All-In PodcastMag 7 sell-off, Wiz rejects Google, UBI, Kamala in, China's nuclear buildout, Sacks responds to PG
EVERY SPOKEN WORD
150 min read · 30,054 words- 0:00 – 3:50
Bestie intros: Nostracanis appears!
- JCJason Calacanis
Oh, no. Gosh, I'm having some technical difficulties, Friedberg. There's something happening.
- CPChamath Palihapitiya
Oh, you got a bit? Oh, there's a bit coming-
- JCJason Calacanis
Something's breaking in.
- CPChamath Palihapitiya
Oh, what's happening?
- JCJason Calacanis
Oh, no. My camera is not working, but I sense something is happening, guys. (object thuds) It's like a transformation I'm going through. You're not gonna believe it. Yes, this is I, Nushra Kanis, I am here.
- CPChamath Palihapitiya
(laughs)
- DSDavid Sacks
(laughs)
- JCJason Calacanis
I'm here, Nushra Kanis has arrived.
- DSDavid Sacks
(laughs)
- JCJason Calacanis
I have predicted the hot swap, Sax. Can I get my flowers now from you, Sax? You s- you need to bring me-
- DSDavid Sacks
Yeah, I give you... I absolutely give you credit for that. You also predicted a speed run primary, which is the opposite-
- JCJason Calacanis
(laughs)
- DSDavid Sacks
... of what happened.
- CPChamath Palihapitiya
(laughs)
- JCJason Calacanis
Okay, well-
- DSDavid Sacks
So one out of two is not bad though.
- JCJason Calacanis
Nushra Kanis did not account for the Democratic Party being run by the Deep State, huh?
- CPChamath Palihapitiya
(laughs)
- DSDavid Sacks
(laughs)
- JCJason Calacanis
But, uh, I'm having a vision. Producer Nick, there is a vision for you, coming in to view. Yes. Your uncle has been bought out of the All-In podcast that's going full MAGA.
- CPChamath Palihapitiya
(laughs)
- DSDavid Sacks
(laughs)
- JCJason Calacanis
And he, he got the $25 million buyout deal and he gave you 20%. We're leaving, we're going to start a new podcast and Jared Kushner is the new moderator here.
- CPChamath Palihapitiya
(laughs)
- JCJason Calacanis
Oh no, wait, it's J.D. Va... No, it's Alex Jones.
- CPChamath Palihapitiya
(laughs)
- JCJason Calacanis
Starting next week, Alex Jones, the new host.
- NANarrator
I'm going all in.
- JCJason Calacanis
Oh wait, I'm going away. Nusra Kanis is being pulled away.
- NANarrator
I'm going all in. Don't let your winners ride.
- 3:50 – 13:30
Wiz turns down Google's $23B offer, intends to IPO
- JCJason Calacanis
All right, let's get started. Wiz has declined Google's $23 billion offer and it intends to IPO. Some big news there. Last week we talked about Google offering to acquire this cloud security startup for $23 billion. CNBC reported Wiz declined Google's offer. Wow, that's big time, because Wiz was valued at $12 billion in its most recent funding round. They've got about $500 million in ARR, uh, so this $23 billion (laughs) is a massive, massive 50 times current revenue, 23 or so times forward-looking revenue. They think they'll hit a mil- a billion in ARR. This is a company that was founded in 2020 and just so... If you don't know what they do, they help people secure their data in clouds like AWS, Azure, Google Cloud, all that good stuff. But high growth SaaS businesses are trading at a 10X forward revenue multiple. There's the chart. This is obviously an absurd premium and two potential reasons that I can think of, and I'm curious your positions, gentlemen, of why they would do this. I guess, Chamath, there's two reasons. One, they think they can grow this company at a high percentage, maybe fill in that premium Google was willing to pay, or maybe they're scared that they can't get this deal through, you know, regulators. What's your take here? And then we'll go talk about the wider cloud and Google Cloud and AWS in a moment, but what, what's your initial take here of why they would do this, Chamath?
- CPChamath Palihapitiya
I actually wonder whether this deal would have had more probability of happening had the whole AT&T/Snowflake leak not happened. Because I think that when you have moments like this, there's a non-trivial possibility that it supercharges sales even more. I think the reality is that if you're a hyper-scaler, so if you're Amazon or Google or Microsoft, your business is pretty fragile and brittle if... the services you provide or the services that third parties like Snowflake provide through you are not reliable. And so, I've never heard of a business that has generated so much ARR so quickly. I mean, from zero to half a billion dollars in four or five years. I mean, how do you even build a product surface area quick enough to capture that much revenue? I think it just goes to show you how bad security is-
- JCJason Calacanis
Mm.
- CPChamath Palihapitiya
... in the cloud and how needed it is. So, it doesn't surprise me that Google wouldn't buy something like this. I think Amazon and, and Microsoft would probably want something like it as well. I suspect that if you had to guess why they said no, is because they thought that they could grow revenue much faster because of recent events as well as their own just natural momentum. And I think that if, if this thing had not happened, I wonder whether they wouldn't have just sold.
- JCJason Calacanis
All right. Sax, I want to get your take on this after showing you a couple of charts here. Google's cloud revenue growth has been absolutely stunning. Here is a chart. They're gonna hit, gosh, in the first half they did almost 20 billion, so they're on a run rate of $40 billion this year. Last year they did 33. Back in 2017, they only did four. And if you compare this to Amazon's AWS, again these are cloud services, people can buy, compute in the cloud. AWS, if you look at those first seven years, the all, the crack all-in research team put these side by side. Uh, Google is tracking almost identical (laughs) in revenue to AWS's. Interestingly, META and Apple do not have a competitor here. You said, uh, on this podcast, Chamath, I think last year, that would be a pretty bold move by Apple to have a cloud computing platform since they have all the app developers. Sax, what, what do you think of this just tremendous run by Google Cloud, or also known as GCP in the industry?
- DSDavid Sacks
Well, all the cloud service providers are doing extremely well. I mean, cloud is still the future of software and the cloud service providers are still growing really strongly. On Wiz, I think the most likely explanation is that they just wanna keep building this as a standalone company. I think they're probably also worried that they can't get the deal through. The multiples that we have right now are not that insane. I mean, I think the long-term median software multiple is around a seven. So, you know, you see here the mid-growth median is 7.7. We're about tracking at the historical pre-COVID mean. And we had that really frothy, bubbly period in 2020 and 2021, and that's clearly over. Now, in terms of how our friends at Altimeter break this down, I think that high growth means a 30% or greater growth rate, and then I think the mid-tier is more like, what is it, like 10 or 15% to 30%. And then the low growth is like, you know-
- JCJason Calacanis
Yeah, single digits.
- DSDavid Sacks
... like under 10. Yeah. So my point is, if Wiz is growing at-
- JCJason Calacanis
100%.
- DSDavid Sacks
A hundred... We don't... 100%. I mean, I don't know if it's still growing at 100%, but, I mean, I guess they're projecting a bill-
- JCJason Calacanis
Even 50%, yeah, would be.
- DSDavid Sacks
Yeah, they're, they're projecting a billion in ARR next year, up from, what is it, roughly 500. Like, that offer may not be that crazy. Again, you know, you're getting 10 times at a 30% average growth rate. So, you know, let's say they get to a billion in ARR next year and then they're forecasting, you know, whatever it is the, the year after. You know, the 23 may be reasonable. So, I can see why these guys would just wanna go for it if they think they're building a big standalone company.
- JCJason Calacanis
Uh, Freyberg, let's talk a little e- since you were a Googler at some point, um, this GCP product, maybe you could tell us a little bit about, uh, and I know you know some of the people running it, um, how meaningful this is becoming to Google or how much of a priority it is. Uh, YouTube, obviously Android priority is there at the company, then you have like the next tier down, Nest, Waymo, you know, some of those other projects. But, but how important is GCP right now to Google?
- DFDavid Friedberg
Well, GCP in the last quarter did 10.3 billion in revenue, which is up from 8 billion in revenue the year before, in the same quarter the year before. And importantly, in this past quarter, they're running at a $1.2 billion operating profit i- out of GCP. So, you know, if you kind of think about what cloud margin should be over time, and, and kind of call it 20 to 30% margin, this cloud business could be generating 20 to $30 billion a year of free cash flow.
- JCJason Calacanis
Mm.
- DFDavid Friedberg
Now, in the last year, if you kind of look at, or even if you look at the last quarter annualized, Google's generating currently about $60 billion a year in free cash flow as an overall organization, Alphabet is. Um, and they have over 100 billion in cash. So, you know, what can I do to accelerate this cloud outcome given the risks, the challenges, the slowdown with respect to the core consumer business? Cloud and AI based tools really is where it's at. And so Google's asking this important strategic question I would imagine, what can we do to accelerate outcomes in the cloud? And what can we do that is gonna be big enough to matter?
- JCJason Calacanis
Mm.
- DFDavid Friedberg
And what can we do that is gonna pass antitrust muster? So we can actually get it through antitrust authorities. So cloud security kind of comes top of mind. It's a fast-growing segment as evidenced by the results with, with Wiz. And it's, uh, an opportunity for Google to cross-sell and to secure more enterprise customers and theoretically cross-sell more enterprise revenue by getting folks on a platform, um, that Google could now offer. I would imagine that what Sax is saying is probably right. I have absolutely no sense of what these individuals and board members at Wiz are thinking. But I think what Sax is saying is right. This is an incredibly fast-growing business. Peter Thiel made the comment once, which I think is totally right. Either the buyer pays way too much...... or the seller sells way too early. Um, when you have a fast-growing business like this, it's really an important question to kind of acknowledge that if Wiz continues to grow at this rate, it's conceivable they could be in the range of a Palo Alto Networks' $100 billion market cap in a couple of years, um, you know, given, uh, given this momentum and if you, if you progress it forward. So if I was them, I would ask that question, "Could we r- reach $100 billion if we feel reasonable- reasonably confident?" This may be a, a, a risk worth taking. And what's the downside, right? The downside is they go public next year anyway, and maybe they're only valued at 15 billion or 20 billion. There's not a lot of downside from this offer, and certainly seems to be quite a bit of upside. But I think for cloud, the thing to, to watch is what they're gonna do next. Google wants to accelerate beyond AWS. They want to become the leader, and they're going to look for other sizable transactions that will pass the antitrust muster. And so I think you could see them perhaps looking at some public M&A in the same space, and I wouldn't be surprised to see them start to get active in that sense.
- JCJason Calacanis
YouTube and GCP are the, uh, are the two money printing machines inside-
- DFDavid Friedberg
Yeah.
- JCJason Calacanis
... the organization that have actually paid off. Android's paid off in terms of dumping more search, you know, from the default search buttons or boxes. But I guess the, to steel me on the other side, if you're on the board and you want your cash, you know, you get 100% of it, you take no risk, and what if Google decides they're going to make this product free and bundle it as we saw Microsoft do in a number of cases, and they just Microsoft Teams this or Internet Explorer it? I guess that would be the risk is if Google feels, uh, some vendetta here and puts this product out for free.
- 13:30 – 17:51
CrowdStrike's rough week
- JCJason Calacanis
As you alluded to, Chamath, it was a big week for cybersecurity. CrowdStrike had a really rough week last week when they knocked out eight and a half million Windows machines. Just to briefly explain what happened here, uh, obviously Wiz is cybersecurity and so is CrowdStrike. CrowdStrike, instead of working on datasets in the cloud, they work on securing your laptop, your desktop, your servers, all that kind of stuff for threats. And, uh, they did an update, and when they did their update, a sensor configuration update as they called it, to Windows, uh, machines, they basically bricked them. And this wasn't a cyberattack. They're a cybersecurity company, they weren't attacked. They updated it and it crashed all these machines, and these machines all needed to have a hard reset by IT. It wasn't something that could just be field swapped apparently. People had to go back to their offices in some cases. Delta was hit hardest. They canceled over 6,000 flights, and there's a Department of Transportation, uh, investigation going on now. Shares are down 25% since Friday, so that represents $24 billion in market cap. Uh, CrowdStrike's CEO has been, uh, clowned for his apology and explanation. And, uh, the good news though is they sent everybody an Uber Eats gift card, so I'm super happy about that. Chamath Sax, looking at this and dovetailing it with the last story, this is gonna be an ongoing story and, and one of the big trends in our industry, yeah? Major outages like this?
- CPChamath Palihapitiya
I think the reality is that that code is still really brittle and there's gaping holes everywhere. And I suspect that the reason why foreign adversaries don't hack us is because we could hack them back. And so I think it's almost like a mutually assured destruction is the only reason why these things stay up every day.
- JCJason Calacanis
Mm-hmm.
- CPChamath Palihapitiya
So at some point, we're gonna write better code. Maybe these AI agents will do it and there won't be, like, memory leaks and all this other random stuff. But in the meantime, I think you just have to assume that everybody will get access to all of your information and that eventually everything is hacked and everything is leaked.
- JCJason Calacanis
Yeah, and act accordingly. (laughs)
- CPChamath Palihapitiya
And act accordingly. (laughs)
- JCJason Calacanis
Yeah, assume every... The worst conversation you ever had on social media or on, uh, DMs is gonna come out. All right, I think we've kind of finished this round. Anybody have any thoughts on this CrowdStrike thing? It seems like it's over now.
- DSDavid Sacks
I don't have a lot to say about them except actually this, is that that company has some murky connections to the deep state.
- JCJason Calacanis
Oh, right.
- DSDavid Sacks
And yeah. Well, apparently-
- JCJason Calacanis
Ooh, CrowdStrike.
- CPChamath Palihapitiya
Really?
- DSDavid Sacks
Yeah, their, their fingerprints were all over, you know, Hillary's Bleached server. Then there's been other reports, which I don't n- know exactly what to make of. I can say this, that in the wake of this, Elon announced that he was removing CrowdStrike from any of his company's servers. Similarly, I had my IT department check and make sure that we didn't have it running anywhere, we don't. I'm just gonna be frank, I don't trust this company.
- JCJason Calacanis
Mm-hmm. All right, there you have it. Uh, deep state.
- CPChamath Palihapitiya
(laughs)
- JCJason Calacanis
Tinfoil hat.
- CPChamath Palihapitiya
Deep state? (laughs)
- DSDavid Sacks
(laughs)
- JCJason Calacanis
Deep state accu- accusation, or-
- DFDavid Friedberg
I was gonna wear a tinfoil hat today. I forgot.
- DSDavid Sacks
You believe what you want. That's what I do.
- JCJason Calacanis
I, I don't... This is the first I'm hearing about it. I don't have my tinfoil hat here.
- CPChamath Palihapitiya
(laughs)
- DSDavid Sacks
(laughs)
- JCJason Calacanis
But, uh, who knows? I guess, uh-
- DSDavid Sacks
Use your products if you want to. Use the products if you want to.
- DFDavid Friedberg
(laughs)
- JCJason Calacanis
Okay, there you have it, folks.
- CPChamath Palihapitiya
(laughs)
- JCJason Calacanis
Uh, and Sax is, is, uh, puts his endorsement behind Palantir, definitely not deep state Palantir. (laughs)
- 17:51 – 22:47
Market update: Mag 7 sell-off?
- JCJason Calacanis
my best. Right. The stock market just had its worst day since 2020 on Wednesday.Clearly, this is because of the January 6th insurrection. The NASDAQ, which is the most tech... I'm joking. The NASDAQ, which is the most tech heavy, fell 3.6%. S&P down 2.3%. Bunch of magnificent seven companies were in the red. But you got to put this in context. NASDAQ and S&P still up around 15% for the first half of the year, record setting territory, obviously, if that holds up or increases. There's a lot of theories about this that people are rotating out of the Mag 7 tech stocks, which were a place that, uh, maybe got a little overheated with the AI bubble. Here's the top gainers that are not in the Mag 7, as you can see. Financials, energy, materials. Over the last six months, S&P financials up 11, S&P energy nine, S&P materials 9% as well, broader index up 11, as we said. Tesla dropped 12% after missing on earnings, but they had a massive runup earlier this year. Google dropped 5%. I guess YouTube was what most people pointed to. Their revenue came in lower than expected. So, maybe some softness in the advertising market, which would then correlate with consumers. NVIDIA down 7%. Meta down 6%. Chamath, any thoughts here on what we're saying? You talked a lot about the consumer weakening on an episode about six weeks ago, I believe. So, is this just the manifestation of that prediction you made?
- CPChamath Palihapitiya
Not this specific thing. I think that when you see a broad-based set of revenue misses that, that will kind of mean that the consumer is really under pressure. I think, I still think that that's more in the fall. But we're headed in that direction.
- JCJason Calacanis
Mm-hmm.
- CPChamath Palihapitiya
I think what happened here is that the market is just priced to perfection, and all of a sudden, we had all kinds of volatility. You had the former president almost assassinated. You have the current sitting president resign. You have a somewhat convoluted process to pick who replaced him that, at a minimum, was opaque. And all of these things create doubt and anxiety in the people that own financial assets. And so if you saw the volatility index, the VIX, that has spiked.
- JCJason Calacanis
Mm.
- CPChamath Palihapitiya
And so whenever you see that stuff happen, people go risk off, right? And when you go risk off, what do you sell? You sell the things that are deepest in the money, where you think that they probably don't have that much more room to run, and that was the Mag 7. And so what you actually saw was a huge rotation out of those companies into everything but those seven names. And I think that that's a pretty reasonable thing to do. So, I think we're in the part of the cycle where people are getting a little bit more sober and risk managing. We're also in the middle of the summer, where a lot more vacation is taken, which how it manifests is that people tend to be, frankly, more risk off and be more liquid, because a lot of people are in and out of the office. And I think it... The real setup is for what happens in September. Maybe there's a cut, which will help. Maybe there isn't, which won't help. And then the whole consumer cycle, the consumer credit cycle, that doesn't look good, to be honest. And so I think the fall is going to be complicated.
- JCJason Calacanis
Yeah, absolutely. What an eventful week on a political front. We'll get towards that in a moment. But, uh, Freyberg, your thoughts here. Is it just people trimming their perfect positions and maybe a dispersion going out, people wanting to own some other assets that maybe have been undervalued in this market cycle?
- DFDavid Friedberg
No, I think it's definitely this mini AI bubble deflating a bit.
- JCJason Calacanis
Okay.
- DFDavid Friedberg
And transactions are, "Let me get out of some of these high multiple tech stocks that are expected to grow rapidly because of AI and shift more into stable market recovery, interest rates are gonna get cut-type trades that will benefit there." So, I think it's just a, a rebalancing. And as a result of the high concentration of the Mag 7 and the S&P and in the Q's, the indices look like they're coming down. But yeah, there's obviously a lot of complexity in what's going on in the economy right now. But I do think that that's been a big trade for PMs, uh, for portfolio managers over the last couple of weeks.
- JCJason Calacanis
Makes sense. Yeah. Sachs, if you owned a bunch of NVIDIA and it ran up, Meta, Google, Apple, other companies that ran way up, you might want to trim your position here and, and deploy capital and balance things out. Yeah.
- DSDavid Sacks
Sure. I just don't want to overreact or overread into one day in the market. I mean-
- JCJason Calacanis
Sure.
- DSDavid Sacks
... today's up, yesterday was down. It's... These are blips in the grand scheme of things. Even a two to 3% move is just not that unusual.
- JCJason Calacanis
Yeah, especially given the context. But definitely something worth keeping an eye on is what the earnings reports will say for Q3 and Q4, and those will come out towards the end of the year.
- 22:47 – 42:02
Sam Altman's UBI study was a mixed bag
- JCJason Calacanis
Okay. Some interesting news. Sam Altman did a UBI experiment a couple of years ago. He put 14 of the $60 million into this experiment that was done by a firm called Open Research. That's a nonprofit group that was founded in 2015 out of an accelerator called Y Combinator. First, I'm hearing of that one. Well, here's the experiment they did. This took place between November of 2020-October of 2023. 3,000 low-income adults in Texas and Illinois making just under $30,000 a year on average were selected. A thousand participants received $1,000 a month for three years. So, on top of the $30,000, they got $12,000 a year tax-free. So, that's nearly a 50% pay increase for doing no more work. 2,000 control participants received $50 per month over the same period, and the research collected and studied a bunch of data. They did blood draws to do, uh, health impact. Uh, they had a custom app that tracked time usage, work, play, et cetera. And they checked everybody's credit reports and bank balances. So probably speaking, the research found almost no lasting impact on everything they tested, from overall health, to work, to education.And here are the quotes directly from the paper, and I'll get the gentleman's take on this. UBI, super fascinating obviously. "The cash transfer resulted in large but short-lived improvements in stress and food security. We find no effect of the transfer across several measures of physical health. We also find that the transfer did not improve mental health after the first year, and by year two we can again reject very small improvements." Final quote, "We also find precise null effects on self-reported access to healthcare, physical s- activity, and sleep."
- CPChamath Palihapitiya
I find this so fascinating and reinforces a bunch of intuition that I think we would probably all have. You k- have you guys seen these studies where when somebody has an amputation or they get paralyzed, they study their pre-levels of happiness, their interim level of happiness, and then they just kind of mean revert to their natural state of happiness, independent of what physical calamity they may have gone through? And I h- I'm, I'm... When you were talking about it, J-Cal, I was reacting in the same way, which is, in the absence of, I think, purpose and community, I think children in many cases, it just doesn't meaningfully shift any of these curves that really matter. I think your happiness levels mean revert, I think your health levels mean revert. So it's great to kind of confirm at least my intuition, which is that UBI is a wonderful idea that I think doesn't really understand how humans are both motivated and wired.
- JCJason Calacanis
Friedberg, your thoughts?
- DFDavid Friedberg
Yeah, so I definitely agree. I think I've talked about this. We talked a little bit about it with Jonathan Haidt. There's some great studies that have shown in the past that the change in income is a better predictor of happiness than absolute income. Eventually, everything normalizes. So I think UBI makes no sense for three reasons. The first is this normalization of spending levels, so once you've kind of had this increase, you have a moment of happiness, and then you actually start spending differently or spending more. And effectively, every human has one innate trait: desire. And desire is what drives humanity, it's what drives progress, it's what pushes us forward, because no matter what our absolute condition, it's our relative condition that matters, relative to others or relative to ourselves in the past, or prospectively in the future. And so we always want to improve our condition. So a UBI-based system basically gives a flat income. So the only way for it to really work is if you increase the income automatically by, say, 10% a year. So in a UBI world, no amount of money will actually make someone satisfied or meet their minimum thresholds, because those minimum thresholds will simply shift. And, you know, the second issue is just the, the net economic effect. If we gave 350 million Americans a thousand bucks a month, that's $350 billion a month. That's $4 trillion a year. Our prospective budget for next year is $7.3 trillion at the federal level. So, you know, that's already more than 50% of the total projected federal budget next year. Finding the mechanism for funding this at scale is not what this study actually looked at, because if you look at it, the net effect would be inflationary, and that's the third major reason is that ultimately, this would have an inflationary effect. Anytime we've stimulated the economy with outside money, with government-driven money, we see many bubbles emerge and we see an inflationary effect. So look at COVID. There were all these little bubbles that popped up in the financial markets. We had NFTs, we had crypto, we had all these sort of new places that money found its way to, and then we had an aggregate inflationary effect. Food prices are still up 30-40% since COVID. And so net-net, I think that the study provides an interesting insight into the micro effects, the psychological effects, the social effects. But the macro effects, or what is so, like, simply arithmetically obvious, which is inflation and an inability to actually fund this at scale. And fundamentally, people wanna work, so they'll take that money and then they'll go find ways to work and generate more money, and you have this inflationary effect. So I think net-net, UBI does not make sense.
- JCJason Calacanis
SACS participants were 5% more likely to start a business by the third year. Maybe that was the most encouraging part of this. People worked slightly less, 2% decrease in labor participation, but that seems negligible. People in their 20s had a 2% increase in enrolling in post-secondary education. Again, very tiny impact. There were major benefits to stress and mental health in year one, but by year two, as we talked about, it reverted to the baseline. How do you think about UBI in a world where, let's say, I don't know, we lost a large amount of jobs in a short period of time because of AI? So in that hypothetical situation, and we hit 20 or 25% unemployment from the historic low we're at now, h- how might you think about UBI?
- DSDavid Sacks
Well, that's positing a future that I don't think's gonna happen, at least not anytime soon.
- JCJason Calacanis
Right. That's why I tried to... Yeah, that's why I'm trying to give you a hypothetical-
- DSDavid Sacks
Yeah, no, I just-
- JCJason Calacanis
... kick. Yeah.
- DSDavid Sacks
... I don't, I don't really buy that, and so I think this u- whole idea of UBI i- is premature and very expensive, and it doesn't work. I mean, I think what we saw from the study, just to echo what Friedberg said, is that cash transfers don't work. We saw this in the Great Society. Just handing people money d- doesn't solve poverty. It actually traps people in conditions of dependence. We also saw during COVID that all those stimu checks, they might have had a macro effect on the economy of kind of boosting the economy during what could have been a COVID depression. However, at an individual level, what did we see? We saw people quitting or quiet quitting their jobs, they spent more on leisure, alcohol, and meme stocks. I- in other words, it wasn't tremendously productive. So I think that what we've seen in the past, this just handing people money, doesn't create the types of outcomes that people want. And-
- CPChamath Palihapitiya
You know-
- JCJason Calacanis
So all this virtue signaling, Sax, is it virtue signaling, you think?
- DSDavid Sacks
Kinda, kinda.
- JCJason Calacanis
I'm kinda-
- DSDavid Sacks
I mean, look-
- JCJason Calacanis
... getting that tone from you, yeah.
- DSDavid Sacks
Yeah. I think it's, I think it's a combination of virtue signaling combined with, let's assume that you wanna become the first AI trillionaire and people are concerned about job loss, you're gonna virtue signal in the direction of, "Well, let's just give everyone money." And-
- JCJason Calacanis
Okay.
- DSDavid Sacks
... a lot of people in power will love that because it creates a lot of dependence.
- JCJason Calacanis
Hmm. Yeah.
- DSDavid Sacks
So it serves the interests of tech moguls and people in the government, but I don't think it serves society. And I think-
- JCJason Calacanis
Hmm.
- DSDavid Sacks
... one of the most interesting data points in the study, please confirm if I get this right, but what it said is that the people who got the $1,000 a month UBI saw their incomes rise to $45,000 on average, while the control group only got $50 a month, increased their average income to $50,000, actually just shy of $51,000. So the people who didn't get the larger STIMI actually genuinely bettered themselves over the course of the study while the ones who got the $12,000 a year stayed in place. And that's kinda what you'd expect, right, which is if you just hand people money without having to work, it doesn't motivate them to work harder. It actually motivates them to-
- JCJason Calacanis
Of course.
- DSDavid Sacks
... do less.
- JCJason Calacanis
Yes.
- DSDavid Sacks
And let's say that you're in a point in your career where you need to learn, you need to get mentorship, you need to advance yourself, by giving people UBI, you could be kicking out those bottom rungs of the ladder where, you know, the work isn't necessarily that fun, but you're picking up very important skills that are gonna help you rise up in the ladder and you're not doing-
- JCJason Calacanis
Yeah, being a cashier, like, sending your kids to be a cashier at a restaurant or a busboy or a waiter, like, that teaches them a work ethic. I was a dishwasher, I did hard work as a child. Like-
- DSDavid Sacks
I was a bartender.
- JCJason Calacanis
Yeah.
- 42:02 – 48:35
Succession IRL: Rupert Murdoch's children are in a legal battle over the future of his media empire
- JCJason Calacanis
docket. All right, there is a battle right now for Rupert Murdoch's media empire. The Times reported...... on a behind the scenes fight for control of Fox News, Wall Street Journal, New York Post, and just tons of TV networks in Australia, the UK. I think we all know the, uh, News Corp holding set, a bit like the TV show Secession, (laughs) which makes sense because they based it on the Murdoch family. It turns out this article in The Times is based on a sealed court document that was obtained by them. Murdoch, to remind you, is 93 years old now, and his trust would have given control to his four eldest children. However, he changed the, uh, trust to ensure that Lachlan Murdoch, who is more conservative and would take over these assets, as opposed to James, Elizabeth, and Prudence, who are more moderate than Lachlan. And they are engaged in a massive court case now that's gonna start in September. The trust is irrevocable, but it contains a provision allowing for changes so long as they're made, quote, "In good faith, and with the purpose of benefiting all members." So Rupert argued that the change is in the best interest (laughs) of James, Elizabeth, and Prudence, as it keeps them formally separate from Fox News without having to worry about its political point of view. Fox News obviously has massive influence and has been a bit of a disaster over the last couple of years. They did the largest settlement ever in a, uh, defamation case with Dominion, paid $787 million. You remember Tucker Hannity, Laura Ingraham, all of them privately, uh, trashed the people who lied about the Dominion case on Fox News, and that all got shown in text messages, and it was a disaster for them. Sachs, any thoughts on this and, and how this collection of assets and the GOP have, you know, collaborated over the years?
- DSDavid Sacks
I wouldn't necessarily call it collaboration. I call it a market position. I mean, Fox News has carved out a powerful and profitable market niche by being the one cable news network that appeals to conservatives. Now, if, you know, let's say the more liberal members of the family, like James, take over and change the content and the programming to serve their own political views, they're gonna lose viewership, they're gonna lose their audience. It would be a foolish idea just from a business standpoint. So I think that Lachlan is the right choice. I've met Lachlan before, by the way. Nice guy. Look, I think a pretty mainstream conservative type of guy. He's clearly the right guy in the family to run this, and the siblings, I think could really screw it up. And I'm talking about not just from a content standpoint, I'm talking about from a, a revenue and profit standpoint if they take it in a different direction. I would already say that Fox News has a, has a market position problem, which is that Rupert is very much a neocon. And neoconservatism is on the way out in the Republican Party in favor of a more populist conservatism that you see with Trump or now his running mate, JD Vance. Rupert and Fox waged a really strong campaign to keep JD Vance off the ticket, obviously lost that battle. Rupert fired Tucker, by far their highest rated and most profitable host ever, and it was over, again, this populism versus neoconservatism direction. So I think that Fox already has a problem where they are becoming misaligned with their audience. And regardless of what you think of the politics, this is bad for business. It'll be really interesting to see if Lachlan will realign things in a more populous direction, but definitely going in a liberal direction that like James or the other siblings want to go in, that would be a disaster.
- JCJason Calacanis
Freeburg, Chamath, any thoughts on this media empire and succession planning?
- CPChamath Palihapitiya
Man, I think probate and wills and trusts are of the devil's making.
- JCJason Calacanis
Mm-hmm.
- CPChamath Palihapitiya
Nothing good comes out of these things. And I don't know, I just think some of these assets should just be left to shareholders. And-
- JCJason Calacanis
Just sell them.
- CPChamath Palihapitiya
Or just sell them and take the money, give it to the kids.
- JCJason Calacanis
Distribute it, yeah.
- CPChamath Palihapitiya
Hopefully you raise good kids, they can all go and pursue their own path. 'Cause again, I think the point is like the path and the journey is the fun, and these kinds of battles are really brutal. And I'll tell you, to me, the thing that I'm, I'm sad when I hear this whole thing is like you have four siblings that I'm guessing grew up together.
- JCJason Calacanis
Yeah.
- CPChamath Palihapitiya
And now are they ever going to talk to each other again? Or is it like three versus one or two versus two or... And I just think that that's ugly. Over what? Power and money? I would have just... So if I was the father, I would have sold the asset, given the money to the kids or to charity or whatever, and hopefully they would have found happiness in a different way.
- DFDavid Friedberg
But that is what they did with the Disney deal. They took the cash and they distributed it to the kids. So they each got a pretty big windfall. And then, you know, I think the concept was this remaining asset would be managed over the long term. Maybe I'm speaking out of school a bit, but I thought that's what happened there. They, they, they, you know-
- JCJason Calacanis
They did sell Fox, the studio, and yeah, that brings-
- DFDavid Friedberg
And the library, yeah.
- JCJason Calacanis
... and the library. And that brings X-Men, Fantastic Four, and Wolverine back together with The Avengers, which is most important.
- DFDavid Friedberg
20th Century Fox, yeah.
- CPChamath Palihapitiya
Clearly, they didn't. (laughs) It's...
- JCJason Calacanis
No, it's all coming back together now. Now they just got to get Sony to give up... I mean, we want to talk about interesting IP, Marvel just sold-
- CPChamath Palihapitiya
(laughs)
- JCJason Calacanis
... these characters to the highest bidder in perpetuity. Such a crazy weird deal, but...
- CPChamath Palihapitiya
(laughs) It's like, it's like me saying, you know, "I, uh, I've collected some really nice belts, and so I'm just gonna have like a death match between my five kids to see who gets the best belt." (laughs)
- JCJason Calacanis
I, uh, just... I mean, and it's not, it's- it- not even about money actually because they have enough. It's clearly, this is about power.
- CPChamath Palihapitiya
No, it's about, it's about being picked. No, and it's about being picked.
- JCJason Calacanis
Yes.
- CPChamath Palihapitiya
Imagine if your father-
- JCJason Calacanis
Who daddy loves the most.
- CPChamath Palihapitiya
... picks your sibling-
- JCJason Calacanis
Mm-hmm.
- CPChamath Palihapitiya
... and not you.
- 48:35 – 1:03:08
Biden out, Kamala in: Hot swap complete, speed-run primary subverted
- JCJason Calacanis
We might as well just go to our next topic. Joe Biden has been hot swapped as Nusha Hannis predicted. The speedrun primary, maybe that's been subverted. Uh, as we all know, Joe Biden formally exited the- (laughs) What, what's your version? Maybe it has been subverted? (laughs) Maybe, possibly, could have been subverted, inadvertently knocked over, forgotten. It could be an oversight. Anything's possible. Joe Biden (laughs) formally exited the presidential race on Sunday after donors and party leadership politely asked him to enjoy his retirement. Nope, they shivved him. By most insider accounts, Biden was not happy about the decision and felt betrayed. Nonetheless, the public has backed his VP, Kamala Harris, who appears to have already wrapped up the nomination. A survey conducted by AP on Monday suggested that Harris already had the endorsement of enough delegates to secure the nomination in the first round of convention voting. So, this won't be official until the DNC that starts August 19th in Chi-Town. So far, no one has stepped forward as a rival for Harris and, in fact, many of her would-be competitors have already endorsed her. That includes Shapiro, Pennsylvania's governor, Newsom, California's governor, Pritzker, Illinois' governor, and Whitmer, Michigan's governor. All of those, I guess, potential VP candidates. She is now the 90% favorite to get Democratic nomination. I'll stop there and ask our panelists what they think of this turn of events. Chamath, do you wanna start us off? I mean, I don't think the process was super open and transparent and democratic, but I don't think they had much of a choice, and I think we've talked about that, because too much of the money would have had to essentially been returned. And I don't think you can fight a federal election in 2024 with one hand tied behind your back. So, she was the de facto nominee ev- when the rumors started, and now, I think the whole point is to figure out where does she stand. I think the thing that she will have to overcome is that these last three years, three and a half years, she's been relatively under the radar. MIA, some might say. And I think that now there's this, like, this whole controversy, I don't know if you guys have seen this where, like, she was named the border czar but then she was not the border czar. Yeah. And I think there's a, there's a... Mainstream media is, it's sort of fighting with itself from six months ago about the whole thing. But the point is that we don't know what she believes and we don't yet have a sense of her agenda really, you know? And I think that over these next two months, it'll be up to her to really create a very clear case of what she believes in. And then it'll be really interesting to see who she picks as her VP candidate. And then people, I think, will be in a position to, to judge. And I think that that's what... You know, what... If I've been kind of like reading the tea leaves from the folks that I've talked to is sort of what they say, which is TBD and we need to figure out where she's at. Freeberg, your thoughts on this unbelievable 10 days in the history of our country where the president was nearly murdered by an assassin and Joe Biden resigns and a 39-year-old political neophyte venture capitalist is picked as VP? I mean, this is consequential. What are your thoughts on this 10 days in July?
- DFDavid Friedberg
Well, that's a lot of stuff. I think we talked about that last week, but the Kamala Harris de facto nomination that took place over 48 hours, um, I think was a little bit shocking to a lot of people I've spoken with that there wasn't a bit more of a process to identify a nominee besides Kamala that effectively the party lined up. Now, what I think is, is relevant here is that for the first time, it's exposing people to the way the electoral process actually works in the United States-
- JCJason Calacanis
Mm-hmm.
- DFDavid Friedberg
...that it's not a direct democracy where every individual in this country votes for their federally elected people. Remember, the United States was set, set up as a federated republic, that there was meant to be these states, the states were in a federation, and then the states would elect electors that would go and figure out who should be the president, who should run the, uh, the federal office. And the states would elect their representatives, their congresspeople, to go represent them in the federal government. And so I, I think a lot of people, you know, whether it's just without thinking about it or based on precedent, assumed, "I get a vote in who gets to be president." What you get to have is a vote in who gets to be the delegate to represent your state in picking the president. And so this process where delegates very quickly fell behind Kamala Harris because of the, the, the significant coalescing of power and influence within the parties, the two major parties in the United States, has, I think, exposed a lot of people to the lack of a democratic process for federal executive role in this country. And I think that's a little bit shocking to people, but it is the way that-
- JCJason Calacanis
It's the way it's always worked and-
- DFDavid Friedberg
... the, the nation was set up.
- JCJason Calacanis
And, and the same thing with the popular ver- vote versus electoral college, right? People keep getting confused by that.
- DFDavid Friedberg
That's right. And in this very unusual condition where a candidate who's earned all of these delegates drops out of the race-
- JCJason Calacanis
Yeah.
- DFDavid Friedberg
... it's shocking and surprising to people that they don't get to go and make a vote again-
- JCJason Calacanis
Yes.
- DFDavid Friedberg
... individually, and I think it feels unfair. And I think that a lot of people are feeling that way. I do, however, think that pretty quickly there's a lot of people who are anyone but Trump that are gonna rally behind her-... and she seems to be polling well in the polls that have come out in the last couple of days here, so...
- JCJason Calacanis
All right. Let me hand it off to, uh, Sax then. You had, uh, a situation where Trump was the runaway favorite and this unbelievable unity at the RNC and immediately after the RNC, the Democratic Party hot swaps Biden for Kamala and they've got a lot of great VP picks that they can choose from. Mark Kelly looking like the possibility, which would obviously give them a lot of support in Arizona and with moderates and law and order folks. So, Sax, we're looking at, uh, essentially a dead heat. Some polls have them tied, some polls, Reuters, Ipsos has Harris with a two percent lead. CNN has Trump with a three percent lead. What's your take on... Forget about how we got here, you know, how does this affect the race itself? This is a dead heat now. What are your thoughts on the race going forward? Who's the VP pick that you're most worried about, uh, going up against the Republicans?
- DSDavid Sacks
Well, look, this clearly reshuffles the race to some degree. I don't think it's a dead heat. The polling shows that Trump is still ahead in most of the swing states, but look, Harris has more upside than Biden does because she can actually campaign. I mean, Biden clearly was a surefire loser and that was exposed in the presidential debate and that's why there was a total panic in the Democrat Party. After that debate they were like, "We gotta get someone new," and they drove him out. I do want to just say a word about that process.
- JCJason Calacanis
Mm-hmm.
- DSDavid Sacks
You know, throughout that process... Remember, it started with Biden doing that Stephanopoulos interview, he said that even God Almighty won't get me out of this race. (laughs) Then he said, "Nobody's pushing me out. I'm not going anywhere. I'm campaigning next week." He expressed that what was happening in the party was a revolt against him. And then boom, all of a sudden he's out.
- JCJason Calacanis
Mm-hmm.
- DSDavid Sacks
And, you know, all we really know from the public reporting is that Nancy Pelosi said, "You know, Joe, we can do this the easy way or the hard way."
- JCJason Calacanis
Mm-hmm.
- DSDavid Sacks
And he was out, again, less than 24 hours after he said, "I'm in and I'm campaigning next week." And even his surrogates on the Sunday morning shows were saying that he's definitely in the race. The White House staff didn't know, his campaign staff didn't know. It kind of came out of the blue. It's a very strange process and it happened via him just posting a photograph of a letter that was on personal stationary, not even like an official White House memorandum and we didn't get an update. We didn't hear directly from the President about one of the most consequential decisions of his life and of his presidency until Wednesday.
- JCJason Calacanis
Well, he did have COVID, so that, you know, for an 80-year-old is pretty hard. Yeah.
- DSDavid Sacks
Fair enough, that was the story, but still, I mean, for us to be left in the dark wondering what was really going on for three days, it was very strange. It certainly was not what you would call a democratic process. There was no speed run primary, as you wanted, Jason. There was no open convention. What happened is the delegates fell in line instantly, as I predicted, because I said that they would not be able to handle the chaos.
- JCJason Calacanis
Mm-hmm.
- DSDavid Sacks
That they wanted to basically fall in line immediately and end the chaos and they fell in line behind Kamala Harris who has never gotten even one primary vote. Uh, so it's just-
- JCJason Calacanis
Who worries you most as a VP candidate? Give us that, because I, we understand that...
- DSDavid Sacks
I'll be honest with you, I think that-
- JCJason Calacanis
Yeah. Who's the scariest?
- DSDavid Sacks
That, uh... The- the guy, the scariest, the one I would pick is Josh Shapiro. He's the governor of Pennsylvania, rising star. Look, if he can deliver Pennsylvania for the Democrats, that's powerful because one way for Harris to eke out a victory is if Shapiro can get her Pennsylvania and then if she sort of tacks back to appealing to the Arab and Muslim vote in Michigan.
- JCJason Calacanis
Mm-hmm.
- DSDavid Sacks
To eke out Michigan and then ekes out Wisconsin with just one point. In other words, if she can hold onto the blue wall and then she loses... The swing states that Trump is very much ahead in, like Arizona and Nevada, Georgia, North Carolina, she can still win this election by 270 electoral votes to 268. It'd be the closest margin in presidential history. So that's the scenario and it's probably her best path to the, to victory, is to win by one, one electoral vote. That's the scenario I'd be most worried about as a Republican. Now, the other candidate you hear a lot about is Mark Kelly, the senator from Arizona-
- 1:03:08 – 1:08:37
Antisemitism rising, Josh Shapiro as a VP candidate
- DFDavid Friedberg
folks I've talked to.
- JCJason Calacanis
Any thoughts on Shapiro and CNN's positioning that the country's not ready for a Jewish vice president?
- DFDavid Friedberg
So, you know, I was shocked recently to hear about a board, a, a pretty, you know, important board because it represents a large organization and there was a, uh, an individual on the board who was supposed to be elected chairman. They went in for the, for the vote and in that board meeting, this individual who happens to be Jewish, there was a conversation that ensued about, "You can't be the, the chairman at this time because having a Jewish chair would be really difficult in this current climate." And I was shocked to hear this. It... you know, it was, it was not expected by, by folks going into the meeting. Things were supposed to be quite different e- in the vote and ultimately the decision was made that a, a, a Jewish person should not be the chair of the board at this time. J Cal, to your question, I think that behind closed doors these are the sorts of conversations that are going on, that there's a perception given the Gaza conflict that there is a risk of having Jewish leadership being put into powerful positions right now, Jewish leaders being put into powerful positions.
- JCJason Calacanis
Wow. That is shocking.
- DSDavid Sacks
That's insane.
- JCJason Calacanis
It's deranged.
- DSDavid Sacks
That's just insane.
- CPChamath Palihapitiya
It's just this is, this is w- what is going, what?
- JCJason Calacanis
This is just-
- DFDavid Friedberg
Yeah.
- JCJason Calacanis
... it's shocking and deranged and, and the antisemitism right now on social media and what we're seeing online is just absolutely heartbreaking and infuriating in equal parts. Sacks, anything you want to add to this as we, uh, wrap up our...
- CPChamath Palihapitiya
What the... (sighs)
- JCJason Calacanis
Well, I mean, just talk about Shapiro, Sacks. I- i- is the country ready for this? You, you saw the CNN clip and, you know, sort of surging hate when you heard that.
- DFDavid Friedberg
Well, can I just ask a question? Can I just ask, I'm sorry.
- JCJason Calacanis
Go ahead.
- DFDavid Friedberg
What, what, what does it solve? What does it accomplish?
- JCJason Calacanis
Less heat coming into that board.
- DFDavid Friedberg
Less protests, less-
- JCJason Calacanis
Less protests. The protestors now have, I guess, what I would read into this, correct me if I'm wrong here, Freyberg, is the protestors have now won in that they've intimidated people to an extent that they don't want to go near Jewish leadership. Am, am I interpreting correctly a possibility here?
- DFDavid Friedberg
Sorry, say that again. The protestors what?
- JCJason Calacanis
So these protests, w- the Gaza conflict have reached a point where people do not want to have Jewish leadership because it would be polarizing and create more protests.
- DFDavid Friedberg
That's right. That's-
- JCJason Calacanis
Yeah.
- DFDavid Friedberg
And that's the conversation that I hear going on behind closed doors or I'm hearing about and so-
- JCJason Calacanis
Wow.
- DFDavid Friedberg
... you know, it's almost like a cancel culture against Jews because of the risk of a Jewish person being in a leadership position that could drive-
- JCJason Calacanis
Or VP which is exactly what CNN was bringing up with the VP choice of Shapiro.
- DFDavid Friedberg
... hating conflict. And that's right.
- DSDavid Sacks
I think it's totally crazy. However, I definitely have seen people online, I mean, articles online, like, saying, like, "Is th- is this an issue with putting Shapiro on the ticket?" Now, I can't believe this is a problem for the voters of the country. However, I think if you're one of the Democratic masterminds and you're trying to engineer enough electoral votes for Harris to win, like I said, you're trying to win that blue wall. You're trying to get not just Pennsylvania but Michigan. And the problem that Biden un... had and now Harris has in Michigan is that the large Arab and Muslim population of Michigan is really against the-
- JCJason Calacanis
Hm.
- 1:08:37 – 1:26:46
Sacks responds to smear campaign
- JCJason Calacanis
There has been a kerfuffle, a donnybrook online between Paul Graham-
- DSDavid Sacks
(laughs)
- JCJason Calacanis
... and our bestie, uh, David Sacks here. Here, Paul Graham threatening you at Sacks on X, "Do you really want the full story of what you did to Parker being told publicly? Because it's the worst case of an investor maltreating a founder that I've ever heard, and I've heard practically all of them." This is Paul Graham, the founder of Y Combinator. "I was talking recently to another investor about whether you are the most evil person in Silicon Valley," referring to you, David Sacks.
- DSDavid Sacks
(laughs)
- JCJason Calacanis
"He thought about it for a few seconds and agreed-"
- DSDavid Sacks
(laughs)
- JCJason Calacanis
"... that he couldn't think of anyone worse. The second tweet about you being the most evil person-"
- DSDavid Sacks
(laughs)
- JCJason Calacanis
"... David Sacks, in Silicon Valley has been deleted."
- DSDavid Sacks
Well, that's nice to know.
- JCJason Calacanis
But your response. It's nice to know, yes.
- DSDavid Sacks
That's nice to know. There was also another unhinged tirade that he had against me a few months ago-
- JCJason Calacanis
Okay.
- DSDavid Sacks
... where he was commenting in the Ukraine debate and-
- JCJason Calacanis
(laughs)
- DSDavid Sacks
... uh, was responding to a Ukrainian partisan who, this guy is like a propagandist for Ukraine who was embedded in the Azov Battalion. People may know what that is. In any event, Paul went out of his way. The- the thing is, I've never met Paul Graham. I- I don't know him.
- JCJason Calacanis
(laughs)
- DSDavid Sacks
I've never- I've never done business with him. So it's just weird to me that he has this animus and this vitriol towards me. It's hard to know exactly what this is based on. I think that part of it is that he thinks he knows what happened at Zenefits even though he wasn't involved at all, and he's just listening to one guy who's been nursing this vendetta for many years. And then other people are speculating that there could be other things involved. I don't quite know.
- JCJason Calacanis
You want to set the record straight on Zenefits and just say what happened?
- DSDavid Sacks
What is it that you guys wanna know?
- JCJason Calacanis
Parker apparently has done several public interviews where he kind of made claims, I think s- I don't know if I've listened to them, I've just read the summaries but JK you probably know that Parker's claimed that he was-
- DSDavid Sacks
Uh, just said-
- JCJason Calacanis
... that he was-
- DSDavid Sacks
... he ran a coup on him. Obviously for folks who don't know, there was an SEC investigation, and Parker was ousted from Zenefits as the founder CEO, he's very bitter about that, did a revenge startup, Rippling, which is doing quite well from what I understand. And, uh, he blames Sacks for all of this even though he was sanctioned for doing essentially insurance fraud by helping people lie on a test for their insurance certifications, and he- he got sanctioned by the SEC for it, and as you pointed out, Sacks, he was the only person who was sanctioned for that. So he broke some rules and he got pretty- pretty serious penalty, yeah? Do I have that basically correct, brushstrokes? Yeah, I mean, look, that- that- that whole experience was like the- was easily the worst year of my entire professional career having to deal with that mess that he created. And look, anybody can now say anything almost 10 years later in a podcast but the situation there was thoroughly investigated by regulators who had subpoena powers, who did extensive discovery, they looked at everyone's emails throughout the whole company. They also interviewed something like a dozen people under oath and took witness testimony from them, and then they sanctioned him, they fined him, and they published an account of what happened. I personally think it's a huge waste of time to be like rehashing events that are almost a decade old but I guess I'm being forced to by this smear campaign-
- JCJason Calacanis
Attack, yeah.
- DSDavid Sacks
... that he and Paul Graham have engineered against me. If you want to know what happened just read what the SEC said, read what the other regulators said. There was only one person who was named as being aware of the misconduct, and there was only one person who was fined-
- JCJason Calacanis
Hm.
- DSDavid Sacks
... and held accountable by regulators, in fact he was fined more than the company. Now if he just said, "Yeah, I, look I learnt from that mistake and I, you know, I- I made some mistakes and moved on," and apparently he does have a successful company, so...I don't really understand why he's so bitter. He seems to have, like, a... You know, he's, like, disturbed about it. Then it would be fine. I mean, there would be no reason to be talking about this. But the guy refuses to admit that he did anything wrong and instead he's created this elaborate story that his departure from Zenefits wasn't related to massive compliance issues, and that somehow i- it was related to him missing a sales target or being the victim of a coup. That's not what happened. This was a regulatory crisis that unfolded over many months and kept getting worse and worse, and we kept discovering new compliance violations. And this created a 50-state insurance investigation that could have shut the company down.
- JCJason Calacanis
Yeah.
- DSDavid Sacks
And he controlled the board. He didn't have to leave if he didn't want to. He ultimately perceived that it was in his interest to leave and let us clean it up, and then he went on to go do this other startup, which I think he was planning to do all along. So th- his plan worked out for him, which is he left a big mess for us to clean up and went on to this other-
Episode duration: 1:39:25
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