don't need to make money from this, the better off you will be because you will get earnest opinions. And what will happen is, whether it's large multinational corporations or foreign state actors, they are going to find unwitting people to take this money and blather on some set of talking points-

   28. Yep.

   29. ... on a whole host of topics.

   30. Okay, and, uh, just to be clear-

Episode duration: 1:35:48