All-In PodcastRed-pilled Billionaires, LA Fire Update, Newsom's Price Caps, TikTok Ban, Jobless MBAs
EVERY SPOKEN WORD
150 min read · 30,041 words- 0:00 – 3:53
The Besties welcome Mark Pincus!
- JCJason Calacanis
All right, everybody. Welcome back to the All-In Podcast, the number one (laughs) finance, technology, business, and MAGA podcast in the world.
- DFDavid Friedberg
(laughs) .
- JCJason Calacanis
Uh, with us again today is the sultan of science, David Friedberg, living a modern 1950s aesthetic lifestyle there.
- DFDavid Friedberg
This is the, uh, house of tomorrow, house of the future-
- JCJason Calacanis
Oh. World fair.
- DFDavid Friedberg
... at the original-
- JCJason Calacanis
(laughs) .
- DFDavid Friedberg
... um, 1955 Tomorrowland at Disneyland.
- JCJason Calacanis
Wow, and you have a NASA hat on. This is amazing. He's in full geek-out mode.
- DFDavid Friedberg
Yeah. I didn't... This... I told you guys about this haircut last week because-
- JCJason Calacanis
Oh. (laughs) Because you couldn't blow yourself-
- DFDavid Friedberg
That's right.
- JCJason Calacanis
... properly.
- DFDavid Friedberg
I told you this would happen to you.
- JCJason Calacanis
It's exactly what Chamath said-
- DFDavid Friedberg
(laughs) .
- JCJason Calacanis
... would happen. Look at the continuity. He told you you could never match the blow you got last week, and here we are.
- DFDavid Friedberg
I did my best.
- JCJason Calacanis
I mean, it looks ridiculous, but stylish in a way. And with us again, your chairman dictator, Chamath Palihapitiya. He's ready to go to the inauguration and take his victory lap-
- DFDavid Friedberg
You know, I think-
- JCJason Calacanis
... and take an enormous amount of credit.
- DFDavid Friedberg
(laughs) .
- JCJason Calacanis
Chamath, are you looking forward to your victory lap?
- DFDavid Friedberg
I was in Florida earlier this week.
- JCJason Calacanis
Oh, really?
- DFDavid Friedberg
I came all the way back so that I could play poker with my friends and see my family and children.
- JCJason Calacanis
Oh. Oh, nice.
- DFDavid Friedberg
And I'll be flying all the way back out tomorrow morning.
- JCJason Calacanis
Were you at Mar-a-Lago?
- DFDavid Friedberg
No. I was with my friend in a-
- 3:53 – 6:02
Mark's background
- JCJason Calacanis
Mark did Freeloader, Tribe, Social Network back in the day, Support.com, and if you wasted some portion of your youth playing Farmville, he was one of the original app creators, or Zynga Poker, which famously he said, "Hey, would you like to be an investor in Zynga Poker?" And I said, "How does it work?" He said, "Oh, well, you play for virtual coins." And I said, "Mark, this is the stupidest thing I've ever heard. You've taken all of the money out of the, the, the game. It's never gonna work." And of course, he turned it into a multi-billion dollar company, and that was another $25 million angel investment miss on my part. (laughs)
- DFDavid Friedberg
But Mark, you, you were also like early general social networking. You were involved in Facebook as an investor, LinkedIn. Weren't you, like-
- MPMark Pincus
Yeah.
- DFDavid Friedberg
... early on? Yeah.
- MPMark Pincus
I, I think the first social media investment I made was Napster. I sent the first check.
- JCJason Calacanis
Wow.
- DFDavid Friedberg
Oh.
- MPMark Pincus
The first $100,000, which I think of that as the beginning of all this. But then, yeah, Reid and I-
- JCJason Calacanis
It is.
- MPMark Pincus
... put up the first money for Friendster, and then we were lucky enough to invest, along with Peter, in the first round of Facebook.
- DFDavid Friedberg
Wow.
- MPMark Pincus
The first round of Twitter. So-
- JCJason Calacanis
Yeah.
- MPMark Pincus
... it's like pick the right body of water even if your boat doesn't... Tribe didn't work.
- JCJason Calacanis
Hmm.
- MPMark Pincus
But...
- JCJason Calacanis
But you placed five other bets, so you hit a couple of them.
- DFDavid Friedberg
(laughs) .
- JCJason Calacanis
It works out just fine.
- MPMark Pincus
Yeah.
- JCJason Calacanis
You also owned-
- DFDavid Friedberg
You made the right, the Red Necro.
- MPMark Pincus
Yeah.
- JCJason Calacanis
You, uh, I believe you own the Six Degrees patents. The original social network in the '90s, in Web 1.0, was a company called Six Degrees and, uh, they had a bunch of patents, and I believe you bought them and then sold them to Facebook. Yeah?
- MPMark Pincus
No, we didn't sell them. Reid and I bought them because we were worried that if Yahoo, at the time, had gotten them, or even Friendster, that they would have blocked the whole industry. So, we bought them. We, we paid 750K, which was a lot then.
- JCJason Calacanis
Mm-hmm.
- MPMark Pincus
And we were accused of being patent trolls, and we never got that opportunity. We just sat on them to this day. Actually, I own half and Microsoft owns the other half.
- 6:02 – 23:21
How Mark got red-pilled for Trump, maintaining friendships despite political differences
- MPMark Pincus
- DFDavid Friedberg
Are you still close with, with Reid, Mark?
- MPMark Pincus
Yeah, very close.
- CPChamath Palihapitiya
How did you guys-
- MPMark Pincus
Right.
- CPChamath Palihapitiya
... reconcile your differences and political views in this last election? 'Cause he was very vocal, Kamala. You obviously became vocal, Trump. And very, kind of, kind of diametrically different views on the future.
- MPMark Pincus
Well, it's interesting 'cause Reid and I really started the whole, uh, journey into bigger national politics together. We both sat down and had lunch with Biden and made... wrote big checks, uh, a little over a year ago, December of '23. And, and then, you know, won't bother you, but I, I had my red pill moment and I went a very different direction, which started off just questioning the Democrats.
- CPChamath Palihapitiya
Hold on, hold on. Can you actually just double click into that? What was your red pill moment?
- MPMark Pincus
Well-
- CPChamath Palihapitiya
Was there one specific thing or was it more of a trickle of things?
- MPMark Pincus
It was both, right? It's like it starts-
- CPChamath Palihapitiya
Yeah.
- MPMark Pincus
The wall starts crumbling and then it comes down all at once. So for me, it really started early in '23. I started reading Pirate Wires and Mike Sollana, and I thought he was a little crazy at first 'cause he would write these articles. One he wrote was about how the Ukrainian soldiers had swastikas on their helmets and The New York Times photographers would ask them to take the swastikas off for photos, and I said, "That can't be right. That can't be true." And then four months later, it was in The New York Times, buried in the middle of the paper, and I kept seeing stories like that, that, that he would be early on. And so I just started feeling uncomfortable and queasy about what was going on with mainstream media. And then in May of last year, of '24, I read some article that talked about Trump's speech in Charlottesville, and this has been well-covered, but, but where he said there was good people on both sides and the article said it was completely, you know, propaganda and not what he actually... not accurately reflecting what he said, that, uh, that he denounced the Nazis a bunch of times in his speech. And so then I went and watched that video, and that was my red pill moment. I think it was for a lot of people, because it wasn't just the media spinning it or politicians spinning it. That was like one of the pillars of why you were supposed to hate Trump was-
- CPChamath Palihapitiya
Mm-hmm.
- MPMark Pincus
... that speech. And, and then you see Biden say that's why he had to run a second time, and you see Obama go to... Even see Biden bring it up again in the beginning of the DNC, and it's one of their pillars, and they clearly know that they're misrepresenting things. So for me, that was just... that was beyond uncomfortable. I was just like, "Okay, now I gotta go back to first principles and look at the primary data and listen only to original speeches by people," and I just realized I couldn't trust mainstream media, so I was... I became... I started questioning the Democrats. As soon as I started questioning the Democrats, I started getting a lot of shame and anger and hatred. Oh, the other thing that happened that was part of this journey is that my chief of staff parted ways with me after nine years in April of last year, and he was the main person protecting me from myself on Twitter, and he was the one who would say, "Stay in your lane. Nobody wants to hear what you think about politics or San Francisco or anything other than, you know, your area of products and investing." And with him gone, I just started tweeting whatever I felt and thought, and sometimes I got it wrong or it was a little too emotional. But first of all, it was really fun, and then second of all, I found... I got connected to this whole new audience of people who are these kind of techno-optimists. I think you guys probably talked about it. And that just brought me down this path that eventually I came out two days before the election publicly for Trump. Um, and it was only because that's when I completely got there, and I was trying to just be completely honest and authentic with myself and on Twitter at the same time. And my daughters turned to me that Sunday and they said, "You're, you're gonna vote for Trump. We know it." And I said, "Yeah, you're probably right." And they said, "Well, then you have to go say it on Twitter." And my daughters were like-
- CPChamath Palihapitiya
Oh, that's great.
- MPMark Pincus
... really in this with me. Yeah. So anyway-
- CPChamath Palihapitiya
Did-
- MPMark Pincus
And then it was on the front page of the New York Post on the day of the election that I was (laughs) , uh, this... Not that I'm such news, but maybe it just was their news peg, um, that I was coming out for Trump, and... But I, I'll get back to your Reid question, but what I love about my New York Times, uh, about my New York friends is that they did not give a (beep) . They were all pro-Kamala and they texted me and they're just like, "Oh, that's kind of funny." But it's one thing I kind of love about New York. They didn't care. Back to your question on Reid, what I love about Reid was he was already getting pings from people saying, "What's going on with Pincus? He's going off the rails. He's becoming a Trumper."
- CPChamath Palihapitiya
(laughs)
- MPMark Pincus
You know, it's, it's... You guys, I'm sure, have gone down this road.
- CPChamath Palihapitiya
I got a little bit of that too (laughs) about Chamath and Friedberg. (laughs)
- MPMark Pincus
Yeah.
- CPChamath Palihapitiya
Me.
- MPMark Pincus
So they're like-
- CPChamath Palihapitiya
Yeah.
- MPMark Pincus
... "What's wrong with him? We g- we gotta bring him back into the fold, you know. He's, he's... Should we lock him up? Is he crazy?" Um, and so Reid was already getting these... I had a lot of anxiety about talking to Reid about it, and finally Reid and I got on FaceTime and he just said, "I just want to start by saying I'm Team Mark." And I said, "I'm Team Reid." And it gets out a little, you know-
- CPChamath Palihapitiya
Aw.
- MPMark Pincus
Aw. But-
- CPChamath Palihapitiya
Well, no, Americans can get along even if they disagree politically about a candidate. It's probably where we need to get to, especially, you know, now that Trump's gonna be in office in a couple of days. What was it like when Biden-
- 23:21 – 51:32
LA Wildfires update: Newsom's EOs, market impact of price controls
- JCJason Calacanis
let's get into a little bit of an update here about the absolute tragedy occurring in Los Angeles. The death toll is now at 25. Uh, 12,000 structures have been destroyed. It's mostly people's homes. It's 40,000 acres. That's 60 square miles. I think San Francisco is seven by seven miles, right? So this is a lot of, uh, space. It's bigger than all of San Francisco. The Palisades and Eaton fires are still burning. And as of Wednesday, 80,000 people were under evacuation orders. A couple of our friends lost their homes and, uh, but they survived, but the stories of losing everything are just tragic. Every memory, all your personal documents, photos, art, whatever that you've collected over a lifetime. I just had two conversations with people and they were just in shock. The estimates right now of damage are between 135 billion and $150 billion. This is some of the most expensive real estate on the planet.It's ten times more costly than any other wildfire in history, according to reports. Uh, you might remember the Camp Fire near, uh, Paradise, California. That's about, what, three hours north of San Francisco? Northeast? That one was 12.5 billion, just to level set it. Uh... And now people are talking about, and we'll talk about here today, what the recovery and rebuild effort might look like. California leadership desgraciad across the board.
(laughs)
Gavin Newsom. I just-
Desgraciad. (laughs)
Desgraciad! Gavin Newsom.
Have you had traffic to desgraciad.com with all of this?
Yeah, right now, desgraciad.com is gonna be redirected to Gavin or Karen Bass. I don't know which one is more disgraceful. I mean-
(laughs) It's, it's an incredible troll that you just redirected every week to whoever you're maddest at. (laughs)
Yeah.
(laughs)
Who would be more disgraceful in this situation, Gavin or Karen Bass? I think it's gotta be Karen Bass-
No, but, no, but I-
... for just being mad at the country.
I think, I think it would be quite funny if every week, you actually gave an award and redirected the website-
Yeah. Okay, I give it to-
... to the person that you believe-
... to Karen Bass this week. And before that, it was Jake Paul for that Tyson fight at the desgraciad.com. But it's... The, the, the stakes have gone up. Gavin is now doing executive orders. One of them is to make it illegal to low ball offers to impacted homeowners for the next-
(laughs)
... three months. I don't know what the point of that is. And the other one is to eliminate the Coastal Act's, uh, review of permits for th- the houses that are along PCH, I suppose. And he wants to extend key price gouging protections, quote, "to help make rebuilding more affordable." Gouging is defined as raising the rent or price of other goods and services more than 10% from the last marketed price. But it could be as little as 5%. It's just not clear. And then, LA Mayor Karen Bass created a snitch hotline to report on any kind of price gouging and rents, uh, which we've started to see. People are now naming and shaming Zillow and Redfin listings where they... You can see the previous history of what they were asking for for a home or for rent. And obviously, the free market is making rental homes double in price. Freeburg, we talked a bunch about this, and I know, Pincus, you've got (laughs) ... We had a... I don't know if you're comfortable talking about it, but we had a whole conversation about your getting dragged by the (laughs) Coastal Commission, uh, in Northern California. Freeburg, maybe kick us off here on what your thoughts are on rebuilding this area, how this will happen, especially with what we brought up last week, and I think went a bit viral, is your sort of talk about putting your thumb on the scale with insurance. I mean, this is... I think, one of the concerning things here is the free market not being allowed to progress previously with insurance and then now with the rebuild.
- CPChamath Palihapitiya
Well, California's got, at this point, price controls, or a mechanism for controlling the change in price on insurance, on housing services, and now they've got this non-solicitation rule. All three, I think, are very challenging to, I think, an appropriate market recovery. Look, the insurance issue is a longer one. If you guys want, we could talk about that. I've got a couple notes I could bring up on the history of how we got to this point. But I think it's gonna be the- one of the biggest burdens going forward, and it could actually lead to a pretty significant effect in long-term housing prices in California because of the way that the insurance market is structured and regulated in California. But if you want, we, we can talk about that.
- JCJason Calacanis
Or up or down. What do you think ultimately, you know, TL;DR, like, do you think prices are gonna go way up here? Do you think this is gonna take five or ten years to rebuild these homes? I mean, we've never seen this many structures go down at this price point in a constrained area, where just construction is so expensive and hard.
- CPChamath Palihapitiya
So, I think the, the governor did a good job suspending the permitting requirements for the Coastal Act for, uh, affected homes and the CEQA review. Those are very important, I think, suspensions. But he also put in place this executive order for price gouging. And if you pull up the note, Nick... So, he basically said California Penal Code Section 396, which prohibits price gouging during a declared state of emergency will now extend indefinitely in this region. And in the language in that penal code, it says that businesses cannot raise the price of essential goods and services by more than 10% above their pre-emergency price for a specified period. And in this case, his executive order is indefinitely. So, in- on an indefinite basis, you cannot raise the price of goods and services, which generally applies to consumer goods like food and emergency supplies, but it also applies to building materials and services related to housing work. So, if you want to attract builders, if you want to attract contractors, if you want to attract electricians and plumbers to go to the LA area, you have to allow the market to do its job. If I'm a plumber operating in Sacramento or in Phoenix, and I'm like, "Man, I could make some money if I go to LA," you will see an influx of service providers and an influx of goods to support the rebuilding effort in Southern California. That's the way the free market should work, is there's an opportunity in the market, folks show up, they say, "Great. I can make money. I'm gonna come here and do this work." And as more folks show up, they begin to compete on price, and eventually the cost kind of normalizes, and you end up finding what is now the new fair market value between the bid and the ask. The people that are saying, "Hey, I'll do the work," they're the ask.... and, hey, I need people to do work. That's the bid. And you find a price. But the benefit of that is you increase the supply. You increase the supply of goods, you increase the supply of service providers, of contractors. There is a home building dearth right now in the United States, so this is an amazing opportunity because they can now move to LA, build homes. We can get a rapid reconstruction effort underway, except the governor just said we can't pay people 10% higher than what they were getting paid right before this happened on an indefinite basis, and then Karen Bass created a hotline. You can go to LA 311 and report people if they're trying to charge too much, and then the, uh, you know, the Stasi will come and investigate you and determine that you're charging too much. I understand that there's a strong moral imperative and incentive to say, "We gotta stop price gouging. We don't want people to get hurt." But the second-order effect is you're actually hurting the market and you're hurting the rebuild effort because you're reducing the incentive for folks to come in and fill the void in the market that is necessary for us to accelerate the development of 15,000 homes in a very short period of time. The alternative now is people are gonna be sitting around, and I already spoke to a couple friends, I'm sure you guys have, that are like, "I tried calling architects. I tried calling contractors, people that live in this area that have been affected. I cannot get anyone to return my call. There is not enough service providers down there. You're gonna end up waiting six, seven years to get your home rebuilt." Now what do you do? You don't have a lot. You don't have a home to live in. And then there's this other thing where we can't take unsolicited offers on the home. That was the other executive order, so if you wanna pull that one up, the governor said it is illegal to make an unsolicited offer on a piece of real estate in one of-
- DSDavid Sacks
Oh Lord.
- CPChamath Palihapitiya
... these affected zip codes. I don't know what ha- happened in Hawaii that makes the governor keep referencing the Hawaii story as if, you know, that there were people that were taken advantage of and we need to protect the citizens of LA, but I'm pretty sure that having an increase in the number of offers coming in for real estate-
- DSDavid Sacks
Absolutely, yeah.
- CPChamath Palihapitiya
... in one of these affected areas increases liquidity in the market, it increases the buying behavior, and that will ultimately drive prices up, and that will ultimately make it easier by having more liquidity. For some of these folks who owned burned down lots to be able to sell their lot, take their insurance check, move to another neighborhood and go somewhere else because they're gonna have to otherwise wait six or seven years to build a home.
- DSDavid Sacks
Hold on, hold on, hold on.
- CPChamath Palihapitiya
And so I think that part of the music... Yeah. Yeah.
- DSDavid Sacks
I think you're a little bit off the deep end with some of this stuff 'cause I think you're not being totally fair in representing what this EO says, and that's coming from me. I mean, I am not a Newsom fan, okay? And I think he is completely and totally incompetent. But I'll just take the other side of this, which is that I read the EO, and I actually think it's somewhat reasonable, and I didn't connect the dots with the EO and the real estate market. And the reason is that if you read all of what he said, the EO is hyper-specific to unsolicited offers-
- CPChamath Palihapitiya
Yeah.
- 51:32 – 1:08:33
Congestion pricing in NYC, fixing broken cities
- DSDavid Sacks
- JCJason Calacanis
All right, really interesting in New York. Finally, New York has put into place congestion pricing. I've been waiting th- for this my entire (laughs) life. Here's a map. This went into effect January 5th. This congestion pricing concept exists in London, as everybody probably knows. Basically, if you're below Central Park, which is 6th State Street in Manhattan, and you enter between 5:00 AM and 9:00 PM, you're gonna get, you know, on your, uh, easy pass a charge of about $9, cheaper than a bacon, egg, and cheese in Manhattan these days. If you're going clubbing in Manhattan between 9:00 PM and 5:00 AM, it's just like two bucks. It's gonna increase to $12 in 2028 and $15 in 2031. Trucks pay more taxes, pay less. The results have been awesome. Wait times to get on the island are down 50% across the board. Lincoln Tunnel down 46%, Holland Tunnel down 63%, Williamsburg Bridge down 35%. It's just an awesome effort. When I lived there, man, as a resident, the traffic was nuts. You can have emergency services move a lot faster. You get rid of noise pollution. You obviously get rid of air quality pollution for ice engines. Uh, it's great for cabs, great for pedestrians, and great for bike riders. The only people really complaining are selfish and entitled people who drive their cars into Manhattan. That's at least my position on it. Opponents are saying it's a money grab for the transit authority because the money from this goes to make public transportation better. What do you think, Mark? You're, you're in favor of this?
- MPMark Pincus
Yeah, I think more generally, I feel like since the pandemic, what's been on my mind a lot, living still in San Francisco, I wanted to start a social network called Still Here.
- JCJason Calacanis
(laughs)
- MPMark Pincus
Uh, 'cause it was like-
- DSDavid Sacks
Oh.
- MPMark Pincus
... "Oh, you still live here? Me too." Some way for us to, like-
- DSDavid Sacks
(laughs)
- MPMark Pincus
... come out of our houses-
- DSDavid Sacks
Still Here. (laughs) That's great.
- MPMark Pincus
... and notice that you're here and I'm here, but we never leave our homes. I walk around this city at my own risk, and I like- the cities, I feel like cities have lost the point. Like, they've lost the plot. Like, why... We've kind of, we still live in cities or value them, but I feel like we have to go back to first principles and think, like, why did we move to cities in the first place and what was the value supposed to be? And is that still the deal we're getting, or does there have to be a new deal? Because we used to live in a city because it was economic. We were closer to our job. And then we lived in a city because there was a high density of things that we wanted, cultural, people, restaurants. And the best cities really were the ones that are fun to walk around. And then we got to a point where it's not safe or clean to walk around. You don't work in the city anymore. And San Francisco started to feel like this gigantic, like, retirement community. It's just, all these people who still live here because their kids are in school maybe or they grew up here, you know. A lot of our friends left, went to Austin and-
- DSDavid Sacks
(laughs)
- MPMark Pincus
... other places. And we started, uh, I don't know about Chamath, but I think, or Dave, but I think our family has a conversation probably tw- twice a year of, "Should we move? Why haven't we moved? What's wrong with us?" And so there's this questioning going on around cities, and I think it's a good question. And I think cities need to innovate aggressively.... to give, to be better. They have to compete with the other options again. They have to make it fun to be there, fun to work there. I think it's great that Daniel Lurie is mayor of San Francisco and he's putting smart people around him. And they're trying to rethink, first some of attacking these core problems, but also, how do we make San Francisco fun again? So I love things like congestion pricing. I think now is the time to try every new innovation that you ever thought of and see what sticks and, and figure out, like, how do you take this, this tax, not literally, I mean, New York has a big tax, but this tax on all of us, whether it is that you can't walk across this city, that you don't feel safe, or that, that the, the good side of it being fun to be in, you know, is that the, the deal is off. And so I think, you know, a- and I also, what I'm hoping Daniel Lurie does and other smart mayors is that they benchmark and they say, "Who's doing it really well around the world?" Whether it's dealing with homelessness or things like congestion pricing, who's, who's innovating and doing it well and why aren't we doing it here? I mean, I think you got to run these, you got to reinvent these cities. And, you know, sorry to sound cliché, but I think you got to kind of take a startup mentality and say, "You're not gonna live on your incumbency anymore. You've got to reinvent this." And we can't make companies come back to work, you know, come back to the off- I mean, the companies can make their employees, but it'd be really nice if the employees wanted to be there. Um, you know, and you-
- JCJason Calacanis
Yeah.
- MPMark Pincus
... can't make people live in California (laughs) , so I'm in favor.
- JCJason Calacanis
Yeah. Chamath, any thoughts on Mark's point about making cities fun again and joyful again? Sounds like a pretty good platform.
- DSDavid Sacks
I mean, I think he's right. Um, San Francisco sucks. It's trash. I never go there.
- JCJason Calacanis
Yeah.
- DSDavid Sacks
It's terrible.
- JCJason Calacanis
A- and the reason that you don't like to go there is?
- DSDavid Sacks
It's dirty.
- JCJason Calacanis
Mm-hmm.
- DSDavid Sacks
It's disgusting. There's crime, there's grime. Everything just sucks there.
- JCJason Calacanis
Yeah. Freeburg, your thoughts, uh, on-
- MPMark Pincus
(laughs)
- JCJason Calacanis
... the Gotham City that (inaudible) (laughs)
- MPMark Pincus
Did he visit you in the Presidio? Dave, did Chamath ever come to the Presidio?
- DSDavid Sacks
I have come to your office, I've come to Dave's office, I've come to, I've gone to Peter's office there. But what I do is I, I don't even go through the city, I go all the way around. I drive-
- MPMark Pincus
Hm.
- DSDavid Sacks
... all through the East Bay, up through Berkeley, and then I come-
- 1:08:33 – 1:19:15
TikTok ban: origin and potential outcomes
- DSDavid Sacks
the docket?
- JCJason Calacanis
All right, TikTok future is in question right now. The ban is about to happen unless the parent company, ByteDance, divests by January 19th, which is this Sunday, TikTok will be banned in America. Google and Apple are going to be forced to remove TikTok from their app stores and Oracle, TikTok's cloud provider, has to stop providing hosting services and cut ties. Assuming ByteDance doesn't come up with a last minute deal, TikTok's only hope is the Supreme Court blocking the law. What do you think, Mark? Do you think it's Chinese spyware? Do you think they should be forced to divest? And what do you think the repercussions will be?
- MPMark Pincus
Here's what's so hard for me about this. On the one hand, part of it seems so obvious from a both not just national security point of view, but also just fairness. Like, it's insane if you think about it, that there's a Chinese company that's arguing in court for protections under our Constitution and freedom of speech, when none of our companies have those kinds of rights in China, much less the right to even operate there if they're not majority controlled or in line like you guys talked about with censorship or whatever else. So on the one hand, it seems like a no-brainer to me that on this case, but what you're starting to see come up in the last couple days, I'm even hearing it from one of my daughters who's a major TikToker, is the law of unintended consequences here is that we could see this banned, especially if they don't get to a deal with somebody. And then the 170 million Americans, many younger Americans, who rely on this all of a sudden feel like this is censoring them and it's taking away their freedom of expression and it could backfire in a lot of ways. And we're already seeing memes where they're going on to these other apps, like there's this Chinese-
- JCJason Calacanis
Red Book?
- MPMark Pincus
(laughs) Red Book, which is-
- JCJason Calacanis
Yeah.
- MPMark Pincus
... even worse, right? I think that one is owned by the Chinese government. And so we're driving them there and so, so I'm... The best outcome I think would be forced to divest and sell to another American company. But if that doesn't happen, I, I'm kind of nervous about a, a real backlash.
- JCJason Calacanis
I'm delighted, Chamath, that our kids are gonna go out and play and have friendships and stop scrolling on TikTok. (laughs)
- MPMark Pincus
Me too.
- JCJason Calacanis
That's, uh, what you described sound- sounds awesome. (laughs)
- MPMark Pincus
I literally get on their iPads and phones when... I sometimes allow them to have phones-
- JCJason Calacanis
Yeah.
- MPMark Pincus
... and just delete the app and then they go get it back.
- JCJason Calacanis
Of course, of course. Kids around, around it. What do you think, Chamath? What do you think is gonna happen here?
- DSDavid Sacks
I mentioned this to President Trump, and I, and I really think this is true. The reason why there was so much bipartisan support for the bill as it worked through Congress is because I think that they were briefed on just how severe the security violations of this app are, because I don't think we've seen anything in modern history that is, that, that is this controversial, yet be so almost unanimous.
- JCJason Calacanis
Yeah.
- DSDavid Sacks
So I think that that's an important data point. There is something happening in the app that they've been briefed on that makes them take this posture. And when I listened to the Supreme Court arguments, I didn't hear a very compelling reason why this ban should be overturned. So, I do agree with Mark that we have to find a suitable home and I think that we'll probably find one, and I think that it probably happens under the Trump presidency. And whoever gets their hands on it gets their hands on an incredible asset that they will be able to buy extremely cheaply, because there is no way that there is a fair market value here deal for that asset, because whoever's the buyer is in the total catbird seat. And in order to get a deal done with the federal government, I think you're just gonna get a basically like a buy it now price that's very cheap. The other thing that I'll say though, on a totally separate tangent. So when I started hunting around, TikTok's real-time recommendation algorithm was open source, the learning method.
- JCJason Calacanis
Yep.
- DSDavid Sacks
Nick, do you wanna just throw it up here? It's called Monolith. This is an incredible paper. The cleverness of what these guys have built cannot be underestimated. And what's incredible is what they describe in this paper, which I think, frankly, a lot of social apps would benefit from understanding, is exactly how they've built it to essentially not take this more monolithic training approach for recommendations, but how do you do it in real time? How do you make it collisionless? It's incredible. This paper is a tour de force and it just makes me realize that despite the political maneuvering of this hot potato, there are some folks that have been working in that app or in, you know, the parent company-... that are truly technically talented and it's a, it's a bit of a shame that they're gonna get sort of, throw the baby out with the bath water, so to speak. So people should know that there's some technological innovations inside of ByteDance and TikTok that are just truly amazing feats of computer science. This is an example. It doesn't though change the fact that I think that enough of Congress and the rest of the security apparatus know that this is a mechanism to spy.
- JCJason Calacanis
I think you both nailed it. Like-
- MPMark Pincus
Isn't China saying though that they're going to, if this does get divested, they're going to keep, either ByteDance or Chinese government saying, "We're not going to give over the algorithm"? Or are you saying it's open source, it doesn't matter?
- DSDavid Sacks
Well, this is an example of just sort of like describing the methodology. It's not functionally open source yet, but I think that open sourcing it doesn't solve the problem and the reason is... So let's just say that you're Pegasus. Pegasus was able to reverse engineer or build penetration attacks into WhatsApp that were imperceptible to everybody until it happened to Jeff Bezos, to other people, right? Where you get these state sponsored attacks on your phone and all of a sudden you're dealing with this attack vector that then you call the FBI and they take your phone and they help you deal with. It's happened to a bunch of people, it's happened to me twice. So the fact that these things can happen and then the attack vectors get incrementally more and more sophisticated, it used to be that there was a PDF payload, then there can just be an image payload. Now it's any payload, right? And you don't even have to click to open it and all of a sudden they just root your phone. So these are extremely sophisticated mechanisms that are enabled by a very few very talented people. Talented, I'll put in quotes, but when those talented people work on the wrong side, you have to act. So open sourcing it won't solve this. These, these exploits are known to a few and I think that if it's known to the NSA, this is probably what was disclosed to folks under confidentiality-
- JCJason Calacanis
Yeah.
- DSDavid Sacks
... that caused them to get to this conclusion.
- JCJason Calacanis
I think people just need to wake up and realize the Chinese government does not have Americans' best interests at heart. I mean, the, there, there is no concept of reciprocity, as you mentioned, Mark. That's the number one reason to do this. Number two, what you pointed out, Chamath, with security and if you think about the two biggest imports from China right now, it's fentanyl and TikTok. They-
- DSDavid Sacks
But here's what I will say. (laughs)
- JCJason Calacanis
... want to make us addicted, they want to impact our society, they want to divide us. This is an, a massive psyops that's going on. It is a psyops and it is a spyware and it's been proven.
- MPMark Pincus
I-
- JCJason Calacanis
They spied our journalists, these are bad actors, it has to go.
- DSDavid Sacks
I was super excited when I saw that there is a potential that X would take over TikTok and the reason I say that is I do think that if you can take the video content of TikTok and the graph of creators, but have a different app and a different substrate be the delivery mechanism where you know that it's much safer and it's governed by an American, that to me would be the compromise. So I think the app should go away but if you can somehow give creators a path to sort of like restart their content creating capabilities on X, I think that that's actually a pretty good one.
- 1:19:15 – 1:34:37
MBA hiring downturn
- JCJason Calacanis
the same bet. Hey guys, here's a chart for you. Companies are not hiring as many MBAs. This is a recent spike in unemployment among MBAs from top business schools like Harvard, MIT and Stanford. I'm not sure, I think... Pincus did you go to Harvard for your MBA?
- MPMark Pincus
(laughs) Guilty.
- JCJason Calacanis
Guilty.So, and you've also stopped working, so you're represented here on the chart.
- MPMark Pincus
Yeah, no longer.
- JCJason Calacanis
You still have a job, right?
- MPMark Pincus
(laughs)
- JCJason Calacanis
You still work. What, what are your thoughts on, on this? Are MBAs out of vogue? Are they opting out? What's your theory here?
- MPMark Pincus
Well, so yes, I went there. I, I would say that, that my, all the learning that's helped me in my career started later after I got out. My first product management job was really when I started learning things that are useful to me today. I think being there, I learned a lot about, like, how to sell to corporate America and some how do they think kind of things. And then I've gone back to HBS for decades trying to recruit from there. And in the beginning they would tell me, the kids would, when I had Support.com and it was gonna go public, they said I'd have to be a vice president, own 3% of the company to take a job with a startup like you. And this was just before the company went public. There was a little bit of a renaissance period where some HBS people were excited to join Zynga, probably 'cause they thought it was going public, but they were a little more risk-on at that point. And now everyone's open to jobs. My take is that there's this fundamental imbalance that people go and get an MBA because they're de-risking their career. You go to HBS or Stanford and you're guaranteed this high salary and this kind of great job for life, so the reason to go there is to take the risk off. That's in fundamental opposition to where we are in our economy, in my opinion today, or where the most interesting sectors are. Those kinds of jobs have dried up, and the kinds of jobs that I think should be interesting to MBAs are more like go find a Y Combinator company and join a founding team as the business person or whatever. And these people are smart and qualified, but there's this mismatch that they are fundamentally risk-averse, and so they're not... So when it says they haven't found jobs, part of it is I think they're gonna, they're gonna have to fall further, or this might happen, so that, and part of it they have maybe debt or they have to pay back this expensive degree, but I think that they've gotta get to a point, like I was when I started my first company, Freeloader, I happily had very little to no opportunity cost 'cause I had torched my career by that point, torched my resume.
Episode duration: 1:42:51
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